DEF 14A of Nutanix, Inc.
Filed Oct 22, 2024 · FY20240001308179-24-000763
Proposal 1: Election of Three Class I and Three Class II Directors (See Page 20)
Proposal 1: Election of Three Class I and Three Class II Directors (See Page 20)
Proposal 1: Election of Three Class I and Three Class II Directors (See Page 20)
| | Our Board Recommends a VOTE FOR Max de Groen, Steven J. Gomo, and Mark Templeton as Class I Directors and Craig Conway, Virginia Gambale, and Brian Stevens as Class II Directors |
Proposal 1: Election of Directors
Proposal 1: Election of Directors
Proposal 1: Election of Directors
| | Our Board Recommends a VOTE FOR Max de Groen, Steven J. Gomo, and Mark Templeton as Class I Directors and Craig Conway, Virginia Gambale, and Brian Stevens as Class II Directors. |
Proposal 1: Election of Directors
Our Board currently consists of nine members divided into three classes:
Proposal 1: Election of Directors
| • | Class I directors: Max de Groen, Steven J. Gomo, and Mark Templeton, whose terms will expire at the Annual Meeting, unless re-elected. | | • | Class II directors: Craig Conway, Virginia Gambale, and Brian Stevens, whose terms will expire at the Annual Meeting, unless re-elected. | | • | Class III directors: David Humphrey, Rajiv Ramaswami, and Gayle Sheppard, whose terms will expire at the annual meeting of stockholders to be held after the end of the fiscal year ending July 31, 2025. |
Proposal 1: Election of Directors
We are in the second year of a three-year process of declassifying our Board. At the Annual Meeting, six Class I and Class II directors will stand for re-election to serve for one-year terms instead of the three-year terms that directors served prior to the start of the declassification of our Board. Until the declassification of our Board is completed, any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. From and after our 2025 annual meeting of stockholders, the division of our directors into classes will terminate in accordance with our Amended and Restated Certificate of Incorporation and all of our directors will stand for election annually. Mr. de Groen, Mr. Gomo, and Mr. Templeton have each been nominated to continue to serve as a Class I director for a one-year term, and Mr. Conway, Ms. Gambale, and Mr. Stevens have each been nominated to continue to serve as a Class II director for a one-year term. Each of these Class I nominees and Class II nominees has agreed to stand for re-election at the Annual Meeting. Our management has no reason to believe that Mr. de Groen, Mr. Gomo, and Mr. Templeton will be unable to serve as Class I directors. If elected at the Annual Meeting, Mr. de Groen, Mr. Gomo, and Mr. Templeton would continue to serve as Class I directors until the annual meeting of stockholders to be held after the end of fiscal year 2025 and until his successor has been duly elected, or if sooner, until his death, resignation or removal. If elected at the Annual Meeting, Mr. Conway, Ms. Gambale, and Mr. Stevens would continue to serve as Class II directors until the annual meeting of stockholders to be held after the end of fiscal year 2025 and until his or her successor has been duly elected, or if sooner, until his or her death, resignation or removal.
Class I Nominees for Re-Election at the Annual Meeting
Class I Nominees for Re-Election at the Annual Meeting
Class I Nominees for Re-Election at the Annual Meeting
| | Max de Groen | | | | Age: 39 Director since: 2020 Independent Board Committees: • Audit • Compensation (Chair) | Other public boards during the past five years: • None |
Class I Nominees for Re-Election at the Annual Meeting
| Professional background Mr. de Groen joined Bain Capital, a private investment firm, in 2011 and is currently a managing director in the Technology Vertical at Bain Capital. Prior to joining Bain Capital, Mr. de Groen was a consultant at The Boston Consulting Group, a management consulting firm, where he consulted in healthcare, financial services, and technology practice areas. Mr. de Groen currently serves on the board of directors of several private companies. Education B.S. in Finance from the University of Minnesota; M.B.A. from Harvard Business School. Key skills and experience Our Board believes that Mr. de Groen is qualified to serve as a member of our Board because of his significant corporate finance and business expertise gained from his experience in the venture capital and IT industries, including his time spent serving on the boards of directors of technology companies. |
Class I Nominees for Re-Election at the Annual Meeting
| | Steven J. Gomo | | | | Age: 72 Director since: 2015 Independent Board Committees: • Audit (Chair) • Nominating and Corporate Governance | Other public boards during the past five years: • Enphase Energy, Inc. (since 2011) • Micron Technology, Inc. (since 2018) |
Class I Nominees for Re-Election at the Annual Meeting
| Professional background Mr. Gomo previously served as Executive Vice President, Finance and Chief Financial Officer of NetApp, Inc., a computer storage and data management company from October 2004 until December 2011, as well as Senior Vice President, Finance and Chief Financial Officer from August 2002 to September 2004. He has served as chair of the board and a director of Enphase Energy, Inc., a solar energy management device maker, since March 2011; and a member of the board of directors of Micron Technology, Inc., a developer and manufacturer of semiconductor memory products, since October 2018. Mr. Gomo also previously served on the board of directors of Solaria Corporation, a solar energy products company, from October 2019 until May 2023; NetSuite Inc., a business management software company, from March 2012 until it was acquired by Oracle Corporation in November 2016; and SanDisk Corporation, a flash memory storage solutions and software company, from December 2005 until the company was acquired by Western Digital Corporation in May 2016. Education B.S. in Business Administration from Oregon State University; M.B.A. from Santa Clara University. Key skills and experience Our Board believes that Mr. Gomo is qualified to serve as a member of our Board because of his substantial corporate governance, operational and financial expertise gained from holding various executive positions at publicly-traded technology companies and from serving on the board of directors of several public companies. |
Class I Nominees for Re-Election at the Annual Meeting
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Class I Nominees for Re-Election at the Annual Meeting
| | Mark Templeton | | | | Age: 72 Director since: 2023 Independent Board Committees: • Compensation • Security and Privacy | Other public boards during the past five years: • Arista Networks, Inc. (since 2017) • Health Catalyst, Inc. (2020-2024) |
Class I Nominees for Re-Election at the Annual Meeting
| Professional background Mr. Templeton previously served at Citrix Systems, Inc., a virtualization, mobility management, networking and SaaS solutions company, where he served as Chief Executive Officer from June 2001 to October 2015, President from January 1998 to October 2015, and Vice President, Marketing from June 1995 to January 1998. He was also Chief Executive Officer of DigitalOcean, Inc., a cloud computing company, from June 2018 to August 2019. Mr. Templeton has served as a member of the board of directors of Arista Networks, Inc., a cloud networking solutions company, since June 2017. He previously served as a member of the board of directors of Citrix Systems, Inc. from May 1998 to October 2015, Equifax, Inc., a consumer credit reporting agency, from February 2008 to November 2018, Keysight Technologies, Inc., an electronics test and measurement equipment company, from December 2015 to July 2018, and Health Catalyst, Inc., a healthcare data and analytics technology and services company, from July 2020 to March 2024. He also currently serves on the board of directors of several private companies. Education B.A. in Industrial and Product design from North Carolina State University; M.B.A. from the Darden School of Business at the University of Virginia. Key skills and experience Our Board believes that Mr. Templeton is qualified to serve as a member of our Board because of his extensive and broad management experience, gained from his background as the chief executive officer of multiple technology companies and from serving on the board of directors of several public companies, including his strong domain knowledge of both cloud and datacenter infrastructure software. |
Class II Nominees for Re-Election at the Annual Meeting
Class II Nominees for Re-Election at the Annual Meeting
Class II Nominees for Re-Election at the Annual Meeting
| | Craig Conway | | | | Age: 70 Director since: 2017 Independent Board Committees: • Compensation • Nominating and Corporate Governance | Other public boards during the past five years: • Paylocity Holding Corporation (since 2024) • Salesforce, Inc. (since 2005) • Guidewire Software, Inc. (2010-2019) |
Class II Nominees for Re-Election at the Annual Meeting
| Professional background Mr. Conway previously served as President and Chief Executive Officer of PeopleSoft, Inc., an enterprise application software company, from 1999 to 2004. Mr. Conway also served as President and Chief Executive Officer of One Touch Systems from 1996 to 1999 and TGV Software from 1993 to 1996. Prior to that, Mr. Conway held executive management positions at a variety of leading technology companies, including Executive Vice President at Oracle Corporation, a global software and services company. Mr. Conway has served as a member of the board of directors of Salesforce, Inc., a cloud-based customer relationship management company, since October 2005 and Paylocity Holding Corporation, a cloud-based HCM and payroll software solutions company, since March 2024. Mr. Conway previously served as a director of Advanced Micro Devices, Inc., a semiconductor company, from September 2009 until May 2013, and Guidewire Software, Inc., an insurance technology company, from December 2010 until January 2019. Education B.S. in Computer Science and Mathematics, the State University of New York at Brockport. Key skills and experience Our Board believes that Mr. Conway is qualified to serve as a member of our Board because of his extensive and broad management experience, gained from his background as the chief executive officer of multiple technology companies and from serving on the board of directors of several public companies. |
Class II Nominees for Re-Election at the Annual Meeting
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Class II Nominees for Re-Election at the Annual Meeting
| | Virginia Gambale | | | | Age: 65 Director since: 2020 Independent Chair of the Board since June 2021 Board Committees: • Audit • Nominating and Corporate Governance (Chair) | Other public boards during the past five years: • EVERTEC, Inc. (since 2023) • Jamf Holding Corp. (since 2021) • Virtu Financial, Inc. (since 2020) • FD Technologies plc (2015-2023) • Regis Corporation (2018-2021) • JetBlue Airways Corporation (2006-2021) |
Class II Nominees for Re-Election at the Annual Meeting
| Professional background Ms. Gambale is Managing Partner of Azimuth Partners LLC, a technology advisory firm facilitating the growth and adoption of emerging technologies for financial services, consumer and technology companies. Prior to founding Azimuth Partners in 2003, Ms. Gambale held senior management positions at Merrill Lynch, Bankers Trust, Deutsche Bank and Marsh & McLennan. She was also the Head of Deutsche Bank Strategic Ventures, and subsequently a General Partner at Deutsche Bank Capital and ABS Ventures. Ms. Gambale currently serves on the boards of directors of: EVERTEC, Inc., a financial technology company, since May 2023; Virtu Financial, Inc., a financial services company, since January 2020; and Jamf Holding Corp., an Apple device management and security company, since May 2021. Ms. Gambale also currently serves on the board of directors of several private companies. She also previously served on numerous international public and private boards, including Core BTS, Regis Corporation, JetBlue Airways, Piper Jaffray, Workbrain, Synchronoss Technologies, IQ Financial, Avellino Lab USA, Inc., and FD Technologies plc. Education B.S. in Mathematics and Computer Science from the New York Institute of Technology. Key skills and experience Our Board believes Ms. Gambale is qualified to serve as a member of our Board because of her extensive prior experience in senior leadership positions in finance and technology, as well as her time spent serving on the boards of numerous public and private companies. |
Class II Nominees for Re-Election at the Annual Meeting
| | Brian Stevens | | | | Age: 61 Director since: 2019 Independent Board Committees: • Compensation • Security and Privacy (Chair) | Other public boards during the past five years: • Genpact Limited (since 2020) |
Class II Nominees for Re-Election at the Annual Meeting
| Professional background Mr. Stevens has served as Chief Executive Officer of Neuralmagic, Inc., a private machine learning company, since March 2021, and as its Executive Chairman from July 2019 until March 2021. Mr. Stevens has also served as a member of the board of directors of Genpact Limited, an IT services company, since May 2020. He previously served as Chief Technology Officer from April 2017 to May 2019 and as Vice President of Product from September 2014 to May 2019 of Google Cloud, owned by Alphabet, Inc., a multinational technology company, where he was responsible for leading the technology vision for Google’s public cloud offering. Prior to Google, from November 2001 until September 2014, Mr. Stevens served in various positions at Red Hat, Inc., an open source solutions company, including as Chief Technology Officer and Executive Vice President of Worldwide Engineering from September 2013 until September 2014. Mr. Stevens has also served on various boards in the past, including the American Red Cross, IEEE, Pentaho, Data Gravity, and the OpenStack Foundation. Education B.S. in Computer Science from the University of New Hampshire; M.S. in Computer Systems from Rensselaer Polytechnic Institute. Key skills and experience Our Board believes Mr. Stevens is qualified to serve as a member of our Board because of his extensive business experience and expertise in our industry, gained from his substantial leadership roles as well as his time spent serving on the boards of other technology companies. |
Class II Nominees for Re-Election at the Annual Meeting
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Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
| | David Humphrey | | | | Age: 47 Director since: 2020 Independent Board Committees: • Nominating and Corporate Governance • Security and Privacy | Other public boards during the past five years: • NortonLifeLock Inc. (2016-2021) • Genpact Limited (2012-2019) |
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
| Professional background Mr. Humphrey is currently a partner in the Technology, Media and Telecommunications Vertical and Co-Head of Bain Capital’s North America Private Equity businesses. Prior to joining Bain Capital, Mr. Humphrey was an investment banker in the mergers and acquisitions group at Lehman Brothers, a global financial firm, where he advised companies on mergers and acquisitions across a range of industries. Mr. Humphrey previously served as a member of the boards of directors of NortonLifeLock Inc. (formerly known as Symantec Corporation), a cybersecurity software and services company, from August 2016 until January 2021, Genpact Limited, an IT services company, from October 2012 to November 2019, and Bright Horizons Family Solutions Inc., a child-care services company, from May 2008 to June 2017. Mr. Humphrey currently also serves on the board of directors of several private companies. Education B.A. in Economics from Harvard College; M.B.A. from Harvard Business School. Key skills and experience Our Board believes that Mr. Humphrey is qualified to serve as a member of our Board because of his significant corporate finance and business expertise gained from his experience in the venture capital and IT industries, including his time spent serving on the boards of directors of various technology companies. |
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
| | Rajiv Ramaswami | | | | Age: 58 Director since: 2020 President and Chief Executive Officer Board Committees: • None | Other public boards during the past five years: • NeoPhotonics Corporation (2014-2022) |
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
| Professional background Mr. Ramaswami has served as our President and Chief Executive Officer since December 2020. A seasoned technology industry executive, Mr. Ramaswami has more than 30 years of experience spanning software, cloud services, and network infrastructure. He brings to our company a proven track record of building and scaling enterprises and teams, having a strong customer-centric approach, operational execution and developing innovative products and solutions to drive growth and value creation. Prior to joining Nutanix, Mr. Ramaswami served as Chief Operating Officer of Products and Cloud Services at VMware,Inc., a virtualization and cloud infrastructure solutions company, from October 2016 until December 2020. From April 2016 to October 2016, Mr. Ramaswami led VMware’s Networking and Security business as Executive Vice President and General Manager. Mr. Ramaswami served as Executive Vice President and General Manager, Infrastructure and Networking at Broadcom, a semiconductor, enterprise software and security solutions company, from February 2010 to January 2016, where he established Broadcom as a leader in data center, enterprise, and carrier networking. Prior to Broadcom, he served in multiple General Manager roles at Cisco, a global networking hardware and software technology company, across switching, data center, storage and optical networking business units. Earlier in his career, he held various leadership positions at Nortel, Tellabs, and IBM. Mr. Ramaswami also served as a member of the board of directors of NeoPhotonics Corporation, a manufacturer of telecommunications circuits, from March 2014 to August 2022. Mr. Ramaswami is an Institute of Electrical and Electronics Engineers Fellow and holds 36 patents, primarily in optical networking. Education B.Tech. in Electrical Engineering and Computer Science from the Indian Institute of Technology, Madras; M.S. and Ph.D. in Electrical Engineering and Computer Science from the University of California, Berkeley. Key skills and experience Our Board believes that Mr. Ramaswami’s extensive business experience and expertise in the technology industry, gained from his executive leadership roles at other technology companies, as well as the perspective and experience that Mr. Ramaswami brings as our President and Chief Executive Officer, uniquely qualify him to serve on our Board. |
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
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Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
| | Gayle Sheppard | | | | Age: 70 Director since: 2022 Independent Board Committees: • Audit • Security and Privacy | Other public boards during the past five years: • Envista Holdings Corporation (2020-2021) |
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
| Professional background Ms. Sheppard previously served as Chief Executive Officer of Bright Machines, Inc., a software-defined factory automation company. Ms. Sheppard also previously served as Corporate Vice President and Chief Technology Officer for Microsoft Asia, a division of Microsoft Corporation, a multinational technology company, where she was responsible for establishing the vision, strategy and execution programs for customer and partner co-innovation and digital transformation. Prior to that, Ms. Sheppard served as the Head of Global Expansion and Digital Transformation for Microsoft Cloud and AI, where she was responsible for the vision, strategy, and long-range P&L for growing Microsoft’s global Cloud Services and working with customers who are implementing multiyear digital innovation and modernization strategies and as the Corporate Vice President of Azure Data at Microsoft. Earlier in her career, she served as Vice President and General Manager of the Saffron AI/ML Division, Intel Corporation, a multinational technology company, and held various leadership positions at Saffron Technology, Inc., Ketera Technologies, Inc., and J.D. Edwards, Inc. She has founded, created, or contributed to start-up and Fortune 100 companies focused on AI platforms, solutions in business and consumer markets, and digitization of business in a wide variety of industries. Ms. Sheppard has served as a member of the board of directors of Astroscale Holdings Inc., an orbital debris removal company, since July 2023. Ms. Sheppard also previously served as a member of the board of directors of Envista Holdings Corporation, a medical technology holding company, from July 2020 until November 2021. Education B.S. in Business Administration from University of South Florida. Key skills and experience Our Board believes that Ms. Sheppard is qualified to serve as a member of our Board based on her extensive global business experience and deep technology expertise, gained from her leadership in driving global market expansion and advancing enterprise data and AI services. |
Class III Directors Continuing in Office Until the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
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Director Compensation
Director Compensation
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy Members of our Board who are not employees or officers of our company, also referred herein as our non-employee directors, receive compensation for their service. The Compensation Committee reviews the total compensation of our non-employee directors and each element of our outside director compensation policy annually. At the direction of the Compensation Committee, Compensia, Inc. (“Compensia”), a nationally recognized compensation consulting firm, annually analyzes the competitive position of our outside director compensation policy against the peer group used for executive compensation purposes. For a more detailed description of the role of Compensia, the Compensation Committee’s independent compensation consultant, please refer to the section titled “Executive Compensation – Compensation Discussion and Analysis – Compensation-Setting Process – Role of Compensation Consultant.” Under our amended and restated outside director compensation policy, each non-employee director is entitled to receive (i) an annual restricted stock unit (“RSU”) award on the date of each annual meeting of stockholders with a total dollar value of $250,000 for the director’s service as a board member (pro-rated for directors who first become a non-employee director other than at an annual meeting) that will vest on the earlier to occur of the day prior to the next occurring annual meeting or the one-year anniversary of the date of grant, subject to continued service, and (ii) annual cash retainers, payable quarterly in arrears, for the director’s service as follows:
Non-Employee Director Compensation Policy
| Annual RSU Award | | | | Board Member | | $250,000 | | Annual Cash Retainer | | | | Board Member | | $50,000 | | Additional Annual Cash Retainers | | | | Board Chair | | $107,500 | | Lead Independent Director | | $47,500 | | Additional Annual Cash Retainers for Committee Service | Chair | Member | | Audit Committee | $30,000 | $12,500 | | Compensation Committee | $20,000 | $10,000 | | Nominating and Corporate Governance Committee | $15,000 | $7,500 | | Security and Privacy Committee | $15,000 | $7,500 |
Non-Employee Director Compensation Policy
Non-employee directors receive no other form of remuneration, perquisites or benefits, but are reimbursed for their reasonable travel expenses incurred in attending board and committee meetings. Our 2016 Equity Incentive Plan provides that, in any fiscal year, none of our non-employee directors may be granted cash-settled awards with a grant date fair value of more than $750,000 (or, in connection with a director’s initial service, $1.5 million) or stock-settled awards with a grant date fair value of more than $750,000 (or, in connection with a director’s initial service, $1.5 million).
Non-Employee Director Compensation Policy
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Fiscal Year 2024 Director Compensation Table
Fiscal Year 2024 Director Compensation Table The following table provides information for all compensation awarded to, earned by or paid to each person who served as a non-employee director for all, or a portion of the fiscal year ended July 31, 2024, or a portion thereof. Mr. Ramaswami, our President and CEO, did not receive compensation for his service as a director. The compensation received by Mr. Ramaswami as an employee is shown in “Executive Compensation – Executive Compensation Tables – Fiscal Year 2024 Summary Compensation Table.”
Fiscal Year 2024 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards(1) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings ($) | All Other Compensation ($) | Total ($) | | Craig Conway | 67,685 | 280,170 | — | — | — | — | 347,855 | | Max de Groen | 82,726 | 280,170 | — | — | — | — | 362,896 | | Virginia Gambale | 185,507 | 280,170 | — | — | — | — | 465,677 | | Steven J. Gomo | 87,740 | 280,170 | — | — | — | — | 367,910 | | David Humphrey | 65,178 | 280,170 | — | — | — | — | 345,348 | | Gayle Sheppard | 69,295 | 280,170 | — | — | — | — | 349,465 | | Brian Stevens | 75,205 | 280,170 | — | — | — | — | 355,375 | | Mark Templeton | 49,705 | 280,170 | — | — | — | — | 329,875 |
Fiscal Year 2024 Director Compensation Table
| (1) The amounts reported in this column represent the aggregate grant date fair value of the RSUs granted, as computed in accordance with Financial Accounting Standards Board, Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“ASC Topic 718”). The assumptions used in the valuation of these awards are set forth in the notes to our consolidated financial statements included in our Annual Report on Form 10-K for our fiscal year ended July 31, 2024 filed with the SEC on September 19, 2024. These amounts do not necessarily reflect the actual economic value that may ultimately be realized by the director. |
Fiscal Year 2024 Compensation Highlights
| • | Annual Incentive Results – Our NEOs earned 70% of their respective target annual incentive opportunities. Despite 22% year-over-year ARR growth, we did not meet the threshold level of performance based on the aggressive internal ARR goals we established at the beginning of the fiscal year. We effectively managed our operating expenses despite not reaching our internal ARR threshold goal. |
Fiscal Year 2024 Compensation Highlights
| • | Performance-Based Long-Term Incentive Results – The results of our performance-based long-term incentive awards reflect the strength in our stock price and the returns we have delivered to stockholders. As of fiscal year-end, our total shareholder return (“TSR”) for each of our outstanding performance cycles was tracking above the 75th percentile of companies in the Nasdaq Composite Index. Our fiscal year 2022 awards paid out at maximum based on our relative performance from August 1, 2021 through July 31, 2024. |
Fiscal Year 2024 Compensation Highlights
| • | CEO Supplemental Long-Term Performance-Based Equity Award – In January 2024, the Compensation Committee determined that a supplemental long-term performance-based equity award was necessary to retain Mr. Ramaswami, who is a highly sought-after, recognized industry leader. This award, which is described in more detail later in this section, aligns compensation opportunities with the interests of our stockholders. We believe the award will enable continued execution of our long-term strategic plan and delivery of long-term value for our stockholders. |
Say-on-Pay Vote Results at 2023 Annual Meeting of Stockholders
| Discussion Topic | Nutanix Perspective | | CEO performance | • We are pleased that stockholders are supportive of our company’s progress, long-term strategy, and believe Mr. Ramaswami is the right long-term leader for Nutanix. We remain focused on enhancing the value proposition of Nutanix Cloud Platform and driving sustainable, profitable growth. • See “Letter from the Chair of the Compensation Committee” above for additional detail. | | Rationale for supplemental long-term performance-based equity award and stockholder policies | • The Compensation Committee appreciates many stockholders’ skepticism of supplemental, off-cycle equity awards and engaged extensively to provide stockholders with an understanding of the extraordinary circumstances that necessitated the award. Further, the Committee discussed with stockholders its efforts to develop an award structure that addressed these unique circumstances while furthering alignment of Mr. Ramaswami’s pay opportunities with long-term value creation for stockholders. • Mr. Ramaswami’s performance has been a key driver of our business evolution as well as our operational and financial success. Against the backdrop of his success and the highly competitive market for CEO talent, the Compensation Committee became aware that Mr. Ramaswami had been approached regarding a potential competitive opportunity outside Nutanix. • In these extraordinary circumstances, the Compensation Committee determined, after a series of meetings in consultation with its external advisors, that a supplemental long-term performance-based equity award was necessary to address the immediate retention concerns and provide a strong incentive for Mr. Ramaswami to continue to drive significant long-term value for stockholders. • The award is 100% performance-based and aligns with, but does not replace, our overall pay-for-performance driven compensation plan. • The award reflects the minimum value that the Compensation Committee believed was necessary to secure Mr. Ramaswami’s continued service. | | Use of relative and absolute performance targets | • The Compensation Committee believes that both absolute and relative performance objectives can serve a purpose in aligning executives with the stockholder experience. • The supplemental long-term performance-based equity award balances stockholders’ interests and long-term, sustained performance with our company’s retention objectives. The stock price performance-based restricted stock units (“PRSUs”) include challenging absolute stock price hurdles and a relative component that limits the payout if our company’s performance ranks at less than the 50th percentile of companies in the Nasdaq Composite Index. • The operational PRSUs align Mr. Ramaswami’s opportunity with the metrics most indicative of the successful execution of our business strategy. • Refer to the “Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award” section below for more detail on performance metrics, targets and weighting. | | The use of “one-time” or supplemental equity awards | • The supplemental long-term performance-based equity award to Mr. Ramaswami is not a reflection of a gap in compensation program design; rather, it is a reflection of the highly competitive market for CEO talent and our desire to retain Mr. Ramaswami’s leadership over the long term. • We have not historically used supplemental equity awards and will not use them going forward absent extraordinary circumstances. | | Disclosure of operational performance goals | • We appreciate that some stockholders expressed a preference for disclosure of operational goals in both the annual incentive plan and the supplemental award. While the specific targets are not disclosed for competitive reasons, the performance levels required to achieve a payout for each metric are anchored to the high-end of our long-range targets provided at our September 2023 Investor Day. Accordingly, meaningful outperformance relative to those plans is required. • We will continue to engage with stockholders on this topic and solicit feedback to inform future disclosure. |
Executive Compensation Practices
| What We Do | | What We Don’t Do | | | | Emphasize performance-based compensation with a balance between short-term and long-term incentives | | No retirement or pension-type plans other than the standard 401(k) plan offered to all employees | | | Maintain a 100% independent Compensation Committee | | No perquisites or personal benefits, other than standard benefits typically received by other employees | | | Engage an independent compensation consultant to advise the Compensation Committee | | No tax gross-ups for change of control payments and benefits | | | Review (at least annually) executive compensation strategy, potential risks, and compensation practices/levels of our selected compensation peer companies | | No short sales, hedging, or pledging of stock ownership positions and transactions involving derivatives of our stock | | | Align our compensation program with the interests of our stockholders through a focus on equity-based awards for executives and directors | | No strict benchmarking of compensation to a specific percentile of our compensation peer group | | | Emphasize PRSU awards over a multi-year performance period as a key component of our executive officers’ compensation | | No “single-trigger” payments or equity acceleration upon a change of control | | | Place our executive officers in the same broad-based company health and welfare benefits programs as other full-time salaried employees | | No guaranteed salary increases, annual incentive awards, or long-term incentive awards | | | Maintain robust stock ownership guidelines for our executive officers and non-employee directors | | No excessive risk taking promoted by our incentive plan designs | | | Maintain a compensation recovery policy that complies with SEC rules and Nasdaq listing requirements | | | | | Include caps on performance-based annual incentive and long-term equity incentive payouts for NEOs | | | | | Hold an annual advisory say-on-pay vote on NEO compensation | | |
Components of our Executive Compensation Program
| Component | Type | Duration | Factors Used to Determine | Rationale | | Base Salary | Cash | Ongoing | • Peer group data (no specific benchmark percentile or formula) • Role Scope • Experience • Performance • Internal Equity | • Provides a market competitive rate of pay aligned to role responsibilities | | Annual Incentive | Cash | 1 Year | • Target opportunities aligned to role, experience, performance, and peer group • Payouts aligned to business and individual performance | • Promotes the achievement of annual individual and business objectives tied to achieving our long-term priorities | | Long-Term Incentive | Equity | 3+ Years | • Target awards aligned to market and influenced by contributions to business results and potential impact on future results • Value realized driven by share price and our performance relative to Nasdaq Composite companies | • Promotes the achievement of our long-term strategic goals that drive our share price and create stockholder value • Retention |
Fiscal Year 2024 Compensation Mix
| (1) Data excludes Mr. Wall, who retired in June 2024, and includes full-year target compensation for Mr. Martin (annual incentive at target plus the value of his new hire equity award), who joined Nutanix as our Chief Legal Officer in June 2024. |
Fiscal Year 2024 Target Annual Incentive Opportunities
Fiscal Year 2024 Target Annual Incentive Opportunities The target annual incentive opportunities for our NEOs during fiscal year 2024 were as follows:
Fiscal Year 2024 Target Annual Incentive Opportunities
| Named Executive Officer | FY2024 Annual Incentive Target ($) | Annual Incentive Target (as % of Base Salary) | Change From Fiscal Year 2023 | | Rajiv Ramaswami | 800,000 | 100% | 0% | | Rukmini Sivaraman | 356,250 | 75% | 5.6% | | David Sangster | 356,250 | 75% | 0% | | Brian Martin(1) | 41,106 | 75% | N/A | | Tyler Wall(2) | 356,250 | 75% | 0% |
Fiscal Year 2024 Target Annual Incentive Opportunities
| (1) Mr. Martin’s incentive target was established upon his hire and prorated based on his June 2024 start date. | | (2) Mr. Wall retired from Nutanix in June 2024. |
Fiscal Year 2024 Executive Incentive Compensation Plan
At the time that the Compensation Committee approved these performance metrics, it believed that they would represent objective measures that are strong indicators of the success of our growth and business strategy for fiscal year 2024. Actual incentive award amounts under the fiscal year 2024 Executive Incentive Compensation Plan were calculated as the sum of the weighted payout percentage for each performance metric multiplied by the target annual opportunity in effect for each NEO and were paid in a lump sum during the first quarter of fiscal year 2025. The following table describes the relative weighting of each performance metric and the payout percentages used to calculate payouts under the fiscal year 2024 Executive Incentive Compensation Plan based on achievement of the targets at and between the low end of the target range and the high end of the target range.
Fiscal Year 2024 Executive Incentive Compensation Plan
| Performance Metric | Weighting | Plan Targets | Payout % | | ARR | | Less than 97.5% of Target | 0% | | | | Between 97.5% and 100% of Target | Between 0% and 100% | | | | 100% of Target | 100% | | | | Between 100% and 102.5% of Target | Between 100% and 200% | | | | 102.5% or More of Target | 200% | | Non-GAAP operating expenses excluding commissions | | 104% or More of Target | 0% | | | | Between 100% and 104% of Target | Between 0% and 100% | | | | 100% of Target | 100% | | | | Between 96% and 100% of Target | Between 100% and 200% | | | | Less than 96% of Target | 200% | | Employee engagement | | Less than 74% | 0% | | | | Between 74% and 78% | Between 0% and 100% | | | | 78% | 100% | | | | Between 78% and 82% | Between 100% and 200% | | | | 82% or More | 200% |
Fiscal Year 2024 Executive Incentive Compensation Plan
The specific targets for ARR and non-GAAP operating expenses excluding commissions were derived from our internal annual operating plan, which is not publicly disclosed for competitive reasons. With respect to each performance metric, the target achievement level was set at a level that the Compensation Committee believed was rigorous, would require stretch performance, and would drive stockholder value creation. The target achievement levels were not certain to be met at the time they were determined, and the payout curves require substantial outperformance of each performance metric to receive significantly above the 100% payout percentage (capped at 200%) for the metric. If the achievement levels rank between these percentile thresholds, the payout is determined using linear interpolation.
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts The achievement of each performance metric under the fiscal year 2024 Executive Incentive Compensation Plan was as follows:
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts
| Performance Metric | Achievement | Payout% | Weighting | Weighted Total | | ARR | Less than 97.5% of Target | 0.0% | 60% | 0% | | Non-GAAP operating expenses excluding commissions(1) | Less than 96% of Target | 200.0% | 30% | 60.0% | | Employee engagement | At Target (78%) | 100.0% | 10% | 10.0% | | | TOTAL WEIGHTED ACHIEVEMENT PERCENTAGE: | | | 70.0% |
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts
| (1) For Non-GAAP operating expenses excluding commissions, achievement below target (lower expenses) translates to a payout above target. |
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts
After considering each executive’s individual performance, the Compensation Committee determined that no adjustment to any NEO’s calculated payout was necessary. The aggregate payouts received by each NEO under the fiscal year 2024 Executive Incentive Compensation Plan were:
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts
| NEO | FY2024 Incentive Target ($) | FY2024 Incentive Payout ($) | | Rajiv Ramaswami | 800,000 | 560,000 | | Rukmini Sivaraman | 356,250 | 249,375 | | David Sangster | 356,250 | 249,375 | | Brian Martin(1) | 41,106 | 28,774 | | Tyler Wall(2) | 356,250 | N/A |
Fiscal Year 2024 Executive Incentive Compensation Plan Payouts
| (1) Mr. Martin’s incentive target was prorated based on his June 2024 start date. | | (2) Mr. Wall retired from Nutanix in June 2024 and did not receive an annual incentive payout for fiscal year 2024. |
Long-Term Equity-Based Compensation
Long-Term Equity-Based Compensation Our corporate culture encourages our NEOs to focus on our company’s long-term strategy. In keeping with this culture, our executive compensation program places a heavy emphasis on equity awards, the value of which depends on our stock price performance, to promote long-term performance. These equity awards include both time-based RSU awards and performance-based PRSU awards. Time-based RSU awards offer our NEOs predictable value delivery while aligning their interests with the long-term interests of our stockholders. We believe PRSU awards directly link a significant portion of the NEO’s target total direct compensation to our performance based on the returns we deliver for our stockholders relative to those of other companies in the Nasdaq Composite Index. The Compensation Committee, in consultation with our CEO (other than with respect to himself) and its compensation consultant, Compensia, determines the size, mix, material terms and, in the case of PRSU awards, performance metrics of the equity awards granted to our NEOs, taking into account a number of factors as described in the section titled “Executive Compensation – Compensation Discussion and Analysis – Compensation-Setting Process.”
Long-Term Equity-Based Compensation
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Fiscal Year 2024 Equity Awards
Fiscal Year 2024 Equity Awards The Compensation Committee continued to align pay and performance and tie the interests of our executive officers with the interests of our stockholders by using PRSUs as a standard component of the equity awards granted to our executive officers. PRSUs comprise 50% of each executive officer’s target annual award value. Annual PRSU awards are based on our TSR relative to the TSR of companies in the Nasdaq Composite Index over three years with interim measurements after one year and two years. To mitigate the influence of interim fluctuations in performance during the first two measurement periods, the achievement percentage is capped at 100% for the first two measurement periods. The Compensation Committee believes relative TSR is a straightforward and objective metric for evaluating our company’s performance against the performance of other companies and further aligns pay with performance and the interests of our executive officers with the experience and interests of our stockholders by promoting the creation of sustainable long-term value. The remaining 50% of each executive officer’s target award value was delivered in time-based RSU awards. The Compensation Committee considers many factors in determining the value of the annual equity awards made to our NEOs, including, but not limited to: competitive total compensation levels (cash and equity) among peer companies for comparable roles, individual performance, the retention value of current unvested equity holdings of each executive officer, and projected contribution towards the achievement of our short- and long-term goals. In establishing fiscal 2024 awards for our CEO and CFO in particular, the Compensation Committee took into consideration the strength of their respective performance and leadership, as well as the importance of continuing to provide market-competitive equity opportunities that reflected the significant year-over-year changes in market data. The equity awards granted in fiscal year 2024 under our 2016 Equity Incentive Plan were as follows:
Fiscal Year 2024 Equity Awards
| Named Executive Officer | Total Annual Target Award Value(1) ($) | Time-Based RSU Awards (#) | PRSU Awards (# at target) | Supplemental PRSU Target Award Value(2) ($) | Supplemental PRSU Awards (# at target) | | Rajiv Ramaswami | 15,000,000 | 254,151 | 254,151 | 30,000,000 | 565,481 | | Rukmini Sivaraman | 4,500,000 | 76,245 | 76,245 | – | – | | David Sangster | 3,000,000 | 50,830 | 50,830 | – | – | | Brian Martin(3) | 5,000,000 | 45,199 | –(3) | – | – | | Tyler Wall(4) | 2,500,000 | 42,358 | 42,358 | – | – |
Fiscal Year 2024 Equity Awards
| (1) The target award values are the values approved by the Compensation Committee and may not be the same as the grant date fair values calculated in accordance with ASC Topic 718 as reported in the “Fiscal Year 2024 Summary Compensation Table” appearing on page 49 of this proxy statement. | | (2) For a detailed discussion of Mr. Ramaswami’s supplemental long-term performance-based equity award, please see the section entitled “Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award.” | | (3) The value reflected for Mr. Martin aligns with his employment offer. The RSU portion of Mr. Martin’s awards was granted on July 10, 2024, in accordance with our standard practices. The PRSU portion was granted on September 10, 2024, and will be included in the Summary Compensation Table of our proxy statement for the fiscal year ending July 31, 2025. | | (4) Mr. Wall’s unvested outstanding equity awards were forfeited upon his retirement in June 2024. |
Fiscal Year 2024 Equity Awards
Each RSU represents a contingent right to receive one share of our Class A common stock upon vesting.
Fiscal Year 2024 Equity Awards
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Fiscal Year 2024 Equity Awards
The elements of the annual equity awards granted to these NEOs for fiscal year 2024 are as follows:
Fiscal Year 2024 Equity Awards
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Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award
Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award As discussed in the Letter from the Compensation Committee Chair above, the Compensation Committee approved a one-time supplemental long-term performance-based equity award for our President and CEO, Rajiv Ramaswami, in January 2024. Prior to the award, the Compensation Committee became aware that Mr. Ramaswami had been approached regarding a potential competitive opportunity outside Nutanix. As Mr. Ramaswami has been the key architect of our company’s transformation and is instrumental to our next stage of growth, the Compensation Committee sought to secure Mr. Ramaswami’s employment through the next stage of our growth while also aligning potential payout opportunities with the value we create for stockholders through the end of fiscal year 2027. The Chair of the Board and the Chair of the Compensation Committee led the process to consider a supplemental award. To ensure a diligent, thorough process, they directly engaged the Compensation Committee’s independent compensation consultant, Compensia, and outside counsel to weigh the value of Mr. Ramaswami’s continued leadership against the non-standard practice of making a one-time supplemental award. Following their review, they determined that a supplemental award was necessary in these extraordinary circumstances and sought to design an incentive that would address our Board’s retention concerns and align long-term pay with company performance while remaining consistent with Nutanix’s executive compensation philosophy. The Compensation Committee approved a supplemental award with a target value of $30 million that is delivered 100% in PRSUs, includes challenging performance objectives, and only vests if Mr. Ramaswami remains our CEO through fiscal year 2027. Absent extraordinary circumstances, the Compensation Committee will not use supplemental awards in the future. The structure of the supplemental long-term performance-based equity award is detailed below:
Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award
| Performance Metric | Metric Type | Weighting (% of Total) | Detail | | FY27 ARR (25%) FY27 Free Cash Flow (25%) | Operational | | • ARR is a key determinant of our top-line growth. • Free cash flow is a key measure of our organizational health and drives our investment strategy. • Threshold performance required to achieve the minimum payout for either performance metric is aligned to the high-end of the long-range (FY27 year-end) targets provided at our September 2023 Investor Day (ARR of $3.1-$3.3B and FCF of $700-$900M). | | Stock Price Hurdles (50%) | Stock Price | | • Our stock price is a direct reflection of the value we create for, and the returns we deliver to, our stockholders. • Stock price hurdles of $70, $80, and $90 (no linear interpolation) must be achieved and sustained for 90 consecutive calendar days to drive a payout at the end of the performance period. Target and maximum hurdles represent implied CAGRs of 13% to 20% through the end of fiscal year 2027. • Payout on the stock price component of the award is capped at target if our stock price is below the median of Nasdaq Composite companies over the performance period. |
Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award
The Compensation Committee believes this award:
Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award
| • | helps secure Mr. Ramaswami’s strategic vision and leadership through the next phase of our growth; | | • | motivates the appropriate behaviors that will drive growth, promote operational excellence, and link decision making to long-term strategy. In particular, the Compensation Committee believes that ARR is a critical measure of successful execution of our next phase growth objective over all time horizons, and for that reason believed it was important to maintain consistency with the growth metric used under our fiscal year 2024 Executive Incentive Compensation Plan; | | • | provides a strong mix of stretch operational and share price performance goals that focus Mr. Ramaswami on strategic execution while directly aligning his incentives with stockholder interests; and | | • | represents the minimum value required to retain Mr. Ramaswami. |
Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award
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Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based Equity Award
Supplemental awards are not a regular part of our executive compensation program, and absent extraordinary circumstances, the Compensation Committee will not use them going forward. Given the long-term forward-looking nature of our ARR and free cash flow targets, prospective disclosure of these targets could cause irreparable harm by providing competitors with insights into our multi-year strategic road map and business initiatives. As noted above, the Compensation Committee intentionally set the threshold goals for each operational metric in alignment with the high-end of our long-range targets to ensure the award incorporated challenging goals that would not provide any payout without meaningful outperformance relative to our long-term plans.
Chief Legal Officer Transition
our company’s legal operations could be adequately transitioned. The Compensation Committee subsequently approved a transition agreement for Mr. Wall that considered the value of his foregone annual incentive, his equity award forfeitures upon retirement, and the importance of maintaining continuity within our legal operations during the period of transition. Accordingly, the Compensation Committee determined to provide Mr. Wall a transition payment of $1.35 million plus COBRA payments for 12 months, to be paid following his retirement. Other than his salary and the vesting of previously granted equity awards prior to his retirement, these payments represent the only compensation paid to Mr. Wall for his services during the year. Mr. Martin was appointed Chief Legal Officer in June 2024.
Severance and Change of Control-Related Benefits
Severance and Change of Control-Related Benefits Our NEOs each participate in our Executive Severance Policy and our Change of Control and Severance Policy. Our Executive Severance Policy provides eligible employees with protections in the event of the involuntary termination of their employment under circumstances not related to a change of control of our company. Our Change of Control and Severance Policy provides eligible employees with protections in the event of their involuntary termination of employment following a change of control of our company. In addition, certain of our executive officers may have such provisions in their employment agreements. We believe that these protections assist us in retaining our executive officers and allow them to maintain continued focus and dedication to their responsibilities to maximize stockholder value, including any potential transaction that could involve a change of control of our company. The terms of these agreements, our Executive Severance Policy, and our Change of Control and Severance Policy are evaluated periodically by our Board and the Compensation Committee against our retention objectives, a review of relevant market data prepared by the Compensation Committee’s compensation consultant, Compensia, and with consideration for our ability to attract and retain critical executive talent. For a summary of the material terms and conditions of these post-employment compensation arrangements, see the section titled “Executive Compensation – Employment Arrangements.”
Role of the Compensation Committee
Role of the Compensation Committee Pursuant to its charter, the Compensation Committee is primarily responsible for establishing, approving, and adjusting compensation arrangements for our executive officers, including our CEO and other NEOs, reviewing and approving corporate goals and objectives relevant to these compensation arrangements, evaluating executive performance against the backdrop of our corporate goals and objectives, and determining the long-term incentive component of our executive compensation arrangements in light of factors related to our performance, including accomplishment of our long-term business and financial goals. For additional information about the Compensation Committee, see the section titled “Corporate Governance - Board of Directors and Its Committees - Compensation Committee” in this proxy statement. Compensation decisions for our executive officers are made by the Compensation Committee, with the input of its independent compensation consultant and our CEO and management team (except with respect to their own compensation). The Compensation Committee periodically reviews and, as necessary, adjusts the cash and equity compensation of our executive officers with the goal of ensuring that our executive officers are properly incentivized. The Compensation Committee considers compensation data from our compensation peer group as one of several factors that inform its judgment of appropriate parameters for target compensation levels. The Compensation Committee, however, does not strictly benchmark compensation to a specific percentile of our compensation peer group, nor does it apply a formula or assign relative weights to specific compensation elements. In addition, while market data is a factor, the Compensation Committee is forward-looking in aligning our executive compensation program with the unique growth opportunity we believe we have, and the risks associated with pursuing the opportunity, which are not captured by reviewing peer data.
Role of Compensation Consultant
Role of Compensation Consultant The Compensation Committee is authorized, in its sole discretion, to retain the services of one or more compensation consultants, outside legal counsel, and such other advisors as necessary to assist with the execution of its duties and responsibilities. For fiscal year 2024, the Compensation Committee engaged Compensia, a national compensation consulting firm, to conduct market research and analysis on our various executive positions, to assist the Compensation Committee in developing appropriate incentive plans for our executive officers on an annual basis, to provide the Compensation Committee with advice and ongoing recommendations regarding material executive compensation decisions, and to review compensation proposals of management. Compensia evaluated the following components to assist the Compensation Committee in establishing executive compensation for fiscal year 2024:
Role of Compensation Consultant
| • | base salary; | | • | target and actual annual incentive compensation; | | • | target and actual total cash compensation (base salary and annual incentive compensation); | | • | long-term incentive compensation in the form of equity awards; and | | • | beneficial ownership of our Class A common stock. |
Role of Compensation Consultant
As described above in the section titled “Corporate Governance – Director Compensation – Non-Employee Director Compensation Policy,” Compensia also annually provides, at the direction of the Compensation Committee, an analysis of the competitive position of our non-employee director compensation policy against the compensation peer group used for executive compensation purposes.
Role of Compensation Consultant
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Role of Compensation Consultant
Based on consideration of the factors specified in the SEC rules and Nasdaq listing standards, the Compensation Committee does not believe that its relationship with Compensia and the work of Compensia on behalf of the Compensation Committee and our management team has raised any conflicts of interest. The Compensation Committee reviews these factors on an annual basis. As part of the Compensation Committee’s determination of Compensia’s independence for fiscal year 2024, it received written confirmation from Compensia addressing these factors and stating its belief that it remains an independent compensation consultant to the Compensation Committee.
Compensation Peer Group
Compensation Peer Group The Compensation Committee reviews compensation market data from companies that we believe are comparable to our company in order to provide insight on competitive pay practices and levels for executive talent. With Compensia’s assistance, the Compensation Committee developed a peer group for use when making its fiscal year 2024 compensation decisions, which consisted of publicly traded information technology companies with revenues and market capitalizations similar to that of our company and generally based in the United States, including companies based in California. While the Compensation Committee considers compensation practices of the peer companies, the Compensation Committee uses this information as one of many factors in its evaluation of compensation matters, as described above, and does not set compensation levels to meet specific percentiles. The Compensation Committee referred to compensation data from this peer group when making fiscal year 2024 base salary, annual incentive, and equity award decisions for our executive officers, including our NEOs. In June 2024, the Compensation Committee reviewed the compensation peer group to be used for compensation decision-making for fiscal year 2025. With Compensia’s assistance, the Compensation Committee approved certain changes to the existing peer group based on relative size and, in certain cases, acquisition-related activity. New Relic, Splunk, and VMware were removed following their acquisitions and SolarWinds was removed based on its relative size. The Compensation Committee approved the addition of Dynatrace, NetApp, and Okta to the peer group for fiscal year 2025. Both the fiscal year 2024 and fiscal year 2025 compensation peer groups are detailed below.
Compensation Peer Group
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Compensation Peer Group
The following graphic illustrates our size relative to the 2025 peer group based on annual revenue (trailing four quarters as reported) and market capitalization as of July 31, 2024.
Employment Arrangements
Employment Arrangements We have employment agreements with our currently employed NEOs. Each of these arrangements provides for “at-will” employment and sets forth the initial terms and conditions of employment of the NEO, including base salary, target annual incentive opportunity, standard employee benefit plan participation, a recommendation for an initial grant of an option to purchase shares of our common stock or other equity awards, opportunities for post-employment compensation and vesting acceleration terms. These agreements also set forth the rights and responsibilities of each party and may protect both parties’ interests in the event of a termination of employment by providing for certain payments and benefits under specified circumstances, including following a change of control of our company. These offers of employment were each subject to the execution of a standard proprietary information and invention assignment agreement and proof of identity and work eligibility in the United States. Each of these agreements was approved on our behalf by the Compensation Committee or our Board at the recommendation of the Compensation Committee. We believe that these arrangements were necessary to induce these individuals to forgo other employment opportunities or leave their then-current employer for the uncertainty of a demanding position in a new and unfamiliar organization. For a summary of the material terms and conditions of our employment agreements with our NEOs, see the section titled “Executive Compensation – Employment Arrangements” below.
Taxation of “Parachute” Payments and Deferred Compensation
Taxation of “Parachute” Payments and Deferred Compensation We do not provide our NEOs with a “gross-up” or other reimbursement payment for any tax liability that they might owe as a result of the application of Sections 280G, 4999, or 409A of the Code. Sections 280G and 4999 of the Code provide that certain officers and directors, and service providers who hold significant equity interests, and certain highly compensated service providers may be subject to an excise tax if they receive payments or benefits in connection with a change of control that exceeds certain prescribed limits, and that our company, or a successor, may forfeit a deduction on the amounts subject to this additional tax. However, under our Change of Control and Severance Policy, if any payment or benefits to a policy participant, including the payments and benefits under the policy, would constitute a “parachute payment” within the meaning of Section 280G of the Code and would therefore be subject to an excise tax under Section 4999 of the Code, then such payments and benefits will be either (i) reduced to the largest portion of the payments and benefits that would result in no portion of the payments and benefits being subject to the excise tax, or (ii) not reduced, whichever, after taking into account all applicable federal, state, and local employment and income taxes and the excise tax, results in the participant’s receipt, on an after-tax basis, of the greater payments and benefits. Section 409A also imposes additional significant taxes on the individual in the event that an executive officer, director, or other service provider receives “deferred compensation” that does not meet certain requirements of Section 409A of the Code.
Accounting for Stock-Based Compensation
Accounting for Stock-Based Compensation We follow ASC Topic 718 for our stock-based awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards made to employees and directors, including stock options, RSU awards, and PRSU awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below. ASC Topic 718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements over the period that a NEO is required to render service in exchange for the award.
Fiscal Year 2024 Summary Compensation Table
| Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Option Awards ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation(3) ($) | Total ($) | | Rajiv Ramaswami | 2024 | 800,008 | — | — | 49,781,703 | 560,000 | 2,000 | 51,143,711 | | President and CEO | 2023 | 800,010 | — | — | 13,153,930 | 892,000 | — | 14,845,940 | | | 2022 | 783,596 | — | — | 11,165,080 | 980,000 | — | 12,928,676 | | Rukmini Sivaraman | 2024 | 474,431 | — | — | 5,939,485 | 249,375 | 2,000 | 6,665,291 | | Chief Financial Officer | 2023 | 449,431 | — | — | 4,778,000 | 376,313 | — | 5,603,744 | | | 2022 | 366,329 | — | — | 5,255,793 | 291,267 | — | 5,913,389 | | David M. Sangster | 2024 | 475,008 | — | — | 3,959,657 | 249,375 | 2,000 | 4,686,040 | | Chief Operating Officer | 2023 | 475,010 | — | — | 4,778,000 | 397,219 | — | 5,650,229 | | | 2022 | 465,263 | — | — | 3,907,717 | 436,406 | — | 4,809,386 | | Brian Martin(4) | 2024 | 54,808 | — | — | 2,676,685 | 28,774 | — | 2,760,267 | | Chief Legal Officer | | | | | | | | | | Tyler Wall(5) | 2024 | 447,604 | — | — | 3,299,688 | — | 1,382,975 | 5,130,267 | | Former Chief Legal Officer | 2023 | 475,010 | — | — | 4,300,200 | 397,219 | — | 5,172,429 | | | 2022 | 465,263 | — | — | 2,679,554 | 436,406 | — | 3,581,223 |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table presents, for each of our NEOs, information concerning plan-based awards granted during the fiscal year ended July 31, 2024. This information supplements the information about these awards set forth in the “Fiscal Year 2024 Summary Compensation Table” above.
Grants of Plan-Based Awards
| | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: | Grant Date Fair Value of | | Name | Award Type | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Number of Shares of Stock or Units (#) | Stock and Option Awards(8) ($) | | Rajiv Ramaswami | Cash incentive | — | — | 800,000 | 1,600,000 | — | — | — | — | — | | | Time-based RSUs(2) | 8/29/2023 | — | — | — | — | — | — | 254,151 | 7,830,392 | | | PRSUs(3) | 8/29/2023 | — | — | — | 127,076 | 254,151 | 508,302 | — | 11,967,971 | | | PRSUs - SP(4) | 1/7/2024 | — | — | — | — | 238,398 | 476,796 | — | 14,983,314 | | | PRSUs - FCF(5) | 1/7/2024 | — | — | — | — | 163,542 | 327,084 | — | 7,500,036 | | | PRSUs - ARR(6) | 1/7/2024 | — | — | — | — | 163,541 | 327,082 | — | 7,499,990 | | Rukmini Sivaraman | Cash incentive | — | — | 356,250 | 712,500 | — | — | — | — | — | | | Time-based RSUs(2) | 8/29/2023 | — | — | — | — | — | — | 76,245 | 2,349,108 | | | PRSUs(3) | 8/29/2023 | — | — | — | 38,123 | 76,245 | 152,490 | — | 3,590,377 | | David M. Sangster | Cash incentive | — | — | 356,250 | 712,500 | — | — | — | — | — | | | Time-based RSUs(2) | 8/29/2023 | — | — | — | — | — | — | 50,830 | 1,566,072 | | | PRSUs(3) | 8/29/2023 | — | — | — | 25,415 | 50,830 | 101,660 | — | 2,393,585 | | Brian Martin | Cash incentive | — | — | 41,106 | 82,212 | — | — | — | — | — | | | Time-based RSUs(7) | 7/10/2024 | — | — | — | — | — | — | 45,199 | 2,676,685 | | Tyler Wall(9) | Cash incentive | — | — | 356,250 | 712,500 | — | — | — | — | — | | | Time-based RSUs(2) | 8/29/2023 | — | — | — | — | — | — | 42,358 | 1,305,050 | | | PRSUs(3) | 8/29/2023 | — | — | — | 21,179 | 42,358 | 84,716 | — | 1,994,638 |
Grants of Plan-Based Awards
| (1) The amounts reported in this column represent cash incentive compensation opportunities under the fiscal year 2024 Executive Incentive Compensation Plan at target levels for our corporate objectives. For achievement in excess of target, overperformance could be rewarded with a payout of up to an additional 100% of each NEO’s target (for a maximum payment of 200% of each NEO’s target). | | (2) The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested on December 15, 2023, subject to continued service to us through each vesting date. | | (3) The PRSUs are eligible to vest in up to three installments based on the TSR of our company relative to the TSR of companies in the Nasdaq Composite Index over three performance periods: (i) August 1, 2023 to July 31, 2024, (ii) August 1, 2023 to July 31, 2025, and (iii) August 1, 2023 to July 31, 2026. PRSUs that become eligible to vest based on performance vest on September 15 following the period, subject to continued service to us through the vesting date. The total number of PRSUs that are eligible to vest range from an achievement percentage of 0% to 200% of the target number of PRSUs, except that the achievement percentage is capped at 100% for the first two performance periods. Up to one-third of the target number of PRSUs are eligible to vest as a result of performance for each of the first two performance periods. The achievement percentage is (i) 0% if our TSR ranks below the 25th percentile of the indexed companies, (ii) 50% if our TSR ranks at the 25th percentile of the indexed companies, (iii) 100% if our TSR ranks at the 50th percentile of the indexed companies, and (iv) 200% if our TSR ranks at the 75th percentile of the indexed companies. If our TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation. 100% of the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will be eligible to vest with respect to the third performance period, less any PRSUs already vested in the first two performance periods. The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the end of the third performance period, with the achievement percentage for the period subject to reduction so that the product of the ending price per share at the end of the period multiplied by the achievement percentage cannot exceed $144.40. | | (4) The PRSUs are eligible to vest at the target level of stock price performance and become eligible to vest in a range from 0% to 200% of the target number based on actual performance achieved relative to the following stock price hurdles at any time during the period that began on the grant date and ends on July 31, 2027 (the “Performance Period”): (i) 100% of the PRSUs for a stock price hurdle of $70, (ii) 150% of the PRSUs for a stock price hurdle of $80, and (iii) 200% of the PRSUs for a stock price hurdle of $90. A stock price hurdle is only achieved if the average closing price of our company’s common stock is equal to or greater than the hurdle price for 90 consecutive calendar days. None of the PRSUs become eligible to vest for achievement of a stock price hurdle of less than $70. In addition, a maximum of 100% of the target number of PRSUs will be eligible to vest if our company’s TSR ranks at less than the 50th percentile relative to the TSR of companies in the Nasdaq Composite Index during the Performance Period. Achievement of the stock price hurdles may occur at any time during the Performance Period, but vesting will remain subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. |
Grants of Plan-Based Awards
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Grants of Plan-Based Awards
| (5) The PRSUs become eligible to vest upon achievement of specified Free Cash Flow hurdles, with achievement of 100% of the PRSUs at the target level of FCF performance and additional achievement levels of 150% and 200% of the target number of PRSUs at higher levels of FCF performance. None of the PRSUs are eligible to vest if performance is below the target level of FCF performance. The target level FCF was set relative to our company’s internal long-term plans and requires strong performance over the Performance Period to be achieved. FCF will be measured over the last four completed fiscal quarters ending on the last day of the Performance Period on July 31, 2027. Linear interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. | | (6) The PRSUs become eligible to vest upon achievement of specified ARR hurdles, with achievement of 100% of the PRSUs at the target level of ARR performance and additional achievement levels of 150% and 200% of the target number of PRSUs at higher levels of ARR performance. None of the PRSUs are eligible to vest if performance is below the target level of ARR performance. The target level ARR was set relative to our company’s internal long-term plans and requires strong performance over the Performance Period to be achieved. ARR will be measured as of the last day of the Performance Period on July 31, 2027. Linear interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. | | (7) The RSUs vest 25% on September 15, 2025 and the remainder in 12 equal quarterly installments, with the first quarterly installment vesting on December 15, 2025, subject to continued service to us through each vesting date. | | (8) The amounts reported in this column represent the aggregate grant date fair value of equity awards, as computed in accordance with ASC Topic 718. These amounts do not necessarily reflect the actual economic value that may ultimately be realized by the NEOs. The grant date fair value for time-based RSUs and PRSUs tied to operational/financial goals reported in the table is calculated in accordance with ASC Topic 718 based on the closing price per share of our Class A common stock as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value for PRSUs tied to market conditions in the table is calculated in accordance with ASC Topic 718 using Monte Carlo simulations. A Monte Carlo simulation requires the use of various assumptions, including the stock price volatility and risk-free interest rate as of the valuation date corresponding to the length of time remaining in the performance period and expected dividend yield. | | (9) All of Mr. Wall’s unvested awards were forfeited upon his retirement in June 2024. |
Grants of Plan-Based Awards
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Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
Outstanding Equity Awards At Fiscal Year 2024 Year-End Table The following table presents, for each of our NEOs, information concerning each outstanding equity award held by such NEO as of July 31, 2024. This information supplements the information about these awards set forth in the “Fiscal Year 2024 Summary Compensation Table” above.
Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
| | | Option Awards | | | | Stock Awards | | | Equity | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Yet Vested (#) | Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | Rajiv Ramaswami | RSUs | | | | | | | | | | | 12/9/2020 | — | — | — | — | 47,326(2) | 2,390,436 | — | — | | | 10/11/2021 | — | — | — | — | 43,140(4) | 2,179,001 | — | — | | | 8/25/2022 | — | — | — | — | 154,858(6) | 7,821,878 | — | — | | | 8/29/2023 | — | — | — | — | 206,498(7) | 10,430,214 | — | — | | | PRSUs | | | | | | | | | | | 12/9/2020 | — | — | — | — | — | — | 116,893(3) | 5,904,265 | | | 10/11/2021 | — | — | — | — | — | — | 201,251(5) | 10,165,188 | | | 8/25/2022 | — | — | — | — | — | — | 370,190(5) | 18,698,297 | | | 8/29/2023 | — | — | — | — | — | — | 508,302(5) | 25,674,334 | | | 1/7/2024 | — | — | — | — | — | — | 238,398(8) | 12,041,483 | | | 1/7/2024 | — | — | — | — | — | — | 163,542(9) | 8,260,506 | | | 1/7/2024 | — | — | — | — | — | — | 163,541(10) | 8,260,456 | | Rukmini Sivaraman | RSUs | | | | | | | | | | | 10/2/2020 | — | — | — | — | 7,662(11) | 387,008 | — | — | | | 10/11/2021 | — | — | — | — | 12,942(4) | 653,700 | — | — | | | 5/1/2022 | — | — | — | — | 38,081(12) | 1,923,471 | — | — | | | 8/25/2022 | — | — | — | — | 56,250(6) | 2,841,188 | — | — | | | 8/29/2023 | — | — | — | — | 61,950(7) | 3,129,095 | — | — | | | PRSUs | | | | | | | | | | | 10/11/2021 | — | — | — | — | — | — | 60,375(5) | 3,049,541 | | | 8/25/2022 | — | — | — | — | — | — | 134,467(5) | 6,791,928 | | | 8/29/2023 | — | — | — | — | — | — | 152,490(5) | 7,702,270 | | David Sangster | RSUs | | | | | | | | | | | 10/2/2020 | — | — | — | — | 11,788(11) | 595,412 | — | — | | | 10/11/2021 | — | — | — | — | 15,099(4) | 762,650 | — | — | | | 8/25/2022 | — | — | — | — | 56,250(6) | 2,841,188 | — | — | | | 8/29/2023 | — | — | — | — | 41,300(7) | 2,086,063 | — | — |
Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
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Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
| | | Option Awards | | | | Stock Awards | | | Equity | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested(1) ($) | Equity Incentive Plan Awards: Unearned Shares, Units or Other Rights That Have Not Yet Vested (#) | Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) | | | PRSUs | | | | | | | | | | | 10/11/2021 | — | — | — | — | — | — | 70,437(5) | 3,557,773 | | | 8/25/2022 | — | — | — | — | — | — | 134,467(5) | 6,791,928 | | | 8/29/2023 | — | — | — | — | — | — | 101,660(5) | 5,134,847 | | Brian Martin | RSUs | | | | | | | | | | | 7/10/2024 | — | — | — | — | 45,199(13) | 2,283,001 | — | — | | Tyler Wall(14) | — | — | — | — | — | — | — | — | — |
Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
| (1) Based on the closing price per share of our Class A common stock as reported on The Nasdaq Global Select Market on July 31, 2024, which was $50.51. | | (2) 25% of the RSUs vested on December 15, 2022, with the remainder in 12 equal quarterly installments, with the first quarterly installment having vested on March 15, 2023, subject to continued service to us through each vesting date. | | (3) The PRSUs were subject to stock price-based milestones. The first milestone required achievement of an average closing price per share of our Class A common stock of $32.09 for a 30 consecutive calendar day period. The second milestone required achievement of an average closing price per share of our Class A common stock of $38.51 for a 30 consecutive calendar day period. Achievement of the first milestone resulted in 67% of the 703,117 PRSUs becoming eligible to vest. Achievement of both milestones resulted in 133% of the 703,117 PRSUs becoming eligible to vest. Upon achievement, 25% of the eligible PRSUs vested on December 15, 2021, with 1/16th of the eligible PRSUs vesting quarterly thereafter, subject to continued service to us through each vesting date. | | (4) The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested on December 15, 2021 subject to continued service to us through each vesting date. | | (5) The PRSUs are eligible to vest in up to three installments based on the TSR of our company relative to the TSR of companies in the Nasdaq Composite Index over one-, two-, and three-year performance periods beginning in the fiscal year granted. PRSUs that become eligible to vest based on performance vest on September 15 following the period, subject to continued service through the vesting date. The total number of PRSUs that are eligible to vest range from 0% to 200% of the target number of PRSUs, except that the achievement percentage is capped at 100% for the first two performance periods. Up to one-third of the target number of PRSUs are eligible to vest as a result of performance for each of the first two performance periods. The achievement percentage is (i) 0% if our TSR ranks below the 25th percentile of the indexed companies, (ii) 50% if our TSR ranks at the 25th percentile of the indexed companies, (iii) 100% if our TSR ranks at the 50th percentile of the indexed companies, and (iv) 200% if our TSR ranks at or above the 75th percentile of the indexed companies. If our TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation. 100% of the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will be eligible to vest with respect to the third performance period, less any PRSUs already vested in the first two performance periods. The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the end of the third performance period, with the achievement percentage for the period subject to reduction so that the product of the ending price per share at the end of the period multiplied by the achievement percentage cannot exceed: $145.92 for the awards granted October 11, 2021; $89.70 for the awards granted August 5, 2022; and $144.40 for the awards granted August 29, 2023. As of July 31, 2024, our TSR ranked above the 75th percentile of the companies in the Nasdaq Composite Index for each respective performance period, therefore the values reported reflect maximum achievement, including the impact of the applicable value cap on the awards granted in fiscal year 2023. | | (6) The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested on December 15, 2022, subject to continued service to us through each vesting date. | | (7) The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested on December 15, 2023, subject to continued service to us through each vesting date. | | (8) The PRSUs are eligible to vest at the target level of stock price performance and become eligible to vest in a range from 0% to 200% of the target number based on actual performance achieved relative to the following stock price hurdles at any time during the Performance Period: (i) 100% of the PRSUs for a stock price hurdle of $70, (ii) 150% of the PRSUs for a stock price hurdle of $80, and (iii) 200% of the PRSUs for a stock price hurdle of $90. A stock price hurdle is only achieved if the average closing price of our company’s common stock is equal to or greater than the hurdle price for 90 consecutive calendar days. None of the PRSUs become eligible to vest for achievement of a stock price hurdle of less than $70. In addition, a maximum of 100% of the target number of PRSUs will be eligible to vest if our company’s TSR ranks at less than the 50th percentile relative to the TSR of companies in the Nasdaq Composite Index during the Performance Period. Achievement of the stock price hurdles may occur at any time during the Performance Period, but vesting will remain subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. The values reported reflect achievement at 100% of target. | | (9) The PRSUs become eligible to vest upon achievement of specified FCF hurdles, with achievement of 100% of the PRSUs at the target level of FCF performance and additional achievement levels of 150% and 200% of the target number of PRSUs at higher levels of FCF performance. None of the PRSUs are eligible to vest if performance is below the target level of FCF performance. The target level FCF was set relative to our company’s internal long-term plans and requires strong performance over the Performance Period to be achieved. FCF will be measured over |
Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
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Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
| the last four completed fiscal quarters ending on the last day of the Performance Period on July 31, 2027. Linear interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. The values reported reflect achievement at 100% of target. | | (10) The PRSUs become eligible to vest upon achievement of specified ARR hurdles, with achievement of 100% of the PRSUs at the target level of ARR performance and additional achievement levels of 150% and 200% of the target number of PRSUs at higher levels of ARR performance. None of the PRSUs are eligible to vest if performance is below the target level of ARR performance. The target level ARR was set relative to our company’s internal long-term plans and requires strong performance over the Performance Period to be achieved. ARR will be measured as of the last day of the Performance Period on July 31, 2027. Linear interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. The values reported reflect achievement at 100% of target. | | (11) The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested on December 15, 2020, subject to continued service to us through each vesting date. | | (12) The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested on September 15, 2022, subject to continued service to us through each vesting date. | | (13) The RSUs vest 25% on September 15, 2025 and the remainder in 12 equal quarterly installments, with the first quarterly installment vesting on December 15, 2025, subject to continued service to us through each vesting date. | | (14) Mr. Wall had no outstanding equity awards as of July 31, 2024. |
2024 Option Exercises and Stock Vested Value
2024 Option Exercises and Stock Vested Value The following table presents, for each of our NEOs, the shares of our Class A common stock that were acquired upon the exercise of stock options and vesting of RSU and PRSU awards and the related value realized during fiscal year 2024.
2024 Option Exercises and Stock Vested Value
| | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Rajiv Ramaswami | — | — | 617,207 | 28,938,271 | | Rukmini Sivaraman | — | — | 150,222 | 6,807,606 | | David M. Sangster | — | — | 158,821 | 7,009,272 | | Brian Martin | — | — | — | — | | Tyler Wall | — | — | 110,387 | 4,870,715 |
2024 Option Exercises and Stock Vested Value
| (1) The value realized upon vesting of RSUs or PRSUs is calculated by multiplying the number of shares vested by the closing price per share of our Class A common stock as reported on The Nasdaq Global Select Market on the applicable vesting date (or, in the event the applicable vesting date occurs on a holiday or weekend, the closing price per share of our Class A common stock as reported on The Nasdaq Global Select Market on the immediately preceding trading day). |
2024 Option Exercises and Stock Vested Value
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Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The following table sets forth the estimated payments that would be received by each of our NEOs who remained employed with us as of July 31, 2024 if (i) pursuant to the terms of our Executive Severance Policy, a hypothetical termination of employment by us (other than for cause, death, or disability) or a hypothetical termination by the officer on account of a Constructive Termination had occurred on July 31, 2024 and (ii) pursuant to the terms of our Change of Control and Severance Policy, a hypothetical termination of employment by us (other than for cause, death, or disability) or a hypothetical termination by the officer for good reason in connection with a change in control of our company had occurred on July 31, 2024. The table below reflects amounts that would have been payable to the NEO assuming that, if applicable, the hypothetical termination occurred on July 31, 2024, and, if applicable, a change in control of our company also occurred on that date.
Potential Payments Upon Termination or Change in Control
| Name | Salary Severance(1) ($) | Annual Incentive Severance(2) ($) | Value of Accelerated Vesting(3) ($) | Other ($) | Continuation of Medical Benefits(4) ($) | Total ($) | | Rajiv Ramaswami | | | | | | | | Involuntary or Constructive Termination(5) | 800,000 | — | — | | 32,323 | 832,323 | | Termination in connection with a Change in Control(6) | 800,000 | 800,000 | 113,187,404 | | 32,323 | 114,819,727 | | Rukmini Sivaraman | | | | | | | | Involuntary or Constructive Termination(5) | 475,000 | — | — | | 33,631 | 508,631 | | Termination in connection with a Change in Control(6) | 475,000 | 356,250 | 26,972,694 | | 33,631 | 27,837,575 | | David M. Sangster | | | | | | | | Involuntary or Constructive Termination(5) | 475,000 | — | — | | 33,631 | 508,631 | | Termination in connection with a Change in Control(6) | 475,000 | 356,250 | 22,264,353 | | 33,631 | 23,129,234 | | Brian Martin | | — | — | | | | | Involuntary or Constructive Termination(5) | 475,000 | — | — | | 33,631 | 508,631 | | Termination in connection with a Change in Control(6) | 475,000 | 356,250 | 2,283,001 | | 33,631 | 3,147,882 | | Tyler Wall | | | | | | | | Retirement Transition Agreement(7) | — | — | — | 1,350,000 | 30,975 | 1,380,975 |
Potential Payments Upon Termination or Change in Control
| (1) The amounts reported in this column reflect a lump-sum payment equal to 100% of the NEO’s annual base salary as of July 31, 2024 under our Executive Severance Policy and a lump-sum payment equal to 100% of the NEO’s annual base salary as of July 31, 2024 under our Change of Control and Severance Policy. | | (2) The amounts reported in this column reflect a lump-sum payment equal to 100% of the NEO’s annual incentive target for fiscal year 2024 under our Change of Control and Severance Policy. |
Potential Payments Upon Termination or Change in Control
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Potential Payments Upon Termination or Change in Control
| (3) The amounts reported in this column reflect RSU and PRSU payment values based upon the closing price of our Class A common stock of $50.51 as reported on The Nasdaq Global Select Market on July 31, 2024. For unearned outstanding annual PRSUs as of July 31, 2024, our TSR ranked above the 75th percentile of the companies in the Nasdaq Composite Index for each respective performance period, therefore the values reported reflect maximum achievement, including the impact of the applicable value cap on the awards granted in fiscal year 2023. For Mr. Ramaswami’s supplemental long-term performance-based equity award, the value reported assumes achievement at 100% of target. | | (4) The amounts reported in this column reflect the cost of COBRA continuation coverage based on elected level of healthcare coverage (medical, dental and vision) for twelve months under our Executive Severance Policy and for twelve months under our Change of Control and Severance Policy. | | (5) Termination by Nutanix (other than for cause, death, or disability) or termination by officer on account of Constructive Termination | | (6) Termination by Nutanix (other than for cause, death, or disability) or termination by officer for good reason in connection with a change in control. | | (7) In February 2024 Mr. Wall notified our company of his decision to retire. In order to provide adequate time to identify a successor and ensure an orderly transition of his responsibilities, our company reached an agreement with Mr. Wall to continue his employment through June 2024 in exchange for a retention payment post-separation of $1.35 million and COBRA benefit payments for 12 months. As a result of his retirement, Mr. Wall forfeited his unvested stock awards and annual incentive (Non-Equity Incentive Plan Compensation). |
CEO Pay Ratio
CEO Pay Ratio In accordance with Item 402(u) of Regulation S-K, promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing (i) the ratio of the annual total compensation of our President and CEO, Rajiv Ramaswami, to (ii) the annual total compensation of our median employee, both calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. For fiscal year 2024:
CEO Pay Ratio
| • | the annual total compensation of our President and CEO was $51,141,711; | | • | the annual total compensation of our median employee was $140,339; and | | • | the ratio of the annual total compensation of our President and CEO to the annual total compensation of our median employee was 364:1. |
CEO Pay Ratio
We believe this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act. We selected July 31, 2024 as the date on which to determine our employee population and the median employee. In determining this population, we included all worldwide full-time and part-time employees other than our President and CEO. We did not include any contractors in our employee population. As permitted by SEC rules, to identify our median employee, we elected to use total target cash compensation plus the grant date fair market value of equity awards, if any, as our consistently applied compensation measure, which we refer to herein as total target compensation and calculated as (i) base salary and target annual incentive as of July 31, 2024, and (ii) the grant date fair market value of equity awards issued during the previous twelve months. For employees paid in a currency other than U.S. dollars, we converted their compensation to U.S. dollars using the exchange rates used by us for various financial and accounting purposes in effect on July 31, 2024. To identify our median employee, we then calculated the total target direct compensation for our global employee population and excluded employees at the median who had anomalous compensation characteristics. The SEC rules for identifying the median 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. Consequently, the pay ratio reported by other companies may not be comparable to the pay ratio reported by us, 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.
CEO Pay Ratio
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Pay Versus Performance
Pay Versus Performance In accordance with Item 402(v) of Regulation S-K, below is a comparison of compensation actually paid (“CAP”) and certain measures of financial performance. For further information concerning our compensation philosophy and how we align executive compensation with performance, refer to the “Executive Compensation – Compensation Discussion and Analysis” section.
Pay Versus Performance
| | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year (a) | SCT Total for First PEO(1) (b)($) | CAP for First PEO(2,7) (c)($) | SCT Total for Second PEO(1,3) (b)($) | CAP for Second PEO(2,3) (c)($) | Avg. SCT Total for Non-PEO NEOs(1) (d)($) | Avg. CAP for Non-PEO NEOs(7) (e)($) | Total Shareholder Return(4) (f)($) | Peer Group Total Shareholder Return(4) (g)($) | Net Income (Loss)(5) (in thousands) (h)($) | Company Selected Measure: Annual Recurring Revenue(6) (in thousands) (i)($) | | 2024 | 51,143,711 | 97,948,820 | N/A | N/A | 4,810,466 | 8,792,715 | 228 | 221 | (124,775) | 1,907,982 | | 2023 | 14,845,940 | 38,679,011 | N/A | N/A | 5,475,467 | 11,092,941 | 136 | 164 | (254,560) | 1,561,981 | | 2022 | 12,928,676 | 3,241,068 | N/A | N/A | 4,990,357 | (2,699,520) | 68 | 129 | (798,946) | 1,202,438 | | 2021 | 37,808,805 | 30,852,801 | 181,250 | (4,475,791) | 4,611,376 | 10,050,763 | 162 | 146 | (1,035,589) | 878,733 |
Pay Versus Performance
| (1) Total compensation as set forth in the “Executive Compensation – Executive Compensation Tables – Fiscal Year 2024 Summary Compensation Table” (“SCT”) above. Mr. Ramaswami has served as our Principal Executive Officer (“PEO”) since his hire on December 9, 2020 (“First PEO”). The individuals comprising the PEO and Non-PEO NEOs for each year are listed in the table below. |
Pay Versus Performance
| | PEO | | | | Non-PEO NEOs | | | | | Name | 2021 | 2022 | 2023 | 2024 | 2021 | 2022 | 2023 | 2024 | | Rajiv Ramaswami | ü | ü | ü | ü | | | | | | Dheeraj Pandey | ü | | | | | | | | | Rukmini Sivaraman | | | | | | ü | ü | ü | | David Sangster | | | | | ü | ü | ü | ü | | Tyler Wall | | | | | ü | ü | ü | ü | | Brian Martin | | | | | | | | ü | | Duston Williams | | | | | ü | ü | | | | Christopher Kaddaras Jr. | | | | | ü | | | |
Pay Versus Performance
| (2) For each covered year, the values included in column (c) for the CAP to our PEO and in column (e) for the average CAP to our non-PEO NEOs reflect the adjustments set forth below. CAP does not mean these amounts were earned or paid during the year. CAP is an amount derived from the starting point of total compensation as presented in the SCT under the methodology prescribed under the SEC’s rules, which is solely based on adjustments to equity award values. Nutanix does not maintain a pension plan and does not pay dividends on its common stock so no adjustments for these factors were necessary. There are no material differences between the assumptions used to compute the valuation of the equity awards for calculating the CAP from the assumptions used to compute the valuation of the equity awards as of the grant date. | | (3) Mr. Pandey previously served as our CEO before retiring from Nutanix in December 2020 (“Second PEO”). We have included Mr. Pandey in the table above in accordance with Item 402(v) of Regulation S-K. However, Mr. Pandey has been excluded from the tables and graphs below as we do not believe Mr. Pandey’s further inclusion is material to any conclusions that may be drawn from this analysis. |
Pay Versus Performance
| (4) Cumulative TSR represents the value of an initial fixed investment of $100 on July 31, 2020 in the company (column (f)) and the Nasdaq Computer Index (column (g)) for the fiscal years ended July 31, 2021, 2022, 2023 and 2024. The Nasdaq Computer Index is also used in our performance graph in our Annual Report on Form 10-K for our fiscal year ended July 31, 2024 filed with the SEC on September 19, 2024. | | (5) The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for the applicable year in accordance with accounting principles generally accepted in the United States. |
Pay Versus Performance
| (6) ARR for any given period is defined as the sum of ACV for all non life-of-device contracts in effect as of the end of a specific period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue for such contract. ACV is defined as the total annualized value of a contract, excluding amounts related to professional services and hardware. The total annualized value for a contract is calculated by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years for contracts that do not have a specified term. |
Pay Versus Performance
| (7) The table below shows the adjustments made to the SCT totals (columns (b) and (d) above) for our First PEO and average for non-PEO NEOs to determine CAP for fiscal year 2024 (columns (c) and (e) above). |
Pay Versus Performance
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Pay Versus Performance
| | | PEO ($) | Average for Non-PEO NEOs ($) | | | Summary Compensation Table - Total Compensation (columns (b) and (d)) | 51,143,711 | 4,810,466 | | - | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year | 49,781,703 | 3,968,879 | | + | Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year | 63,997,025 | 4,415,419 | | + | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years | 23,206,675 | 3,731,194 | | + | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year | 2,596,611 | 432,748 | | + | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | 6,786,500 | 723,399 | | - | Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | 1,351,633 | | = | Compensation Actually Paid (columns (c) and (e)) | 97,948,820 | 8,792,715 |
Analysis of Information Presented in the Pay Versus Performance Table
Analysis of Information Presented in the Pay Versus Performance Table As described in more detail in the section “Executive Compensation—Compensation Discussion and Analysis,” our company’s executive compensation program reflects a pay-for-performance philosophy. While our company uses several performance measures to align executive compensation with performance, we do not seek to align our company’s performance measures with CAP (as calculated in accordance with SEC rules).
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. TSR
Compensation Actually Paid vs. TSR
| 2024 Proxy Statement | 68 |
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. Net Income
Compensation Actually Paid vs. ARR
Compensation Actually Paid vs. ARR
Compensation Actually Paid vs. ARR
| 2024 Proxy Statement | 69 |
Compensation Actually Paid vs. ARR
We have identified the following performance measures (in no specific order) as the most important in aligning the compensation of our NEOs to our financial performance for fiscal year 2024: