DEF 14A of Freshworks Inc., Apr 19, 2024

DEF 14A of Freshworks Inc.

Filed Apr 19, 2024 · FY20230001544522-24-000025

Open on EDGAR

  1. INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE The following table sets forth certain information as of March 31, 2024 concerning the Class III nominees for election at the Annual Meeting and our other directors who will continue in office after the Annual Meeting:

  2. INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    | Name | Class | Age | Position | Director Since | Current Term Expires | Independent | Audit Committee | Compensation Committee | Nominating and Corporate Governance Committee | | Director Nominees | | | | | | | | | | | Rathna Girish Mathrubootham | III | 49 | Chief Executive Officer and Chairman | 2010 | 2024 | No | | | | | Zachary Nelson | III | 62 | Director | 2021 | 2024 | Yes | X | | | | Jennifer Taylor | III | 51 | Director | 2021 | 2024 | Yes | | | X | | Continuing Directors | | | | | | | | | | | Johanna Flower | I | 49 | Director | 2020 | 2025 | Yes | | X | | | Randy Gottfried | I | 58 | Director | 2018 | 2025 | Yes | X* | X | | | Barry Padgett | I | 53 | Director | 2020 | 2025 | Yes | | X | X | | Roxanne S. Austin(1) | II | 63 | Lead Independent Director | 2021 | 2026 | Yes | | | X* | | Sameer Gandhi | II | 58 | Director | 2019 | 2026 | Yes | | X* | X | | Frank Pelzer(2) | II | 53 | Director | 2023 | 2026 | Yes | X | | | | Dennis M. Woodside | II | 55 | Director | 2022 | 2026 | No | | | |

  3. INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    ________________ * Committee chair (1) Ms. Austin served on the audit committee from January 1, 2023 through August 2, 2023. (2) Mr. Pelzer joined the audit committee effective August 3, 2023. Set forth below is biographical information for the Class III director nominees and each person whose term of office as a director will continue after the Annual Meeting. This includes information regarding each director’s experience, qualifications, attributes, or skills that led our board of directors to recommend them for board service.

  4. Nominees for Election at the Annual Meeting

    Nominees for Election at the Annual Meeting Rathna Girish Mathrubootham. Mr. Mathrubootham is a co-founder of our company and has served as our Chief Executive Officer since October 2010, as a member of our board of directors since August 2010 and as Chairman since May 2021. Mr. Mathrubootham holds a B.E. in Electrical and Electronics from Shanmugha Arts, Science, Technology and Research Academy, and an M.B.A. from the University of Madras. We believe that Mr. Mathrubootham is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our Chief Executive Officer and a co-founder and because of his extensive experience with technology companies. Zachary Nelson. Mr. Nelson has served on our board of directors since August 2021. From July 2002 to June 2017, Mr. Nelson served as Chief Executive Officer at NetSuite Inc., a business management software company that was acquired by Oracle Corporation, a computer technology company, in November 2016. Since June 2018, Mr. Nelson has served on the board of directors of PagerDuty Inc., an incident management platform company. Mr. Nelson also currently serves on the board of directors of privately-held Acumatica, Inc. Mr. Nelson holds a B.S. in Biological Sciences and an M.A. in Anthropology from Stanford University. We believe that Mr. Nelson is qualified to serve as a member of our board of directors because of his extensive experience working in the technology sector and senior leadership experience at technology companies. Jennifer Taylor. Ms. Taylor has served on our board of directors since September 2021. Since February 2024, Ms. Taylor has served as President of Plaid Inc., a financial services company. She served as Chief Product Officer and Senior Vice President of Products at Cloudflare, Inc., a website security company, from June 2017 until December 2023. From August 2015 to June 2017, Ms. Taylor served as Senior Vice President of Product Management for Data.com and Search at Salesforce.com, Inc., a cloud-based software company. Ms. Taylor holds a B.A. in Public Policy from Brown University and an M.B.A. from Harvard Business School. We believe Ms. Taylor is qualified to serve as a member of our board of directors because of her product development expertise and strong experience in the technology industry.

  5. Directors Continuing in Office Until the 2025 Annual Meeting

    Directors Continuing in Office Until the 2025 Annual Meeting Johanna Flower. Ms. Flower has served on our board of directors since February 2020. From January 2022 until November 2022, she served as Chief Marketing Officer of CrowdStrike Holdings, Inc., a cybersecurity technology company, a role she previously held from November 2014 to August 2020. She also has served on the board of directors of CrowdStrike since January 2023 and served on the board of directors of ForgeRock, Inc., a digital identity technology company, from July 2021 until August 2023. Ms. Flower also serves on the board of directors of several privately-held companies. Ms. Flower holds a B.A. in Business Administration from Brighton University, United Kingdom. We believe Ms. Flower is qualified to serve as a member of our board of directors because of her significant management and leadership experience in the technology industry. Randy Gottfried. Mr. Gottfried has served on our board of directors since September 2018. From January 2015 to April 2017, Mr. Gottfried served as Chief Financial Officer of AppDynamics, Inc., an application performance management and IT operations analytics company. From January 2019 until May 2023, Mr. Gottfried served on the board of directors of Sumo Logic, Inc., a cloud-based machine data analytics company. Since August 2021, Mr. Gottfried has served on the board of directors of Attentive Mobile, Inc., a marketing technology company. Mr. Gottfried holds a B.B.A in Accounting from the University of Michigan and an M.B.A. in Strategy and Marketing from Northwestern University, Kellogg School of Management. We believe Mr. Gottfried is qualified to serve as a member of our board of directors because of his experience serving on the board of directors of public companies and his knowledge of the industry. Barry Padgett. Mr. Padgett has served on our board of directors since February 2020. Since February 2022, he has served as Chief Executive Officer for Amperity, Inc., an enterprise customer data platform. From May 2020 to February 2022, he served as the Chief Operating Officer of Amperity and from April 2019 to April 2020, Mr. Padgett served as Chief Revenue Officer for Stripe, Inc., a financial services and software-as-a-service company. From January 2016 to March 2019, Mr. Padgett served as President of SAP, a software and information technology services company. Since February 2022, Mr. Padgett has served on the board of directors of Amperity and he also is a member of the board of directors of privately-held Duetto Research Inc. Mr. Padgett holds a B.S. in Applied Mathematics from Union College, an M.B.A. from the University of New South Wales and an M.S. in Software Engineering from the University of Oxford. We believe Mr. Padgett is qualified to serve as a member of our board of directors because of his significant leadership experience in the industry.

  6. Directors Continuing in Office Until the 2026 Annual Meeting

    Directors Continuing in Office Until the 2026 Annual Meeting Roxanne S. Austin. Ms. Austin has served as a member of our board of directors since May 2021. Since December 2004 she has served as the President and Chief Executive Officer of Austin Investment Advisors, a private investment and consulting firm. From 2016 until 2023, she chaired the U.S. Mid-Market Investment Advisors Committee of EQT Partners, an investment organization. Previously, Ms. Austin has held a series of executive positions, including President and CEO of Move Networks, Inc. from 2008 to 2010, President and CEO of DIRECTV, Inc. from 2000 to 2004 and Executive Vice President and Chief Financial Officer of Hughes Electronics Corporation from 1997 to 2000. She is also a former partner of Deloitte & Touche LLP. Ms. Austin served on the board of directors of Target Corporation from 2002 to 2020 and on the board of directors of Abbott Laboratories Inc. from 2000 to April 2022. Ms. Austin currently serves on the boards of directors of several public companies including Verizon Communications, Inc., CrowdStrike Holdings, Inc., and AbbVie, Inc. Ms. Austin holds a B.B.A. in Accounting and Business Administration from the University of Texas at San Antonio. We believe Ms. Austin is qualified to serve as a member of our board because of her extensive business and operational expertise and experience serving on the boards of directors of public companies. Sameer Gandhi. Mr. Gandhi has served on our board of directors since December 2019. Since June 2008, Mr. Gandhi has served as a partner of Accel, a venture capital firm, where he focuses on consumer, software and services companies. Mr. Gandhi currently serves on the board of directors of CrowdStrike, and also serves on the boards of directors of several privately-held companies. Mr. Gandhi holds a B.S. in Electrical Engineering and an M.S. in Electrical Engineering and Computer Science from the Massachusetts Institute of Technology and an M.B.A. from the Stanford Graduate School of Business. We believe Mr. Gandhi is qualified to serve as a member of our board of directors because of his extensive investment and business expertise in the technology industry. Frank Pelzer. Mr. Pelzer has served on our board of directors since July 2023. Since May 2018, he has served as the Executive Vice President and Chief Financial Officer of F5, Inc., a multi-cloud application services and security company. From August 2015 until May 2018, Mr. Pelzer served as the President and Chief Operating Officer of the Cloud Business Group at SAP. From March 2019 until March 2023, Mr. Pelzer served on the board of directors of Duck Creek Technologies, Inc. and, from May 2013 until April 2022, Mr. Pelzer served on the board of directors of Benefitfocus, Inc. Mr. Pelzer received a B.A. from Dartmouth College and an M.B.A. from the Tuck School of Business at Dartmouth College. We believe that Mr. Pelzer is qualified to serve as a member of our board of directors because of his extensive experience in the enterprise technology sector as both an operator and public company director. Dennis M. Woodside. Mr. Woodside has served as our President and as a member of our board of directors since September 2022. He has served on the board of directors for ServiceNow, Inc., a service management software company, from April 2018 to August 2022. Mr. Woodside served as President of Impossible Foods Inc., a company that develops plant-based substitutes for meat products, from March 2019 until August 2022. From April 2014 to September 2018, Mr. Woodside served as Chief Operating Officer of Dropbox, Inc., a provider of cloud storage, file synchronization, personal cloud, and client software services. From May 2012 to April 2014, Mr. Woodside served as Chief Executive Officer for Motorola Mobility LLC, a consumer electronics and telecommunications company. From 2003 to 2011, Mr. Woodside held various roles at Google. Mr. Woodside holds a B.S. in Industrial Relations from Cornell University and a J.D. from Stanford Law School. We believe that Mr. Woodside is qualified to serve as a member of our board of directors because of the perspective and experience he brings as our President and because of his extensive leadership and operating experience.

  7. DIRECTOR COMPENSATION

    DIRECTOR COMPENSATION

  8. 2023 Director Compensation Table

    2023 Director Compensation Table The following table sets forth certain information with respect to the compensation earned by or paid to our directors for the fiscal year ended December 31, 2023, other than Rathna Girish Mathrubootham, our Chief Executive Officer and Chairman, and Dennis Woodside, our President, each of whom is also a member of our board of directors but did not receive any additional compensation for service as a director. The compensation paid to Mr. Mathrubootham and Mr. Woodside is set forth in “Executive Compensation.”

  9. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Roxanne S. Austin | — | 259,858(3) | 259,858 | | Johanna Flower | — | 236,958(4) | 236,958 | | Sameer Gandhi | — | 248,453(5) | 248,453 | | Randy Gottfried | 62,000 | 194,997(6) | 256,997 | | Zachary Nelson | — | 239,455(7) | 239,455 | | Barry Padgett | 46,000 | 194,997(8) | 240,997 | | Frank Pelzer | 18,916 | 334,991(9) | 353,906 | | Jennifer Taylor | — | 233,458(10) | 233,458 |

  10. 2023 Director Compensation Table

    ________________ (1) The amounts disclosed represent the aggregate grant date fair value of the restricted stock units granted to our non-employee directors during 2023 under our 2021 Equity Incentive Plan (the “2021 Plan”), computed in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) 718. The assumptions used in calculating the grant date fair value of the restricted stock units are set forth in Note 9 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These amounts do not reflect the actual economic value that will be realized by the directors upon the vesting of the restricted stock units, or the sale of any common stock acquired under such restricted stock units. (2) As of December 31, 2023, the number of unvested shares subject to outstanding restricted stock unit awards held by each non-employee director was as follows: Ms. Austin — 205,882 shares; Ms. Flower — 67,342 shares; Mr. Gandhi — 11,092 shares; Mr. Gottfried — 11,092 shares; Mr. Nelson — 207,972 shares; Mr. Padgett — 57,962 shares; Mr. Pelzer — 15,022 shares; and Ms. Taylor — 207,972 shares. (3) Includes (i) an aggregate of 3,516 shares of fully-vested Class A common stock granted to Ms. Austin pursuant to her election to receive such shares in lieu of the cash retainer for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023 pursuant to our non-employee director compensation program, granted on April 1, 2023, July 1, 2023, October 1, 2023, and January 2, 2024, respectively, and (ii) a restricted stock unit award for 11,092 shares of our Class A common stock granted on July 1, 2023 pursuant to our amended and restated non-employee director compensation program. (4) Includes (i) an aggregate of 2,253 shares of fully-vested Class A common stock granted to Ms. Flower pursuant to her election to receive such shares in lieu of the cash retainer for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023 pursuant to our non-employee director compensation program, granted on April 1, 2023, July 1, 2023, October 1, 2023, and January 2, 2024, respectively, and (ii) a restricted stock unit award for 11,092 shares of our Class A common stock granted on July 1, 2023 pursuant to our amended and restated non-employee director compensation program. (5) Includes (i) an aggregate of 2,870 shares of fully-vested Class A common stock granted to Mr. Gandhi pursuant to his election to receive such shares in lieu of the cash retainer for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023 pursuant to our non-employee director compensation program, granted on April 1, 2023, July 1, 2023, October 1, 2023, and January 2, 2024, respectively, and (ii) a restricted stock unit award for 11,092 shares of our Class A common stock granted on July 1, 2023 pursuant to our amended and restated non-employee director compensation program. (6) Represents a restricted stock unit award for 11,092 shares of our Class A common stock granted to Mr. Gottfried on July 1, 2023 pursuant to our amended and restated non-employee director compensation program. (7) Includes (i) an aggregate of 2,387 shares of fully-vested Class A common stock granted to Mr. Nelson pursuant to his election to receive such shares in lieu of the cash retainer for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023 pursuant to our non-employee director compensation program, granted on April 1, 2023, July 1, 2023, October 1, 2023, and January 2, 2024, respectively, and (ii) a restricted stock unit award for 11,092 shares of our Class A common stock granted on July 1, 2023 pursuant to our amended and restated non-employee director compensation program. (8) Represents a restricted stock unit award for 11,092 shares of our Class A common stock granted to Mr. Padgett on July 1, 2023 pursuant to our amended and restated non-employee director compensation program. (9) Represents a restricted stock unit award for 15,022 shares of our Class A common stock granted on September 1, 2023 pursuant to our amended and restated non-employee director compensation program. The shares will vest annually over a three-year period, subject to Mr. Pelzer’s continued service as a director through each such vesting date. (10) Includes (i) an aggregate of 2,065 shares of fully-vested Class A common stock granted to Ms. Taylor pursuant to her election to receive such shares in lieu of the cash retainer for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023 pursuant to our non-employee director compensation program, granted on April 1, 2023, July 1, 2023, October 1, 2023, and January 2, 2024, respectively, and (ii) a restricted stock unit award for 11,092 shares of our Class A common stock granted on July 1, 2023 pursuant to our amended and restated non-employee director compensation program.

  11. Non-Employee Director Compensation

    Non-Employee Director Compensation We have adopted an amended and restated non-employee director compensation program pursuant to which each of our directors who is not an employee or consultant of our company will be eligible to receive compensation for service on our board of directors and committees of our board of directors. Below is a description of the compensation to which our directors were entitled in 2023, as well as the changes to our director compensation program that became effective March 1, 2024.

  12. PROPOSAL 1 - ELECTION OF DIRECTORS

    PROPOSAL 1 - ELECTION OF DIRECTORS Our board of directors currently consists of ten members and is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. At each annual meeting of stockholders, the successors to directors whose terms then expire will be elected to serve from the time of election until the third annual meeting following the election and until his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal. Our directors are divided into the three classes as follows: •the Class I directors are Johanna Flower, Randy Gottfried, and Barry Padgett, whose terms will expire at the annual meeting of stockholders to be held in 2025; •the Class II directors are Roxanne S. Austin, Sameer Gandhi, Frank Pelzer, and Dennis M. Woodside, whose terms will expire at the annual meeting of stockholders to be held in 2026; and •the Class III directors are Rathna Girish Mathrubootham, Zachary Nelson, and Jennifer Taylor, whose terms will expire at the Annual Meeting. Any additional directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of the directors. Vacancies on the board of directors may be filled only by persons elected by a majority of the remaining directors. A director elected by the board of directors to fill a vacancy in a class, including vacancies created by an increase in the number of directors, shall serve for the remainder of the full term of that class and until the director’s successor is duly elected and qualified. The division of our board of directors into three classes with staggered three-year terms may delay or prevent a change of our management or a change in control of Freshworks. Our board of directors expects to review this structure periodically to ensure that it continues to be the appropriate board structure for our company. Each of Mr. Mathrubootham, Mr. Nelson, and Ms. Taylor is currently a member of our board of directors, and, at the recommendation of our nominating and governance committee, has been nominated for reelection to serve as a Class III director. Each of these nominees has agreed to stand for reelection at the Annual Meeting. Our management has no reason to believe that any nominee will be unable to serve. If elected at the Annual Meeting, each of these nominees would serve until the annual meeting of stockholders to be held in 2027 and until his or her successor has been duly elected and qualified, or until the director’s earlier death, resignation, or removal. Shares represented by executed proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named above. If any nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will instead be voted for the election of a substitute nominee proposed by Freshworks. Each person nominated for election has agreed to serve if elected. Our Board of Directors Recommends A Vote FOR The Election of Each Named Nominee.

  13. Executive Summary

    Executive Summary Our Business Our mission is to make it fast and easy for businesses to delight their customers and employees. We deliver modern and innovative AI-guided customer and employee service solutions that enable companies of all sizes to drive delightful engagement and increase productivity. We started with Freshdesk, our customer service product, and later expanded our offering to include Freshservice, our IT and employee service management product. Next, we introduced Freshsales and Freshmarketer, our sales force and marketing automation solutions, and Freshchat, our messaging/chat product offering. Currently, more than 67,100 businesses use our software to make engaging customers and employees more efficient and enjoyable. Our enterprise-grade platform and products deliver the modern functionality and capabilities businesses need, while being intuitive and easy to use, rapid to onboard, agile, and affordable for organizations of all sizes. We build intelligence and automation into our products wherever possible to accelerate user productivity and allow them to quickly meet the increasing demands of their customers and employees. By accelerating time to value, increasing productivity, and lowering costs, we provide businesses with a concrete return on their investment in Freshworks. With an increased ability to delight customers and employees, businesses also benefit from improved retention, higher net promoter scores, and better business outcomes. Businesses from approximately 170 countries around the world use Freshworks products to delight their customers and employees every day. As of December 31, 2023, over 50% of our annual recurring revenue (“ARR”) was from customers with more than 250 employees. We provide products across multiple markets in order to address the needs of businesses of all sizes that need to digitally transform to delight their customers and employees. Our business has grown rapidly in recent periods as our customer base and operations have scaled. Our total revenue was $596.4 million, $498.0 million and $371.0 million in the years ended December 31, 2023, 2022 and 2021, respectively, representing year-over-year growth rates of 20% and 34%, respectively. Our 2023 Business Highlights We achieved various business and financial accomplishments in 2023 that we believe will lead to future revenue and profit growth and return stockholder value in the long term. Specifically, in 2023, we: •Continued to increase the total revenue of the Company to $596.4 million for fiscal year 2023; •Improved non-GAAP operating margin to 7.5%, compared to (4.5)% in 2022 (see below under “—Elements of Our 2023 Executive Compensation Program—Performance Bonuses” for the definition of this metric); •Increased free cash flow to $77.8 million, compared to $(14.8) million from the prior year (see Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Non-GAAP Financial Measures in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 for a definition of free cash flow and other information, including a reconciliation of free cash flow for the fiscal years ended December 31, 2023 and 2022 to net cash provided by (used in) operating activities); •Surpassed $600 million in total ARR, and $300 million in ARR for Freshservice; •Increased the number of larger customers contributing more than $50,000 in ARR by 31% year-over-year, representing approximately 48% of total ARR; •Increased the number of customers contributing more than $5,000 in ARR by 14% year-over-year; representing approximately 89% of total ARR; •Held our first Investor Day in September 2023, providing an update on our vision, product plans, growth strategy and financial model; •Expanded our relationship with AWS through a Strategic Collaboration Agreement, and recognition as a finalist for Business Applications Partner of the Year; •Named one of The Best Places to Work in 2024 in Colorado and Bellevue by BuiltIn; and •Listed as one of the Best Mid-Cap Companies in 2024 by Forbes. Our 2023 Compensation Highlights Our executive compensation program has three primary elements: base salary, performance bonus, and long-term equity incentives. Each of these compensation elements serves a specific purpose in our compensation strategy. Base salary is an essential component to any market-competitive compensation program. Performance bonuses reward the achievement of short-term goals, while long-term incentives drive our named executive officers to focus on long-term sustainable stockholder value creation. Based on our performance and consistent with the design of our compensation program, the compensation committee made the following executive compensation decisions for 2023: •Base Salaries. In March 2023, the compensation committee approved merit-based salary increases for certain of the then-serving named executive officers. •Performance Bonuses. In early 2023, the compensation committee established rigorous and challenging 2023 performance goals for the Company under our officer cash incentive bonus plan (“Bonus Plan”), based on Net New ARR and Non-GAAP Operating Margin (see below under the heading “—Elements of Our 2023 Executive Compensation Program—Performance Bonuses” for definitions of and more details regarding these metrics). •Long-Term Equity Incentives. In May 2023, the compensation committee granted long-term equity incentive awards in the form of restricted stock units (“RSUs”) for each of our then-serving named executive officers, other than Mr. Mathrubootham and Mr. Woodside. In addition, in November 2023, in connection with the commencement of her employment, Ms. Yamamoto received an inducement RSU award. Notable Changes since Fiscal Year 2022 While our 2022 Bonus Plan provided for performance-based payments on a quarterly basis using annual financial targets, in early 2023, our board of directors approved the 2023 Bonus Plan, which provided for performance-based payments on a quarterly basis using quarterly financial targets (with no true-up or recoupment policies based on annual targets). This change was made for fiscal year 2023 to align the pay-out methodology with the growth and non-GAAP operating margin targets that were established to reflect the rigors of a public company cadence.

  14. Best Compensation Practices & Policies

    | What We Do | | What We Don’t Do | | | ü | Emphasize variable pay over fixed pay, with a significant portion tied to our operating results and stock performance | û | No guaranteed salary increases or incentive payments | | ü | Provide for “double-trigger” equity award vesting and severance benefits upon a change in control | û | No significant perquisites and no tax gross-ups upon a change in control of the Company | | ü | Maintain anti-hedging and anti-pledging policies | û | No excessive risk-taking in our compensation programs | | ü | Retain an independent compensation consultant reporting directly to the compensation committee | û | No supplemental executive retirement plans or pension plans | | ü | Maintain employment agreements with the named executive officers providing for specific terms of employment or severance benefits | û | No option or stock appreciation rights granted below fair market value | | ü | Review the executive compensation philosophy and strategy to ensure each component is designed to drive the desired behaviors to support business growth and stockholder value as well as ensure market competitiveness and appropriateness | | | | ü | Maintain a clawback policy | | |

  15. Compensation Program Philosophy, Objectives and Elements of Compensation

    | Element of Compensation | Objectives | Key Features | | Base Salary (fixed cash) | Provides financial stability and security through a fixed amount of cash for performing job responsibilities. | Generally reviewed annually in the first quarter of the year and determined based on a number of factors (including individual performance, internal equity, retention and our overall performance) and by reference to market data provided by our independent compensation consultant. | | Quarterly Performance Bonus (at-risk cash) | Motivates and rewards executive officers for attaining rigorous quarterly corporate performance goals that relate to our key business objectives. | Target bonus amounts are generally reviewed annually during the first quarter of the year and determined based upon market data provided by our independent compensation consultant for positions that have similar impact on the organization and competitive bonus opportunities in our market. Bonus opportunities are entirely dependent upon achievement of specific quarterly corporate performance objectives that are consistent with our annual operating plan and long-term strategy. Metrics are generally determined by the compensation committee and board of directors and communicated at the beginning of the year. | | Long-Term Equity Incentives (at-risk equity) | Motivates and rewards for long-term Company performance; aligns executives’ interests with stockholder interests and changes in stockholder value. Attracts highly qualified executives and encourages their continued employment over the long-term. | Long-term equity incentive opportunities are generally reviewed and determined annually during the first quarter of the year or as appropriate during the year for new hires, promotions, or other special circumstances, such as to encourage retention, or as a reward for significant achievement. Individual grants are determined based on a number of factors, including current corporate and individual performance, outstanding equity holdings and their retention value and total ownership, historical value of our stock, internal equity amongst executives and market data provided by our independent compensation consultant. |

  16. 2023 Peer Group

    2023 Peer Group In December 2022, Compensia proposed, and the compensation committee approved, a group of companies that would be appropriate peers for 2023 compensation decisions, based on the following criteria: •Industry: application software (primary) and broader software/services (secondary) •Revenue: approximately 0.5x to 2.5x our last four quarters of revenue •Market Capitalization: approximately 0.25x to 4.0x our market capitalization •Other Factors: SaaS, high growth companies, California based, led by founder CEO As of October 2022, our last four quarters of revenue was approximately $438 million, and our 30-day average market capitalization was at approximately $4.0 billion. In assessing the peer group, the compensation committee decided to look outside the above-listed criteria in order to include one additional company because it is a company with which we compete for talent. Ultimately, based on the above criteria and Compensia’s recommendations, the following seventeen companies were approved by the compensation committee for the purpose of informing executive pay decisions for 2023:

  17. 2023 Peer Group

    | Amplitude, Inc. | Coupa Software, Inc. | JFrog Ltd. | | AppFolio, Inc. | EngageSmart, Inc. | New Relic, Inc. | | Asana, Inc. | Fastly, Inc. | Smartsheet Inc. | | Braze, Inc. | Five9, Inc. | Sprinklr, Inc. | | C3.ai, Inc. | GitLab, Inc. | Workiva Inc. | | Confluent, Inc. | Hubspot, Inc. | |

  18. Elements of Our 2023 Executive Compensation Program

    Elements of Our 2023 Executive Compensation Program Base Salaries The base salaries of our named executive officers are an important part of their total compensation package and are intended to provide a stable level of fixed compensation to our executive officers for performance of their day-today responsibilities. In 2023, the compensation committee targeted the 75th percentile of our peer group with respect to total target cash compensation (base salary and target performance bonus opportunity) due to the competitiveness of the market for hiring and retention of executive talent and reasonableness in relation to our peer group. In March 2023, the compensation committee reviewed the base salaries of our then-serving named executive officers. The compensation committee approved increases to base salaries in amounts ranging from approximately 1.2% to approximately 5.3% for Mr. Ramamurthy, Ms. Epstein, and Mr. Rathinam, with such increases being determined as appropriate to bring each of their base salaries and total target cash compensation closer toward the 75th percentile of market data. Mr. Mathrubootham, Mr. Sloat, and Mr. Woodside did not receive increases to their base salaries for 2023. The 2023 base salaries of our named executive officers are reflected below.

  19. Elements of Our 2023 Executive Compensation Program

    ________________ (1) The compensation committee determined Ms. Yamamoto’s annual base salary in connection with her commencement of employment in November 2023 based on reasonableness in relation to market data and our other executive officers’ base salaries. Performance Bonuses Our Bonus Plan applies to our senior executives, including all of our named executive officers. The Bonus Plan provides for the opportunity to earn cash bonuses based upon the attainment of certain corporate, financial, or operational measures or objectives for each quarter of the fiscal year. The corporate performance goals and incentive formulas are adopted annually by the compensation committee at the beginning of the year and communicated to each participant. In March 2023, our compensation committee reviewed the 2023 target bonuses for our then-serving named executive officers. The target bonus amounts were chosen based on applicable market data comparisons provided by Compensia and input from our Chief Executive Officer (with respect to our then-serving named executive officers other than Mr. Mathrubootham). The 2023 target bonuses of our named executive officers are reflected below and each participant’s target bonus amount corresponds to attainment of 100% of the corporate performance goals.

  20. Elements of Our 2023 Executive Compensation Program

    | Named Executive Officer | 2023 Target Bonus Amount ($) | | Rathna Girish Mathrubootham | 500,000 | | Dennis Woodside | 500,000 | | Tyler Sloat | 290,000 | | Srinivasagopalan Ramamurthy | 290,000 | | Mika Yamamoto(1) | 270,000 | | Stacey Epstein | 230,000 | | Pradeep Rathinam(2) | 405,000 |

  21. Elements of Our 2023 Executive Compensation Program

    ________________ (1) The compensation committee determined Ms. Yamamoto’s target bonus in connection with her commencement of employment in November 2023 based on reasonableness in relation to market data and our other executive officers’ target bonuses. Ms. Yamamoto participated in the 2023 Bonus Plan on a prorated basis for fiscal year 2023. (2) The compensation committee determined to increase Mr. Rathinam’s target bonus in connection with his commencement of his new role of Chief Revenue Officer in 2023 based on reasonableness in relation to market data. 2023 Performance Goals For 2023, our board of directors determined that the Bonus Plan would provide for payouts of performance-based bonuses on a quarterly basis and set quarterly performance targets. The compensation committee, with input from management, approved Net New ARR as the primary performance measure used to determine bonus payments under the Bonus Plan for the 2023 plan year. “Net New ARR” is an operating measure that we define as bookings less churn and excludes the impact of foreign currency exchange rates and ARR from acquisitions (as such terms are used in the ordinary course by the Company’s finance group and as determined by the Company’s Chief Financial Officer). The payment as a percentage of the target bonus amount was calculated using interpolation of actual achievement of Net New ARR versus target for such quarter (to determine the applicable attainment range) relative to the payout range in accordance with the following: (1) if attainment of Net New ARR was below 85% of target, there was 0% payout of the target bonus; (2) if attainment of Net New ARR was at or above 85% through below 90% of target, there was 75% to 90% payout of the target bonus; (3) if attainment of Net New ARR was at or above 90% through at or below 100% of target, there was 90% to 100% payout of the target bonus; (4) if attainment of Net New ARR was above 100% through at or below 115% of target, there was 100% to 125% payout of the target bonus; and (5) if attainment of Net New ARR was above 115% attainment, there was 125% to 175% payout of the target bonus. In addition to Net New ARR, Non-GAAP Operating Margin was also included as a “gating” performance measure used to set a required threshold level of financial performance before quarterly bonus payments based on Net New ARR achievement would be made. Non-GAAP Operating Margin is a non-GAAP financial measure, which represents the GAAP income (loss) from operations as a percentage of total revenue, excluding the impact of stock-based compensation, amortization of acquired intangibles and acquisition related expenses. The compensation committee selected these performance measures because it believed that they were appropriate drivers for our business as they provided a balance between generating revenue and managing our expenses. The Company manages its business based on these measures as it believes Net New ARR is an indicator of future long-term revenue growth and Non-GAAP Operating Margin is an important indicator of our ability to effectively manage operating expenses given our revenue growth. In addition, we believe that Non-GAAP Operating Margin as a supplement to GAAP financial measures, is useful to investors in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance. Target levels for the 2023 performance goals were set in February 2023 for the full year, with the quarterly target levels for each performance and gate metric for 2023 as set forth in the table below.

  22. Elements of Our 2023 Executive Compensation Program

    | Named Executive Officer | Aggregate Bonus Earned ($) | Percentage of 2023 Target Variable Pay (%)(4) | | Rathna Girish Mathrubootham | 461,644(1) | 92.3 | | Dennis Woodside | 461,644 | 92.3 | | Tyler Sloat | 265,191 | 92.2 | | Srinivasagopalan Ramamurthy | 266,472 | 92.3 | | Mika Yamamoto(2) | 28,307 | 91.1 | | Stacey Epstein(3) | 112,904 | 49.6 | | Pradeep Rathinam | 321,406 | 90.7 |

  23. Elements of Our 2023 Executive Compensation Program

    ________________ (1) As further described in our proxy statement for our 2023 annual meeting of the stockholders under “Compensation Discussion and Analysis—Elements of Our 2022 Executive Compensation Program—Performance Bonuses,” we did not meet our annual Net New ARR target under the Bonus Plan in 2022, and the 2022 bonus amounts paid to the applicable named executive officers as advance payouts under the Bonus Plan were eligible to be recouped. Our board of directors exercised discretion to waive such recoupment, but Mr. Mathrubootham declined the recoupment waiver. Accordingly, Mr. Mathrubootham’s 2023 bonus amount was reduced by $61,151. The table above shows the full 2023 bonus amount actually earned based on performance, prior to such reduction. (2) Ms. Yamamoto commenced employment in November 2023 and therefore participated in the 2023 Cash Incentive Plan on a prorated basis for fiscal year 2023. Ms. Yamamoto’s 2023 Target Variable Pay is prorated to reflect her start date. (3) Ms. Epstein left the Company effective September 15, 2023 and therefore participated in the 2023 Cash Incentive Plan on a prorated basis for fiscal year 2023. Ms. Epstein’s 2023 Target Variable Pay reflects what her Target Variable Pay would have been for the full year. (4) The 2023 Target Variable Pay reflects the actual target variable pay in effect for each named executive officer for fiscal year 2023, taking into account any annual compensation cycle increases to the named executive officer’s target variable pay that took effect on April 1, 2023. Long-Term Equity Incentives We grant equity incentive awards to directors, employees and certain consultants of our company and our affiliates to enable us to obtain and retain services of these individuals, which we believe is essential to our long-term success. Individual long-term equity incentive grants are determined by the compensation committee based on a number of factors, including current corporate and individual performance, the retention value of outstanding equity holdings, historical value of prior stock grants, internal equity among executives and market data provided by our independent compensation consultant. In May 2023, as part of the Company’s annual equity refresh award cycle to its employees, our compensation committee granted RSUs to our then-serving named executive officers, other than Mr. Mathrubootham and Mr. Woodside. The 2023 annual award amounts were designed to target approximately the 75th percentile of our peer group because the compensation committee was primarily concerned with increasing the competitiveness of our named executive officers’ total compensation opportunity. The compensation committee considered applicable market data comparisons provided by Compensia, input from our Chief Executive Officer with respect to performance and desired retention incentives related to certain executive officers and the scope and impact of the individual officer’s role and responsibilities. The RSUs vest over a four-year period from the date of grant, subject to the named executive officer’s continued service through each vesting date. The following table sets forth the annual RSUs granted to our named executive officers in 2023:

  24. Elements of Our 2023 Executive Compensation Program

    | Named Executive Officer | Annual RSU Award (# of RSUs) | Value of Annual RSU Award ($) | | Rathna Girish Mathrubootham(1) | — | — | | Dennis Woodside(2) | — | — | | Tyler Sloat | 346,385 | 4,600,000 | | Srinivasagopalan Ramamurthy | 338,855 | 4,500,000 | | Mika Yamamoto(3) | — | — | | Stacey Epstein | 225,903 | 3,000,000 | | Pradeep Rathinam | 320,030 | 4,250,000 |

  25. Elements of Our 2023 Executive Compensation Program

    ________________ (1) Mr. Mathrubootham was not granted any RSUs in 2023 because he received one-time equity awards in September 2021 that were designed to cover at least four years of his equity incentive compensation. In February 2024, the board of directors approved the cancellation of Mr. Mathrubootham’s PRSU award (as defined below) effective March 1, 2024. For more information about these awards, please refer to “—Multiyear Grants to Mr. Mathrubootham” below. (2) Mr. Woodside was granted RSU and option awards in connection with the commencement of his employment in September 2022 and therefore, in accordance with the terms of his offer letter, was not eligible for a grant of RSUs in 2023. (3) Ms. Yamamoto was granted an RSU award in connection with the commencement of her employment in 2023. For more information about her award, please refer to “—Inducement Awards” below. Multi-year Grants to Mr. Mathrubootham As previously disclosed, on September 12, 2021, in recognition of Mr. Mathrubootham’s instrumental role in achieving our strategic and business goals and the significant potential impact of his role on an ongoing basis, our board of directors approved grants of (1) a time-vesting RSU award in respect of 3,000,000 shares that vests in equal quarterly installments over four years, and (2) an RSU award in respect of up to 6,000,000 shares that was subject to both a continued service requirement and certain stock price hurdle requirements that could be achieved over a seven-year performance period (the “PRSU award”). These awards were designed to provide multi-year retention incentives for Mr. Mathrubootham and to align achievement of business and operating objectives with long-term stockholder value creation. At the time that the PRSU award was granted, our board of directors believed that achievement of the performance targets at or above the stock price hurdle requirements described below would result in significant value for our stockholders over the performance period. Given the multi-year structure, our board of directors determined when the PRSU award was granted in 2021 that Mr. Mathrubootham would not be granted additional equity-based incentive awards for at least the next four years and so as noted above, Mr. Mathrubootham did not receive any additional equity awards in 2022 or 2023. In February 2024, our compensation committee and board of directors decided to cancel Mr. Mathrubootham’s PRSU award effective March 1, 2024. In making this determination, our compensation committee and board of directors considered the fact that while long-term equity incentive programs align the interests of executives and the Company’s stockholders over the long term, as a result of macroeconomic conditions that were entirely outside the control of the Company’s leadership team, the stock price hurdles were too far ahead of the current stock price for the PRSU award to have the retention value expected at the time the award was granted. In connection with the cancellation of the PRSU award, Mr. Mathrubootham received new performance-based RSUs ("PRSUs”) and time-based RSUs with an aggregate fair value of $19,000,000 in accordance with the equity program offered to all other named executive officers (for more information see “—Changes for Our 2024 Executive Compensation Program” below). Inducement Awards In December 2023, in connection with the commencement of Ms. Yamamoto’s employment, she was granted an inducement RSU award valued at $8 million. All inducement awards were granted under our Inducement Plan (for more information see “—Inducement Plan” below). The compensation committee considered Ms. Yamamoto’s lack of outstanding equity holdings, necessary retention value, historical value of our stock, internal equity among executives and market data provided by Compensia to determine that these awards were appropriate to induce Ms. Yamamoto to commence her employment with us. This RSU award will vest over a two-year period, with 50% of the shares subject to the award vesting on the first anniversary of the grant date and the remaining shares vesting in equal quarterly installments thereafter. Per Ms. Yamamoto’s offer letter, subject to her remaining employed by Freshworks at the time of grant, we anticipate that she will receive a grant of RSUs with a value of $4 million on or around January 2, 2026. This award will vest over a two-year period in equal quarterly installments.

  26. Changes for Our 2024 Executive Compensation Program

    Changes for Our 2024 Executive Compensation Program Each year the compensation committee reviews and considers whether further refinements to our compensation program are needed. We believe that strong long-term corporate performance can be achieved with a compensation program that encourages a multi-year focus by our executive officers through the use of equity compensation, the value of which depends on the achievement of certain Company performance targets. For this reason, and to further align the interests of our executive officers with the interests of our stockholders, the compensation committee and board of directors have approved the grant of a mix of time-based RSUs and PRSUs that are based on performance measures of the business. Our board of directors approved the grant of PRSUs, effective March 1, 2024, to our current named executive officers, including Mr. Mathrubootham. Seventy percent of the value of each executive’s 2024 annual long-term equity incentive award was granted in the form of time-based RSUs that will vest in equal quarterly installments over four years, subject to the recipient’s continued service as of each vesting date. Thirty percent of the value of each executive’s annual long-term equity incentive award was granted in the form of PRSUs. The number of PRSUs that are earned will be based on Freshworks’ achievement of certain revenue and free cash flow targets over the performance period from January 1, 2024 through December 31, 2024 (the “performance period”). One third of the PRSUs earned, if any, will vest upon the compensation committee’s certification of the achievement of the revenue and free cash flow targets over the performance period and the remainder will vest in equal quarterly installments over the subsequent two years, subject to the recipient’s continued service as of each vesting date. Our board of directors intends that future equity grants will continue to be awarded as a combination of PRSUs and RSUs. The introduction of PRSUs with financial metrics in 2024 aligns with our pay-for-performance philosophy and better aligns us with the practices of our peer companies.

  27. Other Features of Our Compensation Program

    Other Features of Our Compensation Program Employment Offer Letters We entered into offer letters with each of our current named executive officers setting forth the terms and conditions of employment. These agreements provide for “at will” employment with the Company and certain change of control and severance terms. See below under the heading, “Executive Compensation—Employment Arrangements” for more information. Severance and Change in Control Benefits Each of our current named executive officers is eligible for certain single and double-trigger severance benefits pursuant to their employee offer letters as described under “—Potential Payments upon Termination or Change in Control” below. In addition, Ms. Epstein, whose employment with the Company terminated in September 2023, received certain severance benefits in connection with her termination of employment as described following the table under “—Potential Payments upon Termination or Change in Control” below. The compensation committee believes that the limited severance benefits granted to our named executive officers upon a termination without cause is a competitive market feature to attract and retain high caliber executive officers because it allows our executives to receive value in the event of certain terminations of employment that are beyond their control and to aid in orderly transitions. The compensation committee also believes that the double-trigger structure of our change in control severance benefits avoids an unintended windfall to executives in the event of a friendly change in control, but still provides them appropriate incentives to remain an employee in good standing during periods surrounding a change in control transaction in which they believe they could lose their jobs. Inducement Plan In August 2022, the compensation committee adopted an inducement plan (the “Inducement Plan”) pursuant to which the Company reserved 10,000,000 shares of Class A common stock to be used exclusively for grants of equity-based awards to individuals who were not previously employees or directors of the Company, as an inducement material to the individual’s entry into employment with the Company within the meaning of Rule 5635(c)(4) of the Nasdaq Marketplace Rules. The Inducement Plan provides for the grant of equity-based awards in the form of nonstatutory stock options, stock appreciation rights, restricted stock awards, RSU awards, performance awards, and other awards. The Inducement Plan was adopted by the Company without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Marketplace Rules. 401(k) Plan Our named executive officers are eligible to participate in a defined contribution retirement plan that provides eligible U.S. employees with an opportunity to save for retirement on a tax advantaged basis. Eligible employees may defer eligible compensation on a pre-tax or after-tax (“Roth”) basis, up to the statutorily prescribed annual limits on contributions under the Internal Revenue Code of 1986, as amended (the “Code”). Since inception of the 401(k) plan, the Company has not made any company matching or discretionary contributions to the 401(k) plan. The 401(k) plan is intended to be qualified under Section 401(a) of the Code with the 401(k) plan’s related trust intended to be tax exempt under Section 501(a) of the Code. As a tax-qualified retirement plan, contributions to the 401(k) plan (except for Roth contributions) and earnings on those contributions are not taxable to the employees until distributed from the 401(k) plan. Employee Benefit Plans Our named executive officers are eligible to participate in all of our employee benefit plans, such as the 401(k) plan (see the section above titled “401(k) Plan”), medical, dental, vision, disability, life, and accidental death and dismemberment insurance, in each case on the same basis as other employees. We do not currently have qualified or nonqualified defined benefit plans or deferred compensation plans, nor do we offer pension or other retirement benefits, other than our 401(k) plan. Our compensation committee may elect to adopt such plans in the future if it determines that doing so is in our best interests. Perquisites We typically do not, but may, from time to time, offer perquisites or personal benefits to our named executive officers, including, for example, providing reasonable relocation or signing bonuses to our named executive officers as the compensation committee determines appropriate to assist such individuals to commence employment with us.

  28. Summary Compensation Table

    Summary Compensation Table The following table presents all of the compensation awarded to or earned by or paid to our named executive officers during the fiscal years ended December 31, 2021, December 31, 2022 and December 31, 2023, except as otherwise noted.

  29. Summary Compensation Table

    | Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | | Rathna Girish Mathrubootham | 2023 | 500,000 | — | — | — | 461,644 | 540(6) | 962,184 | | Chief Executive Officer and Chairman | 2022 | 453,750 | — | — | — | 61,151 | 1,710(6) | 516,611 | | | 2021 | 315,000 | — | 233,414,700 | — | 296,980 | 1,041(6) | 234,027,721 | | Dennis Woodside(3) | 2023 | 500,000 | — | — | — | 461,644 | 540(6 | 962,184 | | President and Director | 2022 | 166,667 | — | 23,180,863 | 14,999,995 | — | 876(6) | 38,348,401 | | Tyler Sloat | 2023 | 420,000 | — | 4,599,993 | — | 265,191 | 540(6) | 5,285,723 | | Chief Financial Officer | 2022 | 418,750 | — | 4,999,984 | — | 41,425 | 1,710(6) | 5,461,869 | | | 2021 | 411,250 | — | — | — | 187,007 | 1,041(6) | 599,298 | | Srinivasagopalan Ramamurthy | 2023 | 418,750 | — | 4,499,994 | — | 266,472 | 22,357(4) | 5,207,573 | | Chief Product Officer | 2022 | 403,750 | — | 5,999,970 | — | 37,479 | 4,902(6) | 6,446,101 | | | 2021 | 365,000 | — | 6,038,025 | — | 172,571 | 1,596(6) | 6,577,192 | | Mika Yamamoto(5) | 2023 | 49,318 | — | 7,999,988 | — | 28,307 | 219(6) | 8,077,831 | | Chief Customer and Marketing Officer | | | | | | | | | | Stacey Epstein(7) | 2023 | 278,333 | — | 2,999,992 | — | 112,904 | 173,230(8) | 3,564,460 | | Former Chief Marketing Officer | 2022 | 380,000 | — | 1,999,972 | — | 33,534 | 2,622(6) | 2,416,128 | | | 2021 | 306,679 | — | 17,476,360 | — | 132,519 | 1,493(6) | 17,917,051 | | Pradeep Rathinam(9) | 2023 | 403,750 | — | 4,249,998 | — | 321,406 | 17,572(10) | 4,992,727 | | Former Chief Revenue Officer | | | | | | | | |

  30. Summary Compensation Table

    ________________ (1) The amounts disclosed for 2023 represent the aggregate grant date fair value of the restricted stock units granted to our named executive officers under our 2021 Plan and, in the case of Ms. Yamamoto, our Inducement Plan, computed in accordance with FASB ASC 718. The assumptions used in calculating the grant date fair value of the equity awards are set forth in Note 9 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. These amounts do not reflect the actual economic value that will be realized by the named executive officers upon the vesting of the restricted stock units or the sale of any common stock underlying such restricted stock units. (2) The amounts disclosed for 2023 represent amounts earned under our Bonus Plan with respect to 2023 performance. As further described in our proxy statement for our 2023 annual meeting of the stockholders under “Compensation Discussion and Analysis—Elements of Our 2022 Executive Compensation Program—Performance Bonuses,” we did not meet our annual Net New ARR target under the Bonus Plan in 2022, and the 2022 bonus amounts paid to the applicable named executive officers as advance payouts under the Bonus Plan were eligible to be recouped. Our board of directors exercised discretion to waive such recoupment, but Mr. Mathrubootham declined the recoupment waiver. Accordingly, Mr. Mathrubootham’s 2023 bonus amount was reduced by $61,151 and, of the amount disclosed in the table above for 2023, Mr. Mathrubootham received payment of $400,493. (3) Mr. Woodside was hired as our President in September 2022 and as such was not a named executive officer for fiscal year 2021. His annualized base salary as of December 31, 2022 was $500,000. (4) Includes: (i) $540, representing life insurance premiums paid on behalf of Mr. Ramamurthy and (ii) $21,817 in connection with the attendance of his spouse at the Company’s President Club event consisting of: (a) $11,792 of actual costs that were included as part of Mr. Ramamurthy’s compensation and (b) $10,025 representing a tax gross-up related to the inclusion of such amount in compensation. (5) Ms. Yamamoto was hired as our Chief Customer and Marketing Officer in November 2023 and as such was not a named executive officer for fiscal year 2022 or 2021. Her annualized base salary as of December 31, 2023 was $420,000. (6) Represents life insurance premiums paid on behalf of the named executive officers. (7) Ms. Epstein was hired as our Chief Marketing Officer in March 2021. Her annualized base salary as of December 31, 2021 was $380,000. Ms. Epstein’s employment with us ended in September 2023. Her annualized base salary for fiscal year 2023 as of September 15, 2023 was $400,000. (8) Includes (i) $383 of life insurance premiums paid on behalf of Ms. Epstein and (ii) the following components of her severance benefits: (a) $116,668, representing the portion of her six month post-termination salary continuation that was paid in 2023, (b) $7,596, representing the portion of her six-month post-termination payment of the cost of COBRA continuation coverage under our group health plans for October through December 2023, and (c) $48,584, representing the pro-rated portion of her target annual performance bonus for 2023, paid in one lump sum in November 2023. Excludes $3,411,985, representing accelerated vesting of time-based requirements for equity awards held by Ms. Epstein as of her termination date as to the number of shares that would have vested during the six-month period following her termination date. For additional information, see “—Potential Payments Upon Termination or Change in Control” below. (9) Mr. Rathinam was not a named executive officer for fiscal year 2021 or 2022. (10) Includes: (i) $540, representing life insurance premiums paid on behalf of Mr. Rathinam and (ii) $17,032 in connection with the attendance of his spouse at the Company’s President Club event consisting of (a) $10,330 of actual costs that were included as part of Mr. Rathinam’s compensation and (b) $6,702 representing a tax gross-up related to the inclusion of such amount in compensation.

  31. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023

  32. Grants of Plan-Based Awards in 2023

    | Name | Grant Date | Approval Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | Grant Date Fair Value of Stock and Option Awards(3) ($) | | | | | Threshold ($) | Target ($) | Maximum ($) | | | | Rathna Girish Mathrubootham | | | 93,750 | 500,000 | 875,000 | — | — | | Dennis Woodside | | | 93,750 | 500,000 | 875,000 | | | | Tyler Sloat | | | 54,375 | 290,000 | 507,500 | — | — | | | May 1, 2023 | March 24, 2023 | — | — | — | 346,385 | 4,599,993 | | Srinivasagopalan Ramamurthy | | | 54,375 | 290,000 | 507,500 | — | — | | | May 1, 2023 | March 24, 2023 | — | — | — | 338,855 | 4,499,994 | | Mika Yamamoto | | | 50,625 | 270,000 | 472,500 | — | — | | | December 1, 2023 | September 22, 2023 | — | — | — | 377,180 | 7,999,988 | | Stacey Epstein(4) | | | 43,125 | 230,000 | 402,500 | | | | | May 1, 2023 | March 24, 2023 | — | — | — | 225,903 | 2,999,992 | | Pradeep Rathinam | | | 75,938 | 405,000 | 708,750 | | | | | May 1, 2023 | March 24, 2023 | — | — | — | 320,030 | 4,249,998 |

  33. Grants of Plan-Based Awards in 2023

    ________________ (1) Represents annual cash bonus target opportunity pursuant to our annual discretionary cash performance-based bonus program, the terms of which are summarized under “Compensation Discussion and Analysis—Elements of Our 2023 Executive Compensation Program” above and do not represent actual compensation earned by our named executive officers for the year ended December 31, 2023. The amount shown in the “Threshold” column represents 18.75% of the target cash bonus opportunity and the amount shown in the “Maximum” column represents 175% of the target cash bonus opportunity. For the actual amounts paid to each of the other named executive officers, see the “Summary Compensation Table” above and the applicable footnotes. (2) Shares reported represent awards of RSUs granted pursuant to our 2021 Plan and, in the case of Ms. Yamamoto, our Inducement Plan. Each award is subject to service-based vesting criteria described in the footnotes to the table below titled “Outstanding Equity Awards as of December 31, 2023,” except as otherwise indicated in the footnotes to this table. (3) The amounts disclosed represent the aggregate grant date fair value of the RSUs granted under our 2021 Plan and, in the case of Ms. Yamamoto, our Inducement Plan, computed in accordance with Financial Accounting Standard Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. This amount does not reflect the actual economic value that may be realized by each named executive officer. (4) An aggregate of 183,547 shares subject to RSUs granted to Ms. Epstein in fiscal year 2023 were forfeited upon her departure in September 2023.

  34. Outstanding Equity Awards as of December 31, 2023

    Outstanding Equity Awards as of December 31, 2023 The following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2023.

  35. Outstanding Equity Awards as of December 31, 2023

    | Name | Grant Date | Vesting Commencement Date | Option Awards(1) | | | | Stock Awards(1) | | | | | | | | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | 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 ($)(2) | | Rathna Girish Mathrubootham | August 26, 2020(3) | July 1, 2020 | — | — | — | — | 337,500 | 7,927,875 | — | — | | | September 12, 2021(4) | September 12, 2021 | — | — | — | — | — | — | 6,000,000 | 140,940,000 | | | September 12, 2021(5) | November 1, 2021 | — | — | — | — | 1,500,000 | 35,235,000 | — | — | | Dennis Woodside | September 1, 2022(6) | September 1, 2022 | 567,493 | 1,248,487 | 13.61 | August 31, 2032 | — | — | — | — | | | September 1, 2022(7) | September 1, 2022 | — | — | — | — | 1,191,094 | 27,978,798 | — | — | | Tyler Sloat | May 15, 2020(8) | April 13, 2020 | — | — | — | — | 187,500 | 4,404,375 | — | — | | | May 1, 2022(5) | May 1, 2022 | — | — | — | — | 137,590 | 3,231,989 | — | — | | | May 1, 2022(9) | May 1, 2022 | — | — | — | — | 41,276 | 969,573 | — | — | | | May 1, 2023(5) | May 1, 2023 | — | — | — | — | 303,087 | 7,119,514 | — | — | | Srinivasagopalan Ramamurthy | May 17, 2021(5) | April 1, 2021 | — | — | — | — | 131,250 | 3,083,063 | — | — | | | May 1, 2022(5) | May 1, 2022 | — | — | — | — | 171,987 | 4,039,975 | — | — | | | May 1, 2022(9) | May 1, 2022 | — | — | — | — | 41,276 | 969,573 | — | — | | | May 1, 2023(5) | May 1, 2023 | — | — | — | — | 296,499 | 6,964,762 | — | — | | Mika Yamamoto | December 1, 2023(10) | December 1, 2023 | — | — | — | — | 377,180 | 8,859,958 | — | — | | Stacey Epstein(11) | — | — | — | — | — | — | — | — | — | — | | Pradeep Rathinam | May 15, 2020(5) | January 13, 2020 | — | — | — | — | 15,000 | 352,350 | — | — | | | May 15, 2020(3) | January 13, 2020 | — | — | — | — | 28,190 | 662,183 | — | — | | | May 17, 2021(5) | April 1, 2021 | — | — | — | — | 34,190 | 803,123 | — | — | | | May 1, 2022(5) | May 1, 2022 | — | — | — | — | 34,397 | 807,986 | — | — | | | May 1, 2022(9) | May 1, 2022 | — | — | — | — | 371,490 | 8,726,300 | — | — | | | May 1, 2023(5) | May 1, 2023 | — | — | — | — | 280,027 | 6,577,834 | — | — |

  36. Outstanding Equity Awards as of December 31, 2023

    ________________ (1) All of the equity awards listed in this table were granted under our 2011 Plan, our 2021 Plan or our Inducement Plan, the terms of which plans are described below under “—Employee Benefit and Stock Plans.” (2) Calculated by multiplying the number of PRSUs that have not vested or have not been earned, as applicable, by the closing price ($23.49) of our Class A common stock on December 29, 2023, the last trading day before the end of our fiscal year ended 2023, as reported by Nasdaq. (3) 1/4th of the shares subject to the restricted stock unit award vest on the first anniversary of the vesting commencement date, and thereafter 1/8th of the shares subject to the restricted stock unit vest every six months over 36 months, subject to the executive officer’s continued service with us as of each such date. (4) The restricted stock unit award subject to performance requirements is divided into five equal tranches that may be earned over a period of approximately seven years, subject to both (a) Mr. Mathrubootham’s continued service with us through the dates specified and (b) Freshworks’ achievement of a specified price per share, as described below under “—Equity Based Incentive Awards—Rathna Girish Mathrubootham.” The number of shares subject to the award assumes target achievement of all five tranches. This award was cancelled effective March 1, 2024. For additional information regarding this award and the cancellation thereof, please see “—Multi-year Grants to Mr. Mathrubootham” above. (5) The shares subject to the restricted stock unit award will vest in equal quarterly installments over four years, subject to the executive officer’s continued service with us as of each such date. (6) 1/4th of the shares subject to the option grant vests on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal quarterly installments thereafter, subject to Mr. Woodside’s continued service with us as of each such date. The per share exercise price of the options is equal to the closing price of one share of our Class A common stock on August 31, 2022. (7) 1/4th of the shares subject to the restricted stock unit award vest on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal quarterly installments thereafter, subject to the executive officer’s continued service with us as of each such date. (8) 1/4th of the shares subject to the restricted stock unit award vest on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal monthly installments thereafter for 36 months, subject to the executive officer’s continued service with us as of each such date. (9) 1/4th of the shares subject to the restricted stock unit award vest on each annual anniversary of the vesting commencement date, subject to the executive officer’s continued service with us as of each such date. (10) 1/2 of the shares subject to the restricted stock unit award shall vest on the first anniversary of the vesting commencement date, and the remaining shares will vest in equal quarterly installments thereafter for 12 months. (11) Ms. Epstein’s employment with us ended in September 2023 and she had no outstanding equity awards as of December 31, 2023.

  37. Option Exercises and Stock Vested in 2023

    Option Exercises and Stock Vested in 2023

  38. Option Exercises and Stock Vested in 2023

    | | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting(1) ($) | | Rathna Girish Mathrubootham | — | — | 1,129,100 | 18,683,819 | | Dennis Woodside | — | — | 541,407 | 11,955,350 | | Tyler Sloat | — | — | 674,593 | 11,632,867 | | Srinivasagopalan Ramamurthy | — | — | 500,869 | 8,445,214 | | Mika Yamamoto | — | — | — | — | | Stacey Epstein(2) | — | — | 418,783 | 7,531,672 | | Pradeep Rathinam | — | — | 286,773 | 4,385,785 |

  39. Option Exercises and Stock Vested in 2023

    ________________ (1) The value realized on vesting is determined by multiplying the number of vested RSUs by the closing price of our Class A common stock on the vesting date. The value realized on vesting does not reflect the actual value received by each named executive officer because a portion of the shares reflected in the table above were withheld by us to satisfy the named executive officer’s tax withholding obligations. (2) Includes 176,057 shares acquired upon the acceleration of vesting of RSUs held by Ms. Epstein in connection with her departure in September 2023.

  40. Potential Payments upon Termination or Change in Control

    Potential Payments upon Termination or Change in Control

  41. Potential Payments upon Termination or Change in Control

    | Name | Termination Without Cause or Resignation for Good Reason without a Change of Control: | | Termination without Cause with a Change of Control: | | Resignation for Good Reason with a Change of Control: | | | | Equity Acceleration(1) ($) | Cash Severance ($) | Equity Acceleration(1) ($) | Cash Severance ($) | Equity Acceleration(1) ($) | Cash Severance ($) | | Rathna Girish Mathrubootham | 12,772,688(2) | 1,000,000(2) | 43,162,875(3) | 1,500,000(3) | 43,162,875(3) | 1,500,000(3) | | Dennis Woodside | 7,329,782(2) | 1,000,000(2) | 40,313,850(3) | 1,500,000(3) | 40,313,850(3) | 1,500,000(3) | | Tyler Sloat | 6,391,042(4) | 500,000(4) | 15,725,451(5) | 710,000(5) | 8,054,510(6) | 355,000(6) | | Srinivasagopalan Ramamurthy | 3,153,861(4) | 500,000(4) | 15,057,372(5) | 710,000(5) | 5,984,500(6) | 355,000(6) | | Mika Yamamoto | — | 480,000(4) | 8,859,958(5) | 690,000(5) | 4,429,979(6) | 345,000(6) |

  42. Potential Payments upon Termination or Change in Control

    ________________ (1) The value of stock option and RSU award vesting acceleration is based on the closing price of $23.49 per share of our Class A common stock as of December 29, 2023 (the last business day of the fiscal year ended December 31, 2023), minus, in the case of stock options, the exercise price of the unvested stock options subject to acceleration. (2) Pursuant to each of Mr. Mathrubootham and Mr. Woodside’s respective offer letter agreements, in the event that Mr. Mathrubootham or Mr. Woodside’s employment is terminated, other than during the period commencing three months prior to or ending 12 months following the effective date of a “change in control” (change in control period), by us without “cause” or by Mr. Mathrubootham or Mr. Woodside for “good reason” (each, as defined in Mr. Mathrubootham and Mr. Woodside’s offer letter agreement, respectively), and subject to their delivery to us of a general release of claims in a form acceptable to us, they will be entitled to continued payment of their base salary for 12 months after their termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to 12 months following their termination date, an amount equal to a pro-rata portion of their target annual performance bonus for the year in which his termination date occurs, and accelerated vesting of time-based requirements for equity awards held by Mr. Mathrubootham or Mr. Woodside as of his termination date as to the number of shares that would have vested during the six-month period following their termination date. (3) In the event that Mr. Mathrubootham or Mr. Woodside’s employment is terminated by us without cause or by Mr. Mathrubootham or Mr. Woodside for good reason, in either case, during the change in control period, and subject to their delivery to us of a general release of claims in a form acceptable to us, they will be entitled to continued payment of their base salary for 18 months after their termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to 18 months following their termination date, an amount equal to 150% of their target annual performance bonus for the year in which their termination date occurs, and accelerated vesting of all time-based requirements for equity awards held by Mr. Mathrubootham or Mr. Woodside as of their termination date, respectively. (4) Pursuant to each of Mr. Sloat, Mr. Ramamurthy, and Ms. Yamamoto’s respective offer letter agreements, in the event that Mr. Sloat, Mr. Ramamurthy, or Ms. Yamamoto’s employment is terminated, other than during a change in control period, by us without “cause” (as defined in Mr. Sloat, Mr. Ramamurthy, and Ms. Yamamoto’s offer letter agreement, respectively), and subject to their delivery to us of a general release of claims in a form acceptable to us, they will be entitled to continued payment of their base salary for six months after their termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to six months following their termination date, an amount equal to a pro-rata portion of their target annual performance bonus for the year in which their termination date occurs, and accelerated vesting of time-based requirements for equity awards held by Mr. Sloat, Mr. Ramamurthy or Ms. Yamamoto as of their termination date as to the number of shares that would have vested during the six-month period following their termination date. (5) In the event that Mr. Sloat, Mr. Ramamurthy, or Ms. Yamamoto’s employment is terminated by us without cause during the change in control period, and subject to their delivery to us of a general release of claims in a form acceptable to us, they will be entitled to continued payment of their base salary for 12 months after their termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to 12 months following their termination date, an amount equal to 100% of their target annual performance bonus for the year in which their termination occurs, and accelerated vesting of time-based requirements for equity awards held by Mr. Sloat, Mr. Ramamurthy, or Ms. Yamamoto as of their termination date, respectively. (6) In the event that Mr. Sloat, Mr. Ramamurthy, or Ms. Yamamoto’s employment is terminated by Mr. Sloat, Mr. Ramamurthy, or Ms. Yamamoto respectively, for “good reason” (as defined in their respective offer letter agreements) during the change in control period, and subject to their delivery to us of a general release of claims in a form acceptable to us, they will be entitled to continued payment of their base salary for six months after their termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to six months following their termination date, an amount equal to 50% of their target annual performance bonus for the year in which their termination date occurs, and accelerated vesting of time-based requirements for equity awards held by Mr. Sloat, Mr. Ramamurthy, or Ms. Yamamoto as of their termination date as to the number of shares that would have vested during the 12-month period following their termination date. Each of our current executive officers’ respective offer letter agreements also provide that if any benefits payable to them thereunder or otherwise would constitute “parachute payments” within the meaning of Section 280G of the Code, then such benefits will be reduced if such reduction will provide such named executive officer with a greater net after-tax benefit than would no reduction. As noted above, Ms. Epstein’s employment with us ended in September 2023. Actual payments and benefits provided to Ms. Epstein in 2023 in connection with her departure pursuant to the terms of her offer letter equaled $3,584,833, including (i) $116,668, representing the portion of her six month post-termination salary continuation that was paid in 2023, (ii) $7,596, representing the portion of her six-month post-termination payment of the cost of COBRA continuation coverage under our group health plans for October through December 2023, (iii) $48,584, representing the pro-rated portion of her target annual performance bonus for 2023, paid in one lump sum in November 2023, and (iv) $3,411,985 representing accelerated vesting of time-based requirements for equity awards held by Ms. Epstein as of her termination date as to the number of shares that would have vested during the six-month period following her termination date.

  43. Chief Executive Officer Pay Ratio

    Chief Executive Officer Pay Ratio Under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of Regulation S-K, we are required to provide to our stockholders specified disclosure regarding the relationship of our Chief Executive Officer’s (“CEO”) total compensation to the total compensation of our median employee, referred to as “pay-ratio” disclosure. We are reporting pay-ratio disclosure for the first time. For fiscal year 2023, the median of the annual total compensation of all of our employees (other than the CEO) was $40,482 and the annual total compensation of the CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $962,184. Based on this information, the ratio of the annual total compensation of the CEO to the median of the annual total compensation of our other employees was approximately 24 to 1. The pay ratio above represents our reasonable estimate calculated in a manner consistent with SEC rules and applicable guidance and is based on our internal records and the methodology described below. The SEC rules provide significant flexibility in how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, and as the SEC has explained, in considering the pay-ratio disclosure, stockholders should keep in mind that the SEC rule was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand and assess each particular company’s compensation practices and pay-ratio disclosures. Accordingly, the pay ratio and related disclosure reported by other companies may not be comparable to the pay ratio and related disclosure provided herein. Methodology Used to Identify Median Employee We identified the employee with annual total compensation at the median of the compensation of all of our employees (median employee) by considering our employee population as of December 31, 2023 (employee population determination date). We considered all individuals, excluding our CEO, who were employed by us (including our consolidated subsidiaries) on the employee population determination date, whether employed in the United States or outside the United States, or on a full-time, part-time, or temporary basis, including employees on a leave of absence (such group of employees, our employee population). Contractors, including, but not limited to, contractors employed by professional employer organizations, were not included in our employee population. We determined that, as of December 31, 2023, our employee population consisted of approximately 4,963 individuals (not including the CEO) of which approximately 9.4% were located in the United States and 90.6% were located in jurisdictions outside the United States. Compensation for purposes of identifying the median employee included the following: (1) annual base salary, target annual bonus, and target annual commissions, each as in effect as of December 31, 2023; (2) for non-salaried employees, hourly rate as in effect as of December 31, 2023 annualized for a full year; and (3) the value, based on the closing price of our common stock on the date of grant, of equity awards granted to our employee population during fiscal year 2023, which reflects all new hire, off-cycle and “refresh” equity awards granted to our employee population during the fiscal year. For members of the employee population who were paid other than in U.S. dollars, we converted their compensation to U.S. dollars using foreign exchange rates in effect as of December 31, 2023 as provided in our system of record for compensation information. We did not make any cost-of-living adjustments for employees outside of the United States. We believe our methodology represents a consistently applied compensation measure because it strikes a balance in terms of administrative burden while consistently treating all the primary compensation components for our worldwide workforce and capturing a full year of each of such primary compensation components. Using this approach, we determined the median employee of our employee population. After identifying the median employee based on the methodology above, we calculated the annual total compensation for such median employee using the same methodology we used to calculate the amount reported for our named executive officers in the “Total” column of the Summary Compensation Table included in this Proxy Statement.

  44. Pay Versus Performance

    Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the company. For further information concerning our variable pay-for-performance philosophy and how we align executive compensation with our performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”

  45. Pay Versus Performance

    | Year(1) | Summary Compensation Table Total for PEO(2) | Compensation Actually Paid to PEO(3) | Average Summary Compensation Table Total for Non-PEO NEOs(4) | Average Compensation Actually Paid to Non-PEO NEOs(5) | Value of Initial Fixed $100 Investment Based On: | | Net Income (Loss) (millions)(8) | Non-GAAP Operating Margin(9) | | | | | | | Total Shareholder Return(6) | Peer Group Total Shareholder Return(7) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $962,184 | $47,094,192 | $4,681,721 | $11,981,880 | $49 | $125 | $(137.4) | 7.5% | | 2022 | $516,611 | $(96,749,821) | $11,446,469 | $(1,829,320) | $31 | $80 | $(232.1) | (4.5)% | | 2021 | $234,027,721 | $241,534,679 | $12,247,122 | $27,731,839 | $55 | $113 | $(192.0) | (4.9)% |

  46. Pay Versus Performance

    ________________ (1) We were not a reporting company pursuant to Section 13(a) or Section 15(d) of the Exchange Act prior to 2021, and as such, we have not included any information in this table for 2020. (2) The dollar amounts reported in column (b) are the amounts of total compensation reported for our principal executive officer (“PEO”) Mr. Mathrubootham for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.” (3) The dollar amounts reported in column (c) represent the amount of “compensation actually paid” to Mr. Mathrubootham, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Mathrubootham during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Mathrubootham’s total compensation for each year to determine the compensation actually paid:

  47. Pay Versus Performance

    | Year | Reported Summary Compensation Table Total for PEO | Deductions: Value of Equity Awards Reported in Summary Compensation Table(a) | Additions: Value of Stock and Option Awards calculated in accordance with SEC methodology for determining Compensation Actually Paid(b)(c) | Compensation Actually Paid to PEO | | 2023 | $962,184 | — | $46,132,008 | $47,094,192 |

  48. Pay Versus Performance

    a.The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. b.For purposes of the adjustments to determine “compensation actually paid,” we computed the fair value of equity awards as of each measurement date using valuation assumptions and methodology (including volatility, dividend yield and risk-free interest rates) that are consistent with those used to estimate fair value at grant under U.S. GAAP. The valuation assumptions used to calculate Mr. Mathrubootham’s PRSU award fair values are as follows: •risk-free rates of 3.87% for the pay-versus-performance valuation versus 3.98% for prior year valuation and 1.12% for grant-date valuation; •measurement period of 4.7 years for the pay-versus-performance valuation versus 5.7 years for prior year valuation and 7.0 years for grant-date valuation; •stock price volatility of 65% for the pay versus performance valuation versus 65% for prior year valuation and 60% for grant date valuations; •the stock price on the valuation date of $23.49 for the pay versus performance valuation versus $14.71 for prior year valuation and $34.15 for grant date valuation; and •dividend yield of 0% for the pay versus performance, prior year, and grant date valuations. c.The equity award adjustments for 2023 include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in 2023 that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of 2023 (from the end of the prior fiscal year) in fair value of any awards granted in prior years that are outstanding and unvested as of the end of 2023; (iii) for awards that are granted and vest in 2023, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in 2023, the amount equal to the change as of the vesting date (from the end of the prior fiscal year) in fair value; (v) for awards granted in prior years that are determined to fail to meet the applicable vesting conditions during 2023, a deduction for the amount equal to the fair value at the end of the prior fiscal year; and (vi) the dollar value of any dividends or other earnings paid on stock or option awards in 2023 prior to the vesting date that are not otherwise reflected in the fair value of such award or included in any other component of total compensation for 2023. The amounts deducted or added in calculating the equity award adjustments are as follows:

  49. Pay Versus Performance

    | Year | Year End Fair Value of Equity Awards Granted in Year | Change in Fair Value of Prior Year Awards Unvested at Year End | Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Equity Award Value Included in Compensation Actually Paid | | 2023 | — | $44,057,250 | — | $2,074,758 | — | — | $46,132,008 |

  50. Pay Versus Performance

    (4) The dollar amounts reported in column (d) represent the average of the amounts reported for our named executive officers (“NEOs”) as a group (excluding Mr. Mathrubootham, who has served as our CEO since 2010) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the NEOs (excluding Mr. Mathrubootham) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Dennis Woodside, Tyler Sloat, Srinivasagopalan Ramamurthy, Mika Yamamoto, Stacey Epstein, and Pradeep Rathinam; (ii) for 2022, Mr. Woodside, Mr. Sloat, Ms. Epstein, Mr. Ramamurthy and José Morales (our former Chief Revenue Officer); and (iii) for 2021, Ms. Epstein and Mr. Ramamurthy. (5) The dollar amounts reported in column (e) represent the average amount of “compensation actually paid” to the NEOs as a group (excluding Mr. Mathrubootham), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to the NEOs as a group (excluding Mr. Mathrubootham) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total compensation for the NEOs as a group (excluding Mr. Mathrubootham) for each year to determine the compensation actually paid, using the same methodology described above in footnote 3:

  51. Pay Versus Performance

    | Year | Average Reported Summary Compensation Table Total for Non-PEO NEOs | Deductions: Average Value of Equity Awards Reported in Summary Compensation Table | Additions: Average Value of Stock and Option Awards calculated in accordance with SEC methodology for determining Compensation Actually Paid (a)(b) | Average Compensation Actually Paid to Non-PEO NEOs | | 2023 | $4,681,721 | $(4,058,328) | $11,358,487 | $11,981,880 |

  52. Pay Versus Performance

    a.For purposes of the adjustments to determine “compensation actually paid,” we computed the fair value of equity awards as of each measurement date using valuation assumptions and methodology (including volatility, dividend yield and risk-free interest rates) that are consistent with those used to estimate fair value at grant under U.S. GAAP. The valuation assumptions used to calculate Mr. Woodside’s option award fair values are as follows: •risk-free rates of 3.84% for the pay-versus-performance valuation versus 3.37% for grant-date valuation; •the expected option term estimates of 5.1 years for the pay-versus-performance valuation versus 6.1 years for the grant date valuation; •stock price volatility of 65% for the pay-versus-performance and grant date valuations; •the stock price on the valuation date of $23.49 for the pay-versus-performance valuation versus $13.38 for grant date valuation; and •dividend yield of 0% for the pay-versus-performance and grant date valuations. b.The amounts deducted or added in calculating the total average equity award adjustments are shown in the table below.

  53. Pay Versus Performance

    | Year | Average Year End Fair Value of Equity Awards Granted in Year | Average Change in Fair Value of Prior Year Equity Awards Unvested at Year End | Average Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year | Average Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | Average Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | Average Value of Dividends or other Earnings Paid on Stock or Option Awards not Otherwise Reflected in Fair Value or Total Compensation | Equity Award Value Included in Compensation Actually Paid | | 2023 | $4,920,345 | $4,964,318 | $508,899 | $1,803,576 | $(838,651) | — | $11,358,487 |

  54. Pay Versus Performance

    (6) Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our share price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period. For purposes of the Company’s 2021 cumulative TSR, the measurement period begins on the date that the Company became a reporting company in 2021. (7) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. The peer group used for this purpose is the S&P 500 Information Technology Sector. (8) The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for the applicable year. (9) Non-GAAP Operating Margin is a non-GAAP financial measure, which represents the GAAP income (loss) from operations as a percentage of total revenue, excluding the impact of stock-based compensation, amortization of acquired intangibles and acquisition related expenses. GAAP to Non-GAAP Reconciliation (in thousands, except percentages)

  55. Pay Versus Performance

    | | Year Ended December 31, | | | | | 2023 | 2022 | 2021 | | Reconciliation of operating loss and operating margin: | | | | | GAAP loss from operations | $(170,172) | $(233,372) | $(204,782) | | Non-GAAP adjustments: | | | | | Stock-based compensation expense | 210,707 | 207,696 | 173,443 | | Employer payroll taxes on employee stock transactions | 3,711 | 1,827 | 8,754 | | Amortization of acquired intangibles | 303 | 1,591 | 4,329 | | Non-GAAP income (loss) from operations | $44,549 | $(22,258) | $(18,256) | | GAAP operating margin | (28.5)% | (46.9)% | (55.2)% | | Non-GAAP operating margin | 7.5% | (4.5)% | (4.9)% |