DEF 14A of Sonos Inc
Filed Jan 22, 2026 · FY20250001314727-26-000021
BOARD OF DIRECTORS
BOARD OF DIRECTORS Our Board is responsible for overseeing and providing advice and counsel to our CEO and senior leadership team in the conduct of operating our business and fostering the creation of long-term value for our stockholders. In accordance with our Restated Certificate of Incorporation and our restated bylaws ("Restated Bylaws"), the size of our Board is currently set at ten directors and is divided into three classes, with staggered three-year terms, although we are seeking approval to amend our Restated Certificate of Incorporation to phase in declassification of our Board at the Annual Meeting (see “Proposal Four: Management Proposal to Approve an Amendment of the Restated Certificate of Incorporation to Phase in Declassification of the Board of Directors” below). As further described below, the current leadership structure of our Board separates the roles of Chair and CEO, with Julius Genachowski serving as our Chair and Tom Conrad serving as our CEO. Our Board is composed of members with diverse professional backgrounds, experience, expertise and viewpoints who combine a strong professional reputation and knowledge of our business and industry with a reputation for integrity. Many of our directors have experience serving on board and board committees of other public companies, and have an understanding of corporate governance practices and trends and different business challenges and strategies.
PROPOSAL ONE: ELECTION OF DIRECTORS
PROPOSAL ONE: ELECTION OF DIRECTORS In accordance with our Restated Certificate of Incorporation and our Restated Bylaws, the size of our Board is currently set at ten directors and is divided into three classes, with staggered three-year terms. Directors in Class II will stand for election at the Annual Meeting. The terms of office of directors in Class III and Class I expire at our annual meetings of stockholders to be held in 2027 and 2028, respectively. At the recommendation of our Nominating and Corporate Governance Committee, our Board proposes that each of the three nominees named below be elected as a Class II director for a three-year term expiring at our 2029 annual meeting of stockholders or until such director’s successor is duly elected and qualified or until such director’s earlier death, resignation, disqualification or removal. There are no family relationships among our directors and executive officers.
NOMINEES TO OUR BOARD OF DIRECTORS
NOMINEES TO OUR BOARD OF DIRECTORS The nominees, their ages as of January 22, 2026, biographical information and lengths of service on our Board are set forth below.
NOMINEES TO OUR BOARD OF DIRECTORS
| Class II Director Nominees | | | Tom Conrad | | | Age: 56 Director since: March 2017 Other Public Company Boards: None | Key Skills and Qualifications: Tom Conrad was selected to serve as a member of our Board due to his expertise in the design, development and innovation of a diverse range of software-based and consumer-focused technology products and those involving audio content. Mr. Conrad also has extensive C-Suite experience, including at the CEO level, experience leading and building product teams in the consumer technology and content industries and brings a unique perspective to the Board as our Chief Executive Officer. Experience: Mr. Conrad has served as our Chief Executive Officer and President since July 2025 and previously served as our Interim Chief Executive Officer and President from January 2025 to July 2025. Prior to that, he served as the Chief Executive Officer of Zero Longevity Science, Inc. (formerly Big Sky Health), maker of the metabolic health app Zero, from November 2021 to January 2025. He previously served as the Chief Product Officer of Quibi, a short form streaming service, from March 2019 to January 2021. Mr. Conrad was the Vice President of Product at Snap Inc., a camera and social media company, from March 2016 to March 2018. Prior to Snap, Mr. Conrad served as the Chief Technology Officer and Executive Vice President of Product of Pandora Media, Inc., a streaming music service company, from July 2004 to July 2014. Mr. Conrad holds a B.S.E in computer science from the University of Michigan. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Julius Genachowski | | | Age: 63 Director since: September 2013, Chair since May 2023 Committees: Audit Compensation and People Nominating and Corporate Governance Other Public Company Boards: Mastercard Incorporated Mattel Inc. | Key Skills and Qualifications: Julius Genachowski was selected to serve on our Board due to his expertise in government and regulatory matters, including as Chairman of the Federal Communications Commission; experience as a C-suite executive, investor and board member in the technology, communications and media industries, including experience with consumer technology and content; his global perspectives and experiences in various roles; his finance and transactional experience as an executive and investor; and his risk oversight and corporate governance experience, including serving on the board of directors of public companies and on Audit (as chair) and Risk Committees. Experience: Mr. Genachowski is a Senior Advisor at The Carlyle Group, a global investment firm, a position he has held since January 2024; from 2014 through 2023 Julius was a Partner and Managing Director at Carlyle. He served as the Chairman of the U.S. Federal Communications Commission from 2009 to 2013. He has held senior executive positions at IAC/InterActiveCorp, an internet, e-commerce and media company. He currently serves on the board of directors of Mastercard Incorporated, a global technology company in the payments industry, where he chairs the Audit Committee, and of Mattel Inc., a leading global toy and family entertainment company. He previously served on the board of directors of Sprint Corporation, a communications company, from August 2015 until April 2020. He also served on the President’s Intelligence Advisory Board under President Obama, and has served on the staff of then-Representative Charles Schumer and on the staff of the U.S. House Select Committee on the Iran-Contra Affair. Mr. Genachowski holds a B.A. in history from Columbia University and a J.D. from Harvard Law School, and served as a law clerk to U.S. Supreme Court Justice David H. Souter. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Carmine Arabia | | | Age: 56 Director since: January 2026 Other Public Company Boards: None | Key Skills and Qualifications: Carmine Arabia was selected to serve on our Board because of his expertise in product operations, engineering, manufacturing, supply chain, and launch execution on a global scale and in evolving technologies including AI. Mr. Arabia brings more than 30 years of experience across consumer electronics, enterprise hardware, and electronic manufacturing services and unmatched experience scaling complex connected hardware portfolios. Experience: Mr. Arabia has served as a senior executive at Meta Platforms, Inc., a technology company, since 2018, where he leads Hardware and Operations for consumer electronic devices and oversees global engineering operations, manufacturing, sourcing, quality, logistics, and supply chain execution for high-volume products. Previously, he served as Vice President, Product Operations at Amazon Lab126 and as Senior Vice President, Global Manufacturing and Supply Chain Management at BlackBerry Limited. Mr. Arabia holds a mechanical engineering degree from the University of Toronto. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Class III Directors | | | Jonathan Mildenhall | | | Age: 58 Director since: January 2024 Committees: Compensation and People Other Public Company Boards: None | Key Skills and Qualifications: Jonathan Mildenhall was selected to serve on our Board because of his deep expertise in consumer brand strategies, global marketing campaigns and initiatives, design, and advertising. Mr. Mildenhall has a long track record of driving innovative and successful approaches in each of these disciplines, and is also known for helping companies broaden their appeal to diverse audiences. Experience: Mr. Mildenhall is currently the Chief Marketing Officer of Rocket Companies Inc., a position he has held since January 2024. He is the Co-Founder and Executive Chairman of TwentyFirstCenturyBrand, a consumer brand strategy and marketing consultancy firm. He also serves on the board of Fanatics, Inc. and previously served on the board of Peloton Interactive, a connected fitness company, from February 2022 to December 2023 and the board of Northern Star Investment Corp. IV, a special purpose acquisition company, from March 2021 to September 2023. Prior to co-founding TwentyFirstCenturyBrand, Mr. Mildenhall served as Chief Marketing Officer of Airbnb from 2014 to 2018. Before Airbnb, Mr. Mildenhall led The Coca-Cola Company’s marketing initiatives as Senior Vice President of integrated marketing communication and design excellence from 2013 to 2014 and as Senior Vice President of global advertising strategy and content excellence from 2007 to 2013. Earlier in his career, Mr. Mildenhall served in various management positions in marketing and advertising. Mr. Mildenhall holds a Higher National Diploma in Business and Finance from The Manchester Metropolitan University. He completed the Advanced Management Program at Harvard Business School, and holds an Honorary Doctorate in Business Administration from The Manchester Metropolitan University. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Hugo Barra | | | Age: 49 Director since: April 2025 Other Public Company Boards: None | Key Skills and Qualifications: Hugo Barra was selected to serve on our Board because of his deep expertise in product management and development, global operations and expansion, and evolving technologies including AI. Mr. Barra is a world-class technologist with senior executive experience at several of the most important and successful consumer tech companies and a proven ability to turn cutting-edge innovation into great products. Experience: Mr. Barra is currently the co-founder and head of product at /dev/agents, a software company building a next-generation operating system for AI agents, a position he has held since October 2024. Prior to co-founding /dev/agents, Mr. Barra was co-founder and CEO at Detect, a biotech startup focused on ultra low-cost molecular diagnostics, from 2020 to August 2023. Previously, Mr. Barra led the Oculus VR division at Meta as Vice President from 2017 to May 2021. Before Meta, Mr. Barra was Vice President at Xiaomi overseeing global operations and the company's expansion beyond China to become the world's 3rd largest smartphone manufacturer. Prior to Xiaomi, Mr. Barra was Vice President for Android product management at Google and led the Android ecosystem from nascency through its first billion users. Mr. Barra holds a B.S. in Management Science and a M.Eng in Computer Science and Electrical Engineering from Massachusetts Institute of Technology. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Mandy Fields | | | Age: 45 Director since: January 2026 Other Public Company Boards: Within the past five years: Allbirds, Inc. | Key Skills and Qualifications: Mandy Fields was selected to serve as a member of our Board given her public company management experience, operational expertise, financial management acumen, and experience growing brands through cross-functional collaboration. Ms. Fields adds rigorous financial leadership shaped by building a culturally resonant consumer brand. Experience: Ms. Fields has served as Chief Financial Officer of e.l.f. Beauty, Inc., a publicly traded cosmetics company, since April 2019. Previously, she served as Chief Financial Officer of Beverages & More, Inc. (doing business as BevMo!), a beverages retailer, from June 2016 to April 2019. Prior to BevMo! Ms. Fields held various roles at Safeway, an Albertsons banner, as well as at Gap Inc. and JPMorgan. She previously served on the board of directors and as Audit Committee Chair of Allbirds, Inc., a retail apparel and fashion company, from October 2020 to September 2024. She was recently named to the Board of Directors of TruStage, an insurance and financial services provider. Ms. Fields holds a B.S. in Finance from Indiana University's Kelley School of Business. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Class I Directors | | | Karen Boone | | | Age: 52 Director since: June 2017 Committees: Audit Compensation and People Other Public Company Boards: Peloton Interactive Rivian Automotive CoreWeave | Key Skills and Qualifications: Karen Boone was selected to serve as a member of our Board given her background as a C-Suite and finance executive in the consumer sector. Ms. Boone has extensive experience in complex accounting matters, strategic and financial planning, and governance and risk oversight, including cybersecurity and product safety and compliance. She has significant global operating experience having overseen the finance, accounting, investor relations, human resources and legal functions at the leading home furnishings retailer, RH. Ms. Boone is a seasoned director, serving on several public and private company boards and on the Audit Committee (as chair) of several public company boards. Experience: Ms. Boone most recently served as the Interim Co-CEO and Co-President of Peloton Interactive, a connected fitness company, from May 2024 to January 2025. Ms. Boone served as the President, Chief Financial and Administrative Officer of RH (formerly Restoration Hardware, Inc.), a home furnishings company, from May 2014 until August 2018, and as Chief Financial Officer from June 2012 to May 2014. Prior to that, from 1996 to June 2012, she held various roles at Deloitte & Touche LLP, a public accounting firm, most recently as an Audit Partner. She currently serves on the board of directors of Peloton Interactive, a connected fitness company, Rivian Automotive, an automotive technology company, CoreWeave, an AI cloud computing company, and several private companies. Ms. Boone holds a B.S. in business economics from the University of California, Davis. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Joanna Coles | | | Age: 63 Director since: February 2020 Committees: Nominating and Corporate Governance Other Public Company Boards: Current: Snap, Inc. Within the past five years: Bark, Inc. Northern Star Investment Corp. II Northern Star Investment Corp. III Northern Star Investment Corp. IV | Key Skills and Qualifications: Joanna Coles was selected to serve as a member of our Board given her media leadership, extensive experience in partnerships and in content across all forms of media, and expertise in brand development and marketing, including by reaching diverse audiences. Ms. Coles serves on a number of boards at the intersection of culture and commerce, helping Sonos tap into unique partnerships, and build a global brand. Experience: Ms. Coles is the Chief Content Officer of The Daily Beast, an American news website focused on politics, media, and pop culture, a position she has held since April 2024. She is also the Executive Producer of The Bold Type, available on Hulu in the US and Netflix globally and inspired by her career. Previously, Ms. Coles served as chairperson and Chief Executive Officer of Northern Star Acquisition Corp. from July 2020 until its merger with Bark, Inc. in June 2021, Chief Content Officer of Hearst Magazines from September 2016 to August 2018, overseeing editorial for Hearst’s 300 titles globally, and as Editor-in-Chief of Cosmopolitan from September 2012 to September 2016. She edited Marie Claire magazine from April 2006 to September 2012. Ms. Coles worked for The Times of London from September 1998 to September 2001 and served as New York Bureau Chief for The Guardian from 1997 to 1998. She currently serves on the board of directors of Snap, Inc., a camera and social media company. Previously, Ms. Coles served as a director of Bark Inc., Northern Star Investment Corp. II, Northern Star Investment Corp. III, Northern Star Investment Corp. IV, and the Fallen Journalist Memorial Fund. Ms. Coles holds a B.A. in English and American literature from the University of East Anglia. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Bracken Darrell | | | Age: 62 Director since: February 2024 Committees: Audit Other Public Company Boards: VF Corporation | Key Skills and Qualifications: Bracken Darrell was selected to serve on our Board because of his long track record of building enterprise value, expertise in building world-class products, enhancing and elevating design capabilities and innovation, and expanding into new categories, his consumer brand marketing experience with blue-chip companies, his experience as a purpose-driven leader, including at the CEO-level, and his deep international experience. Mr. Darrell is a demonstrated business leader with a strong track record of performance across multiple industries. Experience: Mr. Darrell has served as President and Chief Executive Officer of VF Corporation, one of the world’s largest apparel, footwear and accessories companies, since July 2023. Before joining VF Corporation, Mr. Darrell served for more than 10 years as president and chief executive officer of Logitech International, S.A., a multinational manufacturer of computer peripherals and software, beginning in January 2013. Prior to Logitech, Mr. Darrell held international leadership roles of increasing responsibility at Procter & Gamble, a multinational consumer goods corporation, where he was President of Braun globally, the Whirlpool Corporation, a multinational manufacturer and marketer of home appliances, where he was President of EMEA, and General Electric, a multinational conglomerate. He began his career with Arthur Anderson and then PepsiCo. Mr. Darrell received a B.A. from Hendrix College and an MBA from Harvard Business School. |
NOMINEES TO OUR BOARD OF DIRECTORS
| Joe Kennedy | | | Age: 66 Director since: January 2026 Other Public Company Boards: None | Key Skills and Qualifications: Joe Kennedy was selected to serve as a member of our Board due to his extensive C-Suite experience, including at the CEO level, experience leading and building teams in the technology and content industries, long track record of building enterprise value, expertise in establishing and defining category-leading brands and experience building customer satisfaction. Mr. Kennedy is a seasoned public company CEO who has built and operated a category-defining technology business. Experience: Mr. Kennedy has served as Expert-in-Residence at Rippleworks, a non-profit pairing leaders in technology and business with promising social ventures, since 2018. Mr. Kennedy is the former Chairman, CEO, and President of Pandora. Prior to Pandora, Joe was the former President and Chief Operating Officer of E-Loan, and the former Vice President of Sales, Services, and Marketing for Saturn Corp. Mr. Kennedy holds a B.S. in electrical engineering and computer science from Princeton University and a M.B.A. from Harvard Business School. |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
Director Compensation Table
Director Compensation Table The following table presents the total compensation for each person who served as a non-employee director during Fiscal 2025. Mr. Spence is not included in the table below, as he was employed as our CEO during a portion of Fiscal 2025 and received no compensation for his service as director. The compensation received by Mr. Spence as an employee is included in “Executive Compensation—Summary Compensation Table” below. Mr. Conrad is not included in the table below. Pursuant to Instruction 3 to Item 402(c) of Regulation S-K, Mr. Conrad's compensation as a non-employee director during Fiscal 2025 prior to his service as Interim CEO and then CEO is included in "Executive Compensation - Summary Compensation Table" below. Mr. Conrad does not, and did not in Fiscal 2025, receive additional compensation as a director of the Board while employed as CEO.
Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Hugo Barra (3) | — | 142,984 | 142,984 | | Karen Boone | 102,115 | 200,003 | 302,118 | | Joanna Coles | 75,000 | 200,003 | 275,003 | | Bracken Darrell | 75,000 | 200,003 | 275,003 | | Julius Genachowski | 191,841 | 282,354 | 474,195 | | Jonathan Mildenhall | 65,000 | 200,003 | 265,003 | | Michelangelo Volpi (4) | — | — | — |
Director Compensation Table
(1)The amounts reported in this column represent the aggregate grant date fair value of the restricted stock units (“RSUs”) granted under our 2018 Equity Incentive Plan to our directors during Fiscal 2025, as computed in accordance with Financial Accounting Standard Board Accounting Standards Codification Topic 718 (“ASC 718”), excluding the effect of estimated forfeitures. The assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column are set forth in Note 2 to our audited consolidated financial statements included in our Annual Report. See footnote (1) to the Summary Compensation Table. (2)Our non-employee directors held the following number of stock options and RSUs, each as of September 27, 2025:
Director Compensation Table
| Name | Shares Subject to Outstanding Stock Options | Shares Subject to Outstanding Stock Awards | | Hugo Barra | — | 16,626 | | Karen Boone | 31,766 | 61,716* | | Joanna Coles | — | 15,427 | | Bracken Darrell | — | 15,427 | | Julius Genachowski | 47,652 | 51,705** | | Jonathan Mildenhall | — | 15,247 | | Michelangelo Volpi | — | — |
Director Compensation Table
*Includes 15,427 RSUs that are unvested and 46,289 RSUs that are vested but for which such director has elected to defer settlement until a later date. **Includes 15,427 RSUs that are unvested and 36,278 RSUs that are vested but for which such director has elected to defer settlement until a later date. (3)Mr. Barra joined our Board on April 7, 2025. Mr. Barra declined his cash retainer for his service on the Board in Fiscal 2025. (4)Mr. Volpi declined to accept any compensation for his service on our Board in Fiscal 2025. Mr. Volpi resigned from our Board in April 2025.
Non-Employee Director Compensation Arrangements
Non-Employee Director Compensation Arrangements Pursuant to an updated policy adopted by our Board in August 2025 and effective September 28, 2025, we pay each non-employee director an annual retainer fee of $75,000 (increased from $55,000) for service on our Board and additional annual retainer fees for services as follows: •$75,000 for the Board Chair; •$30,000 (increased from $20,000) for the Chair of our Audit Committee and $15,000 (increased from $10,000) for each of its other members; •$25,000 (increased from $20,000) for the Chair of our Compensation Committee and $10,000 for each of its other members; and •$20,000 for the Chair of our Nominating and Corporate Governance Committee and $10,000 for each of its other members. In addition, following each annual meeting of stockholders, each non-employee director receives an annual equity grant of RSUs having a fair market value on the grant date equal to approximately $200,000, and the Board Chair receives an additional annual equity grant of RSUs having a fair market value on the grant date equal to approximately $75,000. Any non-employee director who is initially appointed to our Board receives an initial equity grant of RSUs having a fair market value on the grant date equal to approximately $200,000 at the time of appointment, subject to proration based on the date of appointment in the event that he or she is appointed on a date other than the date of the annual meeting of stockholders. In each case, the number of shares of our common stock subject to the grant of RSUs is determined by dividing $200,000 by the trailing 30 calendar day average of the closing price of our common stock on The Nasdaq Global Select Market. Each annual or initial grant of RSUs will vest in full on the earlier of (i) the one-year anniversary of the date of grant and (ii) the date of the first annual meeting of stockholders following the date of grant, subject to the director providing services to us through the vesting date; provided, however, that in the event that a director ceases to provide services to us as a non-employee director other than for Cause (as defined in the 2018 Equity Incentive Plan (the “2018 Plan”)), his or her outstanding RSUs will vest on a pro rata basis based on the last day of service. Non-employee directors are provided the opportunity to elect to defer settlement of all or a portion of the RSUs granted to them until a separation from service or a set date; in Fiscal 2025, Mr. Darrell elected to defer settlement of his annual equity grants. RSUs granted to non-employee directors under the policy described above will accelerate and vest in full in the event of a change of control, subject to the terms of our 2018 Plan. We also reimburse our directors for their reasonable out-of-pocket expenses in connection with attending meetings of our Board and committees. During Fiscal 2025, we also compensated members of our special CEO Search Committee for their service on such committee as follows: $25,000 for the Chair and $10,000 for each of its other members. In addition, Mr. Genachowski received an additional equity grant of RSUs having a fair market value on the grant date equal to approximately $75,000 to recognize the additional services he provided as Board Chair in Fiscal 2025, including with respect to the search and appointment of a new CEO of the Company. These RSUs vested immediately on the date of grant.
Fiscal 2025 CD&A Highlights
Fiscal 2025 CD&A Highlights •Fiscal 2025 was a positive transitional year for Sonos. We restored the quality of our software, drove efficiencies and financial discipline into every aspect of our operations, reorganized the way we work and executed on our pivotal transformation initiative. We restructured our leadership team, including through the appointment of our new CEO. We made changes to our compensation program to support our priorities during this transition period and to be responsive to stockholder feedback. •For Fiscal 2025, our revenue was $1,443.3 million, our GAAP gross margin was 43.7%, we had a GAAP net loss of ($61.1) million, and our Adjusted EBITDA was $132.3 million, an increase of 23% year over year. Our GAAP and non-GAAP operating expenses declined by 8% and 10%, respectively, on a reported basis and by 16% and 17% on a normalized basis. We also returned $81 million to stockholders through share repurchases. See Annex A for a reconciliation of non-GAAP to GAAP measures. •Our annual incentive plan results for Fiscal 2025 were based 100% on objective financial performance goals, with the payout under this plan further subject to a determination by the Compensation Committee, using objective metrics, that the quality of our software and customer experience had been substantially restored in Fiscal 2025 following release of the Company’s redesigned app in May 2024. •We link pay to performance and stockholder interests by heavily weighting compensation to short-term cash incentive awards and long-term equity awards that are tied to the value of our stock and financial targets. In Fiscal 2025, 90% of target CEO compensation and 85% of the target compensation for our other named executive officers who were employed for the full fiscal year, on average, was composed of variable, at-risk compensation elements. •Our incentive compensation program in Fiscal 2025 incorporated different financial metrics for PSU achievement than our annual cash incentive plan, a change from prior years that also reflects feedback we received from stockholders. We chose these differentiated metrics to recognize both the short- and long-term impacts of executing on operational efficiencies in Fiscal 2025 and over a longer period, lowering our expense base and driving profitability. •The PSUs granted to our new CEO in connection with his appointment are subject to a multi-year relative TSR performance goal (40% of the award) in addition to two one-year financial performance goals (a combination of 60% of the award). The Compensation Committee revised the design of this PSU grant in order to further align the interests of our CEO with those of our stockholders over a longer-term period and chose relative TSR to further align our CEO's compensation with stock price performance. In addition, the PSUs granted to all of our executive officers in Fiscal 2026 are subject to a relative TSR performance goal measured over three years (40% of the award) in addition to three, one-year financial performance goals (a combination of 60% of the award). •Our financial performance and strong execution against our transformation initiatives in Fiscal 2025 resulted in an approximately 91% payout for our Fiscal 2025 annual cash incentive plan. •Our strong execution against our transformation initiatives in Fiscal 2025 resulted in above-target payouts of approximately 131% for the Fiscal 2025 tranche of our PSUs. •In response to stockholder feedback, we adopted formal severance guidelines for executive officers and included a severance provision in the new CEO’s contract to create greater certainty and transparency.
Selection of Tom Conrad to Serve as CEO
Selection of Tom Conrad to Serve as CEO Effective July 22, 2025, Mr. Conrad was appointed the Company’s CEO. Mr. Conrad is an accomplished technology leader with extensive product-development experience and a deep familiarity with the Company. When constructing his compensation package, in consultation with the Compensation Committee’s independent compensation consultant, the Compensation Committee considered Mr. Conrad’s experience and deep knowledge of the Company, his strong performance as Interim CEO, the competitive market for technology CEO talent, and the Company’s pay-for-performance philosophy. The Compensation Committee believes Mr. Conrad’s compensation package is appropriate given the work required to position the Company for the future, spearhead innovation and drive financial performance. Mr. Conrad receives an annual base salary of $850,000 and is eligible to receive a cash bonus under the Company’s annual incentive plan with a target of one hundred percent (100%) of his earned base salary, both of which were pro-rated for Fiscal 2025 for the period from July 22, 2025 to September 27, 2025. Mr. Conrad was also eligible to receive equity awards at the time of his permanent appointment. The design of Mr. Conrad’s new-hire equity awards emphasizes vehicles that are performance-oriented and aligned with stockholder outcomes over the long-term incorporating: (i) time-based RSUs with a grant date value of approximately $3,500,000 that vest on an annual basis over four years and (ii) PSUs with a grant date value (at target) of approximately $3,500,000. To further align Mr. Conrad’s interests with stockholders interests over a longer-term period and further align his compensation with stock price performance, forty percent (40%) of the PSUs are subject to a multi-year relative TSR goal (compared to the Russell 2000), measured beginning on the date of appointment as CEO, and sixty percent (60%) of the PSUs are subject to two one-year financial performance goals with respect to Fiscal 2026 and fiscal year 2027. The amounts paid to Mr. Conrad in respect of his service as CEO are included in the "Summary Compensation Table" of this Proxy Statement, other than the new-hire PSUs described in the previous paragraph, as the performance goals for these PSUs were set by the Compensation Committee following the end of Fiscal 2025. In response to stockholder feedback, Mr. Conrad’s offer letter also sets forth the specific circumstances pursuant to which he receives severance following a termination of employment. See “Mr. Conrad’s Offer Letter” below for further information.
Other Leadership Transitions
Other Leadership Transitions In Fiscal 2025, Shamayne Braman’s employment was terminated by the Company, effective August 2025. See “Ms. Braman’s Severance Agreement” below for further information. Ms. Braman’s severance payments were structured in accordance with the Company’s severance guidelines for executive officers described below under “CXO Severance Guidelines.” In addition, Ms. Braman received a pro-rata bonus (at target) as part of her severance given that her termination occurred near the end of Fiscal 2025.
Executive Pay Mix
Executive Pay Mix In Fiscal 2025, a significant portion of executive compensation for our NEOs consisted of variable, at-risk compensation, with a focus on equity-based long-term incentives. As illustrated below, 90% of target CEO compensation for Fiscal 2025 was composed of variable compensation elements, and 85% of our other NEOs’ target compensation, on average, was composed of variable compensation elements. 1 Both pie charts reflect target levels of compensation received for Fiscal 2025. Equity grants reflect the target grant date value of equity awards received for Fiscal 2025. 2 As described herein, Mr. Conrad received a salary, a bonus, and a RSU grant for his service as Interim CEO, as well as a new hire equity award; this chart reflects the value of his new hire equity award and the annualized salary and bonus as full-time CEO only and excludes the salary, bonus and RSU grant for his service as Interim CEO. The “Chief Executive Officer” pie chart excludes amounts paid and equity grants made to Mr. Spence, our former CEO, in Fiscal 2025. 3 The “All Other NEOs Average” pie chart includes only the NEOs that were employees of the Company for all of Fiscal 2025 and participated in all aspects of the standard ongoing compensation program. Mr. Lazarus received an additional special equity award in Fiscal 2025, which is excluded from the “All Other NEOs Average” pie chart.
Fiscal 2025 Elements of Pay
| | Pay Element | Purpose | Fiscal 2025 Highlights | Fiscal 2025 Performance Metric | | F I X E D | Base Salary | Designed to be market-competitive and attract and retain talent | •Fiscal 2025 salaries for Ms. Casey, Mr. Lazarus, Mr. Millington, and Ms. Braman remained unchanged. | •N/A | | A T R I S K P A T | Annual Incentive Plan | Incentivize achievement of the Company’s short-term financial objectives, drive profitability and execute on our transformation initiative | •CEO: Mr. Conrad’s Fiscal 2025 target bonus was 100% of base salary for the period of Fiscal 2025 he served as CEO. •Other NEOs: Fiscal 2025 target bonuses were 65% of base salary for each NEO (other than Mr. Conrad). •Interim CEO: Mr. Conrad did not participate in the Fiscal 2025 annual incentive program for the period of Fiscal 2025 he served as Interim CEO. Following his service as Interim CEO, he received a bonus of $750,000 for his accomplishments as Interim CEO. | •Financial metrics of quarterly revenue and adjusted operating income, weighted equally at 50% each, with the payout: •made on an annual basis, •based on the cumulative average of the quarters, and •subject to a determination by the Compensation Committee in its sole discretion that the Company has made substantial progress in Fiscal 2025 against the Quality and Customer Experience Commitments announced in October 2024 (the “Quality Gate”). | | | PSUs (50% of LTI mix for NEOs) | Designed to create alignment with stockholders, facilitate executive retention and reward long-term profitability and long-term performance, as well as execution on the Company’s transformation journey to improve operational efficiencies. | •Fiscal 2025 PSUs vest at the end of three years based on performance against each predetermined one-year performance goal. •Mr. Conrad’s initial hire PSU grant vests at the end of three years based on performance against two one-year performance goals with respect to Fiscal 2026 and fiscal year 2027 (60%) and a multi-year relative TSR goal (40%). | •Normalized operating expense as a percent of revenue (“E/R Ratio”) (NEOs other than the CEO). •Free cash flow, revenue, relative TSR (CEO). | | | RSUs (50% of LTI mix for NEOs) | Facilitates stock ownership, executive retention, and stockholder alignment. | •Time vest quarterly over three years, other than Mr. Conrad’s Interim CEO and initial hire RSU grants and Mr. Lazarus’ November 2024 special RSU grant. | •N/A |
Fiscal 2025 Incentive Program Results
Fiscal 2025 Incentive Program Results As discussed in “Fiscal 2025 NEO Compensation Decisions” on page 40, our Fiscal 2025 executive compensation program was structured to provide strong pay-for-performance alignment, as evidenced by recent payouts. As shown in the following table, consistent performance above target on quarterly revenue, particularly in the second half of Fiscal 2025, offset by below target performance on quarterly adjusted operating income in the second half, resulted in bonuses being earned at 91.4% of target for Fiscal 2025. Strong execution against our transformation initiative resulted in the Fiscal 2025 portion of the PSUs awarded to NEOs (other than our CEO, former CEO and former Chief People Officer) earned at 130.9% of target.
Fiscal 2025 Incentive Program Results
| Pay Element | Fiscal 2025 Result | Performance Summary | | Annual Incentive Plan | •Fiscal 2025 bonuses were earned at 91.4% of target, based on the cumulative average of the quarterly attainment results. | Payout reflects: •Achievement of 103.5% for the quarterly revenue metric, reflecting quarterly revenue results near or above target throughout Fiscal 2025, particularly in the second half. •Achievement of 79.4% for the quarterly adjusted operating income metric, reflecting quarterly adjusted operating income results above target in the first half of Fiscal 2025 but below target in the second half. •Quality Gate met, with significant progress in meeting customer and quality commitments and restoring software quality. | | Year 3 of Fiscal 2023 PSUs (vested 11/11/25) Year 2 of Fiscal 2024 PSUs (vesting November 2026) Year 1 of Fiscal 2025 PSUs (vesting November 2027) | •The Fiscal 2025 portion of the PSUs was earned at 130.9% of target. | Payout reflects strong execution against transformation initiative, with the E/R Ratio of 42.1% above the target of 45.4%. |
What We Do
What We Do •Link Pay For Performance: We link pay to performance and stockholder interests by heavily weighting compensation to short-term cash incentive awards and long-term equity awards that are tied to the value of our stock and our financial targets. •Incentivize a Strong Ownership Mentality: Our primary compensation vehicle is our equity award program, which we use to motivate long-term performance and strongly align the interests of our executives with those of our stockholders. •Maintain Rigorous Stock Ownership Guidelines: Executives are subject to stock ownership guidelines equal to a multiple of their annual base salaries (10x for our CEO and 5x for our other NEOs). •Use an Independent Compensation Consultant: The Compensation Committee selects and engages its own independent compensation consultant. •Prohibit the Hedging of Our Common Stock: We prohibit all employees and directors from engaging in hedging transactions and only allow for pledging our common stock in limited circumstances, subject to the approval of our Compliance Officer. •Maintain a Dodd-Frank Compliant Clawback Policy: We maintain a clawback policy that requires recoupment of excess incentive compensation paid to our executive officers if amounts were based on material noncompliance with any financial reporting requirement that causes an accounting restatement, without regard to any fault or misconduct.
Pay Positioning and Market Comparators
Pay Positioning and Market Comparators The Compensation Committee considered competitive market practices when determining Fiscal 2025 compensation. Competitive market data, however, is only one of several factors considered by the Compensation Committee in setting executive compensation levels. The Compensation Committee also considers individual-specific factors, such as individual performance, scope of responsibilities, experience, level, company performance and economic conditions, as described in more detail below. The Compensation Committee does not use a formula or fixed target to determine compensation. In setting compensation, the Compensation Committee compares base salaries, annual incentive opportunities and long-term compensation (cumulatively, target total direct compensation) for the NEOs to comparable roles from survey data provided by the Radford technology survey. The Compensation Committee believes that the Radford technology survey provides a robust sample of similarly sized technology companies and reflects a broad array of companies against which Sonos competes to attract and retain talent. For the CEO appointment, the Compensation Committee’s independent compensation consultant also supplemented the Radford survey with data from a broad cross-section of publicly-traded technology companies of similar size to Sonos.
Annual Cash Incentive Plan
Annual Cash Incentive Plan We maintain an annual cash incentive plan that is designed to incentivize strong financial performance and execution for the entire organization. Target bonus levels are reviewed each year as part of the Compensation Committee’s annual review process in the first quarter of the fiscal year. For Fiscal 2025, the target bonus levels for our named executive officers, other than Mr. Conrad and including Mr. Spence, was 65% of base salary which was unchanged from the prior fiscal year. Mr. Conrad’s target bonus level was 100% of base salary. The target bonus for Mr. Conrad was determined in connection with his appointment as CEO in July 2025 based on market benchmark data and to recognize his past experience and his strong performance as Interim CEO, as further described above under “Leadership Transitions - Selection of Tom Conrad to Serve as CEO.”
Annual Cash Incentive Plan
| Named Executive Officer | Fiscal 2024 Target Bonus | Fiscal 2025 Target Bonus | | Tom Conrad (1) | - | 100% | | Patrick Spence | 65% | 65% | | Saori Casey | 65% | 65% | | Eddie Lazarus | 65% | 65% | | Nicholas Millington | 65% | 65% | | Shamayne Braman | 65% | 65% |
Annual Cash Incentive Plan
(1) Represents Mr. Conrad’s target bonus in connection with his appointment as CEO effective July 22, 2025. Mr. Conrad did not participate in the Company’s annual cash incentive plan for Fiscal 2025 for the period in which he served as Interim CEO. Each NEO participated in our annual cash incentive plan for Fiscal 2025. However, Mr. Spence did not receive any payments under the annual cash incentive plan because his termination of employment occurred prior to attainment and payout. Ms. Braman received a pro-rata bonus (at target) as part of her severance given that her termination occurred near the end of Fiscal 2025. Mr. Conrad’s participation was pro-rated for Fiscal 2025 for the period from July 22, 2025 to September 27, 2025, during which he served as our CEO. Mr. Conrad received a separate bonus of $750,000 for his service as Interim CEO during Fiscal 2025. This bonus was awarded to recognize his strong performance as Interim CEO, including his contributions to the delivery of strong financial performance by the Company and his achievements in restoring software quality and customer confidence. This bonus was paid in October 2025. For Fiscal 2025, the Compensation Committee approved an annual incentive plan linked to objective Company financial performance goals. In Fiscal 2025, the performance goals were revenue and adjusted operating income, measured on a quarterly basis and each weighted at 50% and paid out annually based on a cumulative average of the quarters. “Adjusted operating income” is defined as GAAP operating income excluding variable bonus compensation, restructuring charges, intellectual property litigation costs and variable quarterly one-time events. Any payout under the annual incentive plan for Fiscal 2025 was subject to a determination by the Compensation Committee in its sole discretion that the Company has made substantial progress in Fiscal 2025 against the Quality Gate metrics. This plan structure reflects a change from the prior year plan metrics of revenue and Adjusted EBITDA margin, each weighted at 45%, and a diversity, equity and inclusion metric, weighted at 10%. In addition, the Compensation Committee established separate metrics for the annual incentive plan and the PSUs, which reflects a change from prior years. The Compensation Committee considered the transitional nature of Fiscal 2025 when setting the quarterly incentive plan goals. The Compensation Committee focused on the importance of day-to-day operational execution and discipline in our business by establishing metrics that would incentivize the achievement of both top-line and bottom-line growth and set metrics intended to reward the improvement of Sonos’ efficiency and effectiveness through its pivotal transformation efforts and driving profitability. The quarterly metric structure is consistent with the shift by the Company to providing quarterly, rather than annual, guidance. The Committee retained the payout timing at year-end to support retention and recognize the annual nature of the plan. Finally, the Compensation Committee recognized the importance of restoring customer confidence and software quality, and made any payout subject to the Quality Gate. Bonus opportunities range from 0% to 200% of target for each quarter. Payout for each financial metric was determined based on the table below using linear interpolation for performance between two levels of achievement. Each quarterly performance target was recommended by management within each quarter of Fiscal 2025 based on the Company’s financial forecast and approved by the Compensation Committee.
Annual Cash Incentive Plan
| Fiscal 2025 Bonus Payout Attainment | Fiscal 2025 Annual Incentive Plan Quarterly Targets* | | | | | | | | | | Q1 Fiscal 2025 | | Q2 Fiscal 2025 | | Q3 Fiscal 2025 | | Q4 Fiscal 2025 | | | | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | | % | (50% weight) | (50% weight) | (50% weight) | (50% weight) | (50% weight) | (50% weight) | (50% weight) | (50% weight) | | 0% | $500 | $19 | $240 | ($51) | $310 | ($10) | $265 | ($25) | | 100% | $550 | $44 | $260 | ($36) | $340 | $17 | $280 | ($6) | | 150% | $613 | $81 | $310 | ($13) | $397 | $49 | $315 | $19 | | 200% | $730 | $86 | $345 | $9 | $451 | $60 | $372 | $35 |
Annual Cash Incentive Plan
*Amounts, other than percentages, in $ millions. For Fiscal 2025, performance against revenue and adjusted operating income metrics was assessed quarterly, with final payouts for NEOs determined based on the average of the results of performance in each of the four quarters. The average of the quarterly revenue attainment was 103.5%, while the average quarterly attainment for operating income was 79.4%, and, as a result, the payout for the combined quarterly financial results was 91.4% of target. The breakdown of quarterly attainment was as follows:*
Annual Cash Incentive Plan
| Fiscal 2025 Quarterly Financial Results and Quarterly Attainment | | | | | | | | Fiscal 2025 Financial Results and Average Quarterly Attainment | | | Q1 Fiscal 2025 | | Q2 Fiscal 2025 | | Q3 Fiscal 2025 | | Q4 Fiscal 2025 | | | | | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | Revenue | Adjusted Operating Income | | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | (50% Weight) | | $551 | $61 | $260 | ($35) | $344 | $5 | $288 | ($18) | $1,442 | $13 | | 100.7% | 122.6% | 98.8% | 101.2% | 103.1% | 56.7% | 111.3% | 37.1% | 103.5% | 79.4% | | 111.7% | | 100.0% | | 79.9% | | 74.2% | | 91.4% | |
Annual Cash Incentive Plan
*Amounts, other than percentages, in $ millions. For the Quality Gate, the Compensation Committee set baseline metrics related to improvement of app quality and critical feature parity in Fiscal 2025, following release of the Company’s redesigned app in May 2024 that led to certain of our customers and partners experiencing missing features and performance issues. The metrics were focused on objectively measuring software quality, app performance, set-up success, and customer satisfaction, as well as meeting delivery dates for software updates. Performance against these metrics was measured at fiscal year-end, with any payout to NEOs under the annual incentive plan for Fiscal 2025 subject to a determination by the Compensation Committee in its sole discretion that the Company substantially met these metrics. For Fiscal 2025, the Compensation Committee determined that the Quality Gate was met, with the Company meeting or exceeding all metrics.
Fiscal 2025 Equity-Based Awards
Fiscal 2025 Equity-Based Awards The majority of the target total direct compensation of our executive officers, including our NEOs, is provided through equity awards. By having a significant percentage of their target total direct compensation payable in the form of equity awards that vest over a number of years and therefore subject to more risk and longer vesting than our cash compensation program, we believe our executive officers are motivated to remain employed with Sonos and take actions that will benefit the Company and its stockholders over the long term. We make annual equity grants to our executive officers in order to align their interests with those of our stockholders and ensure appropriate incentives are in place to promote a focus on our long-term performance. In order to determine the size of equity awards, the Compensation Committee takes a number of factors into account including market data, individual performance, scope of responsibility, current unvested equity awards, total target cash compensation for each role, the retentive value of the compensation package, the recommendations of the CEO (except with respect to his awards), and the Compensation Committee’s judgment after considering all of the factors listed. The annual equity awards granted to Mr. Spence, Ms. Casey, Mr. Lazarus, Mr. Millington and Ms. Braman in Fiscal 2025 were 50% in the form of PSUs and 50% in the form of time-vested RSUs. Mr. Spence departed the Company prior to the PSU metrics being approved and therefore his grant of PSUs in Fiscal 2025, which was forfeited upon termination, is not reflected in the "Summary Compensation Table" below. Annual equity awards to executive officers, including NEOs, generally vest quarterly over three years. In connection with his appointment as CEO in July 2025, Mr. Conrad received new hire grants of (i) time-vested RSUs with a grant date value of approximately $3,500,000 and (ii) PSUs with a grant date value (at target) of approximately $3,500,000. The performance goals for the new hire PSUs were not yet approved as of the end of Fiscal 2025 and therefore this grant is not reflected in the “Summary Compensation Table” or other tables below the “Summary Compensation Table." Mr. Conrad’s new hire RSU grants vests on an annual basis over four years. In determining the size of these grants, the Compensation Committee considered Mr. Conrad’s experience and deep knowledge of the Company, strong performance as Interim CEO, the competitive market for technology executive talent, as well as the work required to position the Company for the future, spearhead innovation and drive growth. Mr. Conrad also received a time-vested RSU grant with a grant date value of approximately $2,650,000 in connection with his appointment as Interim CEO. The value of this grant was based primarily on market benchmark data for other interim CEOs and on the anticipated time spent in role, following consultation with the Company’s independent compensation consultant. Mr. Lazarus also received a one-time special RSU grant in November 2024 with a grant date value of $2,000,000. The Compensation Committee awarded this additional grant to Mr. Lazarus to reflect market compensation for his role as chief legal officer and the expansion of his role to include strategy and business development work. The table below outlines the total target value of the equity awards our NEOs received in Fiscal 2025, assuming target performance in the case of PSUs.
Fiscal 2025 Equity-Based Awards
| Named Executive Officer | Total Target Value of RSUs ($) | Total Target Value of PSUs ($) | | Tom Conrad (1) | 6,150,000 | 3,500,000 | | Patrick Spence | 2,500,000 | 2,500,000 | | Saori Casey | 1,673,700 | 1,673,700 | | Eddie Lazarus (2) | 3,625,000 | 1,625,000 | | Nicholas Millington | 750,000 | 750,000 | | Shamayne Braman | 700,000 | 700,000 |
Fiscal 2025 Equity-Based Awards
(1) In addition to his new hire grant, Mr. Conrad received an RSU grant with a grant date fair value of approximately $2,650,000 in connection with his appointment as Interim CEO in January 2025 which vested in equal installments over 6 months. (2) In addition to his annual equity grant, Mr. Lazarus received a special RSU grant in November 2024. The RSU grant had a grant date value of $2,000,000 and vests over two years, 15% quarterly over year one, and 10% quarterly over year two. The target values reflected in the table above differ from the grant date fair values reflected in the “Summary Compensation Table” and the “Grants of Plan-Based Awards in Fiscal 2025 Table” below. This difference is because we determine the number of shares to grant to each executive officer based on a 30 calendar-day trailing average stock price in order to limit the impact of market volatility on the number of shares underlying granted equity awards. In addition, the grant date value of PSUs for accounting purposes (and therefore for “Summary Compensation Table” and “Grants of Plan-Based Awards in Fiscal 2025 Table” reporting purposes) is not determined until the performance goals are established. Our PSUs granted prior to and in Fiscal 2025 typically have three one-year performance periods with performance goals established in the first quarter of each year of the three-year performance period. As a result of this structure, the stock price used to determine grant date fair value on the performance goal approval date can vary significantly from the stock price on the date used previously to determine the number of shares. The Compensation Committee believes that granting a balance of RSUs and PSUs appropriately aligns our NEOs’ compensation with the achievement of the Company’s strategic goals and long-term stockholder value creation. The PSUs have both (i) time-based vesting conditions and time vest at the end of three years based on continued employment and (ii) performance-based vesting conditions. The RSUs generally time vest ratably over three years. For the PSUs granted in Fiscal 2025 (other than Mr. Conrad’s new hire PSU grant), the Compensation Committee approved a three-year structure under which one-year performance goals are established at the beginning of each fiscal year (Fiscal 2025, Fiscal 2026, and Fiscal 2027). Each one-year goal applies to one-third of the total PSUs granted, and depending on Company performance, between 0% and 200% of the target number of PSUs may be earned for that tranche. For the Fiscal 2025 performance year, the Compensation Committee determined the performance metric would be E/R Ratio and set a target of achieving the annual goal of a 45.4% E/R Ratio. The Fiscal 2025 E/R Ratio of 42.1% was above target, and 130.9% of the target number of PSUs was earned for the first third of the Fiscal 2025 PSU awards. The Fiscal 2025 PSU goals and achievement are set forth below.
Fiscal 2025 Equity-Based Awards
| Fiscal 2025 Performance Period Goals | E/R Ratio | PSU Achievement | | Max | 34.7% | 200% | | Target | 45.4% | 100% | | Threshold | 47.6% | 0% | | Fiscal 2025 Results | 42.1% | 130.9% |
Fiscal 2025 Equity-Based Awards
“Normalized operating expense” is defined as GAAP operating expense excluding variable bonus compensation, restructuring charges and app recovery costs. As described above, in setting incentive plan goals for Fiscal 2025, the Compensation Committee particularly considered the transformational nature of Fiscal 2025. For the PSU performance goals for Fiscal 2025, the Compensation Committee focused on the long-term impact to the Company of driving operating discipline and executing on our transformation initiatives to lower our expense base and increase profitability. The Compensation Committee also recognized the feedback received from stockholders encouraging the use of different performance metrics for the short-term and long-term incentive plans. All NEOs received PSU grants in Fiscal 2025, although the PSU grant to each of Mr. Spence and Ms. Braman was forfeited in connection with their termination of employment. In addition, the new hire PSU grant to Mr. Conrad has performance goals that were established following the end of Fiscal 2025. In addition, all NEOs (except Mr. Conrad) received PSU grants in Fiscal 2024, and all NEOs (except Mr. Conrad, Ms. Casey, and Mr. Lazarus) received PSU grants in Fiscal 2023. Each of these prior-year awards included a performance goal covering Fiscal 2025 performance based on the same E/R Ratio metric noted above. Accordingly, 130.9% of the target number of PSUs was also earned for the portions of the Fiscal 2024 and Fiscal 2023 awards tied to Fiscal 2025 performance. For Mr. Conrad’s new hire PSUs, forty percent (40%) of the PSUs are subject to a multi-year relative TSR goal (compared to the Russell 2000), measured beginning on the date of appointment as CEO, and sixty percent (60%) of the PSUs are subject to two one-year financial performance goals with respect to Fiscal 2026 and fiscal year 2027. As described above, the Compensation Committee revised the design of this PSU grant in order to further align the interests of our CEO with those of our stockholders over a longer-term period and chose relative TSR to further align our CEO's compensation with stock price performance. To further reflect this redesign, the PSUs granted to all of our executive officers in Fiscal 2026 are subject to a relative TSR performance goal measured over three years (40% of the award) in addition to three, one-year financial performance goals (a combination of 60% of the award). The chart below outlines the level of achievement of performance goals for completed one-year performance periods for outstanding PSUs granted prior to and in Fiscal 2025 (other than Mr. Conrad’s new hire PSUs): 1Attainment = 100% of E/R Ratio for Fiscal 2025, or (50% * Revenue Achievement) + (50% * Adjusted EBITDA Margin Achievement) for Fiscal 2024 and Fiscal 2023. The payout for the vested Fiscal 2023 PSU awards, covering Fiscal 2023, Fiscal 2024, and Fiscal 2025 performance, for Mr. Millington was 49.23% of the target number of shares. As only Mr. Millington held outstanding Fiscal 2023 PSU awards, no other NEO’s PSU awards vested during Fiscal 2025. The future tranches of the PSU awards are not considered granted for accounting purposes until the performance goals associated with such awards are established. The grants will be reflected in future years in the “Summary Compensation Table,” and the “Grants of Plan-Based Awards Table” once the performance goals are established, with their value based on the stock price at the time the goals are set, rather than at the time of grant.
Role of the Independent Compensation Consultant
Role of the Independent Compensation Consultant The Compensation Committee has retained Semler Brossy as its independent compensation consultant. Semler Brossy is retained by and reports directly to the Compensation Committee. The Compensation Committee has analyzed whether the work of Semler Brossy as a compensation consultant raises any conflict of interest and has determined that the work of Semler Brossy has not created any conflict of interest. Semler Brossy reviews and advises on all principal aspects of our executive compensation program. Its main responsibilities include: •Providing independent advice to the Compensation Committee on current trends and best practices in compensation design and program alternatives, and advising on plans or practices that may improve the effectiveness of our compensation program, including the selection of performance goals for our short- and long-term compensation plans; •Providing and discussing market comparators for competitive comparisons and based on this information, offering independent advice on NEO compensation, including recommendations for our CEO and newly hired executives; •Reviewing the Company’s equity plan and providing an assessment of total stock usage relative to market comparators; •Reviewing the CD&A and other compensation-related disclosures in our proxy statement; •Offering recommendations, insights, and perspectives on compensation-related matters; •Assisting the Compensation Committee in designing executive compensation programs that are competitive and align the interests of our executives with those of our stockholders; and •Providing the Compensation Committee with ongoing updates regarding trends and regulatory developments in the areas of executive compensation and human capital management. The Compensation Committee typically asks Semler Brossy to attend the Compensation Committee’s meetings. Semler Brossy communicates regularly with management to gather information and review proposals.
Role of Management
Role of Management Our CEO and our other executive officers do not set their own compensation, nor are they present when the Compensation Committee sets their specific individual compensation. Our CEO provides his evaluation of each executive officer’s performance to the Compensation Committee, and makes recommendations with respect to base salary, target annual incentive, and equity awards for each executive officer other than himself. Our CEO’s recommendation is considered by the Compensation Committee, which makes its own ultimate determinations. The finance and human resources departments provide additional analysis and guidance as requested by the Compensation Committee related to NEO compensation, including the following: •Developing, summarizing and presenting information and analyses to enable the Compensation Committee to execute its responsibilities, as well as addressing specific requests for information from the Compensation Committee; •Attending Compensation Committee meetings, as requested, to provide information, respond to questions and otherwise assist the Compensation Committee; and •Assisting the CEO in making preliminary recommendations regarding base salary and annual and long-term incentive awards for other executive officers.
Policies and Practices Related to the Timing of Equity Grants
Policies and Practices Related to the Timing of Equity Grants We maintain an equity grant policy. Generally, under this policy and subject to certain exceptions, the effective date of equity grants (including for new hires) is the fifteenth day of the second month of the quarter (February, May, August, or November) coincident with, or immediately following, the date on which the Compensation Committee or the Board approves the grant, except that if such date falls within a trading blackout period, then the date of grant will generally instead be on the next trading day following the public dissemination of the information giving rise to the blackout period. We generally grant annual equity-based awards to our executive officers in the first quarter of each fiscal year, in connection with our annual compensation review and approval process, although the exact timing may change from year to year. The Compensation Committee and/or the Board may also grant equity awards at different times of the year for new hires and in connection with promotions, or grants made for retention or other purposes. Neither the Compensation Committee nor the Board grants equity awards in anticipation of the release of material non-public information and we have not timed the disclosure of material non-public information for the purpose of affecting the value of executive compensation. In Fiscal 2025, equity compensation for our NEOs consisted solely of RSUs and PSUs; we did not grant stock options to our NEOs in Fiscal 2025.
Employment, Severance and Change in Control Agreements
Employment, Severance and Change in Control Agreements We have entered into offer letters with each of our NEOs. Each of these arrangements provides for at-will employment and generally includes the NEO’s initial base salary and an indication of eligibility for an annual cash incentive award opportunity and for the grant of an initial equity award. As described below under "Potential Payments upon Termination or Change in Control," pursuant to his offer letter, Mr. Conrad is entitled to certain severance payments and benefits upon a qualifying termination of employment, and Mr. Spence and Ms. Braman received certain severance payments in connection with their termination of employment. In addition, each of our NEOs has executed a form of our standard confidential information and invention assignment agreement. As discussed herein, after consideration of stockholder feedback following the 2025 Annual Meeting of Stockholders, the Compensation Committee adopted the CXO Severance Guidelines in June 2025. See “CXO Severance Guidelines” for more information. Each of the stock options, PSU awards and RSU awards granted to our NEOs under our 2018 Plan, including the PSUs and RSUs granted in Fiscal 2025, contains a provision for the full acceleration of vesting upon an involuntary termination, as defined in the applicable agreement, occurring within two months prior to, or within 12 months following, a change in control (a "double-trigger" acceleration). In connection with a change in control, PSUs will vest at target for any PSUs for which the performance period has not been completed and based on the number of PSUs that have been earned by their terms for any performance period that has been completed. If an acquirer in a change in control transaction does not assume the PSUs, they will vest in connection with such transaction. Such benefits are intended to incentivize executives who might be involved in acquisition or merger discussions with another entity to make decisions that are in the best interest of Sonos and our stockholders, without being unduly biased by the impact of such a transaction on their personal situation.
Summary Compensation Table
Summary Compensation Table The following table provides information concerning the compensation of each of our named executive officers for each fiscal year in which they were a named executive officer during the last three fiscal years:
Summary Compensation Table
| | Fiscal Year | Salary ($) | Stock Awards ($) (1) | Option Awards ($) (2) | Bonus ($) | Non-Equity Incentive Plan Compensation ($) (3) | All Other Compensation ($)(4) | Total ($) | | Tom Conrad (5) | 2025 | 1,258,654 | 6,073,193 | — | 750,000 (6) | 146,416 | 47,091 | 8,275,354 | | Chief Executive Officer | | | | — | | | | | | Patrick Spence (7) | 2025 | 202,308 | 4,997,977 | 1,479,225 | — | — | 1,910,653 | 8,590,163 | | Former Chief Executive Officer | 2024 | 550,000 | 5,260,424 | — | — | — | — | 5,810,424 | | | 2023 | 550,000 | 4,568,856 | — | — | 71,858 | — | 5,190,714 | | Saori Casey | 2025 | 550,000 | 3,375,695 | — | — | 326,755 | 7,462 | 4,259,912 | | Chief Financial Officer | 2024 | 380,769 | 7,438,620 | — | — | — | 7,635 | 7,827,024 | | Eddie Lazarus | 2025 | 475,000 | 4,654,148 | — | — | 282,198 | 10,500 | 5,421,846 | | Chief Legal and Business Development Officer | 2024 | 475,000 | 2,641,834 | — | — | — | 10,350 | 3,127,184 | | | 2023 | 475,000 | 160,139 | — | — | 62,059 | 9,900 | 707,098 | | Nicholas Millington | 2025 | 450,000 | 1,449,880 | — | — | 267,345 | 10,106 | 2,177,331 | | Chief Innovation Officer | 2024 | 450,000 | 2,487,933 | — | — | — | 9,866 | 2,947,799 | | | 2023 | 450,000 | 1,103,679 | — | — | 58,793 | 9,846 | 1,622,318 | | Shamayne Braman (8) | 2025 | 355,385 | 1,303,659 | — | — | — | 642,477 | 2,301,521 | | Former Chief People Officer | 2024 | 400,000 | 1,279,479 | — | — | — | 8,062 | 1,687,541 | | | 2023 | 400,000 | 735,786 | — | — | 52,260 | 7,017 | 1,195,063 |
Summary Compensation Table
(1)Reflects the aggregate grant date fair value of (a) the RSU awards granted under our 2018 Plan to our named executive officers during the fiscal years ended September 27, 2025, September 28, 2024 (other than Mr. Conrad), and September 30, 2023 (other than Mr. Conrad, Ms. Casey, and Mr. Lazarus); and (b) the PSU awards granted to our named executive officers during the fiscal year ended September 27, 2025 (other than Mr. Conrad and Mr. Spence), to Ms. Casey, Mr. Lazarus, Mr. Millington, and Ms. Braman during the fiscal year ended September 28, 2024, and to Mr. Spence, Mr. Millington, and Ms. Braman during the fiscal year ended September 30, 2023, as further described below and all as computed in accordance with ASC 718, excluding the effect of estimated forfeitures. For PSU awards, the grant date fair value is based upon the probable outcome of the performance conditions associated with the awards, which assumes that target performance is achieved. PSU awards granted during and prior to Fiscal 2025 have a three-year vesting term generally based on continued employment, with three one-year performance periods or tranches. The value of PSU awards is included in the Summary Compensation Table in the year when the applicable performance goals are set and the fair value of the PSUs is determinable under ASC 718 (and is determined based on the Company’s closing stock price on the trading day immediately preceding such date). The 2025 amounts for Mr. Millington and Ms. Braman each include one-third of their PSU awards granted in Fiscal 2025, one-third of their PSU awards granted in Fiscal 2024, and one-third of the PSU awards granted in Fiscal 2023. The amounts for Ms. Casey and Mr. Lazarus each include one-third of their PSU awards granted in Fiscal 2025, and one-third of their PSU awards granted in Fiscal 2024. All PSU awards are tranches of the awards for which performance goals were set in March 2025 (Fiscal 2025) for the Fiscal 2025 performance period. The grant date fair value of the Fiscal 2025 PSU awards, assuming maximum achievement of the performance conditions associated with the awards, is: Ms. Casey, $3,272,531; Mr. Lazarus, $1,773,572; Mr. Millington, $1,340,840; and Ms. Braman, $1,152,320. The grant date fair values of the Fiscal 2025 PSU award and the 2025 tranches of the Fiscal 2024 and Fiscal 2023 PSU awards to Mr. Spence are not included as he departed the Company prior to the determination of the Fiscal 2025 performance goals. The PSU grants to Mr. Spence and Ms. Braman were forfeited in connection with their respective terminations of employment with the Company. Additional information regarding the assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column is set forth in Note 2 to our audited consolidated financial statements included in our Annual Report. The amount reported in the “Stock Awards” column for Mr. Spence for Fiscal 2025 also includes the incremental fair value of the acceleration of the unvested RSUs that would have vested if his employment had continued until June 30, 2026, as set forth in his Transition Agreement. The incremental fair value of this modifications, calculated in accordance with ASC 718 using a stock price of $14.40 per share on the modification date, was $2,399,803. (2)The amount reported in the “Option Awards” column for Fiscal 2025 for Mr. Spence represents the incremental fair value of the extension of the post-termination stock option exercise period for his vested options to June 30, 2026. The incremental fair value of this modification, calculated in accordance with ASC 718 using a stock price of $14.40 per share on the modification date, was $1,479,225. (3)These amounts reflect bonuses earned by our named executive officers based upon achievement of financial objectives. For more information on bonuses for Fiscal 2025, see “—Fiscal 2025 NEO Compensation Decisions” above. (4)These amounts reported in the "All Other Compensation" column reflect matching contributions made by us under our 401(k) plan for all NEOs, other than Mr. Spence. For Mr. Conrad, the Fiscal 2025 amount also includes (i) $21,841 in director fees paid to him in his capacity as a non-employee director for the portion of Fiscal 2025 during which he was not serving as Interim CEO or CEO and (ii) $20,000 for the reimbursement of legal fees in connection with the negotiation of his CEO offer letter with the Company. For Mr. Spence, the Fiscal 2025 amount reflects (i) $1,875,000 of cash severance and (ii) $35,653 for 12 months of subsidized COBRA continuation coverage, each as set forth under Mr. Spence's Transition Agreement described below. For Ms. Braman, the Fiscal 2025 amount also includes (i) $595,000 of cash severance, (ii) $32,229 for subsidized COBRA continuation coverage through August 31, 2026, and (iii) $6,500 for outplacement services, each as set forth under Ms. Braman's Severance Agreement described below. (5)Mr. Conrad served as our Interim CEO from January 13, 2025 to July 22, 2025 and has served as our CEO since July 22, 2025. (6)Reflects a bonus paid to Mr. Conrad for his service as Interim CEO. (7)Mr. Spence departed as our Chief Executive Officer, effective January 13, 2025, and served as a Special Advisor from January 13 to June 30, 2025. (8)The Company terminated Ms. Braman's employment, effective August 18, 2025, as a result of the elimination of the role of Chief People Officer.
Grants of Plan-Based Awards in Fiscal 2025 Table
Grants of Plan-Based Awards in Fiscal 2025 Table The following table presents information concerning each grant of an award made to the named executive officers during the fiscal year ended September 27, 2025 under any cash or equity incentive plan.
Grants of Plan-Based Awards in Fiscal 2025 Table
| | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards (2) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | | | | Name | Type of Award | Grant Date(1) | Approval Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($) (12) | | Tom Conrad | Cash | — | — | — | 160,192 | 320,385 | — | — | — | — | — | | | RSUs (3) | 1/13/2025 | 1/12/2025 | — | — | — | — | — | — | 179,826 | 2,611,074 | | | RSUs (4) | 7/22/2025 | 7/22/2025 | — | — | — | — | — | — | 326,615 | 3,462,119 | | Patrick Spence | Cash | — | — | — | 357,500 | 715,000 | — | — | — | — | — | | | RSUs (5) | 11/15/2024 | 11/1/2024 | — | — | — | — | — | — | 188,958 | 2,598,173 | | | RSU modification (6) | 1/12/2025 | 1/12/2025 | — | — | — | — | — | — | — | 2,399,803 | | | Option Modification(7) | 1/12/2025 | 1/12/2025 | — | — | — | — | — | — | — | 1,479,225 | | Saori Casey | Cash | — | — | — | 357,500 | 715,000 | — | — | — | — | — | | | RSUs (5) | 11/15/2024 | 11/1/2024 | — | — | — | — | — | — | 126,504 | 1,739,430 | | | PSUs (8) | 3/20/2025 | 2/15/2024 | — | — | — | 24,875 | 99,500 | 199,000 | — | 1,149,225 | | | PSUs (9) | 3/20/2025 | 11/15/2024 | — | — | — | 10,542 | 42,168 | 84,336 | — | 487,040 | | Eddie Lazarus | Cash | — | — | — | 308,750 | 617,500 | — | — | — | — | — | | | RSUs (5) | 11/15/2024 | 11/1/2024 | — | — | — | — | — | — | 122,823 | 1,688,816 | | | RSUs (10) | 11/15/2024 | 11/1/2024 | | | | | | | 151,167 | 2,078,546 | | | PSUs (8) | 3/20/2025 | 12/15/2023 | — | — | — | 8,959 | 35,837 | 71,674 | — | 413,917 | | | PSUs (9) | 3/20/2025 | 11/15/2024 | — | — | — | 10,235 | 40,941 | 81,882 | — | 472,869 | | Nicholas Millington | Cash | — | — | — | 292,500 | 585,000 | — | — | — | — | — | | | RSUs (5) | 11/15/2024 | 11/1/2024 | — | — | — | — | — | — | 58,688 | 779,460 | | | PSUs (11) | 3/20/2025 | 11/15/2022 | — | — | — | 4,025 | 16,098 | 32,196 | — | 185,932 | | | PSUs (8) | 3/20/2025 | 11/15/2023 | — | — | — | 5,763 | 23,051 | 46,102 | — | 266,239 | | | PSUs (9) | 3/20/2025 | 11/15/2024 | — | — | — | 4,724 | 18,896 | 37,792 | — | 218,249 | | Shamayne Braman | Cash | — | — | — | 260,000 | 520,000 | — | — | — | — | — | | | RSUs (5) | 11/15/2024 | 11/1/2024 | — | — | — | — | — | — | 52,909 | 727,499 | | | PSUs (11) | 3/20/2025 | 11/15/2022 | — | — | — | 2,683 | 10,732 | 21,464 | — | 123,955 | | | PSUs (8) | 3/20/2025 | 11/15/2023 | — | — | — | 5,379 | 21,515 | 43,030 | — | 248,498 | | | PSUs (9) | 3/20/2025 | 11/15/2024 | — | — | — | 4,409 | 17,637 | 35,274 | — | 203,707 |
Grants of Plan-Based Awards in Fiscal 2025 Table
(1)The "grant date" for PSUs is the date that the performance goals associated with the PSU awards were set by the Compensation Committee, which is the date the fair values of such awards are determinable under ASC 718. The “grant date” for RSU modifications and option modifications is the date that such modifications were approved by the Board. (2)Reflects threshold, target and maximum bonus amounts for Fiscal 2025 performance under our Annual Cash Incentive Plan, as described in “—Fiscal 2025 NEO Compensation Decisions — Annual Cash Incentive Plan” above. Amounts actually received by the named executive officer, if any, are reported in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. The cash bonus opportunity for Mr. Conrad was prorated based on the portion of Fiscal 2025 during which he served as CEO. Mr. Spence did not receive a bonus in respect of Fiscal 2025 due to his termination of employment during Fiscal 2025. (3)The shares subject to the RSU grant vested in equal monthly installments over six months following the vesting commencement date of January 13, 2025, generally subject to continued employment. (4)The shares subject to the RSU grant will vest in equal annual installments over four years following the vesting commencement date of July 22, 2025, generally subject to continued employment. (5)The shares subject to the RSU grant will vest in equal quarterly installments over three years following the vesting commencement date of November 15, 2024, generally subject to continued employment. (6)Represents the incremental fair value associated with the modification to Mr. Spence’s unvested RSUs in connection with his termination of employment. See footnote (1) to the Summary Compensation Table. (7)Represents the incremental fair value associated with the modification to Mr. Spence’s vested options in connection with his termination of employment. See footnote (2) to the Summary Compensation Table. (8)The amounts shown include one-third of the PSU grant granted in Fiscal 2024, which represents the tranche of the award for which performance goals were set in March 2025 (Fiscal 2025) for the Fiscal 2025 performance period, with the threshold, target and maximum columns reflecting the number of PSUs that can be earned based upon achievement of the pre-established Company performance goal for Fiscal 2025 at 25%, 50% and 200% of target, respectively. As discussed in “—Fiscal 2025 Equity-Based Awards” above, the Compensation Committee determined achievement of the Fiscal 2025 performance goals at 130.9%. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (9)The amounts shown include one-third of the PSU grant granted in Fiscal 2025, which represents the tranche of the award for which performance goals were set in March 2025 (Fiscal 2025) for the Fiscal 2025 performance period, with the threshold, target and maximum columns reflecting the number of PSUs that can be earned based upon achievement of the pre-established Company performance goal for Fiscal 2025 at 25%, 50% and 200% of target, respectively. As discussed in “—Fiscal 2025 Equity-Based Awards” above, the Compensation Committee determined achievement of the Fiscal 2025 performance goals at 130.9%. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (10)The shares subject to the RSU grant will vest over a two year period as follows: (i) 15% of the shares subject to the RSUs will vest quarterly in year 1 following the vesting commencement date of November 15, 2024 and (ii) 10% of the shares subject to the RSUs will vest quarterly in year 2, generally subject to continued employment. (11)The amounts shown include one-third of the PSU grant granted in Fiscal 2023, which represents the tranche of the award for which performance goals were set in March 2025 (Fiscal 2025) for the Fiscal 2025 performance period, with the threshold, target and maximum columns reflecting the number of PSUs that can be earned based upon achievement of the pre-established Company performance goal for Fiscal 2025 at 25%, 50% and 200% of target, respectively. As discussed in “—Fiscal 2025 Equity-Based Awards” above, the Compensation Committee determined achievement of the Fiscal 2025 performance goals at 130.90%. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (12)Reflects the aggregate grant date fair value of the awards granted under our 2018 Plan to our named executive officers during the fiscal year ended September 27, 2025 (or, for Mr. Spence’s awards described in footnotes (6) and (7) to this Grants of Plan-Based Awards in Fiscal 2025 Table, the incremental fair value related to adjustments to his RSUs and options in connection with his termination of employment), in each case, as computed in accordance with ASC 718, and, with respect to PSUs, determined as described in footnote (1) to the Summary Compensation Table. The assumptions used in calculating the dollar amount recognized for financial statement reporting purposes of the equity awards reported in this column are set forth in Note 2 to our audited consolidated financial statements included in our Annual Report. See footnotes (1) and (2) to the Summary Compensation Table.
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table
Outstanding Equity Awards at Fiscal Year-End Table
Outstanding Equity Awards at Fiscal Year-End Table The following table provides information regarding the outstanding equity awards held by our named executive officers as of September 27, 2025.
Outstanding Equity Awards at Fiscal Year-End Table
| | | Option Awards | | | | Stock Awards | | | | | Name | Grant Date (1) | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(14) | Equity Incentive Plan Awards: Number of unearned shares, units or other rights that have not vested (#) | Equity Incentive Plan Awards: Market or Payout value of unearned shares, units or other rights that have not vested ($)(14) | | Tom Conrad | 4/26/2017 (2) | 31,766 | — | 13.56 | 4/25/2027 | — | — | — | — | | | 7/22/2025 | — | — | — | — | 326,615 (3) | 4,997,210 | — | — | | Patrick Spence | 9/8/2016 (2) | 10 | — | 13.56 | 6/30/2026 | — | — | — | — | | | 11/7/2017 (2) | 151,736 | — | 15.03 | 6/30/2026 | — | — | — | — | | | 8/1/2018 (2) | 200,000 | — | 15.00 | 6/30/2026 | — | — | — | — | | | 11/19/2018 (2) | 874,999 | — | 15.44 | 6/30/2026 | — | — | — | — | | Saori Casey | 2/15/2024 | — | — | — | — | 279,497 (4) | 4,276,304 | 99,500 (5) | 1,522,350 | | | 11/15/2024 | — | — | — | — | 150,076 (6) | 2,296,163 | 84,336 (7) | 1,290,341 | | Eddie Lazarus | 2/15/2019 (2) | 200,000 | — | 11.12 | 2/14/2029 | — | — | — | — | | | 12/15/2023 | — | — | — | — | 118,585 (8) | 1,814,351 | 35,837 (5) | 548,306 | | | 11/15/2024 | — | — | — | — | 228,852 (9) | 3,501,436 | 81,882 (7) | 1,252,795 | | Nicholas Millington | 7/7/2016 (2) | 156,842 | — | 13.56 | 7/6/2026 | — | — | — | — | | | 9/8/2016 (2) | 193,642 | — | 13.56 | 9/7/2026 | — | — | — | — | | | 5/22/2017 (2) | 50,000 | — | 13.56 | 5/21/2027 | — | — | — | — | | | 5/25/2018 (2) | 64,000 | — | 15.11 | 5/24/2028 | — | — | — | — | | | 8/1/2018 (2) | 43,000 | — | 15.00 | 7/31/2028 | — | — | — | — | | | 11/15/2022 | — | — | — | — | 27,800 (10) | 425,340 | — | — | | | 11/15/2023 | — | — | — | — | 105,092 (11) | 1,607,908 | 23,051 (5) | 352,680 | | | 11/15/2024 | — | — | — | — | 67,251 (12) | 1,028,940 | 37,792 (7) | 578,218 | | Shamayne Braman (13) | — | — | — | — | — | — | — | — | — |
Outstanding Equity Awards at Fiscal Year-End Table
(1)All of the outstanding stock option awards were granted under our 2003 Plan, except for those with a grant date of August 1, 2018, November 19, 2018 and February 15, 2019, which were granted under our 2018 Plan. (2)The options were fully vested and exercisable as of September 27, 2025. (3)1/4th of the shares subject to the RSU grant vest on July 22, 2026 and an additional 1/4th vest annually thereafter, generally subject to continued employment. (4)Consists of (i) a grant of 298,500 RSUs, with 1/3rd of the shares subject to the RSU grant vested on February 15, 2025 and an additional 1/12th vesting quarterly thereafter, generally subject to continued employment, (ii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2024 at 0.0%, and (iii) 130,246 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (5)Consists of the target number of PSUs that may be earned based upon the achievement of pre-determined performance goals for Fiscal 2026, for which performance goals have not been set as of September 27, 2025. PSU awards have a three-year vesting term generally based upon continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. This PSU award is not shown in the Fiscal 2025 Summary Compensation Table because the performance goals associated with it were not established in Fiscal 2025. (6)Consists of (i) a grant of 126,504 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2025 and an additional 1/12th vesting quarterly thereafter, generally subject to continued employment, and (ii) 55,198 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (7)Consists of the target number of PSUs that may be earned based upon the achievement of pre-determined performance goals for Fiscal 2026 and the fiscal year ending September 25, 2027, for which performance goals have not been set as of September 27, 2025. PSU awards have a three-year vesting term generally based upon continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. This PSU award is not shown in the Fiscal 2025 Summary Compensation Table because the performance goals associated with it were not established in Fiscal 2025. (8)Consists of (i) a grant of 107,511 RSUs, with 1/12th of the shares subject to the RSU grant vested on November 15, 2024 and an additional 1/12th vesting quarterly thereafter, generally subject to continued employment, (ii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2024 at 0.0%, and (iii) 46,911 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (9)Consists of (i) a grant of 122,823 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2025 and an additional 1/12th vesting quarterly thereafter, generally subject to continued employment, (ii) a grant of 151,167 RSUs, vesting according to the following schedule: 60% of the shares subject to the RSU grant will vest quarterly in year one; 40% of the shares subject to the RSU grant will vest quarterly in year two, following the vesting commencement date of November 15, 2024, and generally subject to continued employment, and (iii) 53,592 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (10)Consists of (i) a grant of 48,294 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2023 and an additional 1/12th vesting quarterly thereafter, generally subject to continued employment, (ii) 2,704 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2023 at 16.8%, as determined by the Compensation Committee, (iii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2024 at 0.0%, and (iv) 21,072 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (11)Consists of (i) a grant of 69,154 RSUs, vesting in equal quarterly installments over three years following the vesting commencement date of November 15, 2023, generally subject to continued employment, (ii) a grant of 92,205 RSUs, with 1/2 of the shares subject to the RSU grant vested on November 15, 2024 and the remaining 1/2 vesting on November 15, 2025, generally subject to continued employment, (iii) 0 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2024 at 0.0%, and (iv) 30,174 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (12)Consists of (i) a grant of 56,688 RSUs, with 1/12th of the shares subject to the RSU grant vested on February 15, 2025 and an additional 1/12th vesting quarterly thereafter, generally subject to continued employment, and (ii) 24,735 shares earned under a PSU award based on the achievement of the pre-established Company performance goals for Fiscal 2025 at 130.9%, as determined by the Compensation Committee. PSU awards have a three-year vesting term generally based on continued employment, and, to the extent earned, will vest at such time of Compensation Committee approval of performance attainment at the end of the three-year term. (13)Ms. Braman did not hold any Sonos equity awards as of September 27, 2025. (14)The market values of (i) RSU awards that have not vested, including PSU awards that have been earned based on the achievement of pre-established Company performance goals, and (ii) other PSU awards (at target) are calculated by multiplying the number of shares shown in the table by $15.30, the closing market price of shares of our common stock on September 26, 2025, the last trading day of Fiscal 2025.
Fiscal 2025 Option Exercises and Stock Vested Table
Fiscal 2025 Option Exercises and Stock Vested Table The following table provides information regarding the number of shares of common stock acquired and the value realized pursuant to the vesting of RSUs during Fiscal 2025 by each of our named executive officers.
Fiscal 2025 Option Exercises and Stock Vested Table
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($) (1) | | Tom Conrad | 188,706 (2) | 2,095,035 | | Patrick Spence | 309,952 | 3,588,480 | | Saori Casey | 180,875 | 2,302,792 | | Eddie Lazarus | 140,112 | 1,757,985 | | Nicholas Millington | 102,253 | 1,348,224 | | Shamayne Braman | 66,279 | 847,613 |
Fiscal 2025 Option Exercises and Stock Vested Table
(1)The value realized on vesting is based on the number of shares underlying the RSU awards that vested during Fiscal 2025 multiplied by the closing market price of a share of our common stock on the applicable vesting date, except where such vesting date fell on a day that was not a trading day, in which case such value was calculated by multiplying the number of shares acquired on vesting by the closing market price on the trading day immediately prior to the applicable vesting date. (2)Mr. Conrad was granted 10,656 RSUs on March 11, 2024 in connection with his service as a non-employee director on our Board. In connection with his appointment as Interim CEO on January 13, 2025, Mr. Conrad remained a director but was no longer a non-employee director receiving compensation for service on the Board. As set forth in our Director Compensation Policy, the vesting of this grant was prorated at 83.3%, with 1,776 shares forfeited and 8,880 shares vested. Mr. Conrad has elected to defer the settlement of these 8,880 vested shares until January 1, 2027.
Nonqualified Deferred Compensation Table
Nonqualified Deferred Compensation Table The following table and footnotes provide information regarding our deferred compensation plans for the named executive officers for Fiscal 2025. We do not offer deferred compensation plans for our named executive officers but do offer non-employee directors the opportunity to elect to defer settlement of all or a portion of their annual RSU grant until a separation from service or a set date as described under "Director Compensation." Prior to his employment with us, Mr. Conrad elected to defer settlement of certain of his annual RSU grants with respect to his Board service as a non-employee director, as further described below.
Nonqualified Deferred Compensation Table
| Name | Plan | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/Distributions in Last FY ($) | Aggregate Balance at Last Fiscal Year End ($) | | Tom Conrad | Director Equity Deferral Plan | 128,938 (1) | — | — | — | 289,032 (2) | | Patrick Spence | — | — | — | — | — | — | | Saori Casey | — | — | — | — | — | — | | Eddie Lazarus | — | — | — | — | — | — | | Nicholas Millington | — | — | — | — | — | — | | Shamayne Braman | — | — | — | — | — | — |
Nonqualified Deferred Compensation Table
(1) Represents 8,880 shares granted pursuant to the RSU grant dated March 11, 2024, which vested as of January 12, 2025 and were deferred on December 27, 2023 until January 1, 2027. The closing market price of shares of our common stock on the date of vesting was $14.52/share. (2) Represents (i) 8,880 vested shares granted pursuant to the RSU grant dated March 11, 2024 which vested as of January 12, 2025, and were deferred on December 27, 2023 until January 1, 2027, and (ii) 10,011 vested shares granted pursuant to the RSU grant dated March 9, 2023, which vested as of March 9, 2024, and were deferred on December 22, 2022 until January 1, 2026. The value of the total deferred vested shares is based on the closing market price of shares of our common stock on September 26, 2025, the last trading day of Fiscal 2025 ($15.30). Amounts have not been reported in the Summary Compensation Tables for prior years, but amounts relating to such RSUs were reported in the “Stock Awards” column in the Director Compensation tables in prior years as Mr. Conrad was a non-employee director and not a named executive officer during such time.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control
CEO Pay Ratio
CEO Pay Ratio For Fiscal 2025, the median of the annual total compensation of all employees of our company (other than our CEO) was $170,401, and the annual total compensation of our CEO during Fiscal 2025, Tom Conrad, was $6,241,905. Based on this information, for Fiscal 2025, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all employees was approximately 37 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules. During Fiscal 2025, Patrick Spence, our former CEO, served as CEO through January 12, 2025 and Tom Conrad served as Interim CEO from January 13, 2025 through July 22, 2025 and then as CEO from July 22, 2025 and through the remainder of Fiscal 2025. As permitted under SEC rules, we selected Mr. Conrad for the pay ratio calculation as Mr. Conrad served as Interim CEO or CEO for most of the fiscal year and was serving as such on September 27, 2025. In determining Mr. Conrad’s total annual compensation for purposes of calculating the CEO pay ratio, we adjusted the compensation reported in the "Summary Compensation Table" to (i) remove the compensation paid to Mr. Conrad during the portion of Fiscal 2025 he served as a non-employee director before he was appointed Interim CEO, (ii) remove the compensation paid to Mr. Conrad during the portion of Fiscal 2025 he served as Interim CEO (cash and equity), (iii) annualize the base salary and annual bonus earned by Mr. Conrad in his role as CEO for Fiscal 2025 as if he had served in this role as CEO for the full fiscal year and (iv) include one-third of the new hire PSUs awarded to Mr. Conrad (based on promised grant date value (at target); this grant is not reflected in the “Summary Compensation Table” because the performance goals for the award were not yet approved as of the end of Fiscal 2025). For purposes of calculating the pay ratio, this resulted in total annual compensation of $6,241,905 for the CEO. To identify the median of the annual total compensation of all of our employees and to determine the annual total compensation of the “median employee,” we used the following methodology and material assumptions, adjustments and estimates: •We selected September 27, 2025 as the date upon which we would identify our median employee. •As of September 27, 2025, our employee population consisted of approximately 1,453 individuals, of which 934 were in the United States and 519 were outside of the United States. In determining our employee population, we considered our worldwide employees as of September 27, 2025, including short-term employees and employees employed on a full-time, part-time, temporary or seasonal basis. •To identify our “median employee,” we looked at the total direct compensation for Fiscal 2025 for all active employees, which for this purpose included each such employee's Fiscal 2025 annual base salary (or, in the case of non-salaried employees, hourly rate multiplied by his or her Fiscal 2025 work schedule) plus his or her Fiscal 2025 target bonus plus the actual accounting value of his or her Fiscal 2025 equity awards, if any, and annualized the compensation of any employees who started after the first day of our Fiscal 2025. •With respect to the annual total compensation of the “median employee,” we identified and calculated the elements of such employee’s compensation for Fiscal 2025 in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K, resulting in annual total compensation of $170,401. Because SEC rules for identifying the median of the annual total compensation of all employees allow companies to adopt a variety of methodologies, apply certain exclusions and make reasonable estimates and assumptions that reflect their employee population and compensation practices, the pay ratio reported by other companies may not be comparable to our pay ratio, as other companies have different employee populations and compensation practices and may have used different methodologies, exclusions, estimates and assumptions in calculating their pay ratios.
Pay Versus Performance
Pay Versus Performance The following table and related disclosure below are provided in compliance with the requirements of Item 402(v) of Regulation S-K to summarize information regarding the relationship between “Compensation Actually Paid” (as calculated under applicable SEC rules) (“CAP”), for our current Principal Executive Officer (First PEO), our former Principal Executive Officer (Second PEO) and our non-PEO NEOs, on an average basis, and the Company’s financial performance for Fiscal 2025. Fiscal 2024, Fiscal 2023, Fiscal 2022, and Fiscal 2021. The methodology for calculating amounts presented in the columns “Compensation Actually Paid to First PEO,” “Compensation Actually Paid to Second PEO,” and “Average Compensation Actually Paid to Non-PEO NEOs,” including details regarding the amounts that were deducted from, and added to, the "Summary Compensation Table" totals to arrive at the values presented for CAP, with respect to Fiscal 2025, are provided in the footnotes to the table. A discussion of the relationship between CAP and the Company’s performance measures listed in the table below, including the measure that the Company has deemed most important in linking CAP during Fiscal 2025 to Company performance. The calculations and analysis below do not necessarily reflect the Company’s approach to aligning executive compensation with performance. For information concerning the Company’s compensation philosophy and how the Company aligns executive compensation with financial performance, refer to the "Compensation Discussion and Analysis" on page 40 of this Proxy Statement.
Pay Versus Performance
| | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Fiscal Year | Summary Compensation Table Total for First PEO(1)(3) | Summary Compensation Table Total for Second PEO(2)(3) | Compensation Actually Paid to First PEO(4)(5) | Compensation Actually Paid to Second PEO(2)(4)(5) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4)(5) | Total Shareholder Return(6) | Peer Group Total Shareholder Return | Net Income ($000s)(7) | Adjusted Operating Income ($000s)(8) | | (a) | (b) | (b) | (c) | | (d) | (e) | (f) | (g) | (h) | (i) | | 2025 | $8,275,354 | $8,590,163 | $9,164,935 | $4,124,276 | $3,540,153 | $3,800,362 | $98.71 | $284.88 | ($61,144) | $12,708 | | 2024 | N/A | $5,810,424 | N/A | $3,692,695 | $4,264,554 | $2,813,478 | $78.39 | $217.88 | ($38,146) | ($29,132) | | 2023 | N/A | $5,190,714 | N/A | $4,702,791 | $1,472,635 | $915,290 | $83.29 | $146.23 | ($10,274) | $36,259 | | 2022 | N/A | $8,411,949 | N/A | $(13,528,779) | $2,122,936 | ($2,666,086) | $89.68 | $102.04 | $67,383 | $124,530 | | 2021 | N/A | $5,482,555 | N/A | $32,271,135 | $1,365,007 | $10,146,753 | $208.13 | $139.60 | $158,595 | $242,275 |
Pay Versus Performance
(1)Tom Conrad was appointed Interim CEO in January 2025, and CEO in July 2025 following his tenure as Interim CEO, and is denoted as our First PEO in Fiscal 2025. (2)Patrick Spence, our former CEO, served as CEO from January 2017 to January 2025, and is denoted as our Second PEO in all fiscal years represented. (3)NEOs included in the above compensation columns reflect the following:
Pay Versus Performance
| Fiscal Year | PEO | Non-PEO NEOs | | 2025 | Tom Conrad (First PEO), Patrick Spence (Second PEO) | Saori Casey, Eddie Lazarus, Nicholas Millington and Shamayne Braman | | 2024 | Patrick Spence | Saori Casey, Eddie Lazarus, Maxime Bouvat-Merlin, Deirdre Findlay and Nicholas Millington | | 2023 | Patrick Spence | Eddie Lazarus, Maxime Bouvat-Merlin, Nicholas Millington, Shamayne Braman, and Matthew Siegel | | 2022 | Patrick Spence | Eddie Lazarus, Matthew Siegel, Nicholas Millington, Brittany Bagley, and Anna Fraser | | 2021 | Patrick Spence | Eddie Lazarus, Matthew Siegel, Nicholas Millington, and Brittany Bagley |
Pay Versus Performance
(4)Fair value amounts or change in fair value, as applicable, of equity awards in the Compensation Actually Paid columns were determined based on applicable SEC rules with respect to previously-granted RSUs and PSUs. For stock options, changes in fair value were calculated pursuant to a Black-Scholes model as of the last day of the applicable year. (5)For Fiscal 2025, the values included in the Compensation Actually Paid to First PEO, Compensation Actually Paid to Second PEO, and Average Compensation Actually Paid to Non-PEO NEOs columns reflect the following adjustments from the values shown in columns (b), (c), and (d), respectively. In consideration of transition support to Mr. Spence, his window for post-termination exercise of vested options was extended until June 30, 2026. Additionally, a portion of Mr. Spence’s RSUs were accelerated to vest at the end date of his advisory services on June 30, 2025. The Compensation Actually Paid to Second PEO for Fiscal 2025 included the incremental fair value of such modifications computed in accordance with ASC 718. Numbers may not foot in the tables below due to rounding.
Pay Versus Performance
| | First PEO | Second PEO | Average Non-PEO NEOs | | Total Reported in Fiscal 2025 Summary Compensation Table (SCT) | $8,275,354 | $8,590,163 | $3,540,153 | | Less: Value of stock awards reported in SCT | $6,073,193 | $4,997,977 | $2,695,846 | | Plus: Year-end value of stock awards granted in fiscal year that are outstanding and unvested | $4,997,210 | $0 | $2,253,480 | | Plus: Change in fair value (from prior year-end) of stock awards granted in prior years that are outstanding and unvested | $0 | $28,397 | $239,695 | | Plus: Fair value of vesting date of awards granted in this fiscal year and that vested in this fiscal year | $1,966,098 | $1,055,172 | $489,961 | | Plus: Change in fair value as of the vesting date (from prior year-end) of prior year stock awards that vested this fiscal year | $21,046 | ($84,689) | $66,460 | | Less: Prior year-end fair value of stock awards granted in prior years that failed to vest this fiscal year | $21,578 | $466,791 | $93,540 | | Total Adjustments | $889,581 | ($4,465,887) | $260,209 | | Compensation Actually Paid for Fiscal 2025 | $9,164,935 | $4,124,276 | $3,800,362 |
Pay Versus Performance
(6)For purposes of calculating peer group total shareholder return (“TSR”), the Nasdaq Computer Index was utilized pursuant to Item 201(e) of Regulation S-K and as is reflected in our Annual Report on Form 10-K for the fiscal year ended September 27, 2025. In accordance with applicable SEC rules, peer group TSR was calculated on a market capitalization weighted basis according to the respective issuers’ stock market capitalization at the beginning of each period for which a return is indicated. TSR for both the Company and the peer group is based on an initial $100 investment, measured on a cumulative basis from the market close on October 2, 2020, through and including the end of the fiscal year for which TSR is being presented in the table. TSR calculations reflect reinvestment of dividends. (7)The amounts reported in column (h) represent net income of the Company reported in our Annual Report on Form 10-K for the applicable fiscal year. (8)We identified Adjusted Operating Income for Fiscal 2025 as our Company-Selected Measure that represents, in our view, the most important financial performance measure used to link Compensation Actually Paid in Fiscal 2025 to Company performance. Adjusted Operating Income was one of two of our financial performance measures used in the Company’s annual cash incentive program for Fiscal 2025. For Fiscal 2025, we changed our Company-Selected Measure from Adjusted EBITDA Margin to Adjusted Operating Income. Accordingly, the Company-Selected Measure information for Fiscal 2024, Fiscal 2023, Fiscal 2022, and Fiscal 2021 has been updated to reflect Adjusted Operating Income. We define Adjusted Operating Income as GAAP operating income excluding variable bonus compensation, restructuring charges, intellectual property litigation costs and variable quarterly one time events. See Annex A for a reconciliation of non-GAAP to GAAP measures.
Pay Versus Performance Additional Disclosure
Pay Versus Performance Additional Disclosure We believe the Compensation Actually Paid in each of Fiscal 2025, Fiscal 2024, Fiscal 2023, Fiscal 2022, and Fiscal 2021 and over the five-year cumulative period are reflective of the Committee’s emphasis on “pay-for-performance.” The Compensation Actually Paid fluctuated year-over-year, primarily because of our (i) stock performance, (ii) varying levels of achievement against pre-established performance goals under our long-term incentive program, and (iii) varying levels of achievement against pre-established performance goals under our annual cash incentive program. In addition to reviewing this discussion and the Pay Versus Performance Table above, we encourage you to read the Compensation Discussion and Analysis section of this proxy statement, which explains our executive compensation philosophy and programs for our PEOs and non-PEO NEOs.
Chart 1: Compensation Actually Paid Versus Company and Peer Group Total Shareholder Return (TSR)
Chart 1: Compensation Actually Paid Versus Company and Peer Group Total Shareholder Return (TSR) The Compensation Actually Paid values for our PEOs and non-PEO NEOs over the five-year period of Fiscal 2021 through Fiscal 2025 generally aligns with the Company’s TSR performance over the same period. This is due primarily to the emphasis on at-risk, performance-based equity incentives in the compensation program design for our PEOs and non-PEO NEOs. As depicted in the below chart, strong absolute TSR performance in Fiscal 2021 exceeded the peer group and drove an increase in the fair value of equity awards, which resulted in increased Compensation Actually Paid values. Weaker TSR performance in Fiscal 2022 resulted in a significant decrease in Compensation Actually Paid. Flatter TSR performance in Fiscal 2023 and Fiscal 2024 resulted in more modest Compensation Actually Paid values. In Fiscal 2025, while not exceeding the peer group, the absolute TSR exhibited a modest increase compared to Fiscal 2024, resulting in a relative increase in Compensation Actually Paid. The below chart also compares the Company’s TSR to the peer group TSR, in each case, measured on a cumulative basis from the market close on October 2, 2020, through and including the end of Fiscal 2025.
Chart 2: Compensation Actually Paid Versus Net Income
Chart 2: Compensation Actually Paid Versus Net Income SEC rules require that net income be presented as a performance measure in the Pay Versus Performance table. No portion of our compensation is directly tied to net income results.
Chart 3: Compensation Actually Paid Versus Adjusted Operating Income
Chart 3: Compensation Actually Paid Versus Adjusted Operating Income We identified Adjusted Operating Income as our Company-Selected Measure that represents, in our view, the most important financial performance measure used to link Compensation Actually Paid in Fiscal 2025 to our performance. Adjusted Operating Income was one of two of our financial performance measures used in the Company’s annual cash incentive program for Fiscal 2025. For Fiscal 2025, we changed our Company-Selected Measure from Adjusted EBITDA Margin to Adjusted Operating Income; accordingly, prior-year Compensation Actually Paid does not directly connect to Adjusted Operating Income. In Fiscal 2025, Compensation Actually Paid exhibited a moderate increase, which is partially attributable to the increase in Adjusted Operating Income results in the fiscal year.