DEF 14A of Progress Software Corp /Ma
Filed Mar 27, 2024 · FY20230001308179-24-000300
During the Meeting
| Letter From Our Chair | 1 | | Letter From Our Board of Directors | 2 | | Notice of Annual Meeting of Stockholders | 3 | | Business Overview | 6 | | Proxy Statement Summary | 10 | | PROPOSAL 1: Election of Directors | 15 | | Nominees | 15 | | Our Director Resignation Policy | 15 | | Director Nomination Process | 16 | | Director Selection Process | 17 | | Key Board Qualifications, Expertise and Attributes | 19 | | Board Diversity Matrix | 20 | | Director Independence | 20 | | Nominees for Directors | 21 | | Corporate Governance | 30 | | Our Corporate Governance Framework | 30 | | Our Corporate Governance Practices | 31 | | Committees of the Board of Directors | 35 | | Board Oversight | 39 | | Director Compensation | 42 | | Stock Ownership Guidelines | 43 | | Our Executive Officers | 44 | | PROPOSAL 2: Advisory Vote on Compensation of Our Named Executive Officers | 46 | | Compensation Discussion and Analysis | 47 | | Introduction | 47 | | Executive Summary | 48 | | Executive Compensation Program | 51 | | Compensation Review Process | 52 | | Components of Executive Compensation | 54 | | 2023 Executive Compensation Decisions | 56 | | Other Compensation Elements | 62 | | Other Executive Compensation Matters | 63 | | Compensation Committee Report | 65 | | Analysis of Risk Associated with Our Compensation Plans | 66 | | Summary of Executive Compensation | 67 | | Summary Compensation Table | 67 | | Grants of Plan-Based Awards | 69 | | Outstanding Equity Awards | 71 | | Option Exercises and Stock Vested | 72 | | Severance and Change in Control Agreements | 73 | | Estimate of Severance and Change in Control Benefits at Fiscal-Year End | 75 | | CEO Pay Ratio | 78 | | Pay Versus Performance | 79 |
During the Meeting
| ● Base salaries for our named executive officers targeted at market competitive levels ● 100% of annual cash bonuses for our named executive officers tied to achieving pre-established financial objectives that are difficult to attain and require achievement that is closely linked to our annual operating plan and budget and publicly announced expectations ● Payouts under the annual cash bonuses capped at 150% of target amounts | Annual target equity opportunity for our named executive officers: ● 70% of annual equity award is performance-based: ● 50% was delivered in the form of stock awards tied to three-year relative total stockholder return and cumulative operating income metrics ● 20% was delivered in the form of stock options ● 30% was delivered in the form of time-based restricted stock units |
During the Meeting
| What We Do | | What We Don’t Do | | | ✔ Grant performance-based equity awards with performance measures that span three years ✔ Utilize different measures for performance equity awards and cash incentives ✔ Clawback Policy: adopted updated compensation recovery policy in line with the Security and Exchange Commission’s (the “SEC”) clawback rules and Nasdaq’s final listing standards ✔ Cap the amount our executives can earn under our annual incentive plans | | ✖ No perquisites ✖ No guaranteed salary increases or performance-based bonuses ✖ No excise tax gross-ups | |
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| | | | | | | Proposal 3 | Approve an increase in the number of shares authorized for issuance under the 2008 Stock Option and Incentive Plan, as amended and restated | The Board recommends a vote FOR this proposal. > See page 81 |
During the Meeting
We are asking our stockholders to approve an increase in the number of shares authorized for issuance under the Progress Software Corporation 2008 Stock Option and Incentive Plan, as amended and restated (the “2008 Plan”). On March 19, 2024, our Board of Directors unanimously approved an increase in the number of shares of our common stock reserved for issuance under the 2008 Plan by 4,665,000, which is subject to stockholder approval at the Annual Meeting. Our Board of Directors believes that the availability of an adequate reserve of shares for issuance under the 2008 Plan is essential to enable us to maintain our competitive position with respect to recruiting and retaining highly skilled and engaged personnel.
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| | | | | | | Proposal 4 | Ratify the Selection of Deloitte & Touche LLP as Our Independent Registered Public Accounting Firm for Our Current Fiscal Year | The Board recommends a vote FOR this proposal. > See page 91 |
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Based on the Audit Committee’s assessment of Deloitte & Touche LLP’s qualifications and performance, it believes their retention for fiscal 2024 is in the best interests of the Company.
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| Experience and effectiveness ✔ Enhanced audit quality ✔ Effective audit plans and efficient fee structures ✔ Maintaining continuity avoids disruption | Strong independence controls ✔ Thorough Audit Committee oversight ✔ Robust pre-approval policies and limits on non-audit services ✔ Deloitte’s strong internal independence procedures and regulatory framework |
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| | | | | | | Proposal 1 | Election of Directors | The Board recommends a vote FOR each director nominee. |
During the Meeting
Nominees Nine individuals have been nominated for election at the Annual Meeting to hold office until the 2025 Annual Meeting. The nominees were evaluated and recommended by the Nominating and Corporate Governance Committee in accordance with its charter and our Corporate Governance Guidelines. The Board of Directors and Nominating and Corporate Governance Committee believe the nine Board nominees possess the skills, experience and diversity to effectively monitor performance, provide oversight and advise management on the Company’s long-term strategy. For additional information about the nominees and their qualifications, please see the sections of this Proxy Statement entitled “Director Nomination Process” and “Nominees for Directors.” Each director elected at the Annual Meeting will hold office until the next Annual Meeting of Stockholders or special meeting in lieu of such an Annual Meeting or until their successor has been duly elected and qualified, or until their earlier death, resignation or removal. There are no family relationships among any of our executive officers or directors. Each of the director nominees named in this Proxy Statement has agreed to serve as a director if elected and we have no reason to believe that any nominee will be unable to serve. If, before the Annual Meeting, one or more nominees named in this Proxy Statement should become unable to serve or for good cause will not serve, the persons named in the enclosed proxy will vote the shares represented by any proxy received by our Board of Directors for such other person or persons as may thereafter be nominated for director by the Nominating and Corporate Governance Committee and our Board of Directors. Our Director Resignation Policy Our Corporate Governance Guidelines set forth our director resignation policy for directors, which provides that any nominee for election to the Board in an uncontested election who receives a greater number of votes “withheld” from their election than votes “for” such election is required to submit their offer of resignation for consideration by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is to consider all relevant facts and circumstances and recommend to the Board the action to be taken with respect to that offer of resignation. The Board will then act on the Nominating and Corporate Governance Committee’s recommendation. Promptly following the Board’s decision, the Company will disclose that decision and an explanation of such decision in a filing with the SEC or a press release. If the Board accepts a director’s resignation, then the Board may fill any resulting vacancy or may decrease the size of the Board, in each case pursuant to our Bylaws. If a director’s resignation is not accepted by the Board, such director will continue to serve until the next Annual Meeting of Stockholders or special meeting in lieu of such an Annual Meeting or until their successor has been duly elected and qualified, or until their earlier death, resignation or removal. Through this policy, the Board seeks to be accountable to all stockholders and respects the rights of stockholders to express their views through their votes for directors. At the same time, the policy allows the Board sufficient flexibility to make sound evaluations based on the relevant circumstances and to act in the best interest of the Company and its stockholders in the event of a greater than 50% “withhold” vote against a specific director.
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| 2024 Proxy Statement | 15 |
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Director Nomination Process Board Membership Criteria Our Board of Directors has delegated the search for, and recommendation of, director nominees to the Nominating and Corporate Governance Committee. When considering a potential candidate for membership on our Board of Directors, the Nominating and Corporate Governance Committee will consider any criteria it deems appropriate, including, among other things, the background, experience and qualifications of any candidate as well as such candidate’s past or anticipated contributions to our Board of Directors and its committees. At a minimum, each nominee is expected to have:
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| Highest personal and professional integrity | Demonstrated exceptional ability and judgment | Ability to collaborate effectively with other Board members and management to serve the long-term interests of our shareholders |
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In addition, the Nominating and Corporate Governance Committee has established the following minimum requirements:
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| ● | at least five years of business experience; | | ● | no identified conflicts of interest as a prospective director; | | ● | no convictions in a criminal proceeding (aside from traffic violations) during the five years prior to the date of selection; and | | ● | willingness to comply with our Code of Conduct and Business Ethics. |
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The Board of Directors retains the right to modify these minimum qualifications from time-to-time and exceptional candidates who do not meet these criteria may still be considered. The Nominating and Corporate Governance Committee also considers numerous other qualities, skills and characteristics when evaluating director nominees, including:
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| Direct experience in the software industry or in the markets in which we operate | An understanding of, and experience in, accounting, legal, finance, product, sales and/or marketing matters | Experience on other public or private company boards and involvement in corporate governance best practices | | Leadership experience with public companies or other major organizations with a proven track record in developing and executing a strategic vision and making executive-level decisions | M&A experience around the strategic acquisition of complementary businesses while meeting strict financial criteria | Diversity of the Board, considering business and professional experience, educational background, reputation and industry expertise across various market segments and technologies relevant to our business, as well as other relevant attributes |
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The Nominating and Corporate Governance Committee considers a variety of standards that may be appropriate from time-to-time for the overall structure and composition of our Board of Directors, but it does not assign specific weights to the various criteria and no single criterion is necessarily applicable to all prospective nominees.
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Director Selection Process
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| 1 | IDENTIFYING CANDIDATES | | | Generally, the Nominating and Corporate Governance Committee identifies candidates for director nominees in consultation with the other directors and management, using search firms or other advisors, through recommendations submitted by stockholders or through other methods that the Nominating and Corporate Governance Committee deems to be helpful to identify candidates. | | | | | 2 | INCUMBENT DIRECTORS | | | In the case of incumbent directors, the Nominating and Corporate Governance Committee reviews each incumbent director’s overall past service to us, including the number of meetings attended, level of participation, quality of performance and whether the director continues to meet applicable independence standards. | | | | | 3 | MINIMUM QUALIFICATIONS FOR NEW DIRECTOR CANDIDATE | | | In the case of a new director candidate, the Nominating and Corporate Governance Committee confirms that the candidate meets the minimum qualifications for a director nominee established by the Nominating and Corporate Governance Committee. | | | | | 4 | INTERVIEWING CANDIDATES | | | The candidate will also be interviewed by the Nominating and Corporate Governance Committee and other Board members. | | | | | 5 | EVALUATION OF CANDIDATES | | | The Nominating and Corporate Governance Committee then meets to discuss and evaluate the qualities and skills of each candidate, both on an individual basis and considering the overall composition and needs of our Board of Directors. The same procedures apply to all candidates for director nomination, including candidates submitted by stockholders. | | | | | 6 | RECOMMENDATION OF CANDIDATES | | | Based on the results of the evaluation process, the Nominating and Corporate Governance Committee recommends candidates for our Board of Directors’ approval as director nominees for election to our Board of Directors. The Nominating and Corporate Governance Committee also recommends candidates to our Board of Directors for appointment to its committees. |
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| 2024 Proxy Statement | 17 |
During the Meeting
| We Value Diversity The Board and the Nominating and Corporate Governance Committee value diversity of backgrounds, experience, perspectives and leadership in different fields when identifying nominees. We believe that we have assembled a diverse set of directors with the varied backgrounds, experiences and perspectives critical to our long-term success. Presently, more than half of our Board members are diverse in gender, ethnicity or nationality. Our Board of Directors conducts regular self-evaluations. The survey questions include an assessment of whether the composition of the Board is appropriately diverse and possesses the skills and experience consistent with achieving our short and long-term corporate goals. |
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Stockholder Recommendations The Nominating and Corporate Governance Committee will consider director nominee candidates who are recommended by stockholders of the Company. Recommendations sent by stockholders must provide the following information:
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| ● | the name and address of record of the stockholder; | | ● | a representation that the stockholder is a record holder of our common stock, or if the stockholder is not a record holder, evidence of ownership in accordance with Rule 14a-8(b)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); | | ● | the name, age, business and residential address, educational background, current principal occupation or employment and principal occupation or employment for the preceding five full fiscal years of the proposed director candidate; | | ● | a description of the qualifications and background of the proposed director candidate which addresses the minimum qualifications described above; | | ● | a description of all arrangements or understandings between the stockholder and the proposed director candidate; and | | ● | any other information regarding the proposed director candidate that is required to be included in a Proxy Statement filed under SEC rules. |
During the Meeting
The submission must be accompanied by a written consent of the individual to be named in our Proxy Statement as standing for election if nominated by our Board of Directors and to serve if elected by the stockholders. Stockholder recommendations of candidates for election as directors at an Annual Meeting of Stockholders must be timely and submitted to the Company in accordance with the requirements set forth in the Company’s bylaws.
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Key Board Qualifications, Expertise and Attributes The table and graphs below summarize the director nominees’ experience and the qualifications, skills and attributes most relevant to nominate candidates to serve on the Board. Director biographies in the section below entitled “Nominees for Directors” describe each director’s background and relevant experience in more detail.
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| | Director Skills and Experience | | | | | | | | | | | | Cybersecurity Mitigating risk through cybersecurity is a key area of focus for us. The Audit Committee receives quarterly updates from our IT/Cybersecurity Team, including regarding governance processes, projects to strengthen cybersecurity processes and infrastructure. | | | | | | | | | | | | Leadership Our business is complex and ever-evolving. CEOs and individuals with experience leading large business units have proven track records in developing and executing a vision and making executive-level decisions. | | | | | | | | | | | | Finance and Accounting Individuals with financial expertise able to identify and understand the relevant financial considerations applicable to us as a global public company. | | | | | | | | | | | | Technology/Software Industry Progress is the trusted provider of application development and infrastructure software. Those with relevant technology/software experience are better able to understand the opportunities and challenges facing our business. | | | | | | | | | | | | Go-to-Market/Sales Our business depends on successfully creating awareness of our products and entering new markets as well as executing our sales strategy. | | | | | | | | | | | | Strategy Development and execution of a strong corporate strategy is critical to sustaining and growing our business. | | | | | | | | | | | | Product Development Our business depends on our ability to successfully develop our products and expand our offerings. Experience in product development enhances understanding of the challenges we face and facilitates strategic planning in this area. | | | | | | | | | | | | Public Company Board Service and Governance Individuals having experience serving on public company boards better understand the roles and responsibilities of directors and corporate governance best practices. | | | | | | | | | | | | Mergers & Acquisitions A key element of our corporate strategy includes the acquisition of businesses that offer complementary products, services and technologies, augment our revenues and cash flows and meet our strict financial criteria. M&A experience enhances understanding of the complexities, issues and risks involved with any such acquisitions and their integration. | | | | | | | | | | | | Human Capital Management Progress is driven by our people, so expertise in human capital management and related issues is critical to our long-term success. | | | | | | | | | | | | CSR/ESG Corporate social responsibility is an integral part of our culture and we consider environmental, social and governance issues in multiple aspects of our operations. | | | | | | | | | |
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| 2024 Proxy Statement | 19 |
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Board Diversity Matrix
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| As of March 27, 2024 | | | | Total Number of Directors | 9 | | | Part I: Gender Identity | Female | Male | | Directors | 3 | 6 | | Part II: Demographic Background | | | | African American or Black | - | - | | Alaskan Native or American Indian | - | - | | Asian | 1 | 1 | | Hispanic or Latinx | - | - | | Native Hawaiian or Pacific Islander | - | - | | White | 2 | 5 | | Two or More Races or Ethnicities | - | - | | LGBTQ+ | 1 | |
During the Meeting
The above table is intended to comply with the format suggested by Nasdaq (See Nasdaq Rules 5605(f) and 5606). None of our directors declined to disclose their gender or demographic background. Director Independence Having an independent Board is a core component of our governance philosophy. Our Corporate Governance Guidelines provide that, as a matter of policy and consistent with applicable laws, rules and regulations, a majority of the Board should be independent directors, as defined by Nasdaq Rules. To help ensure independence, our Corporate Governance Guidelines contain limits on director outside activities. Directors are expected to avoid any action, position or arrangement that conflicts with an interest of the Company or gives the appearance of a conflict. Directors who also serve as CEOs or in equivalent positions should not serve on more than two boards of public companies in addition to the Board, and other directors should not serve on more than four other boards of public companies in addition to the Company’s board. Based on the review and recommendation of our Nominating and Corporate Governance Committee, our Board has determined that all current directors except Yogesh Gupta (our President and Chief Executive Officer) are independent within the meaning of the director independence standards of Nasdaq and the applicable rules of the SEC.
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Nominees for Directors
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| Director Since: September 2011 Chair since December 2012 Age: 66 Current Board Committees: Nominating and Corporate Governance | John R. Egan Independent | | | Background: Mr. Egan is managing partner of Carruth Management, LLC, a Boston-based Family Office. From October 1986 until September 1998, Mr. Egan served in several executive positions with EMC Corporation, a publicly held global leader in information technology, including Executive Vice President, Products and Offerings, Executive Vice President, Sales and Marketing, Executive Vice President, Operations and Executive Vice President, International Sales. Other Current Public Company Boards: ●Verint Systems, Inc. (Nasdaq: VRNT), a provider of systems to the internet security market, where he serves as Lead Director ● NetScout Systems, Inc. (Nasdaq: NTCT), a network performance management company, where he serves as Lead Director Prior Public Company Boards in Last 5 Years: ●Agile Growth Corp. |
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| Skills and Experiences: | | Cybersecurity | | CSR/ESG | | Leadership | | Finance and Accounting | | | | Technology/Software Industry | | Go-to-Market/ Sales | | Strategy | | Public Company Board Service and Governance | | | | M&A | | | | | | |
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| 2024 Proxy Statement | 21 |
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| Director Since: June 2017 Age: 66 Current Board Committees: Nominating and Corporate Governance (Chair) | Paul T. Dacier Independent | | | Background: Mr. Dacier is currently a partner at Quinn Emanuel Urquhart & Sullivan LLP, a leading law firm devoted to business litigation and arbitration, which he joined in January 2024. From March 2017 to December 2023, he was the General Counsel of Indigo Agriculture, Inc., a Boston-based agricultural technology start-up company that specializes in products designed to maximize crop health and productivity. Previously, Mr. Dacier was the Chief Legal Officer of EMC Corporation from 1990 until September 2016, when EMC was acquired by another technology company. Mr. Dacier was responsible for the worldwide legal affairs of EMC and its subsidiaries and oversaw the company’s internal audit, real estate and facilities organizations, sustainability aviation and government affairs departments. Other Current Public Company Boards: ●AerCap Holdings NV (NYSE: AER), the world’s largest independent commercial aircraft leasing company Prior Public Company Boards in Last 5 Years: ●GTY Technology Holdings, Inc. |
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| Skills and Experiences: | | Leadership | | Cybersecurity | | Strategy | | M&A | | | | Public Company Board Service and Governance | | Technology/Software Industry | | Human Capital Management | | CSR/ESG |
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| Director Since: June 2017 Age: 56 Current Board Committees: Audit; Mergers and Acquisitions/Strategy | Rainer Gawlick Independent | | | Background: Dr. Gawlick is a public and private company board member and currently serves as Chair of Proto Labs, Inc. Dr. Gawlick formerly served as President of Perfecto Mobile, Ltd., a leader in mobile testing, from July 2015 until September 2016 and as Executive Vice President of Global Sales at lntralinks, Inc., a computer software company providing virtual data rooms and other content management services, from April 2012 until July 2015. From August 2008 to April 2012, Dr. Gawlick served as Chief Marketing Officer of Sophos Ltd., a computer security company providing endpoint, network and data protection software. From April 2005 to August 2008, Dr. Gawlick served as Vice President of Worldwide Marketing and Strategy at SolidWorks Corp., a CAD software company. He has also held a variety of executive positions in other technology businesses and was a consultant with McKinsey & Company. Dr. Gawlick holds a Ph.D. in Computer Science from the Massachusetts Institute of Technology. Other Current Public Company Boards: ●Proto Labs, Inc. (NYSE: PRLB), a leading online and technology-enabled quick-turn manufacturer of custom parts for prototyping and short-run production Prior Public Company Boards in Last 5 Years: None |
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| Skills and Experiences: | | Cybersecurity | | Product Development | | CSR/ESG | | Leadership | | | | Finance and Accounting | | Technology/Software Industry | | Go-to-Market/ Sales | | Strategy | | | | Public Company Board Service and Governance | | M&A | | | | |
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| 2024 Proxy Statement | 23 |
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| Director Since: October 2016 Age: 63 | Yogesh Gupta President and Chief Executive Officer | | | Background: Mr. Gupta became our President and Chief Executive Officer in October 2016. Prior to that time, Mr. Gupta served as an advisor to various venture capital and private equity firms from October 2015 until September 2016. Prior to that time, Mr. Gupta was President and Chief Executive Officer at Kaseya, Inc., a provider of IT management software solutions, from June 2013 until July 2015, at which time, Mr. Gupta became Chair of the Board of Directors of Kaseya, Inc., a position he held until October 2015. From July 2012 until June 2013, Mr. Gupta served as an advisor to various venture capital and private equity firms in several mergers and acquisitions opportunities. Mr. Gupta was previously President and Chief Executive Officer of FatWire Software from July 2007 until February 2012, prior to the acquisition of FatWire Software by Oracle Corporation. Prior roles held by Mr. Gupta include Chief Technology Officer at CA, Inc., with which Mr. Gupta held various senior positions. Other Current Public Company Boards: ●Blackbaud, Inc. (Nasdaq: BLKB), a leading provider of software for powering social impact Prior Public Company Boards in Last 5 Years: None |
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| Skills and Experiences: | | Cybersecurity | | Public Company Board Service and Governance | | Human Capital Management | | CSR/ESG | | | | Leadership | | Finance and Accounting | | Technology/Software Industry | | Go-to-Market/ Sales | | | | Strategy | | Product Development | | M&A | | |
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| Director Since: November 2006 Age: 66 Current Board Committees: Audit (Chair); Mergers and Acquisitions/Strategy | Charles F. Kane Independent | | | Background: Mr. Kane is currently Senior Lecturer, Global Economics and Management and Technological Innovation, Entrepreneurship and Strategic Management at the MIT Sloan Graduate Business School of Management. Since November 2006, Mr. Kane has also been a Director and Strategic Advisor of One Laptop Per Child, a non-profit organization that provides computing and internet access for students in the developing world, for which he served as President and Chief Operating Officer from 2008 until 2009. Mr. Kane served as Executive Vice President and Chief Administrative Officer of Global BPO Services Corp., a special purpose acquisition corporation, from July 2007 until March 2008, and as Chief Financial Officer of Global BPO from August 2007 until March 2008. Prior to joining Global BPO, he served as Chief Financial Officer of RSA Security Inc., a provider of e-security solutions, from May 2006 until RSA was acquired by EMC Corporation in October 2006. From July 2003 until May 2006, he served as Chief Financial Officer of Aspen Technology, Inc. (NYSE: AZPN), a publicly traded provider of supply chain management software and professional services. Other Current Public Company Boards: ●Alkami Technology, Inc. (Nasdaq: ALKT), a digital banking platform that enables banks and credit unions to grow confidently and compete with Megabanks and Fintechs ●Symbotic Inc. (Nasdaq: SYM), a robotics hardware and software company for supply chain management Prior Public Company Boards in Last 5 Years: ●Carbonite, Inc. ●Realpage, Inc. |
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| Skills and Experiences: | | Cybersecurity | | Go-to-Market/ Sales | | Product Development | | Human Capital Management | | | | CSR/ESG | | Leadership | | Finance and Accounting | | Technology/Software Industry | | | | Strategy | | Public Company Board Service and Governance | | M&A | | |
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| 2024 Proxy Statement | 25 |
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| Director Since: February 2018 Age: 50 Current Board Committees: Audit; Mergers and Acquisitions/Strategy (Chair) | Samskriti (Sam) Y. King Independent | | | Background: Ms. King is currently Chief Executive Officer of Veracode, Inc., a leading provider of application security testing. Previously, from July 2017 to January 2019, Ms. King served as Senior Vice President and General Manager of Veracode. From August 2015 until July 2017, Ms. King was the Chief Strategy Officer of Veracode. Prior to that time, from April 2012 until July 2015, Ms. King was Executive Vice President, Product Strategy and Corporate Development GM, Mobile at Veracode. Ms. King joined Veracode in November 2006 and also served as Veracode’s Senior Vice President, Product Marketing and Vice President, Service Delivery. Other Current Public Company Boards: ●ZeroFox Holdings, Inc. (Nasdaq: ZFOX), a leading external cybersecurity provider Prior Public Company Boards in Last 5 Years: None |
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| Skills and Experiences: | | Cybersecurity | | Public Company Board Service and Governance | | Human Capital Management | | Leadership | | | | Finance and Accounting | | Technology/Software Industry | | Go-to-Market/ Sales | | Strategy | | | | Product Development | | M&A | | | | |
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| Director Since: February 2008 Age: 63 Current Board Committees: Compensation (Chair) | David A. Krall Independent | | | Background: Mr. Krall has served as a strategic advisor to Roku, Inc. (Nasdaq: ROKU), a leading manufacturer of media players for streaming entertainment, since January 2011. From February 2010 to December 2010, he served as President and Chief Operating Officer of Roku, where he was responsible for managing all functional areas of the company. Prior to that, Mr. Krall spent two years as President and Chief Executive Officer of QSecure, Inc., a privately held developer of secure credit cards based on micro-electro-mechanical system technology. From 1995 to July 2007, he held a variety of positions of increasing responsibility and scope at Avid Technology, Inc. (Nasdaq: AVID), a publicly traded leading provider of digital media creation tools for the media and entertainment industry. His tenure at Avid included serving seven years as the company’s President and Chief Executive Officer. Other Current Public Company Boards: ●Harmonic Inc. (Nasdaq: HLIT), a leader in video delivery and cable access virtualization ●Audinate Group Ltd (ASX: AD8), a leading developer of professional AV-over-IP solutions Prior Public Company Boards in Last 5 Years: None |
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| Skills and Experiences: | | Mergers & Acquisitions | | Leadership | | Technology/Software Industry | | Strategy | | | | Product Development | | Public Company Board Service and Governance | | | | |
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| 2024 Proxy Statement | 27 |
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| Director Since: February 2018 Age: 57 Current Board Committees: Compensation; Mergers and Acquisitions/Strategy | Angela T. Tucci Independent | | | Background: Ms. Tucci was the Chief Operating Officer of Uplight, Inc., a provider of end-to-end technology solutions dedicated to serving the energy ecosystem, a position she held from January 2020 until October 2022. Since December 2019, she has also served as an advisor to TPG Celegene Aggregation GP, Inc. in connection with its then investment CollabNet/Version One, now Digital.ai. Previously, Ms. Tucci was Chief Executive Officer of Apto, Inc., from August 2017 to September 2019. Prior to that time, Ms. Tucci was General Manager, Agile Management Business Unit of CA, Inc. from September 2015 until July 2017. Prior to that, Ms. Tucci was Chief Revenue Officer, Office of the CEO of Rally Software Development Corp. (“Rally”) from December 2014 until August 2015, when Rally was acquired by CA, Inc. Ms. Tucci joined Rally in December 2013 as Chief Marketing Officer. From January 2011 until August 2013, Ms. Tucci was Chief Strategy Officer of Symantec Corporation. Ms. Tucci currently serves as the Chair of the Board of Directors of Anita Borg Institute for Women and Technology. Other Current Public Company Boards: None Prior Public Company Boards in Last 5 Years: None |
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| Skills and Experiences: | | Leadership | | Public Company Board Service and Governance | | Mergers & Acquisitions | | Go-to-Market/ Sales | | | | Technology/Software Industry | | Strategy | | | | |
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| Director Since: October 2019 Age: 70 Current Board Committees: Compensation; Nominating and Corporate Governance | Vivian Vitale, NACD.DC Independent | | | Background: Ms. Vitale owns and operates Vivian Vitale Consulting, LLC, a consulting practice assisting organizations in the development of human resources and people management practices, a role she has held since April 2018. From April 2012 until March 2018, she held multiple positions of increasing responsibility at Veracode, Inc., a provider of application security testing. Her tenure at Veracode included serving as Executive Vice President of Human Resources, continuing in her role through Veracode, Inc.’s acquisition by CA Technologies in March 2017. Prior to 2012, Ms. Vitale served as Senior Vice President at Care.com, Inc., an online provider of support services to families. Previously, Ms. Vitale has also held senior leadership roles at RSA Security, Unica Corporation and IBM. Ms. Vitale is National Association of Corporate Directors NACD Directorship Certified® since December 2022. Other Current Public Company Boards: ●NetScout Systems, Inc. (Nasdaq: NTCT), a network performance management company Prior Public Company Boards in Last 5 Years: None |
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| Skills and Experiences: | | Cybersecurity | | CSR/ESG | | Leadership | | Technology/Software Industry | | | | Strategy | | Public Company Board Service and Governance | | M&A | | Human Capital Management |
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| 2024 Proxy Statement | 29 |
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Our Corporate Governance Framework We believe we have in place corporate governance processes and practices that are designed to promote and enhance the long-term interests of our stockholders, solidify board oversight, strengthen management accountability and foster responsible decision-making. We regularly monitor developments in corporate governance and review our processes and practices in light of such developments.
During the Meeting
| Accountable to stockholders ✔ All directors are elected annually ✔ We have adopted a director resignation policy for directors ✔ Stockholders of 40% of outstanding shares have the right to call a special meeting ✔ We have no stockholders rights plan (“poison pill”) in place | Responsive to stockholders and proactive in order to understand their perspectives ✔ 96% say-on-pay support at our 2023 Annual Meeting. We believe the vote indicates strong support for our executive compensation program, including enhancements made over prior years. ✔ We hold say-on-pay votes annually to help ensure continued alignment with stockholder values. |
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| Structures and practices that enhance Board effectiveness | | | ✔ 8 of 9 director nominees are independent ✔ 5 of 9 director nominees have a tenure of less than eight years; current Board composition strikes an appropriate balance between directors with deep knowledge of the Company and those with a fresh perspective ✔ All committee members are independent ✔ All Audit Committee members are financially literate and our Audit Committee Chair is a financial expert | ✔ Our Compensation Committee uses an independent compensation consultant ✔ Robust stock ownership requirements for directors and officers ✔ No hedging or pledging of stock by directors or officers ✔ Director access to officers and employers ✔ Director onboarding and continuing education ✔ Performance evaluation of the Board and its committees |
During the Meeting
| Strong, independent leadership ✔ Independent Board Chair: Chair and CEO positions have been separate since 2012 ✔ Independent directors meet in executive session without the Chief Executive Officer at every regularly scheduled Board Meeting | Stockholders vote in proportion to their economic interest ✔ One class of voting stock ✔ “One share, one vote” standard | Management incentives aligned with the long-term strategy of the Company ✔ Long-term incentive compensation goals are tied to long-range Company plans ✔ Board reviews of incentive structures take into account our long-term strategy |
During the Meeting
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During the Meeting
Our Corporate Governance Documents
During the Meeting
| ● | Certificate of Incorporation | ● | Code of Conduct and Business Ethics | | ● | Amended and Restated Bylaws | ● | Finance Code of Ethics | | ● | Audit Committee Charter | ● | Corporate Governance Guidelines | | ● | Nominating and Corporate Governance Committee Charter | ● | Stock Option Grant Policy | | ● | Compensation Committee Charter | ● | Mergers & Acquisitions / Strategy Committee Charter |
During the Meeting
Our Certificate of Incorporation and our Bylaws are filed with the SEC and are available electronically at www.sec.gov. The other documents listed above can be found on our website at www.progress.com under the heading “Corporate Governance” located on the “Investor Relations” page. Any substantive amendment to or waiver of any provision of the Code of Conduct and Business Ethics may be made only by the Board and will be disclosed as required by Nasdaq listing standards or applicable law. Our Corporate Governance Practices Our Board is Independent
During the Meeting
| 8 of 9 nominees are independent | If the director nominees are elected at the Annual Meeting, the Board will continue to be composed of one employee director (Mr. Gupta, our CEO) and eight independent, non-employee directors (Messrs. Egan, Dacier, Kane and Krall, Dr. Gawlick and Mses. King, Tucci and Vitale). | | Regular executive sessions of independent directors | Our independent directors meet in executive session without the Chief Executive Officer at every regularly scheduled Board meeting to discuss, among other matters, the performance of the Chief Executive Officer. | | Committees are independent | Each of the Board’s committees is strictly comprised of independent directors. | | Independent compensation consultant | The compensation consultant is retained by and reports directly to the Compensation Committee. The compensation consultant is independent of the Company and management. |
During the Meeting
| 2024 Proxy Statement | 31 |
During the Meeting
Board Refreshment We believe it is important to maintain a mix of longer-tenured, experienced directors, who can help to preserve continuity and institutional knowledge, and new directors, who can provide fresh perspectives. In furtherance of this objective, the Board elected Mr. Dacier and Dr. Gawlick in June 2017, Mses. King and Tucci in February 2018 and Ms. Vitale in October 2019. We do not impose director tenure limits, although our Corporate Governance Guidelines do impose a mandatory retirement age of 85. We believe our current Board composition strikes an appropriate balance between directors with deep historical knowledge of the Company and those with a tenure of less than eight years, who represent a majority of the Board.
During the Meeting
| | | | | June 2017 | February 2018 | October 2019 | | Paul T. Dacier – Mr. Dacier’s success and expertise with ESG initiatives is a valuable addition to our Board. Mr. Dacier also brings a wealth of experience pertaining to the software industry and applicable regulatory frameworks. Rainer Gawlick – Dr. Gawlick brings deep expertise in a variety of areas of technology key to the Progress success strategy. Dr. Gawlick’s expertise in sales and marketing strategy in the software industry is a valuable addition to the Board. | Samskriti Y. King – Ms. King is a highly accomplished business leader with an extraordinary track record, and she brings a wealth of expertise and diversity to our Board. Ms. King’s industry expertise aligns with the Company’s strategy to deliver strong, sustainable performance in the enterprise infrastructure software industry. Angela T. Tucci – Ms. Tucci brings valuable software industry experience, entrepreneurship and diversity to our Board. Ms. Tucci’s addition supports our longstanding and continuous focus on ensuring our Board has the right skills and perspectives to enable the Company to execute on its business strategy, strengthen its competitive position and deliver value to all its stockholders. | Vivian Vitale – Ms. Vitale brings a wealth of experience in creating high-impact programs and systems aimed at scaling for growth, acquisition integration and talent management. Ms. Vitale’s skillset is critical to our go-forward M&A strategy. |
During the Meeting
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During the Meeting
We Have an Independent Board Chair We believe the current Board leadership structure serves us and our stockholders well by having a strong independent Board Chair to provide independent leadership of the Board and because it allows our CEO to focus primarily on the Company’s business strategy, operations and corporate vision. This leadership structure, coupled with a strong emphasis on Board independence, provides effective independent oversight of management. Board members have complete access to and are encouraged to utilize members of our senior management regularly, and they have the authority to retain independent advisors as they deem necessary. The Board believes this leadership structure affords the Company an effective combination of internal and external experience, continuity and independence.
During the Meeting
| John R. Egan Board Chair | Key Responsibilities of the Independent Board Chair: ● Calling meetings of the Board and independent directors; ● Setting the agenda for Board meetings in consultation with the CEO and our Secretary; ● Chairing executive sessions of the independent directors; ● Engaging with stockholders; ● Acting as an advisor to Mr. Gupta on strategic aspects of the CEO role with regular consultations on major developments and decisions likely to interest the Board; and ● Performing other duties specified in the Corporate Governance Guidelines or assigned by the Board. |
During the Meeting
Mr. Egan currently serves as our independent Board Chair and brings extensive board leadership experience as a current director of publicly traded companies, including Verint Systems, where he serves as Lead Director, and NetScout Systems, Inc., where he serves as Lead Director, having also previously served as a director of EMC Corporation and VMWare, Inc. Mr. Egan also serves on the Board of Trilio, a privately held technology company. Mr. Egan has led global technology companies through strategic growth and operational change. His strong integrity and professional credibility with the other directors and executive officers has helped Mr. Egan to effectively oversee management and execute on the Company’s business strategy. Our Corporate Governance Guidelines do not require the separation of the roles of Board Chair and Chief Executive Officer, as our Board believes that it is important that the Board retain flexibility to determine whether these roles should be separate or combined based upon the Board’s assessment of the Company’s needs and Progress’s leadership at a given point in time. We believe that an effective board leadership structure is highly dependent on the experience, skills and personal interaction between those in leadership roles. Our policy is to have a Lead Independent Director if the Board Chair is not independent.
During the Meeting
| 2024 Proxy Statement | 33 |
During the Meeting
We Proactively Engage with our Stockholders We actively seek to engage with our stockholders as part of our corporate governance. During the past year, members of senior management spoke to, or sought to engage with, a large cross-section of our stockholders. In 2023, nearly half our shares were held by passive investors, whose stewardship teams routinely connect with us only on an as-needed basis. We typically reach out to these investors proactively on a biannual basis. No passive investors requested significant engagement with us in 2023; therefore, the chart below reflects our engagement efforts with active investors.
During the Meeting
| Our stockholder engagement team comprised of: ✔Senior Vice President of Investor Relations ✔Chief Executive Officer ✔Chief Financial Officer ✔Chief Legal Officer ✔Chief Accounting Officer ✔Members of our Finance, Legal and Communications & Marketing Teams, who provide support and relevant information. | We connected with stockholders representing: | | Topics discussed during our meetings included: ✔Our Total Growth Strategy – execution, results, plans ✔Cybersecurity ✔Capital Allocation to M&A, dividends and stock buy-backs ✔Operating trends ✔The state of the M&A market and our outlook for transactions, valuation and multiples ✔The types, sources and growth of our revenues ✔The integration of prior acquisitions ✔Quarterly results, projections/guidance | | | ~75% | of our outstanding common stock held by active investors. | | | | Since about 52% our shares were held by active investors, this figure represents ~39% of all outstanding shares held by all stockholders. | | |
During the Meeting
| | Investor Relations Outreach We conduct a proactive, year-round investor outreach program with existing stockholders and potential investors, with whom we engage both passively (by responding promptly to inbound queries) and actively (through outbound solicitation). Our outreach program is run by our Investor Relations Department, and our CEO and CFO regularly participate in investor meetings. We routinely attend investor conferences and participate in non-deal roadshows hosted by sell-side brokerage firms, as well as host meetings with investors at their request and by our invitation. We aim to maintain proactive, consistent dialog with portfolio managers, analysts and ESG contacts at all institutional investment funds that own 0.5% or more of our shares. Our Investor Relations Department communicates with current and potential investors of all sizes. We further engage stockholders and potential investors on matters pertaining to ESG and related topics. |
During the Meeting
| | How to Communicate with Our Board Our Board of Directors welcomes communications from stockholders. Any stockholder may communicate either with our Board as a whole, or with any individual director, by sending written communications addressed to the Board of Directors or to such director at our offices located at 15 Wayside Road, Suite 400, Burlington, Massachusetts 01803, or by submitting an email communication to BOD@progress.com. All good-faith communications sent to our Board of Directors will be forwarded to the full Board or to the individual director to whom such communication was addressed. |
During the Meeting
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During the Meeting
Our Board Evaluates Its Effectiveness Our Board of Directors conducts periodic self-evaluations to determine whether the Board is functioning effectively. In addition, each committee of the Board also conducts a self-evaluation of its performance and its members’ effectiveness relative to the goals and standards set forth in each committee’s charter. The Nominating and Governance Committee leads these evaluations and is responsible for reporting the results to the full Board and management. Directors may be required to submit responses through a survey or other means to evaluate the effectiveness of the Board. The annual self-evaluation process also evaluates the performance of individual directors, which is considered in connection with director nominations. Committees of the Board of Directors Our Board of Directors has standing Audit, Compensation, Nominating and Corporate Governance, and Mergers and Acquisitions/Strategy Committees. The committee charters adopted by our Board of Directors can be found on our website at www.progress.com under the heading “Corporate Governance” located on the “Investor Relations” page.
During the Meeting
| 2024 Proxy Statement | 35 |
During the Meeting
| Audit Committee | | | Members Charles F. Kane (Chair) Rainer Gawlick Samskriti (Sam) Y. King | Principal Responsibilities: ●Assists our Board of Directors in fulfilling its oversight responsibilities for accounting and financial reporting compliance ●Appoints, compensates, retains and oversees the work performed by our independent registered public accounting firm for the purpose of preparing or issuing an audit report or related work ●Reviews the independent registered public accounting firm’s fees for services performed ●Reviews with the independent registered public accounting firm, the Company’s internal audit and financial management and the integrity of the Company’s internal and external financial reporting processes and the adequacy and effectiveness of the Company’s internal controls over financial reporting ●Reviews with management various matters related to our internal controls and legal, compliance and regulatory matters ●Reviews with management and the independent registered public accounting firm the annual audited financial statements and the quarterly financial statements, prior to the filing of reports containing those financial statements with the SEC ●Reviews with management policies with respect to our risk assessment and risk management (including cybersecurity, data management and applicable regulatory compliance), including appropriate guidelines and policies to govern the process, as well as the steps management has taken to monitor and control those risks ●Is responsible for producing the Audit Committee Report included in this Proxy Statement Our Board of Directors has determined that each member of the Audit Committee meets the independence requirements promulgated by Nasdaq and the SEC, including Rule 10A-3(b)(1) under the Exchange Act. In addition, our Board of Directors has determined that each member of the Audit Committee is financially literate, and that Mr. Kane qualifies as an “audit committee financial expert” under the rules of the SEC. |
During the Meeting
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| Compensation Committee | | | Members David A. Krall (Chair) Angela T. Tucci Vivian Vitale | Principal Responsibilities: ●Oversees our overall compensation structure and benefits, policies and programs ●Administers our equity-based plans ●Reviews and makes recommendations to our Board of Directors regarding the performance of our Chief Executive Officer ●Reviews and recommends to our Board of Directors for its approval, the compensation of our Chief Executive Officer ●Consults with our Chief Executive Officer to review and determine compensation of all of our other executive officers ●Assists in developing and reviewing succession plans for our senior management, including the Chief Executive Officer ●Review’s our policies, programs and initiatives for inclusion and diversity, and provides guidance to our Board of Directors and management on these matters ●Reviews our processes and procedures for the consideration and determination of director and executive compensation ●Is responsible for producing the Compensation Committee Report included in this Proxy Statement Our Board of Directors has determined that each member of the Compensation Committee meets the independence requirements promulgated by Nasdaq. |
During the Meeting
Compensation Committee Interlocks and Insider Participation The members of our Compensation Committee for fiscal 2023 were Mr. Krall and Mses. Tucci and Vitale, with Mr. Krall serving as Chair. Mr. Krall, Ms. Tucci and Ms. Vitale are not, nor have they ever been, an officer or employee of the Company or of any of its subsidiaries or had any relationship with us requiring disclosure in this Proxy Statement. There are no compensation committee interlocks amongst any of our directors.
During the Meeting
| 2024 Proxy Statement | 37 |
During the Meeting
| Nominating and Corporate Governance Committee | | | Members Paul T. Dacier (Chair) John R. Egan Vivian Vitale | Principal Responsibilities: ●Responsible for identifying qualified candidates for election to our Board of Directors and recommending nominees for election as directors at the Annual Meeting ●Assists in determining the composition of our Board of Directors and its committees ●Assists in developing and monitoring a process to assess the effectiveness of our Board of Directors ●Assists in developing and implementing our Corporate Governance Guidelines ●Assists in U.S. federal security clearance and government contracting matters The Board of Directors has determined that each member of the Nominating and Corporate Governance Committee meets the independence requirements promulgated by Nasdaq. |
During the Meeting
| Mergers and Acquisitions/Strategy Committee | | | Members Samskriti Y. King (Chair) Rainer Gawlick Charles F. Kane Angela T. Tucci | Principal Responsibilities: ●Reviews and provide guidance to Company’s management and the Board on the Company’s merger and acquisition strategy as part of overall corporate strategy ●Assists management in the review of acquisition transactions to be brought before the Board and the review of our corporate strategy ●Reviews and evaluates the performance and integration of completed transactions ●Makes regular reports to the Board concerning its areas of responsibility. The Board of Directors has determined that each member of the Mergers and Acquisitions/Strategy Committee meets the independence requirements promulgated by Nasdaq. |
During the Meeting
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During the Meeting
Board Oversight Role of the Board The Board is elected by stockholders. Except for those matters reserved for stockholder approval, the Board is the ultimate decision-making body of the Company. The Board advises and guides senior management and monitors its performance. The fundamental role of the directors is to exercise their business judgment to act in what they reasonably believe to be the best interests of the Company and its stockholders. In fulfilling that responsibility, the directors may rely on the honesty and integrity of the Company’s senior management and on legal, accounting, financial and other advisors. Strategic Oversight Our Board engages with the Company’s management regularly and plays a vital role informing management’s understanding of the Company’s strategic objectives and performance drivers while ensuring proper focus on the risks associated with those corporate strategies and continually evaluating the level of authority delegated to management to ensure that it is reasonable. Our Board delegates substantial authority in certain areas to the Company’s CEO and senior management enabling them to run the Company. The Board remains responsible, however, for overseeing management’s performance within the delegated areas including: strategic initiatives, financial performance, accounting and financial reporting, risk management and compliance.
During the Meeting
| 2024 Proxy Statement | 39 |
During the Meeting
Our Board of Directors Has a Significant Role in Risk Oversight Our Board of Directors believes that its oversight responsibility with respect to the various risks confronting the Company is one of its most important areas of responsibility and provides further checks and balances on our leadership structure. Our Board of Directors views its oversight of risk as an ongoing process that occurs throughout the year while evaluating the strategic direction and actions of the Company. A fundamental aspect of risk management is not only understanding the risks a company faces and what steps management is taking to manage those risks, but also determining what level of risk is appropriate for the Company. We believe that having an independent Board Chair enhances our Board’s ability to oversee our risks.
During the Meeting
| In carrying out this critical function, our Board is involved in risk oversight through direct decision-making authority with respect to significant matters and the oversight of management directly by our Board and through its committees. Each committee’s specific area of responsibility as it relates to risk management is as follows: | | | | | | | | | | Audit Committee ●Financial condition, financial statements and financial reporting process ●Internal controls and accounting matters ●Cybersecurity matters ●Conflict of interest issues and compliance with legal and ethical standards | Compensation Committee ●Overall compensation practices, policies and program design ●Inclusion and diversity initiatives ●Human capital management considerations | Nominating and Corporate Governance Committee ●Corporate governance practices ●Leadership structure of the Board ●Director and management succession planning ●U.S. federal security clearance and government contracting matters | Mergers & Acquisitions / Strategy Committee ●Review of overall company strategy ●Acquisitions and other strategic transactions | | Our Board of Directors receives reports from members of senior management on the functional areas for which they are responsible. These reports may include information concerning operational, financial, sales, competitive, legal and regulatory, strategic and other risks, as well as any related management and mitigation. | | | |
During the Meeting
| | Board Oversight of ESG With rising expectations from investors, customers, employees and regulators related to environmental, social and governance issues (ESG), companies are increasingly taking action and implementing ESG initiatives. It is the role of our Board to guide management in connecting the Company’s ESG efforts to the industry, markets, products and strategies that are unique to Progress in order to ensure such efforts are aligned with the best interests of our stakeholders. Committees of the Board have been assigned responsibilities with respect to certain areas of corporate sustainability. |
During the Meeting
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During the Meeting
| | Oversight of Cybersecurity A key area of focus for us is our risk mitigation practices around cybersecurity risk. Cybersecurity protection is vital to our organization and our stakeholders, and we are committed to ensuring that our products, data and systems are secure from potential breach. Our cybersecurity governance team provides periodic updates to the Board and quarterly updates to the Audit Committee on cybersecurity matters, including information about cybersecurity governance processes, the status of projects to strengthen internal cybersecurity and security features of the products and services we provide our customers. Our cybersecurity program includes external audits of our internal and product security practices under top information security standards, including System and Organization Controls (SOC) 2, Health Insurance Portability and Accountability Act of 1996 and Payment Card Industry Data Security Standard. We have implemented a comprehensive cybersecurity training program for all employees, and we have taken steps to mitigate the impact of potential cybersecurity risks, including by procuring a separate cyber insurance policy as part of our comprehensive corporate insurance program. |
During the Meeting
Director Attendance Our Board of Directors met ten times during the fiscal year ended November 30, 2023. During fiscal 2023, each director nominee attended at least 75% of the aggregate of the total number of meetings of our Board of Directors and the total number of meetings of all committees of our Board of Directors on which he or she served from and after their election to the Board. In January 2018, the Board of Directors adopted a policy requiring members of our Board of Directors to attend the Annual Meeting of Stockholders. All members of our Board of Directors virtually attended the 2023 Annual Meeting of Stockholders.
During the Meeting
| 10 meetings in 2023 Our Board holds five regular meetings a year, with special meetings occurring when necessary. 2023 Regular Board Meetings: |
During the Meeting
Our Board’s organizational meeting follows our annual meeting of stockholders. Our Board meets in executive session at every regularly scheduled Board meeting, which is followed by a session of only independent directors led by the Chair. Directors are expected to attend Board meetings, meetings of the committees on which they serve and our annual meeting of stockholders, with the understanding that on occasion a director may be unable to attend a meeting. Executive Sessions of Independent Directors The independent directors of the Board will meet in Executive Session as required and at least two times each year, typically before or after a regularly scheduled Board meeting, and at any other time requested by any independent director. The Executive Sessions are led by the Board Chair.
During the Meeting
| 2024 Proxy Statement | 41 |
Director Compensation
Director Compensation We pay our non-employee directors a mix of cash and equity compensation. Employee directors receive no compensation for their service as directors. In accordance with the Director Compensation Plan adopted by the Board, for 2023, our non-employee directors were paid an annual retainer of $275,000, of which $50,000 was paid in cash and $225,000 in equity in the form of deferred stock units (“DSUs”). Committee members and chairs also received the additional compensation described below.
Director Compensation
| ANNUAL RETAINER | ADDITIONAL ANNUAL CASH RETAINER | | | | Independent Board Chair | | | | $75,000 | | | | Audit Committee | Compensation Committee | | | Chair - $25,000 | Chair - $25,000 | | | Members - $20,000 | Members - $15,000 | | | Nominating and Corporate Governance Committee | Mergers and Acquisitions/Strategy Committee | | | Chair - $12,500 | Chair - $25,000 | | | Members - $10,000 | Members - $15,000 |
Director Compensation
Prior to adopting the 2023 Director Compensation Plan, the Compensation Committee received market data from Pay Governance, the Compensation Committee’s independent compensation consultant, and considered whether any changes in director compensation should be proposed. Based on the market data, the Compensation Committee recommended to the Board no changes to director compensation and the Board adopted this recommendation. The cash retainers for Board and committee services were paid in June 2023 and the equity retainers were issued in July 2023. The number of DSUs granted was determined by dividing the equity retainer by the grant-date closing price of our common stock as reported by Nasdaq. The DSUs vest in a single installment on the date of the Annual Meeting, subject to continued service on our Board of Directors through such date. DSUs do not convert to shares of common stock until a director terminates service on the Board of Directors or upon a change in control, whichever occurs first. Based on advice of its independent consultant, the Compensation Committee recommended, and the Board approved, a change to director compensation for future years. Starting in 2024, non-employee directors will be provided the option to elect in advance to receive restricted stock units that settle when vested or DSUs for the equity portion of the annual retainer.
Director Compensation
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Director Compensation
Director Compensation Stock Ownership Guidelines Our Board of Directors has adopted stock ownership guidelines for non-employee directors. These guidelines provide for all non-employee directors to hold an amount of our common stock, restricted shares, restricted stock units and/or vested DSUs having a value equal to at least five times the annual cash retainer. Directors have five years to attain this ownership threshold. As of the date of this Proxy Statement, all non-employee directors are in compliance with the stock ownership guidelines. Director Compensation Table—Fiscal 2023 The following table sets forth a summary of the compensation paid or granted to our non-employee directors for service on our Board in 2023.
Director Compensation
| Name | Unvested DSUs Outstanding at November 30, 2023(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Total ($) | | Paul T. Dacier | 3,935 | 62,500 | 225,043 | 287,543 | | John R. Egan | 3,935 | 135,000 | 225,043 | 360,043 | | Rainer Gawlick | 3,935 | 85,000 | 225,043 | 310,043 | | Charles F. Kane | 3,935 | 90,000 | 225,043 | 315,043 | | Samskriti Y. King | 3,935 | 95,000 | 225,043 | 320,043 | | David A. Krall | 3,935 | 75,000 | 225,043 | 300,043 | | Angela T. Tucci | 3,935 | 80,000 | 225,043 | 305,043 | | Vivian Vitale | 3,935 | 75,000 | 225,043 | 300,043 |
Director Compensation
| (1) The number of outstanding unvested DSUs held by each director as of November 30, 2023, is shown. No director held stock options. | | (2) Represents the fair value of the awards measured at the grant date. The number of units granted to each director in 2023 was determined by dividing the grant date value of the award, $225,000, by $57.19, the closing price of our common stock on July 10, 2023, rounded up to the nearest whole unit. |
Director Compensation
| 2024 Proxy Statement | 43 |
Board Recommendation
| ●Base Salaries for our named executive officers targeted at market competitive levels ●100% of annual cash bonuses for our named executive officers tied to achieving pre-established financial objectives that are difficult to attain and require achievement that is closely linked to our annual operating plan and budget and publicly announced expectations ●Payouts under the annual cash bonuses capped at 150% of target amounts | ●50% of annual target equity opportunity for our named executive officers was delivered in the form of cliff-vested performance-based stock awards tied to three-year relative total stockholder return and cumulative operating income metrics ●30% of annual target equity opportunity for our named executive officers was delivered in the form of time-based restricted stock units and 20% in the form of stock options |
Board Recommendation
Our fiscal 2023 compensation structure at the start of fiscal 2023 was consistent with our fiscal 2022 compensation structure. The Compensation Committee reviewed our fiscal 2023 compensation structure in November 2022 and January 2023 in consultation with Pay Governance, its independent compensation consultant. Consistent with prior years, our annual and long-term incentive plans were designed to achieve financial goals related to our business plan for fiscal 2023 and in line with our financial guidance to stockholders. For fiscal 2023, payouts under our Corporate Bonus Plan were made at 107% of target, based on our solid performance. The construct, underlying metrics and resulting performance and payout outcome under the Corporate Bonus Plan are described further in the section below entitled “Cash Incentive Compensation”. The three-year performance period for PSUs awarded under our 2021 Long-Term Incentive Plan (“LTIP”) ended on November 30, 2023. Based on our relative total stockholder return (“TSR”) during that period, we achieved a final payout of 145% for the TSR metric, while we achieved a 200% payout for the cumulative total operating income metric. As a result, 186% of the awarded performance-based restricted stock units (“PSUs”) were earned, as described further in the section entitled “2023 Executive Compensation Decisions – Equity Compensation – PSUs” below.
Board Recommendation
| What We Do: | | What We Don’t Do: | | | ✔ 70% of annual equity award is performance-based, through performance-based stock units and stock options ✔ Grant performance-based equity awards with performance measures that span three years ✔ Utilize different measures for performance equity awards and cash incentives ✔ Maintain stock ownership guidelines to ensure our directors’ and executives’ interests are aligned with those of our stockholders ✔ Clawback Policy: updated our compensation recovery policy in line with the SEC’s rules and Nasdaq’s proposed listing standards ✔ Cap the amounts our executives can earn under our annual incentive plans ✔ Compensation Committee retains independent compensation consultant | | ✖ No perquisites ✖ No guaranteed salary increases or non-performance-based bonuses ✖ No pledging or hedging of company stock by directors or executive officers ✖ No excise tax gross-ups | |
Say-on-Pay Votes (2018-2023)
Role of Compensation Consultant Our Compensation Committee again retained Pay Governance to advise it on matters related to executive compensation for fiscal 2023. Other than providing limited guidance regarding our broad-based equity plan design for all employees, which was approved by the Compensation Committee, Pay Governance did not provide any services for management in fiscal 2023. Pay Governance consulted with our management when requested by the Compensation Committee and only as necessary to obtain relevant compensation and performance data for the executives, as well as essential business information so that it could effectively support the Compensation Committee with appropriate competitive market information and relevant analyses. During fiscal 2023, Pay Governance provided a range of services to the Compensation Committee to support the Compensation Committee’s agenda and obligations under its charter, including providing advice relating to the impact of regulatory updates, industry trends and peer group compensation data, advice on the structure and competitiveness of our compensation programs, advice on the consistency of our programs with our executive compensation philosophy and advice on director compensation. Representatives of Pay Governance also attended Compensation Committee meetings. The Compensation Committee assessed the independence of Pay Governance and determined that Pay Governance is independent of Progress and has no relationships that could create a conflict of interest with us. As part of its assessment, the Compensation Committee considered the fact that Pay Governance did not provide any other services to us and consults with our management only as necessary to provide the services described above. Peer Group To assist the Compensation Committee in making decisions on total compensation for executives and company-wide equity grants, the Compensation Committee utilizes peer and industry group data and analyses. Each year, as necessary, the Compensation Committee reviews with its independent compensation consultant the list of peer companies as points of comparison to ensure that comparisons are meaningful. With management’s input, and focus on the following considerations, Pay Governance provided recommendations on the composition of our peer group for fiscal 2023. General Description Application Software or Systems Software companies which operate in similar or related businesses and with which Progress competes for business or talent. Criteria Considered
Say-on-Pay Votes (2018-2023)
For fiscal 2023, the Compensation Committee removed four peer companies utilized in 2022 and added three new peer companies as shown in the table below. The four companies removed (Bottomline Technologies (de), Inc.; Cornerstone OnDemand, Inc.; MicroStrategy, Incorporated; and QAD Inc.) either were acquired or are no longer an appropriate peer due to unique pay structures or business models.
Say-on-Pay Votes (2018-2023)
| Peer Group List | | | | Appian Corporation | Everbridge, Inc. | SailPoint Technologies Holdings, Inc. | | Aspen Technology, Inc. | Manhattan Associates, Inc. | SPS Commerce, Inc. | | Avid Technology, Inc. | New Relic, Inc.* | Upland Software, Inc. | | Blackbaud, Inc. | OneSpan Inc. | Verint Systems, Inc.* | | CommVault Systems, Inc. | Pegasystems, Inc. | Xperi Holding Corporation | | Dynatrace, Inc.* | Rapid7, Inc. | |
Say-on-Pay Votes (2018-2023)
Pay Governance then prepared a compensation analysis based on survey data and data gathered from publicly available information for our peer group companies. Pay Governance separately analyzed and advised the Compensation Committee regarding the pay practices of companies engaged in a total growth strategy like ours. Survey Data The executive compensation analysis prepared by Pay Governance also included data from Radford’s 2022 Global Compensation Database for U.S.-based companies with revenues similar to ours. The Compensation Committee used this data to compare the current compensation of our named and other executive officers to the peer group and to determine the relative market value for each position, based on direct, quantitative comparisons of pay levels. The survey data was used when there was a lack of public peer data for an executive’s position and to obtain a general market understanding of current compensation practices. Competitive Positioning Fiscal 2023 target total direct compensation for our named executive officers was set by the Compensation Committee based predominantly on competitive pay practices, as reflected in the peer group and survey data. The Compensation Committee reviews market data at the 25th, 50th and 75th percentile and, for 2023, sought to target total direct compensation for the named executive officers as a group at the 50th percentile of our peer group in setting our executive compensation programs. Additional adjustments were considered based on individual tenure, experience, performance, criticality of role, succession planning, internal pay equity and historical pay levels, as well as the level of an executive officer’s unvested equity awards and incentives. Components of Executive Compensation Compensation for our named executive officers currently consists of three primary components that are designed to reward performance in a simple and straightforward manner: base salary, annual cash bonus and long-term equity awards. The objectives and key attributes of these components, as well as how each element accomplishes the goals and objectives of our overall program are summarized below.
Say-on-Pay Votes (2018-2023)
| | Compensation Element | Objective | Key Attributes | Key Features | | | Base Salary | To secure and retain services of key executive talent by providing a fixed level of cash compensation | Aligns with scope and complexity of role and prevailing market conditions; salary levels are generally at market median | Adjustments may be made to reflect market conditions for a position, changes in responsibilities, individual performance or internal pay equity | | | Annual Cash Bonus | To encourage and reward annual corporate performance that enhances short and long-term stockholder value | 100% financial/formulaic Fiscal 2023 metrics utilized are: ●Total non-GAAP revenue (40%) ●Total non-GAAP operating income (40%) ●Total adjusted free cash flow (20%) | Cash bonuses are based on percentage of base salary, with actual awards based exclusively on attainment of objective corporate financial goals. For General Managers, a one-sixth of the total bonus opportunity is also tied to business unit performance goals under the Sales Leader Plan. | | | PSUs under the Long-Term Incentive Plan | To align interests of management with those of our stockholders with the goal of creating long-term growth and value | 50% of annual equity award; three-year performance period with three-year cliff-vesting Performance metrics utilized are: ●75% non-GAAP operating income (subject to 35% annual non-GAAP operating margin threshold) ●25% relative TSR in comparison to the S&P Software and Services Select Industry Index | | | | Restricted Stock Units | To retain executive talent | 30% of annual equity award; vesting over three years | | | | Stock Options | To align interests of management with those of our stockholders with the goal of creating long-term growth and value | 20% of annual equity award; vesting over four years with a seven-year expiration | | | | | | | Exercise price equal to fair market value on date of grant |
Say-on-Pay Votes (2018-2023)
| Name | 2023 Annual base salary | YOY change for base salary (%) | 2023 Target annual Cash Incentive Award (% of salary) | YOY Change for Target Annual Cash Incentive (as % of salary) | 2023 Target Value of Equity Awards ($)(1) | YOY change for Target Value of Equity Awards(2) | | Yogesh Gupta | $600,000 | 4.3% | 100.0% | 0.0% | $7,000,000 | 27.3% | | Anthony Folger | $440,000 | 6.0% | 65.0% | 0.0% | $2,600,000 | 30.0% | | Loren Jarrett | $425,000 | 9.0% | 60.0% | 0.0% | $1,200,000 | 20.0% | | John Ainsworth(3) | $425,000 | 9.0% | 60.0% | 10.0% | $1,200,000 | 20.0% | | Sundar Subramanian(4) | $425,000 | 77.1% | 60.0% | 0.0% | $1,200,000 | 20.0% |
Say-on-Pay Votes (2018-2023)
| (1) Equity Award total split 50% PSUs, 30% RSUs, and 20% Options. | | (2) The year-over-year increase in target equity value for the NEOs reflects a market adjustment approved by the Compensation Committee in consultation with its independent consultant. | | (3) Mr. Ainsworth became a GM and eligible for the Sales Leader Plan in 2023. | | (4) Mr. Subramanian worked for the Company from India in 2022 and was paid in local currency and according to local market. His year-over-year base salary increase is due to adjustment of his compensation in connection with his reassignment to the U.S. His compensation was aligned to the role, location and peers. |
Cash Incentive Compensation
Cash Incentive Compensation
Annual Cash Bonus
Annual Cash Bonus It is our philosophy to base a significant portion of each executive officer’s total compensation opportunity on performance incentives. Our annual bonus plan is intended to motivate eligible participants toward overall business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to attract and retain highly qualified executives. Our bonus plan is administered by our Compensation Committee. The Compensation Committee set the target annual cash incentive opportunity for 2023 (expressed as a percentage of base salary earned during the year) for each named executive officer in January 2023. In setting the target levels, the Compensation Committee considered each named executive officer’s 2023 target total cash opportunity against the peer group data provided by our independent compensation consultant, internal pay equity and the roles and responsibilities of the named executive officers. The Compensation Committee believes that the target annual cash bonus opportunity should make up a larger portion of an executive officer’s total target cash compensation as the executive’s level of responsibility increases. In the case of Ms. Jarrett and Messrs. Ainsworth and Subramanian, as named executive officers who served as General Managers in fiscal 2023, five-sixths of their respective target bonus was tied to performance under the fiscal 2023 Corporate Bonus Plan and one-sixth of their respective target was tied to performance under the fiscal to financial objectives with respect to the products for which they are responsible under the Sales Leader Plan.
2023 Plan Design
| | Payout Percentage | | | | Performance Metric | Threshold—25% | Target—100% | Maximum—150% | | Total Revenue (% of performance target) | 97% | 100% | 103% | | Operating Income (% of performance target) | 92% | 100% | 111% | | Adjusted Free Cash Flow (% of performance target) | 97% | 100% | 111% |
Amounts Earned under the 2023 Corporate Bonus Plan
Amounts Earned under the 2023 Corporate Bonus Plan As a result of our performance during fiscal 2023, we achieved an overall payout percentage of 107% under the fiscal 2023 Corporate Bonus Plan. This reflects non-GAAP corporate revenue achievement at 123% of target, non-GAAP operating income achievement at 113% of target and adjusted free cash flow performance at 64% of target. For all Named Executive Officers, the actual bonuses earned were based purely on the financial metrics and no portion of the annual bonuses were based on subjective measures. The following table shows the bonuses earned by our named executive officers under the fiscal 2023 Corporate Bonus Plan.
Amounts Earned under the 2023 Corporate Bonus Plan
| NEO | Target Annual Bonus ($)(1) | Amount Earned ($) | | Yogesh Gupta | 600,000 | 642,000 | | Anthony Folger | 286,000 | 306,020 | | John Ainsworth | 212,500 | 227,375 | | Loren Jarrett | 212,500 | 227,375 | | Sundar Subramanian | 212,500 | 227,375 |
Amounts Earned under the 2023 Corporate Bonus Plan
| (1) Target annual bonus for Ainsworth, Jarrett and Subramanian above reflects the incentive opportunity tied to the Corporate Bonus Plan (50% of base salary). Each of these executives, also received an incremental incentive opportunity equal to 10% of base salary under the Sales Leader Plan. |
Amounts Earned under the 2023 Corporate Bonus Plan
Equity Compensation We use equity compensation to attract, retain, motivate and reward our named executive officers and other employees and to align our executives’ interests with those of our stockholders. Equity-based incentive awards are intended to be the longer-term components of our overall executive compensation program and are designed to encourage performance by our executive officers over several years. The Compensation Committee’s decisions regarding the amount and type of equity incentive compensation, the allocation of equity and relative weighting of these awards within total executive compensation have been based on advice provided by our independent compensation consultant and the Compensation Committee’s understanding and individual experiences with market practices of similarly situated companies. We issue annual and new hire equity awards based on guidelines for awards commensurate with position levels and that reflect grant practices within our peer group and the broader software industry generally. The following is a summary of our fiscal 2023 equity program.
Amounts Earned under the 2023 Corporate Bonus Plan
| Program | Fiscal 2023 Equity Program | | Form of Equity | Time-based Restricted Stock Units equal to 30% of annual grant value | | | Non-Qualified Stock Options equal to 20% of annual grant value | | | Performance-Based Stock Units equal to 50% of annual grant value | | Performance Periods | PSUs have three-year performance period | | Metrics | PSUs tied 75% to cumulative non-GAAP operating income (subject to 35% annual operating margin threshold) and 25% to relative TSR | | Vesting | Time-based RSUs vest in six equal installments over three years Stock options vest in eight equal installments over four years PSUs: three-year cliff vest ●With respect to TSR metric, participants can earn between 0% to 200% of target amount of PSUs, with threshold vesting at the 35th percentile achievement, target at 55th percentile and maximum vesting at the 90th percentile ●With respect to the non-GAAP operating income metric, participants can earn between 0% and 200% of the target amount of PSUs, subject to a 35% annual operating margin threshold | | Frequency of Grant | Annual |
Amounts Earned under the 2023 Corporate Bonus Plan
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Target Value and Award Determination
Target Value and Award Determination The Compensation Committee reviews the mix of equity awards granted to our named executive officers on an annual basis. Consistent with the Compensation Committee’s philosophy that a significant portion of the equity mix to named executive officers should be tied to our long-term performance, the Compensation Committee determined that there should be no changes to the equity mix utilized for fiscal 2023. Accordingly, the equity mix for fiscal 2023 was 50% PSUs, 30% RSUs and 20% stock options. For the named and other executive officers, to determine the size of the individual annual equity awards, the Compensation Committee, utilizing data provided by Pay Governance, compared the long-term equity incentive compensation levels of our executives with similar positions within our peer group and survey data to determine the long-term equity incentive compensation amount for each executive. The Compensation Committee reviews market data at the 25th, 50th and 75th percentile. In finalizing the amounts of the annual equity awards, the Compensation Committee considers this market data, the CEO’s recommendations, each executive’s performance over a multi-year period and the Compensation Committee’s assessment of the value the individual delivers to the organization, the burn rate of the executive grants and the degree to which those amounts would be aligned with our goals of motivating and retaining key employees.
RSUs
RSUs RSUs typically vest in six equal installments over a three-year period. In a volatile stock market, RSUs continue to provide value when other forms of equity such as stock options may not, which the Compensation Committee believes is useful in retaining talented executives in unpredictable economic times. The RSUs awarded as part of the fiscal 2023 equity program were issued on January 19, 2023. The Compensation Committee awarded these RSUs as a dollar amount, which were then converted to RSUs based on our closing stock price on the date of grant.
Stock Options
Stock Options Stock option awards provide individuals with the right to purchase shares of our common stock at a fixed exercise price, typically for a period of seven years, subject to continuous employment with the Company. Stock option grants are intended to correlate executive compensation to our long-term success as measured by our stock price. Stock options are tied to our future success because options granted have an exercise price equal to the closing market value at the date of grant and will only provide value to the extent that the price of our stock increases above the exercise price. As a result, the Compensation Committee views stock options as a form of performance equity, but with a longer-term focus than PSUs, which are tied to three-year performance metrics. Stock options vest in eight equal installments over a four-year period. We believe that meaningful vesting periods encourage recipients to remain with the Company over the long term and, because the value of the awards is based on our stock price, stock options encourage recipients to focus on achievement of longer-term goals, such as strategic growth, business innovation and stockholder return. The stock options awarded as part of the fiscal 2023 equity program were issued on January 19, 2023. The Compensation Committee awarded these stock options as a dollar amount, which were then converted to stock options based on the Black-Scholes value of our stock options on the date of grant.
Stock Options
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PSUs
PSUs PSUs under our long-term equity incentive compensation plan are subject to three-year performance criteria aligned with our business plan and are earned only to the extent the performance criteria are achieved. These PSUs are awarded to the named executive officers and other executive officers and represent 50% of the total annual equity compensation granted to these individuals. For fiscal 2023, the Compensation Committee, in consultation with Pay Governance and management, reviewed the terms of the fiscal 2022 LTIP to ensure that the plan was aligned with the objectives of the Compensation Committee and with market practices. The Compensation Committee concluded that the fiscal 2022 LTIP met the objectives of the Compensation Committee because the terms of the LTIP tied the vesting of the PSUs to the long-term objectives of achieving both profitable growth and enhanced stockholder value. Pay Governance advised the Compensation Committee that the terms of the fiscal 2022 LTIP were consistent with market practices. Based on this review, the Compensation Committee determined that the metrics and terms of the fiscal 2023 LTIP should remain identical to the fiscal 2022 LTIP. With respect to the relative TSR metric, the Compensation Committee left unchanged the payout scale utilized in fiscal 2022 to reflect current trends and stockholder-friendly practices (e.g., above-median performance required to achieve target payout). Participants can earn between 0% and 200% (the payout cap under the LTIP) of the target number of PSUs attributable to the relative TSR metric. The cumulative three-year TSR measure compares the TSR of our common stock against the TSR of companies included in the S&P Software and Services Select Industry Index during the three-year period. Our relative TSR performance must be at the 55th percentile of the index group for 100% of the target award to be earned. Additionally, regardless of our relative position with respect to the S&P Software and Services Select Industry Index, the award with respect to the TSR metric will be capped at 100% if our absolute TSR over the measurement period is negative. With respect to the operating income metric, participants can earn between 0% and 200% of the target number of PSUs attributable to the operating income metric. In designing the operating income metric to include both operating margin dollar and percentage goals, the Compensation Committee seeks to ensure discipline and reinforce profitable growth and margin expansion/maintenance. The cumulative three-year operating income measure is based on the sum of the operating income amounts for 2023, 2024 and 2025 contained in our 2023 strategic plan. We must achieve 100% of the operating income target for a given performance period for payout with respect to this metric to occur. Furthermore, with respect to the operating income metric, the 35% annual operating margin threshold “performance gatekeeper” applies at all levels of performance and requires that annual operating margin to be at or above 35% for each of 2023, 2024 and 2025 or no payout can occur with respect to this metric, regardless of cumulative operating income performance. The below table sets forth the payout criteria for the 2023 LTIP:
PSUs
| | | % of Target Earned(1) | | | | | | Performance Metric | Weight Factor | 0% | 50% | 100% | 150% | 200% | | Relative TSR Performance (% Rank) | 25% | <35% | 35% | 55% | 75% | 90% | | Operating Income (three-year Cumulative)(2) | 75% | <$846 | N/A | $846 | $895 | $942 |
PSUs
| (1) Award interpolated for performance within stated percentiles. | | (2) $ amounts in millions and using budgeted exchange rates. In addition, if operating margin in any of the three annual periods of the performance period is less than 35%, the operating income metric earned will be zero. |
PSUs
For the fiscal 2023 award under the LTIP, the three-year performance period commenced on December 1, 2022, and will end on November 30, 2025.
PSUs
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PSUs
The three-year performance period with respect to the LTIP awarded in 2021 (the “2021 PSUs”) completed on November 30, 2023. Based on the price of our common stock for the 30-day trading period ending November 30, 2023, our TSR compared to the S&P Software & Services Index for the same period placed us in the 73rd percentile, which resulted in a payout percentage with respect to the TSR metric of 145%. Based on our actual total three-year operating income for fiscal 2021-2023, the payout percentage with respect to the operating income metric was 200%. Blending the two metrics together, weighting TSR at 25% and operating income metric at 75%, resulted in a 186.25% payout percentage. The following table shows the portion of the 2021 PSUs earned by our named executive officers based on Company performance.
PSUs
| Named Executive Officer | Target LTIP Value ($) | Target PSUs (#)(1) | PSUs Earned | | Yogesh Gupta | 2,250,000 | 52,817 | 98,371 | | Anthony Folger | 850,000 | 19,954 | 37,164 | | John Ainsworth | 400,000 | 9,390 | 17,489 | | Loren Jarrett | 400,000 | 9,390 | 17,489 | | Sundar Subramanian | 400,000 | 9,390 | 17,489 |
PSUs
| (1) Target PSUs for the 2021 LTIP were determined by dividing the Target LTIP Value listed above by the closing price on the date of grant, which was $42.60 on January 19, 2021. |
PSUs
Other Compensation Elements
PSUs
| Compensation Element | Objective | Key Features | | Other Compensation | To provide benefits that promote employee health and welfare, which assists in attracting and retaining our executive officers | Indirect compensation element consisting of programs such as medical, dental and vision insurance, a 401(k) plan with up to a 3% matching contribution, an employee stock purchase plan program and other plans and programs generally made available to employees | | Severance and Change in Control Benefits | To serve our retention and motivational objectives helping our named executive officers maintain continued focus and dedication to their responsibilities and objectivity to maximize stockholder value, including in the event of a transaction that could result in a change in control of the Company; particularly important in a time of increased consolidation in our industry and increased competition for executive talent | Provides protection in the event of an involuntary termination of employment under specified circumstances, including following a change in control of the Company as described below under “Executive Compensation-Severance and Change in Control Agreements” and “Estimate of Severance and Change in Control Benefits.” |
PSUs
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PSUs
Other Executive Compensation Matters Timing of Equity Grants We do not time grants either to take advantage of a depressed stock price or in anticipation of an increase in stock price and have limited the amount of discretion that can be exercised in connection with the timing of awards. We generally make awards only on pre-determined dates to ensure that awards cannot be timed to take advantage of material non-public information. Equity awards may be made only by the Compensation Committee. The Compensation Committee makes awards only at Compensation Committee meetings and awards are not granted during regular quarterly trading blackout periods. Stock Ownership Guidelines Our Board of Directors has adopted stock ownership guidelines for our senior executive officers, including our named executive officers. These guidelines provide for the Chief Executive Officer to hold an amount of our common stock, restricted shares and/or restricted stock units having an aggregate value equal to at least three times their base salary. For other senior executive officers, the stock ownership requirement is at least one times their base salary. Executive officers have five years to attain the applicable ownership threshold. As of the date of this Proxy Statement, all the named executive officers met the applicable ownership threshold. Compensation Recovery Policy Following the SEC’s recent approval of new clawback requirements, our Board of Directors reviewed the applicable Nasdaq and SEC standards and approved an updated clawback policy in compliance with the final SEC rules. This policy applies to current and former Section 16 officers and provides for the recovery by the Company following a financial restatement of any incentive compensation received in excess of what would have been received had such compensation been determined based on our restated financials. The Compensation Committee periodically reviews the Company’s approach to clawbacks. Hedging and Pledging Policy Our directors and executive officers are prohibited from engaging in short sales, transactions in derivative securities such as put or call options, hedging transactions or other inherently speculative transactions with respect to our stock. In addition, no director or executive officer may pledge or margin, or make any offer to pledge or margin, any of our stock, including without limitation, borrowing against such stock, at any time. Stock options granted under our stock option plans are not deemed to be derivative securities covered by this policy. Employees, other than our executive officers, are generally permitted to engage in transactions designed to hedge or offset market risk.
PSUs
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PSUs
Tax and Accounting Considerations and Compensation Recovery Policies
Section 409A of the Internal Revenue Code
Section 409A of the Internal Revenue Code Section 409A of the Internal Revenue Code imposes additional significant taxes if an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A. Our severance and change in control agreements described below, including the Employee Retention and Motivation Agreements we entered with our named executive officers, contain provisions that are intended to either avoid the application of Section 409A or, to the extent doing so is not possible, comply with the applicable Section 409A requirements. The Compensation Committee has the sole discretion to change the severance guidelines applicable to executive officers to the extent necessary to avoid the application of Section 409A or comply with applicable Section 409A requirements.
Analysis of Risk Associated with Our Compensation Plans
Analysis of Risk Associated with Our Compensation Plans In setting compensation, the Compensation Committee considers the risks to our stockholders and to the achievement of our goals that may be inherent in the compensation plans and programs for all employees, including our executives. When evaluating our overall executive compensation program, the Compensation Committee considers whether the program is based on the appropriate philosophy, benchmarked against the appropriate peer group and balanced between long and short-term performance targets and company and individual performance. Although a significant portion of our executives’ compensation is performance-based and “at-risk,” we believe our compensation plans and programs are appropriately structured so as not to encourage our employees to take excessive or unreasonable risks. We considered the following elements of our compensation plans and policies when evaluating whether such plans and policies are structured to encourage our employees to take unreasonable risks:
Analysis of Risk Associated with Our Compensation Plans
| ● | A detailed planning process with executive or Compensation Committee oversight exists for all compensation programs. | | ● | The proportion of an employee’s performance-based pay increases as the responsibility and potential impact of the employee’s position increases, which structure is in line with market practices. | | ● | Compensation consists of both fixed and variable components. The fixed portion (i.e., base salary) and variable portion (i.e., performance-based bonus and equity awards) provide a mix of compensation intended to produce corporate performance without encouraging excessive risk. | | ● | We set performance goals that we believe are strategically focused and consistent with building long-term stockholder value. | | ● | We use consistent corporate performance metrics from year-to-year rather than changing the metric to take advantage of changing market conditions. | | ● | Our short-term incentive plans are capped as to the maximum potential payout, which we believe mitigates excessive risk taking by limiting bonus payments even if we dramatically exceed the performance targets. | | ● | We modify the short-term and long-term incentive plans to reflect acquisitions consistent with our internal acquisition model, five-year strategic plan and publicly announced expectations. | | ● | The time-based vesting for RSUs and stock options ensures that our executives’ interests align with those of our stockholders for the long-term performance of the Company. | | ● | Assuming achievement of at least a minimum level of performance, payouts under our performance-based plans result in some compensation at levels below full target achievement, rather than an “all-or-nothing” approach. | | ● | Our long-term performance-based equity awards are based on multi-year criteria that align with our stockholders’ interests that we grow the Company in a highly profitable and disciplined manner. | | ● | In accordance with our written stock option grant policy, all equity grants must occur at a meeting of the Compensation Committee and management has no authority to issue equity. | | ● | The Compensation Committee retains and does not delegate any of its power to determine matters of executive compensation. | | ● | We maintain a system of controls and procedures designed to ensure that amounts are earned and paid in accordance with our plans and programs. | | ● | We do not allow our executives and directors to hedge their exposure to ownership of, or interest in, our stock. We also do not allow them to engage in speculative transactions with respect to our stock. |
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
| Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Option Awards(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($)(4) | Total ($) | | Yogesh Gupta, Chief Executive Officer | 2023 | 598,750 | 5,784,591 | 1,400,004 | 642,000 | 210,189 | 8,635,534 | | | 2022 | 575,000 | 4,542,957 | 1,100,007 | 644,000 | 38,249 | 6,900,213 | | | 2021 | 575,000 | 3,657,400 | 900,007 | 862,500 | 24,122 | 6,019,029 | | Anthony Folger, Chief Financial Officer | 2023 | 438,750 | 2,148,576 | 520,014 | 306,020 | 126,020 | 3,539,380 | | | 2022 | 414,423 | 1,652,016 | 400,004 | 302,120 | 23,055 | 2,791,618 | | | 2021 | 400,000 | 1,381,718 | 340,002 | 390,000 | 18,149 | 2,529,869 | | John Ainsworth, EVP and General Manager, Application and Data Platform(5) | 2023 | 423,250 | 991,659 | 240,013 | 227,375 | 110,441 | 1,992,738 | | | 2022 | 389,231 | 826,054 | 200,007 | 218,400 | 15,195 | 1,648,887 | | | 2021 | 370,000 | 650,220 | 160,007 | 277,500 | 14,586 | 1,472,313 | | Loren Jarrett, EVP and General Manager, Digital Experience | 2023 | 423,250 | 991,659 | 240,013 | 227,375 | 101,755 | 1,984,052 | | | 2022 | 389,231 | 826,054 | 200,007 | 218,400 | 54,075 | 1,687,767 | | | 2021 | 367,115 | 650,220 | 160,007 | 277,500 | 56,336 | 1,511,178 | | Sundar Subramanian EVP and General Manager, Infrastructure Management(6) | 2023 | 426,586 | 991,659 | 240,013 | 227,375 | 119,054 | 2,004,687 |
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
| (1) These amounts do not reflect the actual economic value realized by the named executive officer. In accordance with FASB ASC Topic 718, we estimate the fair value of each stock-based award on the measurement date, using either the current market price of the stock or the Monte Carlo Simulation valuation model, assuming the probable outcome of related performance conditions at target levels. See the description of our 2023 Annual Equity Program described in “Compensation Discussion and Analysis” in this Proxy Statement and Note 13 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023. The value at grant date of the PSUs included in the amounts shown in this column, assuming the highest level of performance conditions achieved (payout at 200% at target) are $7,000,088, $5,500,032 and $4,501,065 for Mr. Gupta for fiscal 2023, 2022 and 2021 respectively; $2,600,009, $2,000,003 and $1,700,480 for Mr. Folger for fiscal 2023, 2022 and 2021, respectively; $1,200,012, $1,000,046 and $800,216 for Ms. Jarrett and Mr. Ainsworth for fiscal 2023, 2022 and 2021, respectively; and, $1,200,012 for Mr. Subramanian for fiscal 2023. | | (2) Represents the grant date fair value of options on the date of grant. The grant date fair value of our options is equal to the number of shares subject to the option multiplied by the fair value of our options on the date of grant determined using the Black-Scholes option valuation model. The methodology and assumptions used to calculate the Black-Scholes value of our options are described in Note 13 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2023. | | (3) The amounts listed reflect the amounts earned under our Corporate Bonus Plan. For all individuals, bonus payments were accrued and earned in the year indicated and paid in the succeeding fiscal year. |
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
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Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
| (4) Amounts listed in this column for 2023 and prior years include: |
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
| Name, | Company Contributions (401(k)) ($) | Insurance Premiums ($) | Sales Leader Plan ($) | Taxable/ Fringe Benefit Expenses ($) | Dividend Equivalents ($) | | Mr. Gupta | | | | | | | 2023 | 30,000 | 720 | — | 708 | 178,762 | | 2022 | 9,150 | 720 | — | — | 28,379 | | 2021 | 12,161 | 720 | — | 141 | 11,100 | | Mr. Folger | | | | | | | 2023 | 30,000 | 634 | — | — | 95,386 | | 2022 | 9,150 | 633 | — | — | 13,272 | | 2021 | 12,182 | 576 | — | — | 5,391 | | Mr. Ainsworth | | | | | | | 2023 | 30,000 | 720 | 47,031 | 405 | 32,393 | | 2022 | 9,150 | 612 | — | 318 | 5,115 | | 2021 | 11,940 | 533 | — | 106 | 2,007 | | Ms. Jarrett | | | | | | | 2023 | 22,500 | 612 | 45,790 | 460 | 32,393 | | 2022 | 9,150 | 612 | 38,703 | 495 | 5,115 | | 2021 | 11,940 | 511 | 41,524 | 354 | 2,007 | | Mr. Subramanian | | | | | | | 2023 | 22,500 | 612 | 35,575 | 31,708 | 28,659 |
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
| (5) Mr. Ainsworth was not a named executive officer in fiscal 2021; however, he was in fiscal 2020 therefore we are reporting his compensation for 2021 as well in accordance with SEC rules. | | (6) Mr. Subramanian was not a named executive officer before fiscal 2023. The amount included as taxable/fringe benefit expenses for Mr. Subramanian also includes certain relocation expenses. |
Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
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Summary Compensation Table – Fiscal Years 2023, 2022 and 2021
Grants of Plan-Based Awards
Grants of Plan-Based Awards Table – 2023
Grants of Plan-Based Awards Table – 2023
Grants of Plan-Based Awards Table – 2023
| | | Estimated Future Pay-outs Under Non-Equity Incentive Plan Awards | | | Estimated Future Pay-outs Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units | All Other Option Awards: Number Securities Underlying Options | Exercise of or Base Price of Option Awards | Grant Date Fair Value of Stock and Option Awards | | Name | Grant Date(1) | Threshold ($)(2) | Target ($)(2) | Maximum ($)(2) | Threshold (#)(3) | Target (#)(3) | Maximum (#)(3) | (#)(4) | (#)(5) | ($/Sh) | ($)(6) | | Yogesh Gupta | — | 150,000 | 600,000 | 900,000 | — | — | — | — | — | — | — | | | 1/19/2023 | — | — | — | 8,510 | 68,081 | 136,162 | — | — | — | 3,500,044 | | | 1/19/2023 | — | — | — | — | — | — | 40,849 | — | — | 2,100,047 | | | 1/19/2023 | — | — | — | — | — | — | — | 97,155 | 51.41 | 1,400,004 | | Anthony Folger | — | 71,500 | 286,000 | 429,000 | — | — | — | — | — | — | — | | | 1/19/2023 | — | — | — | 3,161 | 25,287 | 50,574 | — | — | — | 1,300,005 | | | 1/19/2023 | — | — | — | — | — | — | 15,173 | — | — | 780,044 | | | 1/19/2023 | — | — | — | — | — | — | — | 36,087 | 51.41 | 520,014 | | John Ainsworth | — | 63,750 | 255,000 | 382,500 | — | — | — | — | — | — | | | | 1/19/2023 | — | — | — | 1,459 | 11,671 | 23,342 | — | — | — | 600,006 | | | 1/19/2023 | — | — | — | — | — | — | 7,003 | — | — | 360,024 | | | 1/19/2023 | — | — | — | — | — | — | — | 16,656 | 51.41 | 240,013 | | | | — | — | — | — | — | — | | — | — | | | Loren Jarrett | — | 63,750 | 255,000 | 382,500 | — | | | | | | | | | 1/19/2023 | — | — | — | 1,459 | 11,671 | 23,342 | — | — | — | 600,006 | | | 1/19/2023 | — | — | — | — | — | — | 7,003 | — | — | 360,024 | | | 1/19/2023 | — | — | — | — | — | — | — | 16,656 | 51.41 | 240,013 | | Sundar Subramanian | — | 63,750 | 255,000 | 382,500 | — | — | — | — | — | — | — | | | 1/19/2023 | — | — | — | 1,459 | 11,671 | 23,342 | — | — | — | 600,006 | | | 1/19/2023 | — | — | — | | — | — | 7,003 | — | — | 360,024 | | | 1/19/2023 | — | — | — | | — | — | — | 16,656 | 51.41 | 240,013 |
Grants of Plan-Based Awards Table – 2023
| (1) Awards granted on January 19, 2023, were approved by the Compensation Committee on January 9, 2023. | | (2) These columns indicate the range of payouts (25%, 100% and 150%) targeted for fiscal 2023 performance under our Corporate Bonus Plan as described in “Compensation Discussion and Analysis” in this Proxy Statement. The actual payout with respect to fiscal 2023 for each named executive officer is shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” For Messrs. Ainsworth and Subramanian and Ms. Jarrett, one-sixth of amounts are tied to performance under the Sales Leader Plan. | | (3) These columns represent performance share units awarded under our Long-Term Incentive Plan (LTIP). The amounts shown indicate the potential performance share units at threshold, target and maximum levels of performance. If the threshold is not achieved, no performance share units will be earned with respect to that performance metric. See “Compensation Discussion and Analysis” section of this Proxy Statement for additional discussion of the LTIP. | | (4) Represents RSUs that vest, subject to continuous employment, in six equal installments over three years beginning approximately nine months after the date of issuance. | | (5) Represents stock options that vest, subject to continuous employment, in eight equal installments over four years beginning approximately nine months after date of issuance. | | (6) For RSUs and PSUs, the value shown is the fair value of the awards, measured at the grant date. For stock options, the grant date fair value is equal to the number of shares subject to the option multiplied by the fair value of our options on the date of grant determined using the Black-Scholes option valuation model. The methodology and assumptions used to calculate the Black-Scholes value of our options are described in Note 13 of the consolidated financial statements contained in our Annual Report. The closing price of our stock on January 19, 2023, was $51.41. |
Grants of Plan-Based Awards Table – 2023
| 2024 Proxy Statement | 69 |
Grants of Plan-Based Awards Table – 2023
Narrative Description of Summary Compensation Table and Grants of Plan-Based Awards Table The material terms of our named executive officers’ annual compensation, including base salaries, cash incentive plan, time-based RSUs, stock options and Long-Term Incentive Plan PSUs and the explanations of the amounts of salary, cash incentives and equity values in proportion to total compensation are described under “Compensation Discussion and Analysis” in this Proxy Statement. As discussed in greater detail in “Compensation Discussion and Analysis” in this Proxy Statement, the 2023 non-equity incentive awards were granted pursuant to the fiscal 2023 Corporate Bonus Plan, with amounts to be earned based on the achievement of certain financial targets. In fiscal 2023, we achieved strong performance under our bonus plan with respect to the revenue, non-GAAP operating income and the adjusted free cash flow metrics, which resulted in an overall payout percentage of 107% with respect to the annual cash bonus. As discussed in greater detail in “Compensation Discussion and Analysis” in this Proxy Statement, the PSUs awarded under the Long-Term Incentive Plan will be earned based on the results achieved during the three-year performance period as determined following our 2025 fiscal year, contingent upon each named executive officer’s continued service. The RSUs granted to our named executive officers in 2023 vest in equal installments every six months over three years, subject to continuous employment. There is no purchase price associated with PSU or RSU awards. The stock options granted to our named executive officers in 2023 vest in equal installments every six months over four years, subject to continuous employment. The stock options have an exercise price equal to the closing price of our common stock on the date of grant.
Grants of Plan-Based Awards Table – 2023
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Grants of Plan-Based Awards Table – 2023
Outstanding Equity Awards The following table sets forth certain information with respect to the outstanding equity awards at November 30, 2023, for each of the named executive officers.
Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023
Outstanding Equity Awards at Fiscal Year-End 2023
| | | Option Awards | | | | | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options | | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(1) | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(4) | | | | Exercisable (#) | Unexercisable (#) | | | | | | | | Yogesh Gupta | 1/12/2018 | 69,195(5) | — | 50.69 | 1/11/2025 | — | — | — | — | | | 1/22/2019 | 100,275(6) | — | 34.73 | 1/21/2026 | — | — | — | — | | | 1/21/2020 | 63,503(7) | 9,071 | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 60,812(8) | 36,486 | 42.61 | 1/18/2028 | 5,282(9) | 284,489 | 52,817(10) | 2,844,724 | | | 1/20/2022 | 38,445(11) | 64,072 | 44.49 | 1/19/2029 | 18,544(12) | 998,780 | 61,812(13) | 3,329,194 | | | 1/19/2023 | 12,145(14) | 85,010 | 51.41 | 1/18/2030 | 34,041(15) | 1,833,448 | 68,081(16) | 3,666,843 | | Anthony Folger | 3/31/2020 | 34,095(7) | 6,299 | 31.49 | 3/30/2027 | — | — | — | — | | | 1/19/2021 | 22,975(8) | 13,782 | 42.61 | 1/18/2028 | 1,996(9) | 107,505 | 19,954(10) | 1,074,722 | | | 1/20/2022 | 13,980(11) | 23,299 | 44.49 | 1/19/2029 | 6,744(12) | 363,232 | 22,477(13) | 1,210,611 | | | 1/19/2023 | 4,511(14) | 31,576 | 51.41 | 1/18/2030 | 12,645(15) | 681,060 | 25,287(16) | 1,361,958 | | John Ainsworth | 1/12/2018 | 13,271(5) | — | 50.69 | 1/11/2025 | — | — | — | — | | | 1/22/2019 | 19,231(6) | — | 34.73 | 1/21/2026 | — | — | — | — | | | 1/21/2020 | 11,547(7) | 1,649 | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 10,812(8) | 6,486 | 42.61 | 1/18/2028 | 939(9) | 50,575 | 9,390(10) | 505,745 | | | 1/20/2022 | 6,990(11) | 11,650 | 44.49 | 1/19/2029 | 3,372(12) | 181,616 | 11,239(13) | 605,333 | | | 1/19/2023 | 2,082(14) | 14,574 | 51.41 | 1/18/2030 | 5,836(15) | 314,327 | 11,671(16) | 628,600 | | Loren Jarrett | 1/22/2019 | 19,231(6) | — | 34.73 | 1/21/2026 | — | — | — | — | | | 1/21/2020 | 11,547(7) | 1,649 | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 10,812(8) | 6,486 | 42.61 | 1/18/2028 | 939(9) | 50,575 | 9,390(10) | 505,745 | | | 1/20/2022 | 6,990(11) | 11,650 | 44.49 | 1/19/2029 | 3,372(12) | 181,616 | 11,239(13) | 605,333 | | | 1/19/2023 | 2,082(14) | 14,574 | 51.41 | 1/18/2030 | 5,836(15) | 314,327 | 11,671(16) | 628,600 | | Sundar Subramanian | 9/30/2019 | 14,617(17) | — | 38.06 | 6/28/2027 | — | — | — | — | | | 1/21/2020 | 9,898(7) | 1,413 | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 10,812(8) | 6,486 | 42.61 | 1/18/2028 | 939(9) | 50,575 | 9,390(10) | 505,745 | | | 1/20/2022 | 6,990(11) | 11,650 | 44.49 | 1/19/2029 | 3,372(12) | 181,616 | 11,239(13) | 605,333 | | | 1/19/2023 | 2,082(14) | 14,574 | 51.41 | 1/18/2030 | 5,836(15) | 314,327 | 11,671(16) | 628,600 |
Outstanding Equity Awards at Fiscal Year-End 2023
| (1) The unvested awards shown in this column are RSUs subject to service-based vesting, unless otherwise noted. |
Outstanding Equity Awards at Fiscal Year-End 2023
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Outstanding Equity Awards at Fiscal Year-End 2023
| (2) The market value of unvested RSUs was calculated as of November 30, 2023 (the last trading day of our fiscal 2022), based on the closing price of our common stock on Nasdaq of $53.86 on that date. | | (3) The unvested awards shown in this column are PSUs subject to performance-based vesting. PSUs are reported assuming payout at target award levels, unless otherwise noted. | | (4) The market value of unvested PSUs was calculated as of November 30, 2023, based on the closing price of our common stock on Nasdaq of $53.86 on that date. | | (5) Vested in eight equal semi-annual installments beginning October 1, 2018. | | (6) Vest in eight equal semi-annual installments beginning October 1, 2019. | | (7) Vest in eight equal semi-annual installments beginning October 1, 2020. | | (8) Vest in eight equal semi-annual installments beginning October 1, 2021. | | (9) Vest in six equal semi-annual installments beginning October 1, 2021. | | (10) Vested on February 1, 2024, based on the Company meeting total stockholder return and operating income criteria over the three-year period ending November 30, 2023. | | (11) Vest in eight equal semi-annual installments beginning October 1, 2022. | | (12) Vest in six equal semi-annual installments beginning October 1, 2022. | | (13) Vest on February 1, 2025, subject to the Company meeting total stockholder return and operating income criteria over the three-year period ending November 30, 2024. | | (14) Vest in eight equal semi-annual installments beginning October 1, 2023. | | (15) Vest in six equal semi-annual installments beginning October 1, 2023. | | (16) Vest on February 1, 2026, subject to the Company meeting total stockholder return and operating income criteria over the three-year period ending November 30, 2025. | | (17) Vest in eight equal semi-annual installments beginning April 1, 2020. |
Outstanding Equity Awards at Fiscal Year-End 2023
Option Exercises and Stock Vested The following table sets forth certain information regarding the number of stock options exercised and RSUs that vested in the fiscal year ended November 30, 2023, under our equity incentive plans and the corresponding amounts realized by the named executive officers. The value realized on exercise of stock option awards is calculated as the difference between the closing price of our common stock on Nasdaq on the exercise date and the exercise price of the applicable stock option award. The value realized on vesting for RSUs is calculated as the product of the number of shares subject to the RSUs that vested and the closing price of our common stock on Nasdaq on the vesting date.
Option Exercises and Stock Vested - Fiscal 2023
Option Exercises and Stock Vested - Fiscal 2023
Option Exercises and Stock Vested - Fiscal 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 ($) | | Yogesh Gupta | 149,573 | 4,696,143 | 98,819 | 5,365,938 | | Anthony Folger | 10,000 | 275,047 | 54,012 | 2,929,868 | | John Ainsworth | 23,490 | 743,400 | 17,855 | 969,585 | | Loren Jarrett | 36,761 | 719,886 | 17,855 | 969,585 | | Sundar Subramanian | — | — | 16,060 | 872,426 |
Option Exercises and Stock Vested - Fiscal 2023
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Option Exercises and Stock Vested - Fiscal 2023
Severance and Change in Control Agreements We have agreements with, or guidelines applicable to, our executive officers that provide the benefits described below in connection with certain terminations of employment or a change in control of the Company. We do not provide excise tax gross-ups to our executive officers under these or any other agreements. The Company is not obligated to pay any enhanced benefits to our executive officers in the event of a voluntary termination by an executive or upon termination by the Company for cause. Mr. Gupta’s Executive Employment Agreement In connection with his appointment as our President and Chief Executive Officer, we and Mr. Gupta entered into an employment agreement, effective as of October 10, 2016, setting forth Mr. Gupta’s compensation and certain other terms. Mr. Gupta’s employment agreement provides that if his employment is terminated because of an “involuntary termination,” he will be entitled to:
Option Exercises and Stock Vested - Fiscal 2023
| (1) the payment of cash severance equal to 18 months of total target cash compensation as of the date of termination, which will be paid over 18 months; | | (2) the payment of his annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; | | (3) the continuation, for a period of 18 months, of benefits that are substantially equivalent to the benefits (medical, dental, vision and life insurance) that were in effect immediately prior to termination; and | | (4) 18 months of acceleration of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). |
Option Exercises and Stock Vested - Fiscal 2023
Receipt of the severance and benefits is subject to Mr. Gupta’s execution of a standard separation and release agreement. Separation payments upon any involuntary termination within 24 months following a change in control would be governed by the Employee Retention and Motivation Agreement (“ERMA”) described below and not by Mr. Gupta’s employment agreement. An “involuntary termination” is defined in the employment agreement as a termination of employment by us other than for cause, disability or death or a termination by Mr. Gupta as a result of certain events occurring without his consent such as an assignment to him of duties or a significant reduction of his duties, either of which is materially inconsistent with his position prior to the assignment or reduction, or the removal of Mr. Gupta from that position, a material reduction in Mr. Gupta’s base salary or target bonus, a relocation of Mr. Gupta to a facility or location more than fifty miles from his then present location, or a material breach of the employment agreement by us. Mr. Gupta’s employment agreement also includes non-competition and related covenants. The non-competition covenant will be in effect for the duration of the period in which severance and other benefits are paid. The non-competition covenant relates to certain businesses with similar product areas and activities as Progress. Mr. Gupta’s Employee Retention and Motivation Agreement We and Mr. Gupta have also entered into an ERMA, which provides certain compensation and benefits if his employment is involuntarily terminated within 24 months of a change in control of the Company. If an involuntary termination of Mr. Gupta’s employment occurs under other circumstances, the severance terms of his employment agreement, as described above, would control and not the ERMA. Change in Control Benefits. Under Mr. Gupta’s ERMA, upon a change in control of the Company, Mr. Gupta would be entitled to:
Option Exercises and Stock Vested - Fiscal 2023
| (1) the payment of his annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; and |
Option Exercises and Stock Vested - Fiscal 2023
| 2024 Proxy Statement | 73 |
Option Exercises and Stock Vested - Fiscal 2023
| (2) 12 months of acceleration of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms), unless the acquirer assumes all such options and restricted equity. If such outstanding stock options and shares of restricted equity held by Mr. Gupta are continued by us or assumed by our successor entity, then vesting will continue in its usual course. |
Option Exercises and Stock Vested - Fiscal 2023
Involuntary Termination Following Change in Control. In the event of an involuntary termination within 24 months following a change in control, Mr. Gupta would be entitled to:
Option Exercises and Stock Vested - Fiscal 2023
| (1) a lump-sum payment of cash severance equal to 24 months of total target cash compensation as of the date of termination; | | (2) the continuation, for a period of 24 months, of benefits that are substantially equivalent to the benefits (medical, dental, vision and life insurance) that were in effect immediately prior to termination; and | | (3) accelerated vesting of all unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). |
Option Exercises and Stock Vested - Fiscal 2023
In the event that any amounts provided for under Mr. Gupta’s ERMA or otherwise payable to Mr. Gupta would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and be subject to the related excise tax, Mr. Gupta would be entitled to receive either full payment of the benefits under the agreement or such lesser amount that would result in no portion of the benefits being subject to the excise tax, whichever results in the greatest amount of after-tax benefits to Mr. Gupta. Mr. Folger’s Executive Employment Agreement In connection with his appointment as Chief Financial Officer, we and Mr. Folger entered into an employment agreement, effective January 31, 2020, setting forth Mr. Folger’s compensation and certain other terms. Mr. Folger’s employment agreement provides that if his employment is terminated because of an “involuntary termination,” he will be entitled to:
Option Exercises and Stock Vested - Fiscal 2023
| (1) the payment of cash severance equal to 12 months of total target cash compensation as of the date of termination, which will be paid over 12 months; | | (2) the continuation, for a period of 12 months of benefits that are substantially equivalent to the benefits (medical, dental, vision and life insurance) that were in effect immediately prior to termination; and | | (3) 12 months accelerated vesting of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). |
Option Exercises and Stock Vested - Fiscal 2023
Receipt of the severance and benefits is subject to Mr. Folger’s execution of a standard separation and release agreement, which will also include non-competition and related covenants. The non-competition covenant will be in effect for the duration of the period in which severance and other benefits are paid. The non-competition covenant relates to certain businesses with similar product area and activities as the Company. Separation payments upon any involuntary termination within 12 months following a change in control would be governed by the ERMA described below and not by Mr. Folger’s employment agreement. An “involuntary termination” is defined in the employment agreement as a termination of employment by the Company other than for “Cause” (as defined in the agreement), disability or death or a termination by Mr. Folger as a result of certain events occurring without his consent such as an assignment to him of duties, a significant reduction of his duties, either of which is materially inconsistent with his position prior to the assignment or reduction, or the removal of Mr. Folger from such position, a material reduction in Mr. Folger’s base salary or target bonus, a relocation of Mr. Folger to a facility or location more than fifty miles from his then-present location or a material breach of the employment agreement by the Company.
Option Exercises and Stock Vested - Fiscal 2023
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Option Exercises and Stock Vested - Fiscal 2023
Other Employee Retention and Motivation Agreements We have also entered into ERMAs with each of Messrs. Folger, Ainsworth, Subramanian and Ms. Jarrett. Currently, upon the involuntary termination of the executive officer within 12 months following a change in control, the executive officer will be entitled to receive a lump sum payment equal to 18 months of their total target compensation and their benefits will continue for 18 months. In addition, outstanding stock options and shares of restricted stock or restricted units held by the executive officer granted prior to the date of such termination under the Company’s equity plans which would otherwise become fully vested, nonforfeitable and not subject to any restrictions following the date of such termination shall instead become fully vested, nonforfeitable and not subject to restrictions as of the date of such termination. Under no circumstances would any of our executive officers be entitled to a gross-up payment under the ERMAs for any excise taxes to which they may be subject if any of the above payments and benefits are considered to be “parachute payments.” Executive Severance Guidelines We have adopted severance guidelines applicable to our executive officers, including the named executive officers other than Messrs. Gupta and Folger. Any severance payable to Messrs. Gupta and Folger is governed by the employment agreements described above. Our executive severance guidelines provide that upon an involuntary termination and the execution of a standard release of claims, an executive officer is entitled to:
Option Exercises and Stock Vested - Fiscal 2023
| (1) the payment of cash severance equal to 12 months of total target cash compensation as of the date of termination, which will be paid over 12 months; | | (2) the payment of their annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; | | (3) the continuation, for a period of 12 months of benefits that are substantially equivalent to the benefits (medical, dental and vision) that were in effect immediately prior to termination; and | | (4) 12 months of acceleration of unvested stock options and RSUs (but not unvested performance equity). |
Option Exercises and Stock Vested - Fiscal 2023
Severance payments and benefits upon any involuntary termination within 12 months following a change in control are governed by the Employee Retention and Motivation Agreement described below. The payment of severance and other benefits is conditioned upon the executive agreeing to non-competition, non-disparagement and related covenants. The non-competition covenant would be in effect for one year following the termination of employment. In connection with the termination of employment of an executive officer, all PSUs awarded to that executive officer are cancelled. Estimate of Severance and Change in Control Benefits at Fiscal-Year End The following table indicates the estimated payments and benefits that each of Messrs. Gupta, Folger, Ainsworth, Subramanian and Ms. Jarrett would have received under (a) their respective employment agreements, in the case of Mr. Gupta , (b) our severance guidelines applicable to executive officers, in the case of Messrs. Ainsworth, Folger, Subramanian and Ms. Jarrett and (c) each of their ERMAs, assuming in each case that the change in control of the Company, termination of their employment and/or retirement occurred at November 30, 2023.
Option Exercises and Stock Vested - Fiscal 2023
| 2024 Proxy Statement | 75 |
Option Exercises and Stock Vested - Fiscal 2023
These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the named executive officer, which amounts would only be known at the time that he or she becomes entitled to such payment.
Option Exercises and Stock Vested - Fiscal 2023
| | Involuntary Termination(1) ($) | Change in Control Only(2) ($) | Involuntary Termination Following Change in Control(2)(3) ($) | | Yogesh Gupta | | | | | Cash Severance | 1,800,000 | — | 2,400,000 | | Pro Rata Bonus | 600,000 | 600,000 | 600,000 | | Stock Options | 920,727 | — | 1,279,872 | | Restricted Stock Units | 2,383,305 | — | 3,116,717 | | Benefits(4) | 42,782 | — | 57,042 | | Total | 5,746,814 | 600,000 | 7,453,631 | | Anthony Folger | | | | | Cash Severance | 726,000 | — | 1,089,000 | | Pro Rata Bonus | 286,000 | — | 286,000 | | Stock Options | 353,706 | — | 591,629 | | Restricted Stock Units | 622,083 | — | 1,151,796 | | Benefits(4) | 38,417 | — | 57,626 | | Total | 2,026,206 | — | 3,176,051 | | John Ainsworth | | | | | Cash Severance | 680,000 | — | 1,020,000 | | Pro Rata Bonus | 255,000 | — | 255,000 | | Stock Options | 113,559 | — | 228,883 | | Restricted Stock Units | 297,361 | — | 546,517 | | Benefits(4) | 28,575 | — | 42,863 | | Total | 1,374,495 | — | 2,093,263 | | Loren Jarrett | | | | | Cash Severance | 680,000 | — | 1,020,000 | | Pro Rata Bonus | 255,000 | — | 255,000 | | Stock Options | 113,559 | — | 228,883 | | Restricted Stock Units | 297,361 | — | 546,517 | | Benefits(4) | 38,203 | — | 57,304 | | Total | 1,384,123 | — | 2,107,704 | | Sundar Subramanian | | | | | Cash Severance | 680,000 | — | 1,020,000 | | Pro Rata Bonus | 255,000 | — | 255,000 | | Stock Options | 111,978 | — | 227,301 | | Restricted Stock Units | 297,361 | — | 546,517 | | Benefits(4) | 31,076 | — | 46,614 | | Total | 1,375,415 | — | 2,095,432 |
Option Exercises and Stock Vested - Fiscal 2023
| (1) The amounts shown in the first column, with respect to stock options and RSUs, represent the value of certain unvested options and RSUs becoming fully vested and are calculated using the exercise price for each unvested stock option and the closing price of our common stock on November 30, 2023 (the last trading day of our fiscal 2023), which was $53.86. In the event of an involuntary termination, all unvested PSUs awarded to an individual under our Long-Term Incentive Plans (LTIP) are cancelled. |
Option Exercises and Stock Vested - Fiscal 2023
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Option Exercises and Stock Vested - Fiscal 2023
| (2) In the event of a change in control, there is no accelerated vesting of outstanding stock options or shares of restricted stock or restricted units provided that the acquirer assumes all such outstanding stock options and shares of restricted stock or restricted units held by the individual. These tables have been prepared under that assumption. However, if the acquirer does not assume all outstanding stock options and shares of restricted stock or restricted units of the individual, (i) in the case of Mr. Gupta there is limited (12 month) accelerated vesting of stock options and RSUs in the event of a change in control, which values, based on the closing price of our common stock on November 30, 2023, are $634,084 and $1,683,664, respectively, and (ii) in the case of Messrs. Folger, Ainsworth, Subramanian and Ms. Jarrett, there is limited (12 month) accelerated vesting of stock options and RSUs, and the values of stock options and RSUs indicated in the first column would apply upon a change in control. The amounts referenced in the foregoing sentence have been calculated using the exercise price for each unvested stock option and the closing price of our common stock on November 30, 2023, which was $53.86. Under the terms of the LTIP, in the event of a change in control, grantees are entitled to accelerated determination of PSUs earned under outstanding LTIP awards, unless the acquirer assumes such LTIP awards. Upon the change in control, our Compensation Committee will determine the number of PSUs that are eligible to be earned based on the actual attainment of the relevant metrics as of the change in control. Those PSUs determined to be earned will not become fully vested until the conclusion of the original three-year performance period, subject to the continued employment of the grantee through such date. Additionally, under the terms of the LTIP, in the event of an involuntary termination following a change in control, grantees are entitled to accelerated payout of PSUs determined to be earned under outstanding LTIP awards as of the change in control. For purposes of computing amounts attributable to accelerated vesting, the columns exclude all unvested PSUs awarded under our LTIP as those amounts are undeterminable. | | (3) The amounts shown reflect the value of certain unvested equity awards becoming fully vested in the event of an involuntary termination within 24 months following a change in control for Mr. Gupta, and involuntary termination within 12 months following a change in control for each of Messrs. Folger, Ainsworth, Subramanian and Ms. Jarrett. | | (4) Represents the estimated value of continuing benefits (medical, dental, vision and life insurance) for: |
Option Exercises and Stock Vested - Fiscal 2023
| a. | 18 months in the case of an involuntary termination of Mr. Gupta’s employment; and | | b. | 12 months in the case of an involuntary termination of employment of Messrs. Folger, Ainsworth and Subramanian and Ms. Jarrett, other than in connection with a change in control; 18 months, in the case of an involuntary termination in connection with a change in control. |
Option Exercises and Stock Vested - Fiscal 2023
| 2024 Proxy Statement | 77 |
CEO Pay Ratio
CEO Pay Ratio In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. The 2023 annual total compensation of our CEO Mr. Gupta is $8,635,534, the 2023 annual total compensation of our median compensated employee is $81,146, and the ratio of these amounts is 106 to 1. Progress recalculates the median employee each year for purposes of this ratio in order to capture growth and variation in our employee population due to our acquisitive growth strategy. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources system of record and the methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. For purposes of identifying our median compensated employee, we used our global employee population as of November 1, 2023, identified based on our human resources system of record. We utilized total direct compensation as our consistently applied compensation measure. In this context, total direct compensation means the applicable annual fixed pay determined as of November 1, 2023, the annual incentive cash target amount or commission target amount payable for service in 2023 and the approved value of the annual equity awards granted during 2023. To identify our median compensated employee, we then calculated the total direct compensation for our global employee population, converted other currencies to U.S. dollars as of November 30, 2023, and ordered the employees based on their total direct compensation. To compute the pay ratio, we then calculated both the CEO and median employee’s annual total compensation pursuant to the proxy disclosure rules and compared the annual total compensation of the CEO to that of the median employee.
CEO Pay Ratio
| 78 | |
CEO Pay Ratio
The following table sets forth information regarding the Company’s performance and the “compensation actually paid” to our NEOs, as calculated in accordance with applicable SEC rules. In accordance with the transitional relief under the SEC rules, only three years of information is required as this is the Company’s first year of disclosure under Item 402(v) of Regulation S-K.
CEO Pay Ratio
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year (a) | Summary Compensation Table Total for PEO($)(1)(2) (b) | Compensation Actually Paid to PEO($)(3) (c) | Average Summary Compensation Table Total for non-PEO NEOs($)(1)(2) (d) | Average Compensation Actually Paid to non-PEO NEOs($)(3) (e) | PRGS Total Stockholder Return($)(4) (f) | NASDAQ Computer Index Total Stockholder Return($)(4)(5) (g) | Net Income ($M) (h) | Non-GAAP Operating Income ($M)(6) (i) | | 2023 | 8,635,534 | 9,246,854 | 2,380,214 | 2,526,879 | 134.31 | 148.35 | 194.2 | 270.6 | | 2022 | 6,900,213 | 12,820,362 | 1,928,895 | 3,424,464 | 132.97 | 102.36 | 182.8 | 242.1 | | 2021 | 6,019,029 | 13,091,651 | 2,440,870 | 4,036,210 | 120.82 | 142.39 | 172.9 | 229.2 |
CEO Pay Ratio
| (1) The Principal Executive Officer (“PEO”) and non-PEO NEOs for the applicable years were as follows: |
CEO Pay Ratio
| ● | 2023: Mr. Gupta served as the PEO for the entirety of 2023. The Company’s other NEOs for 2023 were: Anthony Folger, John Ainsworth, Loren Jarrett and Sundar Subramanian. | | ● | 2022: Mr. Gupta served as the PEO for the entirety of 2022. The Company’s other NEOs for 2022 were: Anthony Folger, John Ainsworth, Loren Jarrett and Jeremy Segal. | | ● | 2021: Mr. Gupta served as the PEO for the entirety of 2021. The Company’s other NEOs for 2021 were: Anthony Folger, Stephen Faberman, Loren Jarrett and Gary Quinn. |
CEO Pay Ratio
| (2) Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in which the NEO served as PEO in the case of Mr. Gupta and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s other NEOs reported for the applicable year. | | (3) To calculate the compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Gupta and for the average of the other NEOs is set forth following the footnotes to this table. | | (4) Pursuant to rules of the SEC, the comparison assumes $100 was invested on November 30, 2020. Historic stock price performance is not necessarily indicative of future stock price performance. |
CEO Pay Ratio
| (5) The TSR Peer Group consists of the NASDAQ Computer Index, an independently prepared index (and which is used for the Company’s stock performance chart in the Annual Report on Form 10-K for the year ended November 30, 2023). |
CEO Pay Ratio
| (6) As noted in “Compensation Discussion and Analysis,” the Compensation Committee selected Non-GAAP Operating Income as a key metric for evaluating and rewarding management’s performance in the 2023 incentive program design. This measure is used to determine the payout of 40% of the 2023 corporate bonus plan, as well as 75% of the LTIP (on a three-year aggregated basis), and is aligned with the earnings we have reported to stockholders on a quarterly basis. |
CEO Pay Ratio
| 2024 Proxy Statement | 79 |
CEO Pay Ratio
The following tables set forth the detailed calculation from SCT Total to Compensation Actually Paid for the PEO and NEOs, respectively:
CEO Pay Ratio
| | PEO | | | | Fiscal Year | 2021 | 2022 | 2023 | | SCT Total | $6,019,029 | $6,900,213 | $8,635,534 | | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | ($4,557,407) | ($5,642,964) | ($7,184,594) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | $5,272,547 | $7,164,080 | $6,944,482 | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | $5,407,403 | $4,351,106 | $26,379 | | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $452,241 | $419,596 | $553,066 | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $497,837 | ($371,669) | $271,987 | | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | | Compensation Actually Paid | $13,091,651 | $12,820,362 | $9,246,854 |
CEO Pay Ratio
| | NEO | | | | Fiscal Year | 2021 | 2022 | 2023 | | SCT Total | $2,440,870 | $1,928,895 | $2,380,214 | | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | ($1,688,435) | ($1,282,551) | ($1,590,901) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | $1,922,508 | $1,628,288 | $1,537,748 | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | $1,142,112 | $1,115,953 | $7,467 | | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $105,531 | $95,362 | $122,452 | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $113,625 | ($61,483) | $69,899 | | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | | Compensation Actually Paid | $4,036,210 | $3,424,464 | $2,526,879 |
CEO Pay Ratio
Relationship Between Pay and Performance We believe the “Compensation Actually Paid” in each of the years reported above and over the three-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance.” “Compensation Actually Paid” is higher than our Summary Compensation Total figures in each year due to the increased value of performance-based and equity compensation as a result of strong stock price performance over the three-year period.
CEO Pay Ratio
| 80 | |
CEO Pay Ratio
The following charts provide a description of the relationship between the “Compensation Actually Paid” to the PEO and average of non-PEO NEOs and respective metrics. PRGS & Peer TSR vs. Compensation Actually Paid Net Income vs. Compensation Actually Paid
CEO Pay Ratio
| 2024 Proxy Statement | 81 |
CEO Pay Ratio
Operating Income vs. Compensation Actually Paid