DEF 14A of Strategy Inc, Apr 12, 2024

DEF 14A of Strategy Inc

Filed Apr 12, 2024 · FY20230001193125-24-094634

Open on EDGAR

  1. NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS

    | Director Compensation | 38 | | Equity Compensation Plan Information | 40 | | Pay Versus Performance | 41 | | CEO Pay Ratio | 45 | | AUDIT COMMITTEE REPORT | 46 | | PROPOSAL 2—RATIFICATION OF THE SELECTION OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024 | 47 | | INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES | 48 | | Fees and Services | 48 | | Audit Committee Pre-approval Policies and Procedures | 48 | | OTHER MATTERS | 49 |

  2. PROPOSAL 1—ELECTION OF DIRECTORS

    PROPOSAL 1—ELECTION OF DIRECTORS The Board proposes the election of the persons listed below as directors of the Company. Each current director of the Company has been nominated for re-election. The persons named in the proxy card will vote to elect as directors the six nominees named below, unless authority to vote for the election of any or all of the nominees is withheld by marking the proxy to that effect. All of the nominees have indicated their willingness to serve, if elected, but if any should be unable or unwilling to serve, proxies may be voted for a substitute nominee designated by the Board. Each director will be elected to hold office until the next annual meeting of stockholders and until the election and qualification of his successor or his earlier death, resignation, or removal. The Board may elect additional directors in the future in accordance with the Company’s Amended and Restated By-laws.

  3. Nominees

    Nominees Set forth below, for each nominee, is his name, age, position with the Company, principal occupation and business experience during at least the past five years, the year of commencement of his term as a director of the Company, and the names of other public companies in which he currently holds directorships or has held directorships during at least the past five years, as applicable. We have also presented information below regarding each nominee’s specific experience, qualifications, attributes, and skills that led our Board to conclude that he should serve as a director.

  4. Nominees

    | Michael J. Saylor Chairman of the Board & Executive Chairman Age: 59 Director since: 1989 Board Committees: None | Mr. Saylor has served as Chairman of the Board and Executive Chairman since August 2022 and previously served as Chairman of the Board and Chief Executive Officer from November 1989, when he founded MicroStrategy, to August 2022. Mr. Saylor also previously served as President from November 1989 to November 2000, from January 2005 to October 2012, and from January 2016 to July 2020. Prior to that, Mr. Saylor was employed by E.I. du Pont de Nemours & Company as a venture manager from 1988 to 1989 and by Federal Group, Inc. as a consultant from 1987 to 1988. Mr. Saylor received an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society from the Massachusetts Institute of Technology. Qualifications: We believe that Mr. Saylor is well-suited to serve on our Board due to his position as our Executive Chairman and his more than 30 years with the Company, including as its founder. In addition to his leadership expertise, Mr. Saylor is regarded as a technology visionary and bitcoin thought leader, and he has deep knowledge of the Company’s history, strategy, technology, and culture, as well as unique insight into the Company’s product development, marketing, finance, and operations. |

  5. Nominees

    | 8 | MICROSTRATEGY | 2024 Proxy Statement |

  6. Nominees

    | Phong Le Chief Executive Officer Age: 47 Director since: 2022 Board Committees: None | Mr. Le has served as a member of the Board and as President & Chief Executive Officer since August 2022 and previously served as President from May 2022 to August 2022, President & Chief Financial Officer from July 2020 to May 2022, Senior Executive Vice President, Chief Operating Officer & Chief Financial Officer from April 2020 to July 2020, Senior Executive Vice President & Chief Operating Officer from November 2019 to April 2020, Senior Executive Vice President, Chief Operating Officer, Chief Financial Officer & Treasurer from June 2018 to November 2019, and Senior Executive Vice President, Chief Financial Officer & Treasurer from August 2015 to June 2018. Prior to joining MicroStrategy, Mr. Le served as the chief financial officer of XO Communications, a privately-held telecommunications company, from August 2014 to August 2015. From March 2010 to August 2014, Mr. Le held senior positions at NII Holdings, a Nasdaq-listed telecommunications company, including vice president of financial planning and analysis, vice president of strategy and business operations, and vice president of strategic finance. Prior to that, Mr. Le worked in the consulting practice at Deloitte from 1998 to 2010, where he held various positions, including senior manager. Mr. Le holds a B.S. in Biomedical and Chemical Engineering from The Johns Hopkins University and an M.B.A. from the Sloan School of Management at the Massachusetts Institute of Technology. Qualifications: We believe that Mr. Le is well-suited to serve on our Board due to his position as our Chief Executive Officer, his more than eight years with the Company, and his outside executive experience. | | Stephen X. Graham Independent Director Age: 71 Director since: 2014 Board Committees: Audit (Chair) | Mr. Graham has been a member of the Board since April 2014. Mr. Graham is currently president of CrossHill Financial Group, Inc., a private merchant bank and advisory firm that he founded in 1988, and was a general partner of both CrossHill Georgetown Capital, L.P. from 2000 through December 2023 and CrossHill Debt II, L.P. from 2004 through December 2023. He has been a manager of CrossHill Georgetown Management, LLC since 2000. Mr. Graham also served as chairman of the board of directors from 2009 until December 2022, and as chief executive officer from 2014 until December 2022, of Meteor Affinity, Inc. (“Meteor”), a marketing and advertising company, which operated the Official NASCAR Members Club and which served as a portfolio company of CrossHill Debt II, L.P. Meteor was voluntarily dissolved on December 15, 2022. Prior to that, Mr. Graham was a principal with Kidder, Peabody & Co. and held positions with Merrill Lynch & Co. and Arthur Young & Co. (which later became part of Ernst & Young LLP). Mr. Graham was a member of the board of directors of TNS, Inc. (“TNS”), a former New York Stock Exchange-listed global data communications and interoperability solutions company, from 2003 until the company’s acquisition by Siris Capital Group, LLC in 2013. While a member of the board of directors of TNS, Inc., Mr. Graham served as chairman of the audit committee from 2003 to 2013 and as chairman of the board of directors from 2012 to 2013. Mr. Graham also served as a member of the board of directors of Speedus Corp. from 2009 to 2011. Mr. Graham also previously served from 1995 to 2001 as a member of the board of directors of Credit Management Solutions, Inc., a former Nasdaq-listed credit processing software company, and several private companies. Mr. Graham received a B.S.B.A. from Georgetown University and an M.B.A. from the University of Chicago Booth School of Business. | | | Qualifications: We believe that Mr. Graham is well suited to serve on our Board due to his substantial executive experience and his experience as an outside director and audit committee member, which provides the Board with important perspectives on financial matters. |

  7. Nominees

    | MICROSTRATEGY | 2024 Proxy Statement | 9 |

  8. Nominees

    | Jarrod M. Patten Independent Director Age: 52 Director since: 2004 Board Committees: Audit, Compensation | Mr. Patten has been a member of the Board since November 2004. Mr. Patten founded RRG, a global real estate consulting and advisory firm, and has served as the firm’s president and chief executive officer since its inception in 1996. RRG is an international consulting firm specializing in the development and implementation of enterprise-wide audit and cost control strategies that heighten operational controls, lower operating costs, increase transparency, and extend cost accountability for RRG’s geographically diverse client base. In January 2024, Mr. Patten joined the board of directors of Core Scientific, Inc. (“Core Scientific”), a Nasdaq-listed digital asset mining and blockchain infrastructure company, and has since served as the chairman of the board of directors and as a member of the audit committee of the board of directors of Core Scientific. Mr. Patten received a B.S. in Biology and a B.A. in Biological Anthropology and Anatomy from the Trinity College of Arts and Sciences at Duke University. Qualifications: We believe that Mr. Patten is well-suited to serve on our Board due to his leadership and management expertise as a chief executive officer, his international business, finance, and corporate compliance experience, and his extensive knowledge of cost and operational controls. | | Leslie J. Rechan Independent Director Age: 62 Director since: 2018 Board Committees: Compensation | Mr. Rechan has been a member of the Board since March 2018. Mr. Rechan founded Rechan Consulting Group LLC, a CXO services firm, and has served as the firm’s chief executive officer since its inception in February 2022. Mr. Rechan has also served as a board advisor since March 2024 at Lorica Cybersecurity, a privately-held developer of privacy enhancing technologies. Mr. Rechan also served as chief growth officer from February 2022 through January 2024 and as a board advisor from January 2017 through January 2024 at JASCI Software, a privately-held next generation warehouse management system company. Mr. Rechan also served as a board advisor and board member at Cognitive Scale, a trusted AI development platform company, from October 2014 through December 2022. Mr. Rechan served as chief operating officer of PROS Holdings, Inc., a publicly-traded cloud software company, from May 2020 to February 2022. From September 2017 to May 2020, Mr. Rechan served as president and chief executive officer and a director of Solace Corp., a privately-held smart data movement solutions company. Prior to that, Mr. Rechan served as president and chief executive officer and a director of Halogen Software, a cloud-based talent management software provider, from May 2015 to May 2017. Previously, he served as general manager from November 2011 to April 2014 and as vice president, sales, solutions, and services from February 2008 to October 2011 of IBM Business Analytics, a software group at IBM Corp. (“IBM”). He also served as chief operating officer of Cognos Inc. from 2006 to 2008. Prior to Cognos, Mr. Rechan worked at Siebel Systems, Inc. (“Siebel Systems”) and then Oracle Corporation (“Oracle”) upon its acquisition of Siebel Systems in 2006. From March 2006 to May 2006, Mr. Rechan served as senior vice president and global general manager, CRM strategy at Oracle. From 2004 to 2006, Mr. Rechan served as senior vice president and general manager of Americas sales of Siebel Systems and served in the same capacity for the global manufacturing and distribution industries business unit of Siebel Systems. Mr. Rechan served as senior vice president and general manager of North American worldwide field operations of Cadence Design Systems Inc. from 2003 to 2004. He served as president and chief operating officer of Onyx Software Corp. from 2001 to 2002. Prior to 2001, Mr. Rechan held several leadership positions at IBM across field sales, systems engineering, services, solutions, development, and general management in North America, Europe, and Asia Pacific. From May 2015 to May 2020, Mr. Rechan served on the board of directors and audit committee of PROS Holdings, Inc. Mr. Rechan received a B.S. in Electrical Engineering and a B.A. in Organizational Behavior from Brown University and an M.A. in Management from Northwestern University. Qualifications: We believe that Mr. Rechan is well-suited to serve on our Board due to his expertise in corporate strategy and development in the enterprise software sector and his extensive experience in international operations, sales, and services. |

  9. Nominees

    | 10 | MICROSTRATEGY | 2024 Proxy Statement |

  10. Nominees

    | Carl J. Rickertsen Independent Director Age: 64 Director since: 2002 Board Committees: Compensation (Chair), Audit | Mr. Rickertsen has been a member of the Board since October 2002. Mr. Rickertsen is currently managing partner of Pine Creek Partners LLC and Iris Partners LLC, each a private equity investment firm, positions he has held since January 2004. From January 1998 to January 2004, Mr. Rickertsen was chief operating officer and a partner at Thayer Capital Partners (“Thayer”), a private equity investment firm. From September 1994 to January 1998, Mr. Rickertsen was a managing partner at Thayer. Mr. Rickertsen was a founding partner of three Thayer investment funds totaling over $1.4 billion and is a published author. Mr. Rickertsen served as a member of the boards of directors and audit committees of Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc., each of which is a closed-end management investment company, from 2011 and 2013, respectively, until 2023. He has also served as a member of the board of directors and audit and compensation committees of Berry Global Inc., a global manufacturer and marketer of value-added plastic consumer packaging and engineered materials, since January 2013. He has also served as a member of the board of directors of Hut 8 Corp. (formerly Hut 8 Mining Corp., prior to a business combination transaction completed in November 2023), a Nasdaq-listed digital asset mining company, since December 2021. From April 2012 to October 2016, Mr. Rickertsen was a member of the board of directors and compensation committee of Noranda Aluminum Holding Corporation, an integrated producer of value-added primary aluminum products and rolled aluminum coils. From April 2003 to January 2010, Mr. Rickertsen was a member of the board of directors and audit committee of Convera Corporation, a publicly-traded search-engine software company. From March 2004 to September 2008, Mr. Rickertsen was a member of the board of directors and compensation committee of UAP Holding Corp., a distributor of farm and agricultural products. Mr. Rickertsen received a B.S. from Stanford University and an M.B.A. from Harvard Business School. Qualifications: We believe that Mr. Rickertsen is well-suited to serve on our Board due to his finance and capital markets experience across various industries and his experience as an outside director of several public companies, which provides the Board with important perspectives on corporate governance matters. |

  11. Nominees

    | The Board Recommends a Vote “FOR” Each of the Nominees Named Herein for Election as Director. | ✔ |

  12. Nominees

    | MICROSTRATEGY | 2024 Proxy Statement | 11 |

  13. Board of Directors

    Board of Directors Our Board is currently comprised of Messrs. Saylor, Le, Graham, Patten, Rechan, and Rickertsen. During 2023, the Board met six times and acted by unanimous written consent four times. During 2023, (i) Mr. Saylor attended five of the six meetings of the Board (the meeting that Mr. Saylor did not attend related to the Company’s indemnification arrangements with Mr. Saylor and Mr. Saylor recused himself from that meeting—see “Related Person Transactions Policy and Related Person Transactions”) and (ii) all other Board members attended all the meetings of the Board. The Board has determined that each of the Company’s non-employee directors is an independent director as defined in Rule 5605(a)(2) of the Nasdaq Stock Market, Inc. (“Nasdaq”) Marketplace Rules. Neither Mr. Saylor nor Mr. Le is an independent director under Rule 5605(a)(2) because they are our Executive Chairman and Chief Executive Officer (“CEO”), respectively. Independent directors collectively constituted during 2023, currently constitute, and following the Annual Meeting (if all nominees are elected) will constitute a majority of the Board. The independent members of the Board regularly meet in executive sessions without any employee director or other members of management in attendance. The Company’s certificate of incorporation and by-laws require the Company to indemnify its directors and officers to the fullest extent permitted by Delaware law. As discussed above, in 2021, the Company determined not to renew its directors’ and officers’ liability insurance policy due to the Company’s inability to obtain acceptable terms due to market trends toward higher premiums and the novelty of the Company’s bitcoin acquisition strategy. Instead, Mr. Saylor agreed with the Company to personally provide coverage substantially equivalent to such a policy for up to a one-year period, and the other members of the Board were third-party beneficiaries thereof. As further discussed above, in 2022 and 2023, the Company entered into additional agreements with Mr. Saylor, who continued to personally provide directors’ and officers’ liability coverage. In order to assess the independence of its non-employee directors, the Board considered the indemnification agreements that the Company entered into with Mr. Saylor relating to the indemnification of directors and officers. The Board concluded that because such arrangements are governed by binding agreements with the Company as to which Mr. Saylor does not have unilateral discretion to perform, and because they are intended to replace or supplement, as applicable, an ordinary course insurance policy, those agreements would not impair the independent judgment of the other non-employee members of the Board.

  14. EXECUTIVE AND DIRECTOR COMPENSATION

    EXECUTIVE AND DIRECTOR COMPENSATION

  15. General Philosophy and Compensation Objectives: Performance, Alignment, and Retention

    General Philosophy and Compensation Objectives: Performance, Alignment, and Retention The goal of our compensation program for our executive officers is the same as our goal for operating the Company—to create long-term value for our stockholders. In furtherance of this goal, our executive compensation program is designed to reward, motivate, and provide incentives for exceptional individual performance and effective leadership by our executive officers, to reward executive officers for superior financial and operating results of the Company, and to align our executive officers’ interests with those of our stockholders. It is also designed to attract and retain executive officers who may be presented with other professional opportunities, including ones at potentially higher compensation levels, by providing an overall compensation package that is market competitive over time and provides significant long-term incentives through the grant of equity awards. These objectives serve as the basis for determining the overall compensation of each executive officer, all in the context of general economic and industry conditions and Company performance. Key elements of our executive compensation program for 2023 that were designed to achieve these objectives included:

  16. General Philosophy and Compensation Objectives: Performance, Alignment, and Retention

    | • | a discretionary annual cash bonus target for each of Messrs. Le, Kang, and Shao designed to help retain, reward, and motivate them based on a subjective evaluation of their achievement of strategic, operational, and financial objectives in their areas of responsibility that support our goal of enhancing stockholder value; |

  17. General Philosophy and Compensation Objectives: Performance, Alignment, and Retention

    | • | long-term incentives in the form of (i) stock options granted to each of Messrs. Adkisson and Kang, and (ii) RSUs and Performance Stock Units (“PSUs”) granted to each of Messrs. Le, Adkisson, Kang and Shao, under the 2023 Equity Plan, designed to provide them with long-term performance-based incentives that are intended to further align their interests with those of our stockholders. |

  18. Role of the Compensation Consultant

    Role of the Compensation Consultant The Compensation Committee engaged WTW in May 2022 to review and assist the Company in developing a compensation peer group, and to review the Company’s executive and Board compensation to inform the Compensation Committee’s and Mr. Le’s determinations of compensation levels for 2023. The Compensation Committee reviewed analyses prepared by WTW in making compensation determinations with respect to the President & CEO’s base salary and cash bonus target for 2023, as well as the structure and amounts of equity compensation to be awarded to all executive officers in 2023, and Mr. Le reviewed these analyses in making base salary and cash bonus target determinations for 2023 with respect to Messrs. Kang and Shao. Additionally, the Compensation Committee reviewed analyses prepared by WTW in assessing changes to compensation of non-employee directors to be effective in 2023. The Company also engaged WTW to advise on equity compensation matters generally in 2022, and on compensation matters generally in 2023. WTW did not provide any other services to us or our affiliates during 2023 and the work of WTW for the Compensation Committee did not result in any conflicts of interest. In 2022, in consultation with WTW, we developed the below peer group, which informed the Compensation Committee’s and Mr. Le’s review of our executive compensation program for 2023. We selected our peer group of companies based on a combination of factors, including industry classification and size (including employee count, revenue, and market capitalization). The Compensation Committee expects to review the relevance of the peer group intermittently and determine if any future modifications are necessary at that time.

  19. Role of the Compensation Consultant

    | • Teradata Corp. | • Guidewire Software, Inc. | • Altair Engineering Inc. | • SPS Commerce Inc. | | • Pegasystems Inc. | • Coupa Software Inc.* | • Progress Software Corp. | • Everbridge, Inc. | | • Verint Systems Inc. | • Five9, Inc. | • EVO Payments, Inc.** | • DOMO, Inc. | | • New Relic, Inc. | • Alteryx, Inc. | • EverCommerce Inc. | • Enfusion, Inc. |

  20. Role of the Compensation Consultant

    | * Coupa Software Inc. was acquired in February 2023 and is no longer publicly traded. |

  21. Role of the Compensation Consultant

    | ** Evo Payments, Inc. was acquired in March 2023 and is no longer publicly traded. |

  22. Role of the Compensation Consultant

    As of June 1, 2022, our market capitalization was at the 38th percentile relative to our peer group, and for the year ended December 31, 2021 (the most recently completed fiscal year when this peer group was approved), our revenue was at the 38th percentile relative to our peer group.

  23. Role of the Compensation Consultant

    | 20 | MICROSTRATEGY | 2024 Proxy Statement |

  24. Determining Compensation

    Each of the Compensation Committee and the President & CEO, as applicable, subjectively combine the compensation elements for each executive officer in a manner that each believes is consistent with the executive officer’s role and contributions to the Company. The Compensation Committee and the President & CEO incorporate flexibility into our compensation program and the assessment process to respond to and adjust for an evolving and dynamic business environment. We believe that our executive compensation program promotes long-term value to stockholders by retaining key executive officers and rewarding them for increases in the market price of our Class A Stock and for financial, operational and strategic results that are expected to contribute to long-term stockholder value. The Compensation Committee and the President & CEO generally establish performance-based cash bonus arrangements and generally make determinations regarding adjustments to base salary and cash bonus targets for our executive officers in the first quarter of each year. Determinations regarding the actual payment of bonuses are generally made in the first quarter following the applicable performance period. The Compensation Committee and the President & CEO, as applicable, established compensation based on their respective subjective determinations of the factors discussed above as well by reference to peer group benchmarking. In particular, the Compensation Committee reviewed analyses prepared by WTW with respect to (i) the President & CEO’s cash compensation when setting the President & CEO’s base salary and bonus targets for 2023 and (ii) the structure of equity compensation for executive officers more broadly when making equity grants in June 2023. The Compensation Committee also considered recommendations from the President & CEO in establishing compensation arrangements. Additionally, Mr. Le referred to WTW’s analysis when setting base salary and bonus target compensation for Messrs. Kang and Shao. The Compensation Committee and President & CEO did not assign relative weights to Company and individual performance in establishing these compensation arrangements, but instead made respective subjective determinations after considering such performances collectively.

  25. Employment and Severance Agreements

    Employment and Severance Agreements As a general matter, our executive officers do not have standing employment, severance, or change-of-control agreements. However, Mr. Kang’s offer letter in connection with the commencement of his employment with the Company included a one-time reporting bonus of $100,000, and a severance arrangement in the event that his employment was terminated without cause, as defined in the offer letter, in an amount equal to twelve (12) months of base salary and an additional amount to be determined by the Company not to exceed his annual bonus potential prorated for the time he worked in that year up through his termination date, contingent on signing and not revoking a general release of claims against the Company. Additionally, in connection with his resignation from the Company in July 2023, Mr. Adkisson entered into an agreement with the Company, which provided for a lump-sum cash payment of $100,000. Our Executive Chairman and President & CEO serve at the will of the Board, and the other executive officers serve at the will of the Board and the President & CEO. This approach is consistent with our employment and compensation philosophy that relies significantly upon providing incentives based on performance and aligning the interests of executive officers with those of our stockholders.

  26. Employment and Severance Agreements

    | MICROSTRATEGY | 2024 Proxy Statement | 21 |

  27. Elements Used to Achieve 2023 Compensation Objectives

    Elements Used to Achieve 2023 Compensation Objectives The principal elements of our 2023 compensation program for each of our named executive officers were the following: Michael J. Saylor: a stock option award under the 2013 Equity Plan granted in 2014 and perquisites consisting principally of security and transportation-related benefits and associated tax gross-up payments. Phong Le: a base salary, a discretionary annual cash bonus target, stock option awards granted in 2017, 2018, 2019, 2021 and 2022 and RSUs granted in 2020 under the 2013 Equity Plan, and RSUs and PSUs granted in 2023 under the 2023 Equity Plan. Kevin Adkisson: a base salary, quarterly cash bonus awards pursuant to his sales management variable compensation plan, stock option awards granted in 2019, 2020, 2021 and 2022 and RSUs granted in 2020 and 2021 under the 2013 Equity Plan, and a stock option award, RSUs and PSUs granted in 2023 under the 2023 Equity Plan. Additionally, in connection with his resignation from the Company in July 2023, Mr. Adkisson entered into an agreement with the Company, which provided for a lump-sum cash payment of $100,000. Andrew Kang: a base salary, a discretionary annual cash bonus target, a stock option award and RSUs granted in 2022 under the 2013 Equity Plan, and a stock option award, RSUs and PSUs granted in 2023 under the 2023 Equity Plan. Wei-Ming Shao: a base salary, a discretionary annual cash bonus target, stock option awards granted in 2018, 2019, 2021 and 2022 and RSUs granted in 2020 under the 2013 Equity Plan, and RSUs and PSUs granted in 2023 under the 2023 Equity Plan. We also provided each of our executive officers with certain perquisites and other benefits in 2023 that the Compensation Committee and the President & CEO, as applicable, believe are reasonable and consistent with the objectives of our executive compensation program. Each of these compensation elements satisfies one or more of our performance, alignment, and retention objectives, as described more fully below.

  28. Base Salary

    | • | the competitive market for talented managers with comparable experience and expertise; and |

  29. Base Salary

    In addition, in making their determinations with respect to 2023 base salaries, the Compensation Committee and the President & CEO considered analyses received from WTW regarding executive compensation in the Company’s peer group and WTW’s conclusion that the 2022 base salaries for the named executive officers other than Mr. Adkisson, were in the upper quartile of the peer group and generally competitive with the market. Mr. Adkisson’s base salary was in the 50th percentile. Each position is unique, not only in function, but also in terms of the market norms for compensation and the pool of potential executives who may be available to fill that particular role. Given these unique conditions, determinations regarding base salaries are unique to each executive officer and do not necessarily reflect any comparative judgments.

  30. Cash Bonuses

    Cash Bonuses Our cash bonus compensation is designed to help (i) attract and retain talented executive officers, (ii) reward achievement of strategic, operational, and financial objectives that support our goal of enhancing stockholder value, and (iii) motivate executive officers to achieve superior performance in their areas of responsibility. Together with equity awards, our cash bonus compensation program is one of the main vehicles for providing performance-based compensation to executive officers. The Compensation Committee, and the President & CEO, as applicable, consider various factors in determining the form and structure of the cash bonus arrangement that is most appropriate for attracting, retaining, rewarding, and motivating the individual executive officer. No Saylor Cash Bonus In September 2014, at Mr. Saylor’s request, the Compensation Committee eliminated Mr. Saylor’s incentive cash bonus arrangement. The Compensation Committee considered that, following the reduction in Mr. Saylor’s salary and elimination of his incentive cash bonus arrangement, a larger percentage of Mr. Saylor’s compensation would be directly tied to the Company’s stock performance, which is consistent with the Company’s compensation policies approved by stockholders at our 2023 Annual Meeting of Stockholders, and that such change would not adversely impact his financial stability. The Compensation Committee considered Mr. Saylor’s compensation arrangements in each of February 2023 and February 2024 and, in each case at Mr. Saylor’s request, did not establish a cash bonus arrangement for him. Discretionary Annual Cash Bonuses For 2023, Mr. Le’s compensation included a discretionary annual cash bonus target established based in part on the Compensation Committee’s subjective evaluation of the appropriate targets to help retain, reward and motivate Mr. Le, and the compensation of Messrs. Kang and Shao included discretionary annual cash bonus targets established based in part on the President & CEO’s subjective evaluation of the appropriate targets to help retain, reward, and motivate them. In addition, in setting the discretionary annual cash bonus targets for 2023, the Compensation Committee and the President & CEO considered analyses received from WTW regarding executive target bonuses as a percentage of base salary in the Company’s peer group and WTW’s conclusion that the 2022 target bonuses of the Company’s executive officers were generally aligned with the 75th percentile of the peer group or higher, with Mr. Kang’s cash bonus target approximating the 50th percentile. In making their determinations of the discretionary annual cash bonus targets for 2023, the Compensation Committee and the President & CEO, as applicable, took into account the same factors described above with respect to base salary determinations. In setting target bonus amounts for the other executive officers, the President & CEO also considered the expectations for the business department headed by each executive officer and the executive officers’ potential for achieving the expectations. The Compensation Committee and the President & CEO, as applicable, believed that a discretionary annual cash bonus arrangement was an appropriate mechanism for retaining, rewarding, and motivating Messrs. Le, Kang, and Shao with respect to 2023 because each of these executive officers was responsible for, among other things, strategic and operational objectives that cannot always be measured by traditional financial metrics, which included the following objectives: Phong Le: contributions to operational, financial, and human capital management initiatives, including bitcoin-related initiatives and business strategy; Andrew Kang: financial, accounting, and strategic management initiatives, including his contributions to the Company’s equity offering transactions and bitcoin strategy; and Ming Shao: oversight of corporate governance, commercial contracts, legal risk management, and other legal matters, as well as bitcoin-related initiatives and business strategy and his efforts in structuring and executing the Company’s equity offering transactions. The Compensation Committee determined to leave the discretionary bonus target for Mr. Le unchanged for 2023, and the President & CEO determined to leave discretionary bonus targets for Messrs. Kang, and Shao unchanged for 2023, in each case after taking into consideration the factors described above. The Compensation Committee, in determining the bonus award for Mr. Le with respect to 2023, and the President & CEO, in determining the bonus awards for Messrs. Kang and Shao with respect to 2023, subjectively determined each

  31. Cash Bonuses

    | 24 | MICROSTRATEGY | 2024 Proxy Statement |

  32. Cash Bonuses

    applicable executive officer’s overall performance and achievement of various strategic, operational, and financial objectives, in relation to the target bonus amount that was previously established for the applicable executive officer, all in the context of general economic and industry conditions and Company performance. For example, the Compensation Committee and the President & CEO subjectively determined that the applicable executive officers enhanced our operational excellence, achieved specific elements of our long-term strategic plans, and implemented development of certain growth initiatives. In addition, the Compensation Committee with respect to Mr. Le and the President & CEO with respect to Messrs. Kang and Shao, subjectively determined that each of the applicable executive officers had made continued progress in the area of his responsibility. The Compensation Committee also considered Mr. Le’s efforts in implementing the Company’s bitcoin strategy and business transformation initiative, and the additional responsibilities he undertook in connection with his assumption of the CEO role, and the President & CEO also considered (i) Mr. Kang’s efforts in developing and implementing the Company’s bitcoin strategy, and his efforts in structuring and executing the Company’s “at the market” equity offering, and (ii) Mr. Shao’s efforts in implementing the corporate governance and regulatory compliance aspects of the bitcoin strategy and his efforts in structuring and executing the Company’s “at the market” equity offering. None of these achievements was assigned any specific weighting or dollar amount of the total bonus. The Compensation Committee calculated the individual bonus payout to Mr. Le, and the President & CEO calculated individual bonus payouts to each of Messrs. Kang and Shao utilizing the following formula:

  33. Cash Bonuses

    | Individual Annual Cash Bonus Target for 2023 ($)X | Individual Achievement Percentage (%)X | Company Performance Percentage (%) | = | Individual Bonus Payout ($) |

  34. Cash Bonuses

    Individual Achievement Percentage. The individual achievement percentage is based on the Compensation Committee’s and President & CEO’s, as applicable, subjective assessment of each executive officer’s overall performance and achievement of objectives for 2023. A higher performance assessment drives a higher individual percentage (and vice-versa) such that it is possible for an executive officer who exceeds performance expectations to receive an individual achievement percentage above 100% and for an executive officer with a low performance assessment to receive less than his bonus target or no bonus. The performance assessments were based on an overall subjective assessment of each executive officer’s performance and no single factor was determinative in the individual achievement percentage, nor was the impact of any individual factor on the individual achievement percentage quantifiable. Company Performance Percentage. The Company performance percentage is based on the President & CEO’s quarterly subjective assessment (and, in the case of the President & CEO’s discretionary annual bonus, the Compensation Committee’s annual subjective assessment) of the Company’s overall business and product development achievements and financial performance. The Compensation Committee and the President & CEO, as applicable, did not determine any pre-set range for the Company performance percentage and approved a Company performance percentage of 85% for 2023, which was equivalent to the average Company performance percentage used in determining bonuses for all Company employees on a discretionary bonus plan. In the first quarter of 2024, the Compensation Committee determined the cash bonus award for Mr. Le with respect to performance in 2023, and the President & CEO determined the cash bonus awards to Messrs. Kang and Shao with respect to performance in 2023, as follows:

  35. Cash Bonuses

    | | Individual Annual Cash Bonus Target for 2023 ($) | Individual Achievement Percentage (%) | Company Performance Percentage (%) | Individual Bonus Payout ($) | | Phong Q. Le | 800,000 | 100 | 85 | 680,000 | | Andrew Kang | 500,000 | 100 | 85 | 425,000 | | W. Ming Shao | 500,000 | 100 | 85 | 425,000 |

  36. Cash Bonuses

    | MICROSTRATEGY | 2024 Proxy Statement | 25 |

  37. Cash Bonuses

    Sales Management Variable Compensation Plan In February 2023, the President & CEO established a performance-based sales management variable compensation plan for Mr. Adkisson with respect to his performance for 2023. Since Mr. Adkisson was responsible for managing the Company’s worldwide sales organization, the President & CEO believed that basing Mr. Adkisson’s cash bonus plan on his department’s “Contribution” (as defined below) would provide the appropriate reward and incentive for his efforts to strengthen sales execution and operating margin growth. The President & CEO believed that establishing Contribution as a performance metric would help to align Mr. Adkisson’s interests with those of our stockholders because increases in this metric directly increase the overall value of the Company to stockholders. Under the Sales Management Variable Compensation Plan, Mr. Adkisson was entitled to receive cash bonus compensation, determined and payable quarterly, based on the achievement of three performance criteria:

  38. Cash Bonuses

    | • | Individual Achievement – a quantitative measure serving as the baseline for Target Compensation (as described below); |

  39. Cash Bonuses

    | • | Teamwork – a qualitative measure based on individual and team performance; and |

  40. Cash Bonuses

    | • | Professional Development – a qualitative measure focused on professional growth. |

  41. Cash Bonuses

    Individual Achievement, calculated by reference to Contribution as described below, served as the baseline for quarterly Target Compensation, with performance in Teamwork and Professional Development having the potential to serve as accelerators or decelerators to Target Compensation or to defer variable compensation payout. “Target Compensation” was calculated by multiplying Contribution (defined below) by 1.25%. “Contribution” was calculated by subtracting Revenue Budget from Revenue, each as defined below. “Revenue Budget” was the minimum threshold Revenue that Mr. Adkisson’s business unit was required to achieve for Mr. Adkisson to be eligible to receive a payout under the Sales Management Variable Compensation Plan. For 2023, Revenue Budget was $24 million for the first quarter, $29.5 million for the second quarter, $31.75 million for the third quarter, and $44.75 million for the fourth quarter, resulting in total Revenue Budget for the year of $130 million. “Revenue” was the value of transactions sold during the measurement period. Revenue only included appropriately executed contracts (orders) that included a complete order package containing all elements necessary for the Company to recognize revenue and where the Company has determined that such revenue was recognizable under U.S. GAAP. Transactions “sold” refers to the non-cancellable amounts of an executed contract, excluding any shipping, taxes, referral fees or similar fees. Any Revenue that was cancelled or written off would be charged back for purposes of calculating Mr. Adkisson’s applicable bonus to the extent he had been given credit for such Revenue in calculating such bonus. Mr. Adkisson was only eligible to receive cash bonus compensation for a given quarter if Revenue exceeded Revenue Budget for the quarter, resulting in positive Contribution. If Contribution was less than zero, then such negative amount was carried forward to the subsequent quarter within the calendar year and included as a charge in computing Contribution under subsequent quarters during the year until the negative amount was eliminated or the calendar year concludes. Mr. Adkisson’s department achieved Contribution of $3.5 million with respect to the first quarter of 2023, and a negative Contribution with respect to the second quarter of 2023, resulting in Target Compensation of $43,951 for the first quarter, and Mr. Adkisson not being eligible to receive a cash bonus under the plan with respect to the second quarter. Mr. Adkisson resigned in July 2023 and was not eligible to receive payments under the plan with respect to the third and fourth quarters of 2023. The President & CEO determined that no adjustment was necessary for achievement of the Teamwork and Professional Development criteria for each of the first and second quarters, and consequently, after certain adjustments relating to revenue received, Mr. Adkisson received an aggregate bonus payout of $40,185 under the Sales Management Variable Compensation Plan with respect to 2023.

  42. Cash Bonuses

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  43. Equity Awards

    Equity Awards In September 2013, the Board adopted the 2013 Equity Plan, and in April 2023, the Board adopted the 2023 Equity Plan, in each case in order to enhance our ability to attract, retain, reward, and motivate persons who are expected to make important contributions to the Company, and to provide such persons with equity ownership opportunities and performance-based incentives that are intended to further align their long-term interests with those of our stockholders. The 2023 Equity Plan replaced the 2013 Equity Plan, though awards outstanding under the 2013 Equity Plan as of the effective date of the 2023 Equity Plan remain outstanding. Employees, officers, directors, consultants, and advisors (as the terms consultants and advisors are defined and interpreted for purposes of Form S-8 under the Securities Act or any successor form) of the Company may be granted awards under the 2023 Equity Plan. As of March 26, 2024, an aggregate of 225,736 shares of our Class A Stock are authorized for issuance under the 2023 Equity Plan. No additional awards may be issued under the 2013 Equity Plan. The 2023 Equity Plan provides for the grant of incentive stock options intended to qualify as such under Section 422 of the Code, non-statutory stock options, restricted stock, RSUs, stock appreciation rights, other stock-based awards, and cash-based awards. Any type of award granted under the 2023 Equity Plan may be granted subject to the achievement of specified performance goals. In 2020, the Compensation Committee granted RSUs to each executive officer, other than Mr. Saylor, in lieu of stock options. In 2021, the Compensation Committee returned to primarily granting stock option awards to executive officers. In 2022, WTW conducted an assessment of our equity compensation program for executive officers and made several recommendations, including that we tie equity awards more closely to defined annual long term incentive values based on market data and other factors, and that we diversify the types of awards granted to include RSUs and PSUs. In 2023, based upon advice from WTW, the Compensation Committee granted PSUs to executive officers for the first time, and transitioned to a targeted allocation of equity award value of approximately 40% to stock options, 40% to PSUs and 20% to RSUs for executive officers. In granting equity awards, the Compensation Committee, based on recommendations from the President & CEO, made subjective evaluations of appropriate award amounts to help attract, retain, reward, and motivate the applicable executive officer based on the scope of the executive officer’s responsibilities, employment, and compensation history with us, overall compensation arrangements, including outstanding equity awards held by the executive officer, and long-term potential to enhance stockholder value, all in the context of general economic and industry conditions and Company performance. The Compensation Committee also took into account the stock option grants made in the third and fourth quarters of 2022 to Messrs. Le and Shao, respectively, when determining the grant of equity awards in June 2023, and determined not to grant additional option awards to Messrs. Le and Shao, and to instead grant to them only PSUs and RSUs. Accordingly, in June 2023 Messrs. Le and Shao received awards with value allocated approximately 67% to PSUs and 33% to RSUs. The Compensation Committee generally targeted for each of the executive officers a total value of equity awards in the upper quartile relative to the Company’s peer group. Pursuant to the 2023 Equity Plan, the Compensation Committee granted the following awards to named executive officers in June 2023:

  44. Equity Awards

    | | Stock Options | PSUs | RSUs | | Phong Q. Le | — | 9,537 | 4,768 | | Andrew Kang | 4,949 | 3,406 | 1,703 | | W. Ming Shao | — | 3,065 | 1,533 | | Kevin Adkisson(1) | 1,980 | 1,362 | 681 |

  45. Equity Awards

    | (1) Mr. Adkisson’s awards granted in June 2023 expired unvested in connection with his resignation from the Company in July 2023. |

  46. Equity Awards

    In each case, the awards were granted on the terms and conditions as described below. All outstanding awards are also subject to such other terms and conditions as are set forth in the applicable plan and the applicable award agreement. Stock Options Outstanding stock options generally vest as to 25% of the original number of shares subject to the award on the first anniversary of the grant date and as to an additional 25% on each anniversary thereafter until the award is vested in full,

  47. Equity Awards

    | MICROSTRATEGY | 2024 Proxy Statement | 27 |

  48. Equity Awards

    unless earlier terminated in accordance with the terms of the applicable equity plan or the applicable award agreement; provided that awards granted to executive officers will vest in full, to the extent not already vested, upon the occurrence of a “change in control event” if the executive officer is terminated without “cause” by the Company or resigns for “good reason” (in each case as defined in the applicable award agreement) within 12 months following the change in control event or if the acquiring company does not assume the award or substitute equivalent awards. The outstanding stock options have an exercise price per share equal to the closing sale price of our Class A Stock as quoted on Nasdaq on the grant date and expire ten years following the grant date. If a stock option recipient dies or becomes disabled before the final exercise date of an option, the option shall be exercisable within one year of the date of such death or disability; provided that such option shall be exercisable only to the extent that it was exercisable by the award recipient on the date of his or her death or disability and only until the final exercise date. If a stock option recipient ceases to be eligible to receive award grants under the applicable plan, including through termination of employment without cause, the stock option recipient generally retains the right to exercise his or her option to the extent that the option was exercisable on the date of such cessation for a period of three months after such cessation. However, if the stock option recipient is terminated for cause, the stock option recipient’s right to exercise his or her option terminates in full immediately upon such termination, and if the stock option recipient violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement, or other agreement between the stock option recipient and the Company, the stock option recipient’s right to exercise his or her option terminates in full immediately upon such violation. RSUs Outstanding RSUs generally vest as to 25% of the original number of shares subject to the award on the first anniversary of the grant date and as to an additional 25% on each anniversary thereafter until the award is vested in full, unless earlier terminated in accordance with the terms of the applicable equity plan or the applicable award agreement; provided that awards granted to executive officers will vest in full, to the extent not already vested, upon the occurrence of a “change in control event” if the executive officer is terminated without “cause” by the Company or resigns for “good reason” (in each case as defined in the applicable award agreement) within 12 months following the change in control event or if the acquiring company does not assume the award or substitute equivalent awards. Absent a change in control event, if an RSU recipient ceases to be eligible to receive award grants under the 2013 Equity Plan or the 2023 Equity Plan, as applicable, including through termination of employment without cause, the RSUs that are unvested as of such time are forfeited immediately to the Company without payment of consideration. PSUs Based upon advice received from WTW, in June 2023 the Compensation Committee for the first time granted performance awards, which are subject to achievement of a total stockholder return (“TSR”) performance goal. Executive officers received a “target” number of PSUs. The number of PSUs that will vest will be determined based on the Company’s TSR over a three-year performance period (June 1, 2023 – May 31, 2026) relative to the TSR of the group of companies in the Nasdaq Composite Index. The Compensation Committee granted PSUs with a three-year cliff vesting period and potential payout factors in excess of 100% to promote retention. The Committee selected the Nasdaq Composite Index to measure the Company’s relative TSR because this index provides a sufficient number of comparable companies and represents a significant majority of the companies with which the Company competes for stockholder capital. The measurement of the achievement of the TSR performance goal will be made based on the average stock price over a 90-trading day period for both the Company and the companies in the Nasdaq Composite Index as of both the beginning and the end of the performance period. Only companies that are in the Nasdaq Composite Index as of both the date that is 90 trading days before the first day of the performance period through, and including, the last day of the performance period will be included in the measurement. The measurement of the 90-trading day period at the beginning of the performance period begins on the day immediately prior to the first day of the performance period. The measurement of the 90-trading day period at the end of the performance period ends on the last day of the performance period.

  49. Equity Awards

    | 28 | MICROSTRATEGY | 2024 Proxy Statement |

  50. Equity Awards

    The number of PSUs, if any, that vest will be determined and certified by the Compensation Committee following the end of the performance period and will be equal to the product of (i) the target number of PSUs and (ii) the applicable payout factor, calculated as set forth below:

  51. Equity Awards

    | The Company’s TSR Performance Stated as a Comparative Percentile Ranking Within the Members of the Nasdaq Composite Index | Payout Factor | | ≥ 75th Percentile | 200% | | 50th Percentile | 100% | | 25th Percentile | 50% | | < 25th Percentile | 0% |

  52. Equity Awards

    The payout factor will be linearly interpolated for TSR performance between the 25th and 75th percentiles. Upon a change in control, achievement of the performance goal will be measured as of immediately prior to the closing of the change in control transaction, and the award will convert to a time-vested RSU for the remainder of the performance period, subject to acceleration on a qualifying termination (i.e., termination without cause or for good reason). Upon death or disability of a participant, the award would remain outstanding and the participant or his or her estate would receive the pro rata portion of the shares that otherwise would have vested had the participant remained in service through the completion of the applicable performance period and certification of the achievement of the performance goal by the Compensation Committee. Except as noted above, the participant is required to remain an eligible participant under the 2023 Equity Plan through the Compensation Committee’s certification of the achievement of the performance goal (which we expect to occur shortly after the end of the performance period) for the PSU to be eligible for vesting. Additionally, several executive officers were granted equity awards in prior years. For a description of awards outstanding for each of the named executive officers as of December 31, 2023, please see the information in the table “Outstanding Equity Awards at 2023 Fiscal Year-end” in “Executive Officer Compensation.” We believe that stock option awards, RSUs, PSUs, discretionary and sales management variable cash bonus arrangements, and our sales performance incentive fund arrangements, as applicable, provide appropriate short and long-term incentives to our executive officers to increase stockholder value through their collective efforts in corporate functions, product design, engineering, marketing, and sales and services to our customers.

  53. Change-in-control Agreement

    Change-in-control Agreement The stock option awards and RSUs granted under the 2013 Equity Plan and 2023 Equity Plan to our executive officers provide or provided, as applicable, (A) for stock options and RSUs vesting in full (i) upon the occurrence of a change in control event under specified conditions or (ii) upon the termination without cause or resignation for good reason of the applicable executive officer within 12 months following a change in control event, and (B) for PSUs, upon a change in control, measurement of achievement of the performance goal as of immediately prior to the closing of the change in control transaction, with the award converting to a time-vested RSU for the remainder of the performance period, subject to acceleration on a qualifying termination (i.e., termination without cause or for good reason), in each case as described above in the “—Elements Used to Achieve 2023 Compensation Objectives—Equity Awards” section. For details on potential payments upon a change in control, please see “Executive and Director Compensation—Executive Officer Compensation—Potential Payments Upon Termination or Change in Control.”

  54. Summary Compensation Table

    Summary Compensation Table The table below sets forth certain information concerning the compensation of the executive officers for the fiscal years ended December 31, 2023, December 31, 2022, and December 31, 2021, as applicable.

  55. Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | Michael J. Saylor(4) Chairman of the Board & Executive Chairman (Former Principal Executive Officer) | 2023 | 1 | — | — | — | 799,669(14) | 799,670 | | | 2022 | 1 | — | — | — | 670,811 | 670,812 | | | 2021 | 1 | — | — | — | 2,780,240 | 2,780,241 | | Phong Q. Le(5) President & Chief Executive Officer | 2023 | 1,000,000 | 680,000(8) | 5,954,383 | — | 393,872(15) | 8,028,255 | | | 2022 | 939,773 | 770,000(8) | — | 18,324,800 | 139,787 | 20,174,360 | | | 2021 | 900,000 | 1,000,000(8) | — | 15,237,200 | 1,581,384 | 18,718,584 | | Andrew Kang(6) | 2023 | 640,000 | 425,000(9) | 2,126,570 | 920,217 | 46,067(16) | 4,157,854 | | Senior Executive Vice President & Chief Financial Officer | 2022 | 413,333 | 424,658(10) | 987,200 | 1,921,500 | 5,080 | 3,751,771 | | Kevin L. Adkisson(7) | 2023 | 233,333 | 142,370(11) | 850,378 | 368,161 | 100,904(17) | 1,695,146 | | Senior Executive Vice President & Chief Revenue Officer | 2022 | 400,000 | 645,804(12) | — | 4,550,200 | 27,563 | 5,623,567 | | W. Ming Shao Senior Executive Vice President, General Counsel & Secretary | 2023 | 640,000 | 425,000(13) | 1,913,802 | — | 52,344(18) | 3,031,146 | | | 2022 | 640,000 | 550,000(13) | — | 6,983,800 | 36,487 | 8,210,287 | | | 2021 | 600,000 | 650,000(13) | — | 7,618,600 | 42,445 | 8,911,045 |

  56. Summary Compensation Table

    | (1) Stock Awards include RSUs granted prior to 2023, and RSUs and PSUs granted in 2023. Represents the grant date fair value of RSUs granted under the 2013 Equity Plan and the 2023 Equity Plan and PSUs granted under the 2023 Equity Plan, calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” See Note 11 “Share-based Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for the assumptions made in determining grant date fair value for the RSUs and PSUs. This amount reflects the grant date fair value for the RSUs and PSUs and is not intended to represent the value, if any, that has been or will be actually realized by the individual. |

  57. Summary Compensation Table

    | (2) Represents the grant date fair value of an option to purchase shares of our Class A Stock granted under the 2013 Equity Plan and the 2023 Equity Plan, calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” See Note 11 “Share-based Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for the assumptions made in determining grant date fair value for the option. This amount reflects the grant date fair value for the option and is not intended to represent the value, if any, that has been or will be actually realized by the individual. |

  58. Summary Compensation Table

    | (3) All Other Compensation includes the value of perquisites and other personal benefits, employer 401(k) Plan Match, and group term Life Insurance for the executive officer, as well as tax gross-ups paid to such executive officer for the fiscal year. |

  59. Summary Compensation Table

    | For purposes of the amounts reported in this column for 2023: |

  60. Summary Compensation Table

    | • | “401(k) Plan Match” refers to matching payments of up to $5,000 annually made by the Company under the Company’s 401(k) plan, which is a benefit available to most Company employees; |

  61. Summary Compensation Table

    | • | “Company Aircraft” refers to the Bombardier Global Express XRS aircraft owned by the Company collectively with additional aircraft that we may lease or charter; |

  62. Summary Compensation Table

    | • | “Life Insurance” refers to premiums paid by the Company with respect to a group term life insurance plan, which is a benefit available to most Company employees; |

  63. Summary Compensation Table

    | • | “President’s Club” refers to an annual trip and related events for sales and services personnel who have met specified performance criteria as well as certain executive officers, other Company personnel, and their guests; |

  64. Summary Compensation Table

    | • | “Security Program” refers to the expenses related to the security program pursuant to which the Company pays for various costs related to the provision of security to Mr. Saylor; |

  65. Summary Compensation Table

    | 32 | MICROSTRATEGY | 2024 Proxy Statement |

  66. Summary Compensation Table

    | • | “Supplemental Disability Insurance” refers to premiums paid by the Company with respect to individual disability insurance policies provided to certain Company personnel, including eligible executive officers, as a supplement to the group disability insurance that is available to most Company employees. |

  67. Summary Compensation Table

    | • | “Executive Physicals” refers to the costs of annual healthcare screenings provided by a third-party health care provider for which certain company executives, other than Mr. Saylor, are eligible. |

  68. Summary Compensation Table

    | See “Executive and Director Compensation—Compensation Discussion and Analysis” for further discussion of the benefits referred to in this footnote. |

  69. Summary Compensation Table

    | With respect to each item of All Other Compensation, we report the aggregate incremental cost to the Company. We generally calculate aggregate incremental cost to the Company by disregarding fixed costs that the Company has already incurred as a general matter but are necessary to provide the item and aggregating only the variable costs that the Company incurs as a result of providing the item to the executive officer. We calculate aggregate incremental cost to the Company for the following perquisites that represented the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for a particular executive officer as indicated below: |

  70. Summary Compensation Table

    | • | With respect to the Company Aircraft, we have determined that there is no aggregate incremental cost to the Company when personal guests of executive officers accompany executive officers on business flights. When the purpose of the flight is personal in nature, we determine the aggregate incremental cost of providing the Company Aircraft for personal use by aggregating variable costs associated with the particular flight such as fuel costs, crew travel expenses, casual and temporary labor costs, aviation staff expenses, aircraft trip planning fees, handler and landing fees, and catering costs. In addition, with respect to 2021 only, when determining the aggregate incremental cost of providing the Company Aircraft for personal use we also attributed to such personal use a pro rata share of the fixed costs of maintaining the Company Aircraft during the year (determined based on the total flight hours of an executive officer’s personal use in 2021 compared to the total flight hours of the Company Aircraft for all uses during 2021), due to the overall use of the Company Aircraft in 2021 having been primarily for personal rather than business purposes. This resulted in a substantial increase in aggregate incremental cost per flight hour of personal use for 2021 as compared to 2022 and 2023. |

  71. Summary Compensation Table

    | • | With respect to Mr. Saylor’s use of assistants for personal matters, we have determined that there is no aggregate incremental cost to the Company as such Company personnel are otherwise performing services for the Company in connection with the business of the Company. |

  72. Summary Compensation Table

    | • | With respect to the Security Program, we have determined that the aggregate incremental cost to the Company of providing this benefit is calculated by prorating certain aggregated costs associated with the operation of the Security Program by the percentage of time spent by the security specialists on matters that are personal in nature. Such costs include compensation and fees for the security specialists, travel, parking, lodging, and meal expenses associated with the provision of security services, consulting and advisory fees, rent and related office expenses, training, and other business costs. In addition, the aggregate incremental cost to the Company of providing the Security Program includes amounts paid by the Company to enhance the operation and security of the network infrastructure at certain properties owned by Mr. Saylor. |

  73. Summary Compensation Table

    | (4) Mr. Saylor ceased serving as the Company’s Chief Executive Officer and began serving as the Company’s Executive Chairman in August 2022. |

  74. Summary Compensation Table

    | (5) From July 2020 to May 2022, Mr. Le was appointed as the Company’s President and ceased serving as the Company’s Senior Executive Vice President & Chief Operating Officer, but remained in his role as Chief Financial Officer. Mr. Le ceased serving as the Company’s Chief Financial Officer in May 2022 and began serving as the Company’s President & Chief Executive Officer in August 2022. |

  75. Summary Compensation Table

    | (6) Mr. Kang joined the Company and began serving as the Company’s Senior Executive Vice President & Chief Financial Officer in May 2022. |

  76. Summary Compensation Table

    | (7) Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer effective as of July 5, 2023. |

  77. Summary Compensation Table

    | (8) Amount shown represents a discretionary cash bonus awarded to Mr. Le for the respective fiscal year. |

  78. Summary Compensation Table

    | (9) Amount shown represents a discretionary cash bonus awarded to Mr. Kang for 2023. |

  79. Summary Compensation Table

    | (10) Amount shown represents (i) a one-time reporting bonus of $100,000 and (ii) a prorated discretionary cash bonus of $324,658 awarded to Mr. Kang for 2022. The cash bonus award was a prorated amount to reflect time worked in 2022. |

  80. Summary Compensation Table

    | (11) Amount shown represents (i) a one-time severance payment of $100,000 and (ii) a cash bonus award pursuant to Mr. Adkisson’s 2023 Sales Management Variable Compensation Plan (“Variable Compensation Plan”) made with respect to Mr. Adkisson’s performance in the first quarter of 2023. Such amount was determined according to performance criteria relating to revenue, teamwork, and professional development goals specified in the Variable Compensation Plan. |

  81. Summary Compensation Table

    | (12) Amount shown represents quarterly cash bonus awards pursuant to Mr. Adkisson’s 2022 Sales Management Variable Compensation Plan (“2022 Variable Compensation Plan”) as well as additional promotional cash bonus awards paid to Mr. Adkisson pursuant to a sales performance inventive fund (“SPIF”) for migrating customers to our MCE (Cloud) service, all of which were made with respect to Mr. Adkisson’s performance in 2022. The amounts of these individual cash bonus awards were determined according to performance criteria relating to revenue, teamwork, and professional development goals specified in the 2022 Variable Compensation Plan and under the SPIF, as applicable. |

  82. Summary Compensation Table

    | (13) Amount shown represents a discretionary cash bonus awarded to Mr. Shao for the respective fiscal year. |

  83. Summary Compensation Table

    | (14) Amount shown consists of (i) $293,987 in connection with the Security Program, (ii) $351,003 in connection with personal use of the Company Aircraft, (iii) $143,740 in tax gross-ups paid to Mr. Saylor for 2023, (iv) $6,000 in connection with personal use of a Company website, and (v) $4,939 in Supplemental Disability Insurance. |

  84. Summary Compensation Table

    | (15) Amount shown consists of (i) $238,288 in connection with personal use of the Company Aircraft, (ii) $133,000 in tax gross-ups paid to Mr. Le for 2023, (iii) $13,714 in connection with President’s Club, (iv) $5,000 in connection with 401(k) Plan Match, (v) $3,750 in connection with Executive Physicals and (vi) $120 in connection with Life Insurance. |

  85. Summary Compensation Table

    | (16) Amount shown consists of (i) $22,480 in connection with President’s Club, (ii) $18,467 in tax gross-ups paid to Mr. Kang for 2023, (iii) $5,000 in connection with 401(k) Plan Match and (iv) $120 in connection with Life Insurance. |

  86. Summary Compensation Table

    | (17) Amount shown consists of (i) $53,846 in connection with accrued but unused vacation in connection with Mr. Adkisson’s resignation from the Company, (ii) $23,387 in connection with President’s Club, (iii) $18,601 in tax gross-ups paid to Mr. Adkisson for 2023, (iv) $5,000 in 401(k) Plan Match, and (v) $70 in connection with Life Insurance. |

  87. Summary Compensation Table

    | (18) Amount shown consists of (i) $19,167 in tax gross-ups paid to Mr. Shao for 2023, (ii) $15,592 in connection with President’s Club, (iii) $12,465 in Supplemental Disability Insurance, (iv) $5,000 in connection with 401(k) Plan Match, and (v) $120 in connection with Life Insurance. |

  88. Summary Compensation Table

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  89. Grants of Plan-based Awards for 2023

    Grants of Plan-based Awards for 2023 The following table sets forth certain information concerning grants of plan-based awards to the executive officers for the fiscal year ended December 31, 2023:

  90. Grants of Plan-based Awards for 2023

    | | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(1) | All Other Option Awards: Number of Securities Underlying Options (#)(2) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | Name | Grant Date | Grant Type | | | | | | Michael J. Saylor | — | — | — | — | — | — | | Phong Q. Le | 6/5/2023 | RSUs | 4,768 | — | — | $1,317,684 | | Phong Q. Le | 6/5/2023 | PSUs | 9,537 | — | — | $4,636,699 | | Kevin L. Adkisson(4) | 6/5/2023 | Options | — | 1,980 | $276.36 | $368,161 | | Kevin L. Adkisson(4) | 6/5/2023 | RSUs | 681 | — | — | $188,201 | | Kevin L. Adkisson(4) | 6/5/2023 | PSUs | 1,362 | — | — | $662,177 | | Andrew Kang | 6/5/2023 | Options | — | 4,949 | $276.36 | $920,217 | | Andrew Kang | 6/5/2023 | RSUs | 1,703 | — | — | $470,641 | | Andrew Kang | 6/5/2023 | PSUs | 3,406 | — | — | $1,655,929 | | W. Ming Shao | 6/5/2023 | RSUs | 1,533 | — | — | $423,660 | | W. Ming Shao | 6/5/2023 | PSUs | 3,065 | — | — | $1,490,142 |

  91. Grants of Plan-based Awards for 2023

    | (1) Amount shown relates to RSUs and PSUs. The RSUs (i) will vest as to 25% of the original number of RSUs on the first anniversary of the date of grant and will vest as to an additional 25% on each anniversary thereafter until fully vested, unless earlier terminated in accordance with the terms of the 2023 Equity Plan and/or the applicable RSU agreement, (ii) provide for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable RSU agreement, and (iii) are otherwise subject to such other terms and conditions as are set forth in the RSU agreement and the 2023 Equity Plan. Each PSU represents a contingent right to receive shares of Class A Stock of between 0% and 200% of the target number of units, with the percentage determined based on our relative TSR as compared to the TSR of members of the Nasdaq Composite Index over a three-year performance period (June 1, 2023 to May 31, 2026). Vesting is subject to certification by the Compensation Committee of the level of achievement of the performance goal and the participant’s continued service through that date. The PSUs are otherwise subject to such other terms and conditions as are set forth in the PSU agreement and the 2023 Equity Plan. The “target” number of PSUs is provided in this table. |

  92. Grants of Plan-based Awards for 2023

    | (2) The amounts shown relate to options to purchase shares of our Class A Stock granted under the 2023 Equity Plan. Each option (i) is not intended to qualify as an incentive stock option, (ii) expires on the tenth anniversary of the date of grant, (iii) will vest as to 25% of the original number of shares subject to the stock option on the first anniversary of the date of grant and vests as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 2023 Equity Plan or the applicable option agreement, (iv) provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable option agreement, and (v) is otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2023 Equity Plan. |

  93. Grants of Plan-based Awards for 2023

    | (3) Amounts calculated in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” See Note 11 “Share-based Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for the assumptions made in determining grant date fair values. These amounts reflect the grant date fair values for the options and RSUs and are not intended to represent the value, if any, that has been or will be actually realized by the individual. |

  94. Grants of Plan-based Awards for 2023

    | (4) Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer effective as of July 5, 2023. |

  95. Grants of Plan-based Awards for 2023

    | 34 | MICROSTRATEGY | 2024 Proxy Statement |

  96. Outstanding Equity Awards at 2023 Fiscal Year-end

    Outstanding Equity Awards at 2023 Fiscal Year-end The following table sets forth information concerning unexercised options and unvested RSUs and PSUs outstanding as of December 31, 2023, for each of the executive officers. All option awards, RSUs and PSUs were with respect to our Class A Stock and were granted under the 2013 Equity Plan and 2023 Equity Plan.

  97. Outstanding Equity Awards at 2023 Fiscal Year-end

    | | Option Awards | | | | Stock Awards | | | Name | Number of Securities Underlying Unexercised Options (#) Exercisable(1) | Number of Securities Underlying Unexercised Options (#) Unexercisable(1) | Option Exercise Price per Share ($) | Option Expiration Date | Number of Shares or Units of Stock that Have Not Vested (#)(2) | Market Value of Shares or Units of Stock that Have Not Vested ($)(3) | | Michael J. Saylor | 400,000 | — | 121.43 | 4/30/2024 | — | — | | Phong Q. Le | 5,000 | — | 189.16 | 3/8/2027 | — | — | | | 65,000 | — | 151.60 | 11/22/2029 | — | — | | | 20,000 | 20,000 | 691.23 | 2/23/2031 | — | — | | | 10,000 | 30,000 | 404.60 | 2/17/2032 | — | — | | | 15,000 | 45,000 | 231.15 | 9/13/2032 | — | — | | | — | — | — | — | 250 | 48,068 | | | — | — | — | — | 4,768 | 1,317,648 | | | — | — | — | — | 9,537 | 2,635,645 | | Kevin L. Adkisson(4) | — | — | — | — | — | — | | Andrew Kang | 3,750 | 11,250 | 197.44 | 5/18/2032 | — | — | | | — | 4,949 | 276.36 | 6/5/2033 | — | — | | | — | — | — | — | 3,750 | 740,400 | | | — | — | — | — | 1,703 | 470,641 | | | — | — | — | — | 3,406 | 941,282 | | W. Ming Shao | 12,500 | — | 151.60 | 11/22/2029 | — | — | | | 10,000 | 10,000 | 691.23 | 2/23/2031 | — | — | | | 5,000 | 15,000 | 404.60 | 2/17/2032 | — | — | | | 5,000 | 15,000 | 175.00 | 11/10/2032 | — | — | | | — | — | — | — | 250 | 48,068 | | | — | — | — | — | 1,533 | 423,660 | | | — | — | — | — | 3,065 | 847,043 |

  98. Outstanding Equity Awards at 2023 Fiscal Year-end

    | (1) Each option (i) is not intended to qualify as an incentive stock option, (ii) has an exercise price per share equal to the closing sale price of our Class A Stock as quoted on Nasdaq on the grant date, (iii) expires on the tenth anniversary of the grant date, (iv) vested or will vest as to 25% of the original number of shares subject to the stock option on the first anniversary of the grant date and vests as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan, the 2023 Equity Plan or the applicable option agreement, (v) provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable option agreement, and (vi) is otherwise subject to such other terms and conditions as are set forth in the applicable option agreement, the 2013 Equity Plan and the 2023 Equity Plan. |

  99. Outstanding Equity Awards at 2023 Fiscal Year-end

    | (2) Amounts shown relate to RSUs and PSUs. The RSUs (i) will vest as to 25% of the underlying shares on the first anniversary of the grant date and as to an additional 25% on each anniversary thereafter until the RSUs are vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan, the 2023 Equity Plan or the applicable RSU agreement, (ii) provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable RSU agreement, and (iii) is otherwise subject to such other terms and conditions as are set forth in the applicable RSU agreement, the 2013 Equity Plan and the 2023 Equity Plan, as applicable. Each PSU represents a contingent right to receive shares of Class A Stock of between 0% and 200% of the target number of units, with the percentage determined based on our relative TSR as compared to the TSR of members of the Nasdaq Composite Index over a three-year performance period (June 1, 2023 to May 31, 2026). Vesting is subject to certification by the Compensation Committee of the level of achievement of the performance goal and the participant’s continued service through that date. The PSUs are otherwise subject to such other terms and conditions as are set forth in the PSU agreement and the 2023 Equity Plan. The “target” number of PSUs is provided in this table. |

  100. Outstanding Equity Awards at 2023 Fiscal Year-end

    | MICROSTRATEGY | 2024 Proxy Statement | 35 |

  101. Outstanding Equity Awards at 2023 Fiscal Year-end

    | (3) The market value of the RSUs and PSUs is based on the closing price of our Class A Stock on Nasdaq on December 29, 2023. |

  102. Outstanding Equity Awards at 2023 Fiscal Year-end

    | (4) Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer on July 5, 2023 and has no exercisable options or unvested RSUs or PSUs remaining as of December 31, 2023. |

  103. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023 The following table sets forth information concerning (i) the number of shares acquired and the value realized on exercise or transfer for value of stock options and (ii) the number of shares acquired, and the value realized on vesting of stock awards during the fiscal year ended December 31, 2023, by each of the executive officers.

  104. Option Exercises and Stock Vested in 2023

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) | | Michael J. Saylor | — | — | — | — | | Phong Q. Le | 35,000 | $8,898,232 | 250 | $126,220 | | Kevin L. Adkisson(1) | 15,000 | $2,172,250 | — | — | | Andrew Kang | — | — | 1,250 | $359,475 | | W. Ming Shao | 12,000 | $2,368,344 | 250 | $126,220 |

  105. Option Exercises and Stock Vested in 2023

    | (1) Although Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer on July 5, 2023, his employment with the Company continued through July 31, 2023, as a result of which options to purchase an additional 3,125 shares vested on July 31, 2023 prior to his departure from the Company. |

  106. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The options to purchase shares of our Class A Stock granted under the 2013 Equity Plan and the2023 Equity Plan to the executive officers outstanding as of December 31, 2023 provide for vesting in full in connection with a change in control event if the executive officer is terminated without “cause” by the Company or resigns for “good reason,” in each case as defined in the applicable option agreement, within 12 months following the change in control event or if the acquiring company does not assume the options or substitute equivalent awards. If such a change in control event had occurred on December 31, 2023, and the specified conditions as set forth in the applicable option agreement were satisfied:

  107. Potential Payments Upon Termination or Change in Control

    | • | no portion of the option held by Mr. Saylor would have been subject to accelerated vesting because the option was already fully vested as of December 31, 2023; |

  108. Potential Payments Upon Termination or Change in Control

    | • | vesting of the options held by Mr. Le would have been accelerated with respect to (i) 30,000 shares granted in February 2022, representing a benefit of $6,810,600, based on the difference between $404.60, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023 and (ii) 45,000 shares granted in September 2022, representing a benefit of $18,016,650, based on the difference between $231.25, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023; no portion of the remaining options held by Mr. Le would have been subject to accelerated vesting, or if subject to accelerated vesting would have resulted in a benefit, because (i) with respect to the option granted in 2017, the remaining shares underlying such option were already fully vested as of December 31, 2023, (ii) with respect to the option granted in 2019, the remaining shares underlying such option were already fully vested as of December 31, 2023, and (iii) with respect to the option granted in 2021, the remaining shares underlying such option were either already vested as of December 31, 2023 or would not have resulted in a benefit because the exercise price of the shares underlying such option was greater than the closing price of our Class A Stock on Nasdaq on December 29, 2023; |

  109. Potential Payments Upon Termination or Change in Control

    | • | vesting of the options held by Mr. Kang would have been accelerated with respect to (i) 11,250 shares granted in May 2022, representing a benefit of $4,884,525, based on the difference between $197.44, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023 and (ii) 4,949 shares granted in June 2023, representing a benefit of $1,758,182, based on the difference between $276.36, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023; |

  110. Potential Payments Upon Termination or Change in Control

    | 36 | MICROSTRATEGY | 2024 Proxy Statement |

  111. Potential Payments Upon Termination or Change in Control

    | • | vesting of the options held by Mr. Shao would have been accelerated with respect to (i) 15,000 shares granted in February 2022, representing a benefit of $3,405,300, based on the difference between $404.60, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023 and (ii) 15,000 shares granted in November 2022, representing a benefit of $6,849,300, based on the difference between $175.00, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023; no portion of the remaining options held by Mr. Shao would have been subject to accelerated vesting, or if subject to accelerated vesting would have resulted in a benefit, because (i) with respect to the option granted in 2019, the remaining shares underlying such option were already vested as of December 31, 2023 and (ii) with respect to the option granted in 2021, the remaining shares underlying such option were either already vested as of December 31, 2023 or would not have resulted in a benefit because the exercise price of the shares underlying such option was greater than the closing price of our Class A Stock on Nasdaq on December 29, 2023. |

  112. Potential Payments Upon Termination or Change in Control

    As with the options, the RSUs granted under the 2013 Equity Plan and 2023 Equity Plan to the executive officers outstanding as of December 31, 2023 provide for vesting in full in connection with a change in control event if the executive officer is terminated without “cause” by the Company or resigns for “good reason,” in each case as defined in the applicable RSU agreement, within 12 months following the change in control event or if the acquiring company does not assume the RSUs or substitute equivalent awards. If such a change in control event had occurred on December 31, 2023, and the specified conditions as set forth in the applicable RSU agreement were satisfied, (i) the vesting of the RSUs held by Mr. Le would have been accelerated with respect to 5,018 shares, representing a benefit of $3,169,469, (ii) the vesting of the RSUs held by Mr. Kang would have been accelerated with respect to 5,453 shares, representing a benefit of $3,444,224, and (iii) the vesting of the RSUs held by Mr. Shao would have been accelerated with respect to 1,783 shares representing a benefit of $1,126,178, in each case based on the $631.62 closing price of our Class A Stock on Nasdaq on December 29, 2023. For PSUs, upon a change in control, achievement of the performance goal will be measured as of immediately prior to the closing of the change in control transaction, and the award will convert to a time-vested RSU for the remainder of the performance period, subject to acceleration on a qualifying termination (i.e., termination without cause or for good reason), in each case as described above in the “—Elements Used to Achieve 2023 Compensation Objectives—Equity Awards” section. If such events had occurred on December 31, 2023, (i) the vesting of the PSUs held by Mr. Le would have been accelerated with respect to 19,074 shares, representing a benefit of $12,047,520, (ii) the vesting of the PSUs held by Mr. Kang would have been accelerated with respect to 6,812 shares, representing a benefit of $4,302,595, and (iii) the vesting of the PSUs held by Mr. Shao would have been accelerated with respect to 6,130 shares representing a benefit of $3,871,831 in each case based on the $631.62 closing price of our Class A Stock on Nasdaq on December 29, 2023 and reflecting a payout factor of 200%. In addition, under the offer letter he executed in connection with joining the Company, Mr. Kang is entitled to a severance payment in the event that his employment was terminated without cause, as defined in the offer letter, in an amount equal to twelve (12) months of base salary and an additional amount to be determined by the Company not to exceed his annual bonus potential prorated for the time he worked in that year up through his termination date, contingent on signing and not revoking a general release of claims against the Company. Assuming that the triggering event for such payment occurred on December 31, 2023, Mr. Kang would have been entitled to a severance payment of $640,000 (his base salary as of such date) plus an additional amount to be determined by the Company of up to $500,000 (his annual bonus potential for 2023). In connection with his resignation in July 2023, Mr. Adkisson entered into an agreement with the Company, which provided for a lump-sum cash payment of $100,000.

  113. Potential Payments Upon Termination or Change in Control

    | MICROSTRATEGY | 2024 Proxy Statement | 37 |

  114. Director Compensation

    Director Compensation In 2023, prior to our 2023 Annual Meeting, each non-employee or “outside” director received a fee of $37,500 for each quarterly meeting of the Board that the outside director attended in person, telephonically, or virtually. Each outside director who was (i) a member of the Audit Committee also received a fee of $10,000 (or $12,500 in the case of the Chair of the Audit Committee) for each quarterly meeting of the Audit Committee, that the outside director attended in person, telephonically, or virtually, and (ii) a member of the Compensation Committee also received a fee of $5,000 (or $7,500 in the case of the Chair of the Compensation Committee), which was paid quarterly (provided that, in order to be eligible to receive the fee with respect to a fiscal quarter, the outside director must have served on the Compensation Committee on the last day of such fiscal quarter). Each outside director was also entitled to receive up to an additional $12,000 of fees in the aggregate in any fiscal quarter for additional services delegated by the Board to such outside director in the outside director’s capacity as a member of the Audit Committee, the Compensation Committee, the Board, or any other committee of the Board; provided that any such fee paid with respect to a particular service was required to be approved by the Board following the completion of such service by the outside director. In April 2023, the Compensation Committee recommended, and the Board approved, amendments to the compensation program for the Company’s outside directors, which commenced with the conclusion of the 2023 Annual Meeting. Since our 2023 Annual Meeting, each outside director is entitled to receive an annual retainer of $100,000 ($25,000 per quarter), which is not contingent on meeting attendance. Each outside director who is a member of the Audit Committee is also entitled to receive a quarterly fee of $10,000 (or $15,000 in the case of the Chair of the Audit Committee); provided that, in order to be eligible to receive the fee with respect to a fiscal quarter, the outside director must serve on the Audit Committee on the last day of such fiscal quarter. Each outside director who is a member of the Compensation Committee is also entitled to receive a quarterly fee of $5,000 (or $7,500 in the case of the Chair of the Compensation Committee); provided that, in order to be eligible to receive the fee with respect to a fiscal quarter, the outside director must serve on the Compensation Committee on the last day of such fiscal quarter. Outside directors are no longer eligible to receive additional retainers for additional delegated services. Beginning in April 2021, outside directors have received all fees for their service on the Board in bitcoin instead of cash. At the time of payment, the fees are converted from U.S. dollars into bitcoin by the payment processor and then deposited into the digital wallet of the applicable outside director. Additionally, pursuant to the 2023 Equity Plan, on May 31 of each year beginning in 2023, each non-employee director who is then serving as a non-employee director as of such date is automatically granted Awards with an aggregate fair value (calculated based on grant date fair value for financial reporting purposes) equal to $300,000, half of which ($150,000) consist of non-statutory stock options and half of which ($150,000) consist of RSUs. Each such Award vests on the first anniversary of the date of grant. In establishing the new director compensation program, the Board and Compensation Committee reviewed analysis and recommendations prepared by WTW, including peer group data and percentiles provided by WTW as a baseline for comparison. The estimated total remuneration associated with the new compensation program for all the Company’s current outside directors in the aggregate (calculated by including annual retainers and equity awards for all outside directors but excluding all committee retainers and meeting fees) is at approximately the 50th percentile relative to the peer group. From time to time, the Board may hold meetings and other related activities in various locations for which the Company pays for the expenses of outside directors and their guests (“Meeting Activities”). In addition, we may hold, host, or otherwise arrange parties, outings, or other similar entertainment events for which the Company pays for the expenses of outside directors and their guests (“Entertainment Events”). We may also request that outside directors participate in conferences, symposia, and other similar events or activities relating to our business for which the Company pays the expenses of outside directors and their guests (“Company-sponsored Activities” and collectively with Meeting Activities and Entertainment Events, “MicroStrategy Activities”). Any employee director is also eligible to participate in MicroStrategy Activities. We are also authorized to make available, from time to time, for personal use by outside directors: tickets to sporting, charity, dining, entertainment, or similar events, as well as use of corporate suites, club memberships, or similar facilities that we may acquire; Company-owned vehicles and related driving services; the services of one or more drivers for vehicles other than Company-owned vehicles; and the Company’s Bombardier Global Express XRS aircraft (collectively with additional aircraft that we may lease or charter, the “Company Aircraft”). Outside directors may make personal use of

  115. Director Compensation

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  116. Director Compensation

    Company Aircraft; provided that (a) all outside directors are invited by the Company to travel on the applicable flight and (b) such personal use is in connection with the outside director’s participation in one or more (1) Meeting Activities, (2) Entertainment Events to which all outside directors have been invited, or (3) Company-sponsored Activities. In addition, outside directors may make personal use of Company Aircraft on a “ride-along” basis. We also make available to outside directors certain medical, dental, and vision insurance plan benefits that we offer to our U.S. employees. To the extent that any of the arrangements described above, other than fee compensation, result in imputed compensation to an outside director, we pay to (or withhold and pay to the appropriate taxing authority on behalf of) such outside director a tax gross-up in cash approximating his (i) federal and state income and payroll taxes on the taxable income associated with such arrangements, plus (ii) federal and state income and payroll taxes on the taxes that the outside director may incur as a result of the payment of taxes by us with respect to the imputed compensation, subject to the aggregate amount limitations described above in “Executive and Director Compensation—Compensation Discussion and Analysis,” if applicable. The following table sets forth information concerning the compensation of each of our non-employee directors for the fiscal year ended December 31, 2023. For more information regarding the compensation of our employee directors, Messrs. Saylor and Le, please see “Executive and Director Compensation—Executive Officer Compensation” above.

  117. Director Compensation

    | Name | Fees Earned or Paid in Bitcoin ($) | Equity Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | | Stephen X. Graham | 170,000 | 299,896 | 7,600 | 477,496 | | Jarrod M. Patten | 172,500 | 299,896 | — | 472,396 | | Leslie J. Rechan | 132,500 | 299,896 | 12,980 | 445,376 | | Carl J. Rickertsen | 182,500 | 299,896 | 8,665 | 491,061 |

  118. Director Compensation

    | (1) Represents the aggregate grant date fair value of automatic annual grants made pursuant to our 2023 Equity Plan to each non-employee director on May 31, 2023, and calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” Pursuant to the 2023 Equity Plan, in May 2023 we granted to each of our non-employee directors 497 RSUs and options to purchase 761 shares of our Class A Stock. See Note 11 “Share-based Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for the assumptions made in determining grant date fair value for these options. The amounts reflect the grant date fair value for these options and are not intended to represent the value, if any, that has been or will be actually realized by the individual. As of December 31, 2023, our non-employee directors held the following shares of our Class A Stock and the following number of outstanding options to purchase shares of our Class A Stock: |

  119. Director Compensation

    | Name | Shares of Class A Stock | Outstanding Options(a) | Unvested RSUs(b) | | Stephen X. Graham | 200 | 39,761 | 497 | | Jarrod M. Patten | — | 60,761 | 497 | | Leslie J. Rechan | 2,000 | 22,011 | 497 | | Carl J. Rickertsen | 2,000 | 18,261 | 497 |

  120. Director Compensation

    | (a) Each option (i) is not intended to qualify as an incentive stock option, (ii) has an exercise price per share equal to the closing sale price of our Class A Stock as quoted on Nasdaq on the grant date, (iii) expires on the tenth anniversary of the grant date, and (iv) provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable option agreement. Stock options granted prior to May 2023 vested or will vest as to 25% of the original number of shares subject to the stock option on the first anniversary of the grant date and vests as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan or the applicable option agreement, and are otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2013 Equity Plan. Stock options granted in May 2023 will vest as to 100% of the original number of shares subject to the stock option on the first anniversary of the grant date, unless earlier terminated in accordance with the terms of the 2023 Equity Plan or the applicable option agreement, and are otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2023 Equity Plan. |

  121. Director Compensation

    | (b) Each RSU vests as to 100% on the first anniversary of the grant date, unless earlier terminated in accordance with the terms of the 2023 Equity Plan or the applicable RSU agreement, and is otherwise subject to such other terms and conditions as are set forth in the applicable RSU agreement and the 2023 Equity Plan. The RSU agreement provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable RSU agreement. |

  122. Director Compensation

    | (2) All Other Compensation includes the value of perquisites and other personal benefits for the director, as well as tax gross-ups paid to the applicable director for the fiscal year, but does not include perquisites and other personal benefits for the director if the total value of all perquisites and other personal benefits for such director in a given fiscal year was less than $10,000. For the fiscal year ended December 31, 2023, the figures shown in this column represent only tax gross-ups paid to the applicable director for the fiscal year. Personal use of the Company Aircraft by Messrs. Graham, Patten, and Rickertsen resulted in no aggregate incremental cost to the Company. |

  123. Director Compensation

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  124. Pay Versus Performance

    Pay Versus Performance As discussed in “Executive and Director Compensation—Compensation Discussion and Analysis,” the goal of our compensation program for our executive officers is the same as our goal for operating the Company—to create long-term value for our stockholders. The following tables and related disclosures provide information about (i) the “total compensation” of our principal executive officers (the “PEOs”) and our other named executive officers (the “Non-PEO Named Executive Officers”) as presented in the Summary Compensation Table on page 32 (the “SCT Amounts”), (ii) the “compensation actually paid” to our PEOs and our Non-PEO Named Executive Officers, as calculated pursuant to the SEC’s pay-versus-performance rules (the “CAP Amounts”), (iii) certain financial performance measures, and (iv) the relationship of the CAP Amounts to those financial performance measures. This disclosure has been prepared in accordance with Item 402(v) of Regulation S-K under the Exchange Act and does not necessarily reflect value actually realized by the executives or how our Compensation Committee or President & CEO, as applicable, make compensation decisions in light of Company or individual performance. For discussion of how our Compensation Committee and the President & CEO, as applicable, make compensation decisions, please see “Executive and Director Compensation—Compensation Discussion and Analysis.”

  125. Pay Versus Performance

    Pay Versus Performance

  126. Pay Versus Performance

    | Year | Summary Compen- sation Table Total for First PEO (Saylor) (1) ($) | Summary Compen- sation Table Total for Second PEO (Le) (1) ($) | Compen- sation Actually Paid to First PEO (Saylor) (2) ($) | Compen- sation Actually Paid to Second PEO (Le) (2) ($) | Average Summary Compen- sation Table Total for Non-PEO Named Executive Officers (3) ($) | Average Compen- sation Actually Paid to Non-PEO Named Executive Officers (2) ($) | Value of Initial Fixed $100 Investment Based on: | | Net Income (Loss) ($) (in thousands) (6) | Non-GAAP Adjusted Income from Operations ($) (in thousands) (6) | | | | | | | | | Total Shareholder Return (4) ($) | Peer Group Total Shareholder Return (5) ($) | | | | 2023 | N/A | 8,028,255 | N/A | 63,649,217 | 2,420,954 | 10,435,349 | 443 | 221 | 429,121 | 70,375 | | 2022 | 670,812 | 20,174,360 | 670,812 | (15,836,288) | 6,282,443 | (1,983,026) | 99 | 133 | (1,469,797) | 74,163 | | 2021 | 2,780,241 | N/A | 2,780,241 | N/A | 12,152,910 | 27,803,878 | 382 | 207 | (535,480) | 90,220 | | 2020 | 407,160 | N/A | 407,160 | N/A | 1,308,109 | 11,094,471 | 272 | 150 | (7,524) | 68,226 |

  127. Pay Versus Performance

    | (1) Mr. Saylor (our “First PEO”) served as our PEO in 2020, 2021 and until August 7, 2022. Mr. Le (our “Second PEO”) is the current PEO and has served as our PEO since August 8, 2022. The amounts reported under Summary Compensation Table Total for First PEO and Summary Compensation Table Total for Second PEO reflect the total compensation amounts reported in the “Summary Compensation Table” for our First PEO and our Second PEO, respectively, for each respective year in which such individual served as PEO for any portion of the year. |

  128. Pay Versus Performance

    | (2) The following table describes the adjustments, each of which is prescribed by SEC rule, to calculate the CAP Amounts from the SCT Amounts. The SCT Amounts and the CAP Amounts do not reflect the actual amounts of compensation earned by or paid to the executives during the applicable years, but rather are amounts determined in accordance with Item 402 of Regulation S-K under the Exchange Act. |

  129. Pay Versus Performance

    | MICROSTRATEGY | 2024 Proxy Statement | 41 |

  130. Pay Versus Performance

    | Adjustments | 2023 | | 2022 | | | 2021 | | 2020 | | | | PEO ($) | Non-PEO Named Executive Officers * ($) | First PEO ($) | Second PEO ($) | Non-PEO Named Executive Officers* ($) | PEO ($) | Non-PEO Named Executive Officers * ($) | PEO ($) | Non-PEO Named Executive Officers * ($) | | SCT Total Compensation | 8,028,255 | 2,420,954 | 670,812 | 20,174,360 | 6,282,443 | 2,780,241 | 12,152,910 | 407,160 | 1,308,109 | | Adjustments for stock and option awards | | | | | | | | | | | Less: Aggregate value for stock awards and option awards included in SCT Amounts for the covered fiscal year | (5,954,383) | (1,544,782) | — | (18,324,800) | (5,204,525) | — | (10,158,133) | — | (144,203) | | Plus: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end | 14,378,619 | 3,063,917 | — | 8,087,752 | 2,363,133 | — | 6,768,250 | — | 291,412 | | Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end | 35,805,915 | 5,448,715 | — | (14,730,642) | (3,518,449) | — | 6,072,885 | — | 9,894,279 | | Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year | 11,390,811 | 1,481,456 | — | (11,042,958) | (1,905,628) | — | 12,967,966 | — | 424,806 | | Less: Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year | — | (434,911) | — | — | — | — | — | — | (679,932) | | CAP Amounts (as calculated) | 63,649,217 | 10,435,349 | 670,812 | (15,836,288) | (1,983,026) | 2,780,241 | 27,803,878 | 407,160 | 11,094,471 |

  131. Pay Versus Performance

    | 42 | MICROSTRATEGY | 2024 Proxy Statement |

  132. Pay Versus Performance

    | * Amounts presented are averages for the entire group of Non-PEO Named Executive Officers in each respective year. |

  133. Pay Versus Performance

    | Stock option grant date fair values were calculated based on the Black-Scholes valuation model as of the grant date. The calculations of stock option fair values as of each measurement date were made using the Black-Scholes valuation model, using the stock price as of the measurement date with updated assumptions (i.e., expected term, volatility, and risk free rates) as of the measurement date. In updating the expected term assumptions as of each measurement date, we considered the passage of time, exercise history, and “in-the-money” status of awards (i.e. how much the award’s exercise price was above or below the market price of the underlying class A common stock issuable upon exercise of such award) and adjusted the expected term, as applicable. RSU grant date fair values were calculated using the stock price as of the grant date. RSU fair values as of year-end and as of each date of vesting were calculated using the stock price as of the applicable date. All of our PSUs include a market condition such that vesting is subject to the Company’s achievement of a relative total shareholder return performance goal over a three-year performance period. The number of PSUs that will vest will be based on the percentile ranking of the Company’s TSR over the three-year performance period as compared to the TSR of the members of the Nasdaq Composite Index over the same period, with the payout factor ranging from 0% to 200% of the number of PSUs granted. The PSU grant date fair values were calculated using a Monte Carlo simulation as of the grant date. The calculations of unvested PSU fair values as of year-end were made using a Monte Carlo simulation, using the stock price as of year-end with updated assumptions (i.e., expected term, volatility, risk free rates, actual TSR from date of grant to year-end) as of the measurement date. |

  134. Pay Versus Performance

    | (3) The amounts reported under Average Summary Compensation Table Total for Non-PEO Named Executive Officers reflect the average of the total compensation amounts reported in the “Summary Compensation Table” for the Non-PEO Named Executive Officers for each respective year. The Non-PEO Named Executive Officers were: |

  135. Pay Versus Performance

    | • | For 2023, Messrs. Saylor, Adkisson, Kang, and Shao; |

  136. Pay Versus Performance

    | • | For 2022, Messrs. Adkisson, Kang, Lang, and Shao; |

  137. Pay Versus Performance

    | • | For 2021, Messrs. Lang, Le, and Shao; |

  138. Pay Versus Performance

    | • | For 2020, Ms. Mayr and Messrs. Lang, Le, and Shao. |

  139. Pay Versus Performance

    | (4) For the fiscal years ended December 31, 2023, 2022, 2021, and 2020 represents the cumulative total shareholder return (“TSR”) of our Class A Stock (“MicroStrategy TSR”) for the measurement periods beginning as of market close on December 31, 2019 and ending on December 31, 2023, 2022, 2021 and 2020, respectively. |

  140. Pay Versus Performance

    | (5) For the fiscal years ended December 31, 2023, 2022, 2021 and 2020, represents the cumulative TSR of the Nasdaq Computer Index (“Peer Group TSR”) for the measurement periods beginning as of market close on December 31, 2019 and ending on December 31 of each of 2023, 2022, 2021, and 2020, respectively. The Nasdaq Computer Index is the peer group used by the Company for purposes of Item 201(e) of Regulation S-K under the Exchange Act in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023. |

  141. Pay Versus Performance

    | (6) Reflects “Net Income (Loss)” for the fiscal years ended December 31, 2023, 2022, and 2021 included in the Company’s Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, and “Net Income (Loss)” for the fiscal year ended December 31, 2020 included in the Company’s Consolidated Statements of Operations included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |

  142. Pay Versus Performance

    | (7) Non-GAAP Adjusted Income from Operations is a non-GAAP financial measure calculated by adjusting loss from operations to exclude digital asset impairment losses and share-based compensation expense. |

  143. Pay Versus Performance

    The following table lists the six financial and non-financial performance measures that, in our assessment, represent the most important performance measures that our Compensation Committee and President & CEO, as applicable, assess to link the CAP Amounts for our named executive officers for 2023 (our most recently completed fiscal year), to Company performance.

  144. Pay Versus Performance

    | Measure | Nature | Explanation | | Revenue | Financial Measure | Revenue generated by our business intelligence operating strategy in 2023 | | Current Subscription Billings | Financial Measure | A non-GAAP financial measure calculated as the sum of subscription services revenues and change in current deferred subscriptions services revenues | | Non-GAAP Adjusted Income from Operations | Financial Measure | A non-GAAP financial measure calculated by adjusting loss from operations to exclude digital asset impairment losses and share-based compensation expense. | | Non-GAAP Operating Margin | Financial Measure | The ratio of Non-GAAP Adjusted Income from Operations to Total Revenue | | Total Stockholder Return | Financial Measure | Total returns on an investment in shares of Class A Stock | | Bitcoin-Related Initiatives | Non-Financial Measure | Subjective evaluation of the effectiveness of the execution of our strategy to acquire and hold bitcoin to create shareholder value. |

  145. Pay Versus Performance

    | MICROSTRATEGY | 2024 Proxy Statement | 43 |

  146. Pay Versus Performance

    The following charts show graphically the relationships over the past four years of the CAP Amounts for our PEOs and Named Executive Officers as compared to MicroStrategy TSR, Net Income (Loss), and Non-GAAP Adjusted Income from Operations, as well as the relationship between MicroStrategy TSR and Peer Group TSR: For each of the fiscal years shown, we believe the CAP Amounts for our PEO(s) and Non-PEO Named Executive Officers were consistent with the changes in MicroStrategy TSR. Although CAP amounts for our PEO(s) and Named Executive Officers may be correlated to our Net Income (Loss) between the fiscal years ended December 31, 2021 and 2023, this is not a performance measure we use to link compensation actually paid to our named executive officers to Company performance.

  147. Pay Versus Performance

    | 44 | MICROSTRATEGY | 2024 Proxy Statement |

  148. CEO Pay Ratio

    CEO Pay Ratio Pursuant to applicable SEC rules, set forth below is the ratio of the total annual compensation of our CEO as of December 31, 2023 to the median of the total annual compensation of our employees (excluding our CEO) for 2023. The ratio below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. We selected the median employee from the group of 1,933 U.S. and non-U.S., full-time, part-time, temporary, and seasonal workers who were employed as of December 31, 2023 (the “Employee Pool”). The Employee Pool did not include Phong Le, who served as our CEO as of December 31, 2023, or third-party consultants and contractors. In identifying our median employee, we calculated the total annual compensation of each employee for the year ended December 31, 2023, using internal payroll and human resources records. Compensation calculated in foreign currency was converted into U.S. dollars using fixed foreign exchange rates set by our finance department. As disclosed in the Summary Compensation Table on page 32, the total compensation for Mr. Le in 2023, as determined under Item 402 of Regulation S-K, was $8,028,255. The total compensation for our median employee in 2023, as determined under Item 402 of Regulation S-K, was $86,494. Based on the foregoing, for 2023, we estimate the ratio of our CEO’s total annual compensation to our median employee’s total annual compensation to be 92.8 to 1. Given the different methodologies that companies use in estimating their pay ratios, our estimated pay ratio set forth above should not be used as a basis for comparing companies.

  149. CEO Pay Ratio

    | MICROSTRATEGY | 2024 Proxy Statement | 45 |