DEF 14A of Freshworks Inc.
Filed Apr 9, 2026 · FY20250001544522-26-000075
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, 2026 concerning the Class II nominees for election at the Annual Meeting and our other directors who will continue in office after the Annual Meeting:
INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
| Name | Class | Age | Position | Director Since | Current Term Expires | Audit Committee (2) | Compensation Committee (3) | Nominating and Corporate Governance Committee | | Director Nominees | | | | | | | | | | Roxanne S. Austin(1) | II | 65 | Chairperson of the Board | 2021 | 2026 | | | Chair | | Sameer Gandhi(1) | II | 60 | Director | 2019 | 2026 | | Chair | X | | Frank Pelzer(1) | II | 55 | Director | 2023 | 2026 | X* | | | | Dennis Woodside | II | 57 | Director | 2022 | 2026 | | | | | Continuing Directors | | | | | | | | | | Jennifer Taylor(1) | III | 53 | Director | 2021 | 2027 | | | X | | Johanna Flower(1) | I | 51 | Director | 2020 | 2028 | X | X | | | Randy Gottfried(1) | I | 60 | Director | 2018 | 2028 | Chair* | X | | | Barry Padgett(1) | I | 55 | Director | 2020 | 2028 | | X | X |
INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
________________ (1)Independent as defined under the Nasdaq listing rules. (2)Members of our audit committee satisfy heightened independence standards required for audit committee members in accordance with securities regulations and the Nasdaq listing standards, as further detailed below. (3)Members of our compensation committee satisfy heightened independence standards required for compensation committee members in accordance with securities regulations and the Nasdaq listing standards, as further detailed below. *Audit Committee financial expert Set forth below is biographical information for the Class II 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.
Nominees for Election at the Annual Meeting
Nominees for Election at the 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. He currently serves as the President and Chief Operating Officer of Spotnana, a provider of modern travel infrastructure, a position he has held since January 2025. From May 2018 to November 2024, he 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. Since March 2025, Mr. Pelzer has served on the board of directors of NetApp, Inc., a data infrastructure company. 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 Woodside. Mr. Woodside has served as our Chief Executive Officer since May 2024 and as our President and as a member of our board of directors since September 2022. He 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 Chief Executive Officer and President and because of his extensive leadership and operating experience.
Directors Continuing in Office Until the 2028 Annual Meeting
Directors Continuing in Office Until the 2028 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 April 2025, he has served as the Chief Growth Officer of SentinelOne. From February 2022 to May 2024, he 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. 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.
Information Regarding Committees of the Board of Directors
Information Regarding Committees of the Board of Directors The composition and responsibilities of each of the audit committee, compensation committee and nominating and corporate governance committee of the board of directors are described below. Our committees operate under written charters that satisfy the applicable Nasdaq listing standards. Each committee charter is available to stockholders on the Investor Relations section of our website at ir.freshworks.com/corporate-governance/governance-overview.
Information Regarding Committees of the Board of Directors
| Audit Committee | | | Randy Gottfried, Chair Johanna Flower* Frank Pelzer Meetings in 2025: 4 | The Audit Committee represents and assists our board of directors with respect to our corporate accounting and financial reporting processes, systems of internal control and financial statement audits, and to oversee our independent registered public accounting firm. | | Principal Functions of the Committee: •helping our board of directors oversee our corporate accounting and financial reporting processes; •managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; •discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; •developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; •reviewing related person transactions; •obtaining and reviewing a report by the independent registered public accounting firm at least annually that describes our internal quality control procedures, any material issues with such procedures and any steps taken to deal with such issues when required by applicable law; and •approving or, as permitted, pre-approving, all audit and all permissible non-audit services to be performed by the independent registered public accounting firm. | | | All members of the Audit Committee are (a) “independent” under the Nasdaq listing standards and Rule 10A-3(b)(1) of the Exchange Act and are (b) able to read and understand fundamental financial statements in accordance with the Nasdaq listing rules. Each of Mr. Gottfried and Mr. Pelzer qualifies as an “audit committee financial expert” within the meaning of SEC rules and each can read and understand fundamental financial statements in accordance with the Nasdaq listing rules. | |
Information Regarding Committees of the Board of Directors
*Mr. Nelson served on the Audit Committee through December 31, 2025, and Ms. Flower joined the Audit Committee effective January 1, 2026.
Information Regarding Committees of the Board of Directors
| Compensation Committee | | | Sameer Gandhi, Chair Johanna Flower Randy Gottfried Barry Padgett Meetings in 2025: 5 | The Compensation Committee represents and assists our board of directors in overseeing our compensation policies, plans and programs and to review and determine the compensation to be paid to our executive officers, directors and other senior management, as appropriate. | | Principal Functions of the Committee: •reviewing and recommending to our board of directors the compensation of our chief executive officer and other executive officers; •reviewing and recommending to our board of directors the compensation of our directors; •administering our equity incentive plans and other benefit programs; •reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management; and •reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall compensation philosophy. | | | Each member of the Compensation Committee is (a) “independent” under the Nasdaq listing standards applicable to compensation committees and (b) a “non-employee director” as defined in Rule 16b-3 promulgated under the Exchange Act. | |
Information Regarding Committees of the Board of Directors
| Nominating and Corporate Governance Committee | | | Roxanne Austin, Chair Sameer Gandhi Barry Padgett Jennifer Taylor Meetings in 2025: 4 | The Nominating and Corporate Governance Committee represents and assists our board of directors in fulfilling its responsibilities relating to our corporate governance and director nominations and elections. | | Principal Functions of the Committee: •identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by stockholders, to serve on our board of directors; •considering and making recommendations to our board of directors regarding the composition and chairmanship of the committees of our board of directors; •evaluating the independence of the directors and director nominees and the members of each committee of our board of directors against the independence requirements of Nasdaq, the applicable rules and regulations of the SEC, and other applicable laws; •developing and making recommendations to our board of directors regarding corporate governance guidelines and related matters; and •overseeing periodic evaluations of the board of directors’ performance, including committees of the board of directors. | | | Each member of the Nominating and Corporate Governance Committee is “independent” under the Nasdaq listing standards. | |
DIRECTOR COMPENSATION
DIRECTOR COMPENSATION
2025 Director Compensation Table
2025 Director Compensation Table The following table sets forth certain information with respect to the compensation earned by or paid to our non-executive directors for the fiscal year ended December 31, 2025. Dennis Woodside, our Chief Executive Officer and President, and Rathna Girish Mathrubootham, our former Executive Chairman, did not receive any additional compensation for service as a member of our board of directors. The compensation paid to Messrs. Woodside and Mathrubootham is set forth in “Executive Compensation.”
2025 Director Compensation Table
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1)(2) | Total ($) | | Roxanne S. Austin | — | 260,396(3) | 260,396 | | Johanna Flower | — | 240,421(4) | 240,421 | | Sameer Gandhi | — | 251,096(5) | 251,096 | | Randy Gottfried | 62,375 | 200,922(6) | 263,297 | | Zachary Nelson | — | 242,733(7) | 242,733 | | Barry Padgett | 46,375 | 200,922(8) | 247,297 | | Frank Pelzer | 44,875 | 200,922(9) | 245,797 | | Jennifer Taylor | — | 237,161(10) | 237,161 |
2025 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 2025 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 12 to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 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, 2025, the number of unvested shares subject to outstanding restricted stock unit awards held by each non-employee director was as follows: Ms. Austin — 13,236 shares; Ms. Flower — 13,236 shares; Mr. Gandhi — 13,236 shares; Mr. Gottfried — 13,236 shares; Mr. Nelson — 13,236 shares; Mr. Padgett — 13,236 shares; Mr. Pelzer — 18,243 shares; and Ms. Taylor — 13,236 shares. (3)Includes (i) an aggregate of 4,579 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, 2025, June 30, 2025, September 30, 2025, and December 31, 2025 pursuant to our non-employee director compensation program, granted on April 1, 2025, July 1, 2025, October 1, 2025, and January 2, 2026, respectively, (the “Quarterly Retainer Grants”) and (ii) a restricted stock unit award for 13,236 shares of our Class A common stock granted on July 1, 2025 pursuant to our non-employee director compensation program. (4)Includes (i) an aggregate of 3,041 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 as Quarterly Retainer Grants and (ii) a restricted stock unit award for 13,236 shares of our Class A common stock granted on July 1, 2025 pursuant to our non-employee director compensation program. (5)Includes (i) an aggregate of 3,863 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 as Quarterly Retainer Grants and (ii) a restricted stock unit award for 13,236 shares of our Class A common stock granted on July 1, 2025 pursuant to our non-employee director compensation program. (6)Represents a restricted stock unit award for 13,236 shares of our Class A common stock granted to Mr. Gottfried on July 1, 2025 pursuant to our non-employee director compensation program. (7)Includes (i) an aggregate of 3,219 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 as Quarterly Retainer Grants and (ii) a restricted stock unit award for 13,236 shares of our Class A common stock granted on July 1, 2025 pursuant to our non-employee director compensation program. (8)Represents a restricted stock unit award for 13,236 shares of our Class A common stock granted to Mr. Padgett on July 1, 2025 pursuant to our non-employee director compensation program. (9)Represents a restricted stock unit award for 13,236 shares of our Class A common stock granted to Mr. Pelzer on July 1, 2025 pursuant to our non-employee director compensation program. (10)Includes (i) an aggregate of 2,790 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 as Quarterly Retainer Grants and (ii) a restricted stock unit award for 13,236 shares of our Class A common stock granted on July 1, 2025 pursuant to our non-employee director compensation program.
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 2025, as well as the changes to our director compensation program that became effective January 1, 2026.
PROPOSAL 1 - ELECTION OF DIRECTORS
PROPOSAL 1 - ELECTION OF DIRECTORS Our board of directors currently consists of eight members and is divided into three classes. 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 to be held in 2028; •the Class II directors are Roxanne S. Austin, Sameer Gandhi, Frank Pelzer, and Dennis Woodside, whose terms will expire at the Annual Meeting; and •the Class III director is Jennifer Taylor, whose term will expire at the annual meeting to be held in 2027. 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 Ms. Austin, Mr. Gandhi, Mr. Pelzer and Mr. Woodside 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 II director. Each of Ms. Austin, Mr. Gandhi and Mr. Woodside was previously elected by our stockholders at our 2023 annual meeting of stockholders. Mr. Pelzer, who was recommended to our nominating and corporate governance committee by certain members of our board of directors, was appointed to our board of directors in July 2023 after being considered and recommended by our nominating and corporate governance committee. 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 2029 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, if any, proposed by Freshworks. Each person nominated for election has agreed to serve if elected. A Vote FOR The Election of Each Named Nominee.
Executive Summary
Our 2025 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 company financial 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 2025: •Base Salaries. In February 2025, the compensation committee approved merit-based salary increases for certain of the then-serving named executive officers. •Performance Bonuses. In early 2025, the compensation committee established rigorous and challenging 2025 performance goals for the Company under our officer cash incentive plan (“Bonus Plan”), based on Net New ARR and Non-GAAP Operating Margin (see below under the heading “—Elements of Our 2025 Executive Compensation Program—Performance Bonuses” for definitions of and more details regarding these metrics). •Long-Term Equity Incentives. In early 2025, the compensation committee and the board of directors granted long-term equity incentive awards to each of our then-serving named executive officers in the form of restricted stock units (“RSUs”) and performance-based RSUs (“PRSUs”) that could be earned based on both the achievement of certain revenue and free cash flow targets and the recipient’s continued service to the Company. The addition of PRSUs with financial performance metrics to our executive compensation program furthers our pay-for-performance philosophy and better aligns us with the practices of our peer companies. See below under the heading “—Elements of Our 2025 Executive Compensation Program—Long-Term Equity Incentives” for definitions of the PRSU performance measures and more details regarding the 2025 RSUs and PRSUs.
Best Compensation Practices & Policies
| What We Do | | What We Don’t Do | | | ✔ | Emphasize variable pay over fixed pay, with a significant portion tied to our operating results and stock performance | 🗶 | No guaranteed salary increases or incentive payments | | ✔ | Provide for “double-trigger” equity award vesting and severance benefits upon a change in control | 🗶 | No significant perquisites and no tax gross-ups upon a change in control of the Company | | ✔ | Maintain anti-hedging and anti-pledging policies | 🗶 | No excessive risk-taking in our compensation programs | | ✔ | Retain an independent compensation consultant reporting directly to the compensation committee | 🗶 | No supplemental executive retirement plans or pension plans | | ✔ | Maintain employment agreements with the named executive officers providing for specific terms of employment or severance benefits | | | | ✔ | 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 | | | | ✔ | Maintain a clawback policy and stock ownership guidelines | | |
2025 Peer Group
2025 Peer Group In October 2024, the compensation committee approved the below group of peer companies for executive pay and program comparison purposes for fiscal year 2025. The committee determined the below peer group, taking into consideration the recommendations of its independent compensation advisor, and focusing on industry, companies with revenues that are 0.5x to 2.5x our revenues and a market capitalization that is 0.25x to 4.0x our market capitalization, complexity, and with which we compete for top executive talent. Based on the foregoing, the peer group used for purposes of evaluating compensation decisions in 2024 was adjusted to remove Alteryx, Inc., New Relic, Inc., and Hubspot, Inc., and to add Appian Corporation, Blackline, Inc., Klaviyo, Inc. and Zuora, Inc.
2025 Peer Group
| AppFolio Inc (APPF) | Cloudflare, Inc. (NET) | Klaviyo, Inc. (KVYO) | | Appian Corporation (APPN) | Confluent, Inc. (CFLT) | MongoDB, Inc. (MDB) | | Asana, Inc. (ASAN) | Dropbox, Inc. (DBCX) | Smartsheet Inc(1) | | Blackline, Inc. (BL) | Five9, Inc. (FIVN) | Sprinklr, Inc. (CXM) | | Braze, Inc. (BRZE) | Gitlab Inc. (GTLB) | Workiva Inc (WK) | | C3.ai, Inc. (AI) | Guidewire Software, Inc. (GWRE) | Zuora, Inc.(2) |
2025 Peer Group
(1)Smartsheet Inc was acquired in January 2025 and is no longer publicly traded. (2)Zuora, Inc. was acquired in February 2025 and is no longer publicly traded.
Elements of Our 2025 Executive Compensation Program
Performance Bonuses Our Bonus Plan applies to our senior executives, including all named executive officers (other than Mr. Mathrubootham). 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 February 2025, our compensation committee reviewed the 2025 target bonuses for our named executive officers. The target bonuses, as a percentage of base salary, were chosen based on applicable market data comparisons provided by Compensia and input from our Chief Executive Officer (with respect to our named executive officers other than himself). As such, the target bonus for Mr. Sloat was increased from 75% to 80%, and for Ms. Yamamoto from 75% to 100%. The 2025 target bonuses, which correspond to attainment of 100% of the corporate performance goals, of our named executive officers are reflected below.
Elements of Our 2025 Executive Compensation Program
| Named Executive Officer | 2024 Target Bonus % of Base Salary | 2025 Target Bonus % of Base Salary | | Dennis Woodside | 100% | 100% | | Rathna Girish Mathrubootham (1) | 100% | – | | Tyler Sloat | 75% | 80% | | Mika Yamamoto | 75% | 100%(2) |
Elements of Our 2025 Executive Compensation Program
________________ (1)Mr. Mathrubootham transitioned to the Executive Chairman role effective May 1, 2024. After reviewing and comparing his compensation as executive chairman against similar roles at the Company’s 2025 peer group, Mr. Mathrubootham did not receive a 2025 bonus opportunity because it was determined that his 2024 base salary was competitive for an executive chairman total compensation. (2)Ms. Yamamoto’s target bonus opportunity was changed from 75% to 100% to increase the incentive-based portion of her cash compensation, and to be more aligned with market practice reflective of a sales & marketing executive. 2025 Performance Goals For 2025, 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 and Non-GAAP Operating Margin as the primary performance measures used to determine bonus payments under the Bonus Plan for the 2025 plan year. The performance measures were defined below and weighted as follows: 70% for Net New ARR and 30% for Non-GAAP Operating Margin. *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. *Non-GAAP Operating Margin is a non-GAAP financial measure, which represents the GAAP income (loss) from operations, excluding the impact of stock-based compensation, amortization of acquired intangibles and acquisition related expenses, as a percentage of total revenue. 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. The Net New ARR company performance multiplier 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:
Elements of Our 2025 Executive Compensation Program
| Net New ARR Company Performance Multiplier | | | Performance (% of Target) | Payout (% of Target) | | 0% < 75% | 0% | | 75% < 85% | 50% < 69.9% | | 85% < 95% | 70% < 84.9% | | 95% < 100% | 85% < 99.9% | | 100% < 105% | 100% < 114.9% | | 105% < 110% | 115% < 129.9% | | 110% < 115% | 130% < 139.9% | | 115% < 120% | 140% < 144.9% | | 120% < 125% | 145% < 150% | | 125% ≤ | 150% |
Elements of Our 2025 Executive Compensation Program
The Non-GAAP Operating Margin company performance multiplier was calculated based on the company’s actual Non-GAAP Operating Margin attainment relative to the applicable Non-GAAP Operating Margin target for such quarter. The Non-GAAP Operating Margin threshold was 1.5% less than the Non-GAAP Operating margin target for the applicable quarter (“Non-GAAP Operating Margin Threshold”). The Non-GAAP Operating Margin company performance multiplier was either (i) 0% if the Non-GAAP Operating Margin achievement for the applicable quarter was below the Non-GAAP Operating Margin Threshold for such quarter; or (ii) 100% if the Non-GAAP Operating Margin achievement for the applicable quarter was at or above the Non-GAAP Operating Margin Threshold for such quarter. The target levels for Net New ARR and Non-GAAP Operating Margin are set to reward management performance in light of our strategic objectives and economic conditions at the time. The compensation committee believed such targets would drive the appropriate amount of focus on propelling growth without detracting from our ultimate performance as a whole. Target levels for the 2025 performance goals were set in February 2025 for the full year, with quarterly target levels for each performance metric for the 2025 fiscal year (“FY 25”) as set forth in the table below:
Elements of Our 2025 Executive Compensation Program
| Performance Metrics | Weight | Q1 FY25 Target | Q2 FY25 Target | Q3 FY25 Target | Q4 FY25 Target | | Net New ARR | 70% | $21.0 million | $26.5 million | $26.8 million | $32.6 million | | Non-GAAP Operating Margin | 30% | 19.4% | 14.2% | 17.1% | 19.2% |
Elements of Our 2025 Executive Compensation Program
| Performance Metrics | Weight | Q1 FY25 Target | Q2 FY25 Target | Q3 FY25 Target | Q4 FY25 Target | | Net New ARR | 70% | $21.0 million | $26.5 million | $26.8 million | $32.6 million | | Non-GAAP Operating Margin | 30% | 19.4% | 14.2% | 17.1% | 15.3% |
Elements of Our 2025 Executive Compensation Program
| Performance Metrics | Weight | Q1 FY25 Attainment | Q2 FY25 Attainment | Q3 FY25 Attainment | Q4 FY25 Attainment | | Net New ARR | 70% | $23.1 million | $29.6 million | $27.8 million | $30.1 million | | Non-GAAP Operating Margin | 30% | 23.6% | 21.9% | 21.0% | 18.7% |
Elements of Our 2025 Executive Compensation Program
| Named Executive Officer | Aggregate Bonus Earned ($) | Percentage of 2025 Target Variable Pay (%)(1) | | Dennis Woodside | $688,698 | 109.5% | | Rathna Girish Mathrubootham(2) | – | – | | Tyler Sloat | $438,084 | 109.5% | | Mika Yamamoto | $457,650 | 109.2% |
Elements of Our 2025 Executive Compensation Program
________________ (1)The 2025 Target Variable Pay reflects the actual target variable pay in effect for each named executive officer for fiscal year 2025, taking into account any annual compensation cycle increases to the named executive officer’s target variable pay that took effect on March 1, 2025. (2)As noted above, Mr. Mathrubootham did not receive a bonus opportunity in 2025. 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. 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, effective March 1, 2025, the compensation committee and board of directors approved the grant of a mix of time-based RSUs and PRSUs that could be earned based on financial performance measures to our named executive officers other than Mr. Mathrubootham. Seventy percent (70%) of the value of each executive’s 2025 annual long-term equity incentive award was granted in the form of time-based RSUs that vest in equal quarterly installments over four years, subject to the recipient’s continued service as of each vesting date. Thirty percent (30%) 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 were earned was based on our achievement of certain revenue and free cash flow targets over the performance period from January 1, 2025 through December 31, 2025 (the “Performance Period”), 70% based on attainment of the revenue performance metric (the “revenue PRSUs”) and 30% based on attainment of the free cash flow performance metric (the “free cash flow PRSUs”), as described in more detail below. Following the compensation committee’s certification of performance achievement against the revenue and free cash flow targets over the Performance Period, one-third of the earned PRSUs vested on March 1, 2026, 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. The below table sets forth the value and number of RSUs and PRSUs (at target) granted to our named executive officers in 2025 (other than Mr. Mathrubootham, who did not receive any RSUs and PRSUs in 2025):
Elements of Our 2025 Executive Compensation Program
| Named Executive Officer | Approved Value ($)(1) | Annual RSU Award Value (70% of Approved Value) (1) | Annual RSU Award (# of RSUs) | Annual PRSU Award Target Value (30% of Approved Value) (1) | Annual PRSU Award (# of Target PRSUs) | | Dennis Woodside | $15,000,000 | $10,500,000 | 586,920 | $4,500,000 | 251,537 | | Tyler Sloat | $6,250,000 | $4,375,000 | 244,550 | $1,875,000 | 104,807 | | Mika Yamamoto | $5,100,000 | $3,570,000 | 199,553 | $1,530,000 | 85,522 |
Elements of Our 2025 Executive Compensation Program
| Revenue PRSUs | | Free Cash Flow PRSUs | | | Performance (% of Target) | Payout (% of Target) | Performance (% of Target) | Payout (% of Target) | | 0% < 92% | 0% | 0% < 70% | 0% | | 92% < 96% | 75% < 85% | 70% < 100% | 60% < 100% | | 96% < 100% | 85% < 100% | 100% < 102% | 100% < 102% | | 100% < 104% | 100% < 115% | 102% < 105% | 102% < 105% | | 104% < 108% | 115% < 130% | 105% < 107% | 105% < 107% | | 108% < 113% | 130% < 145% | 107% < 110% | 107% < 110% | | 113% < 117% | 145% < 160% | 110% < 112% | 110% < 112% | | 117% < 121% | 160% < 180% | 112%+ | 112% | | 121% < 125% | 180.0% < 200% | | | | 125% ≤ | 200% | | |
Elements of Our 2025 Executive Compensation Program
| Performance Metrics | Target ($ in millions) | Attainment ($ in millions) | Interpolated Achievement (% of Target) | Weight (%) | Weighted PRSU Payout (%) | | Revenue | $823.1 | $838.8 | 107.2% | 70% | 105.4% | | Free Cash Flow | $220.4 | $223.1 | 101.2% | 30% | |
Elements of Our 2025 Executive Compensation Program
(1)The number of PRSUs earned under each PRSU award is calculated by multiplying the target number of PRSUs by the total payout percentage of 105.4%, rounded down to the nearest whole share. Certain 2026 Compensation Decisions In December 2025, the compensation committee approved annual refresh equity awards to be granted effective January 2, 2026 to Messrs. Woodside and Sloat in the form of RSUs and PRSUs. To further reinforce the importance of aligning pay with company performance, the compensation committee determined to increase the PRSU component to 40% of the overall equity grant value, as compared to 30% in 2025 and decrease the RSU component to 60% of the overall grant value, as compared to 70% in 2025.
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. 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”). The Company began matching employee contributions to the 401(k) plan up to a $1,000 annual limit in 2025. 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, as the compensation committee determines appropriate to assist such individuals to commence employment with us.
Other Compensation Policies and Practices
Other Compensation Policies and Practices Compensation Recovery (“Clawback”) Policy In October 2023, we adopted an incentive compensation recoupment, or “clawback,” policy in connection with the SEC’s adoption of final guidance regarding the clawback rules under the Dodd-Frank Wall Street Reform and Consumer Protection Act. Under our clawback policy, if we are required to prepare an accounting restatement for any fiscal quarter or year due to our material noncompliance with any financial reporting requirement under federal securities laws, we must seek recoupment of the full amount of the incentive compensation that was granted, vested or paid during the 36-month period preceding the restatement obligation (“Lookback Period”) from current executive officers or former executive officers who received incentive compensation during the Lookback Period. Stock Ownership Guidelines In December 2024, we adopted stock ownership guidelines for the members of the board of directors and our named executive officers (“Covered Individuals”). The non-employee directors are required to own shares of our Class A common stock with a value equal to four times their annual cash retainer fee. Our Chief Executive Officer and Executive Chairman are each required to own shares of our Class A common stock with a value equal to five times their base salary, and other named executive officers are required to own shares of our Class A common stock with a value equal to three times their base salary. The guidelines must be achieved by each Covered Individual by the end of the calendar year in which the fifth anniversary of the later of (1) December 1, 2024 and (2) the date the individual became a Covered Individual occurs. For purposes of these stock ownership guidelines, shares deemed to be owned include shares owned directly by the Covered Individual and shares owned by his or her immediate family members, shares held in trust for the benefit of the Covered Individual or for the benefit of a family member of such Covered Individual, shares owed by an entity for which the Covered Individual serves as a partner or is otherwise materially affiliated with, if such entity beneficially owns 5% or more of the outstanding shares of the Company, vested shares under any deferred compensation plan, vested and unvested time-based restricted stock units, and vested performance-based vesting equity awards. Each of the Covered Individuals was in compliance with the stock ownership guidelines as of December 31, 2025, having acquired the required number of shares or having more time to do so per the terms of our stock ownership guidelines. Hedging and Pledging of Securities We believe it is improper and inappropriate for any person associated with Freshworks to engage in short-term or speculative transactions involving the Company's securities. Our directors, officers and employees are, therefore, prohibited from engaging in short sales and buying or selling puts, calls, options or other derivative securities of the Company. Our Insider Trading Policy also prohibits our directors, officers and employees from engaging in transactions that are designed to or have the effect of hedging or offsetting any decrease in the market value of the Company's equity securities, whether they are granted to such individual by the Company as part of such person's compensation or otherwise held, directly or indirectly, by such individual. In addition, we prohibit our executive officers, all other employees and the non-employee members of our board of directors from purchasing or holding our common stock in a margin account. We also prohibit pledging our common stock as collateral for a loan. Risk Assessment Concerning Compensation Practices and Policies Our compensation committee, with the assistance of Compensia, regularly reviews our compensation program, including philosophy, policies and practices to assess whether they encourage our employees to take inappropriate risks. After reviewing and assessing our compensation philosophy, policies and practices, our compensation committee has determined that the Company’s compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
Disclosure of Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information
Disclosure of Policies and Practices Related to the Grant of Certain Equity Awards Close in Time to the Release of Material Nonpublic Information Our board of directors has established six grant dates for purposes of granting awards under our 2021 Plan (each an “Established Grant Date”). It is our policy not to purposely accelerate or delay the public release of material information in consideration of a pending equity grant to allow the grantee to benefit from a more favorable stock price. Awards granted to Section 16 persons are subject to approval by our compensation committee (or board of directors in the case of the Chief Executive Officer and President and the Executive Chairman) and, unless otherwise determined by our board of directors or compensation committee, would be granted on the next available Established Grant Date after the applicable compensation committee or board approval (with vesting commencement to be the same day as the Established Grant Date). While we have granted stock options to employees, including some of our named executive officers, in the past, we do not currently grant stock options, stock appreciation rights, or similar instruments with option-like features and have no policies or practices to disclose pursuant to Item 402(x)(1) of Regulation S-K.
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, 2023, December 31, 2024, and December 31, 2025, except as otherwise noted.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Dennis Woodside | 2025 | 629,167 | | 14,304,076 | 688,698 | 1,540 | 15,623,481 | | Chief Executive Officer and President | 2024 | 537,500 | — | 14,176,631 | 308,125 | 540 | 15,022,796 | | | 2023 | 500,000 | — | — | 461,644 | 540 | 962,184 | | Rathna Girish Mathrubootham | 2025 | 552,273 | | — | — | 1,495 | 553,768 | | Former Executive Chairman | 2024 | 575,000 | — | 17,957,066 | 326,375 | 540 | 18,858,981 | | | 2023 | 500,000 | — | — | 461,644 | 540 | 962,184 | | Tyler Sloat | 2025 | 505,000 | | 5,960,030 | 438,084 | 1,540 | 6,904,654 | | Chief Operating Officer and Chief Financial Officer | 2024 | 465,000 | — | 9,451,087 | 193,678 | 540 | 10,110,305 | | | 2023 | 420,000 | — | 4,599,993 | 265,191 | 540 | 5,285,723 | | Mika Yamamoto | 2025 | 436,667 | | 4,863,380 | 457,650 | 1,540 | 5,759,237 | | Former Chief Customer and Marketing Officer | 2024 | 420,000 | — | 3,307,870 | 172,958 | 540 | 3,901,368 | | | 2023 | 49,318 | — | 7,999,988 | 28,307 | 219 | 8,077,831 |
Summary Compensation Table
(1)The amounts disclosed for fiscal 2025 represent the aggregate grant date fair value of the restricted stock units and stock options granted to our named executive officers during the relevant fiscal years under our 2021 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 the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 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 performance-based restricted stock units, as applicable, or the sale of any common stock underlying such restricted stock units or performance-based restricted stock units. Because the named executive officers' 2025 performance-based restricted stock unit awards are subject to certain revenue and free cash flow targets, the amounts reported in the Stock Awards column for such awards assume the probable outcome of the performance conditions at the grant date based on target level performance and the grant date fair value disclosed was based upon the closing price of our Class A common stock on the date of grant. As a result, the amount disclosed does not necessarily correspond to the actual value that may be recognized by the named executive officer. The value of each named executive officer's performance-based restricted stock unit award on the grant date assuming the highest level of performance conditions will be achieved was: $7,449,556, with respect to Mr. Woodside; $3,103,965, with respect to Mr. Sloat; and $2,532,830, with respect to Ms. Yamamoto, which is based on maximum vesting of the award multiplied by the closing price of our Class A common stock on the grant date. For additional information regarding the specific terms of the named executive officers' performance-based restricted stock unit awards, see the section entitled “Compensation Discussion and Analysis— Elements of Our 2025 Executive Compensation Program—Long-Term Equity Incentives” above. (2)The amounts disclosed for fiscal 2025 represent the bonus amounts earned by applicable named executive officers under our cash incentive bonus plan in 2025. (3)Represents life insurance premiums and 401(k) matching contributions paid on behalf of the named executive officers.
Grants of Plan-Based Awards in 2025
Grants of Plan-Based Awards in 2025
Grants of Plan-Based Awards in 2025
| Name | Type of Award | Grant Date | Approval Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units(2) (#) | Grant Date Fair Value of Stock and Option Awards(3) ($) | | | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Dennis Woodside | Cash Bonus | | | 220,208 | 629,167 | 849,375 | | | | | | | | RSUs | March 1, 2025 | February 13, 2025 | | | | | | | 586,920 | 10,012,855 | | | PRSUs | March 1, 2025 | February 13, 2025 | | | | 177,333 | 251,537 | 436,668 | | 4,291,221 | | Rathna Girish Mathrubootham | Cash Bonus | — | — | — | — | — | | | | | | | | RSUs | — | — | | | | — | — | — | — | — | | | PRSUs | — | — | | | | — | — | — | | — | | Tyler Sloat | Cash Bonus | | | 140,000 | 400,000 | 540,000 | | | | | | | | RSUs | March 1, 2025 | February 13, 2025 | | | | | | | 244,550 | 4,172,023 | | | PRSUs | March 1, 2025 | February 13, 2025 | | | | 73,888 | 104,807 | 181,944 | | 1,788,007 | | Mika Yamamoto | Cash Bonus | | | 146,708 | 419,167 | 565,875 | | | | | | | | RSUs | March 1, 2025 | February 13, 2025 | | | | | | | 199,553 | 3,404,374 | | | PRSUs | March 1, 2025 | February 13, 2025 | | | | 60,293 | 85,522 | 148,466 | | 1,459,005 |
Grants of Plan-Based Awards in 2025
________________ (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 2025 Executive Compensation Program” above and do not represent actual compensation earned by our named executive officers for the year ended December 31, 2025. The amount shown in the “Threshold” column represents 35% of the target cash bonus opportunity and the amount shown in the “Maximum” column represents 135% 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. Each award is subject to performance-based and/or service-based vesting criteria described in the footnotes to the table below titled “Outstanding Equity Awards as of December 31, 2025,” except as otherwise indicated in the footnotes to this table. (3)The amounts disclosed represent the aggregate grant date fair value of the RSUs and PRSUs granted under our 2021 Plan computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the RSUs and PRSUs are set forth in the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. This amount does not reflect the actual economic value that may be realized by each named executive officer. Furthermore, because the named executive officers' 2025 PRSU awards are subject to certain revenue and free cash flow targets, the amounts reported in this column for the PRSUs assume the probable outcome of the performance conditions at the grant date based on target level performance and the grant date fair value disclosed was based upon the closing price of our Class A common stock on the date of grant. As a result, the amount disclosed does not necessarily correspond to the actual value that may be recognized by the named executive officer.
Outstanding Equity Awards as of December 31, 2025
Outstanding Equity Awards as of December 31, 2025 The following table presents the outstanding equity incentive plan awards held by each named executive officer as of December 31, 2025.
Outstanding Equity Awards as of December 31, 2025
| 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 ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) | | Dennis Woodside | September 1, 2022(4) | September 1, 2022 | 1,475,483 | 340,497 | 13.61 | August 31, 2032 | — | — | — | — | | | September 1, 2022(5) | September 1, 2022 | — | — | — | — | 324,844 | 3,979,339 | — | — | | | March 1, 2024(6) | March 1, 2024 | | | | | 275,521 | 3,375,132 | | | | | March 1, 2025(6) | March 1, 2025 | | | | | 476,873 | 5,841,694 | | | | | March 1, 2024(9) | March 1, 2024 | — | — | — | — | 89,479 | 1,096,118 | | | | | March 1, 2025 | March 1, 2025 | | | | | | | 251,537 | 3,081,328 | | Rathna Girish Mathrubootham | | | | | | | | | | | | Tyler Sloat | May 1, 2022(6) | May 1, 2022 | — | — | — | — | 27,518 | 337,096 | — | — | | | May 1, 2022(7) | May 1, 2022 | — | — | — | — | 13,758 | 168,536 | — | — | | | May 1, 2023(6) | May 1, 2023 | — | — | — | — | 129,895 | 1,591,214 | — | — | | | March 1, 2024(6) | March 1, 2024 | — | — | — | — | 110,209 | 1,350,060 | — | — | | | March 1, 2024(8) | March 1, 2024 | | | | | 23,325 | 285,731 | | | | | March 1, 2025(6) | March 1, 2025 | | | | | 198,697 | 2,434,038 | | | | | March 1, 2024(9) | March 1, 2024 | | | | | 35,792 | 438,452 | | | | | March 1, 2025 | March 1, 2025 | | | | | | | 104,807 | 1,283,886 | | Mika Yamamoto | March 1, 2024(6) | March 1, 2024 | | | | | 64,289 | 787,540 | | | | | March 1, 2025(6) | March 1, 2025 | | | | | 162,137 | 1,986,178 | | | | | March 1, 2024(9) | March 1, 2024 | | | | | 20,878 | 255,756 | | | | | March 1, 2025 | March 1, 2025 | | | | | | | 85,522 | 1,047,645 |
Outstanding Equity Awards as of December 31, 2025
________________ (1)All of the equity awards listed in this table were granted under our 2011 Plan, our 2021 Plan, or our Inducement Plan. (2)The market value of unvested RSUs and unearned PRSUs is based on the $12.25 closing price of our Class A common stock on December 31, 2025, as reported by Nasdaq. (3)Represents number of PRSUs granted in March 2025 that were earned based on our achievement of certain revenue and free cash flow targets over the one-year performance period beginning January 1, 2025 and ending December 31, 2025, 70% based on attainment of the revenue performance metric and 30% based on attainment of the free cash flow performance metric, as described in more detail in the section entitled “Compensation Discussion and Analysis— Elements of Our 2025 Executive Compensation Program—Long-Term Equity Incentives” above. One third of the PRSUs earned based on performance vested on March 1, 2026, following the compensation committee’s certification of the achievement of the revenue and free cash flow targets, 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. (4)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. (5)1/4th of the shares subject to the RSU 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. (6)The shares subject to the RSU 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. (7)The shares subject to the RSU award will vest in equal annual installments over four years, subject to the executive officer’s continued service with us as of each such date. (8)The shares subject to the RSU award will vest in equal quarterly installments over two years, subject to the executive officer’s continued service with us as of each such date. (9)Represents PRSUs earned based on our achievement in 2024. One third of the PRSUs earned vested on the first of the month following our compensation committee’s certification of the achievement of the revenue and free cash flow targets over the one-year performance period beginning January 1, 2024 and ending December 31, 2024, and the remainder vested or will vest in equal quarterly installments over the subsequent two years, subject to the recipient’s continued service as of each vesting date.
Option Exercises and Stock Vested in 2025
Option Exercises and Stock Vested in 2025
Option Exercises and Stock Vested in 2025
| | 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) ($) | | Dennis Woodside | — | — | 790,895 | 11,443,791 | | Rathna Girish Mathrubootham | — | — | 1,063,782 | 15,363,674 | | Tyler Sloat | — | — | 393,630 | 5,662,538 | | Mika Yamamoto | — | — | 283,807 | 4,090,509 |
Option Exercises and Stock Vested in 2025
________________ (1)The value realized on vesting is determined by multiplying the number of vested RSUs by the closing price of our Class A common stock on the vesting date. The value realized on vesting does not reflect the actual value received by each named executive officer because a portion of the shares reflected in the table above were withheld by us to satisfy the named executive officer’s tax withholding obligations.
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control
Potential Payments upon Termination or Change in Control
| Name | Termination Without Cause or Resignation for Good Reason without a Change of Control: | | Termination without Cause with a Change of Control: | | Resignation for Good Reason with a Change of Control: | | | | Equity Acceleration(1) ($) | Cash Severance ($) | Equity Acceleration(1) ($) | Cash Severance ($) | Equity Acceleration(1) ($) | Cash Severance ($) | | Dennis Woodside | 6,095,453(2) | 1,290,000 (2) | 17,545,442 | 1,935,000(3) | 17,545,442 | 1,935,000(3) | | Rathna Girish Mathrubootham | (4) | (4) | (4) | (4) | (4) | (4) | | Tyler Sloat | 2,736,332(5) | 663,000(5) | 7,960,503(6) | 918,000(6) | 4,342,980(7) | 459,000(7) | | Mika Yamamoto | 2,215,302(8) | 235,000(8) | (9) | (9) | (9) | (9) |
Potential Payments upon Termination or Change in Control
________________ (1)Represents acceleration of any unvested PRSUs held by the NEO as of December 31, 2025, assuming a 105.4% payout percentage, based on the Company’s actual revenue and free cash flow from January 1, 2025 through December 31, 2025. The value of stock option, RSU award, and PRSU award vesting acceleration is based on the closing price of $12.25 per share of our Class A common stock as of December 31, 2025, minus, in the case of stock options, the exercise price of the unvested stock options subject to acceleration. (2)Pursuant to Mr. Woodside’s offer letter agreement, in the event that 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. Woodside for “good reason” (each, as defined in Mr. Woodside’s offer letter agreement), and subject to their delivery to us of a general release of claims in a form acceptable to us, he will be entitled to continued payment of his base salary for 12 months after termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to 12 months following termination date, an amount equal to a pro-rata portion of his 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. 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. Woodside’s employment is terminated by us without cause or by Mr. Woodside for good reason, in either case, during the change in control period, and subject to his delivery to us of a general release of claims in a form acceptable to us, Mr. Woodside will be entitled to continued payment of his base salary for 18 months after termination, payment of the cost of COBRA continuation coverage under our group health plans for up to 18 months following termination, an amount equal to 150% of their target annual performance bonus for the year in which his termination occurs, and accelerated vesting of all time-based requirements for equity awards held by Mr. Woodside as of his termination date. (4)Effective December 1, 2025, Mr. Mathrubootham retired from his Executive Chairman role (in addition to his roles as a Class III member of the Company’s Board of Directors and Chairman of the Board). No payment was triggered by Mr. Mathrubootham’s separation from the Company. (5)Pursuant to Mr. Sloat’s offer letter agreement, in the event that Mr. Sloat’s employment is terminated, other than during a change in control period, by us without “cause” (as defined in Mr. Sloat’s offer letter agreement), and subject to their delivery to us of a general release of claims in a form acceptable to us, he will be entitled to continued payment of his base salary for six months after his termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to six months following his termination date, an amount equal to a pro rata portion of his target annual performance bonus for the year in which his termination date occurs (which has been calculated at 100% since the pro rata portion is not determinable), and accelerated vesting of time-based requirements for equity awards held by Mr. Sloat as of his termination date as to the number of shares that would have vested during the six-month period following his termination date. (6)In the event that Mr. Sloat’s employment is terminated by us without cause during the change in control period, and subject to his delivery to us of a general release of claims in a form acceptable to us, he will be entitled to continued payment of his base salary for 12 months after his termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to 12 months following his termination date, an amount equal to 100% of their target annual performance bonus for the year in which his termination occurs, and accelerated vesting of time-based requirements for equity awards held by Mr. Sloat as of his termination date. (7)In the event that Mr. Sloat’s employment is terminated by Mr. Sloat for “good reason” (as defined in his offer letter agreement) during the change in control period, and subject to his delivery to us of a general release of claims in a form acceptable to us, he will be entitled to continued payment of his base salary for six months after his termination date, payment of the cost of COBRA continuation coverage under our group health plans for up to six months following his termination date, an amount equal to 50% of his 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. Sloat as of his termination date as to the number of shares that would have vested during the 12-month period following his termination date. (8)Represents the amount that Ms. Yamamoto became entitled to receive in connection with her termination on April 2, 2026, which included six months of her base salary, the cost of COBRA continuation coverage under our group health plans for up to six months, and an amount equal to the pro-rata portion of her target annual performance bonus for 2026. Ms. Yamamoto also received accelerated vesting of time-based requirements for equity awards held as of her termination date as to the number of shares that would have vested during the six-month period following her termination date. (9)Ms. Yamamoto left her position as Chief Integrated Customer Growth Officer, effective March 2, 2026, and no payments will be triggered under these termination scenarios. Each of our current named 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, 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.
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 the total compensation of Mr. Woodside, our current Chief Executive Officer (“CEO”) as of our employee population determination date of December 31, 2025, to the total compensation to the total compensation of our median employee, referred to as “pay-ratio” disclosure. For fiscal year 2025, the median of the annual total compensation of all of our employees (other than the current CEO) was $44,111 and the annual total compensation of the current CEO, as reported in the Summary Compensation Table included in this Proxy Statement, was $15,623,481. Based on this information, the ratio of the annual total compensation of the current CEO to the median of the annual total compensation of our other employees was approximately 354 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, 2025 (employee population determination date). We considered all individuals, excluding our current 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, 2025, our employee population consisted of approximately 4,500 individuals (not including the current CEO) of which approximately 12.9% were located in the United States and approximately 87.1% 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, 2025; (2) for non-salaried employees, hourly rate as in effect as of December 31, 2025 annualized for a full year; and (3) the value, based on the closing price of our Class A common stock on the date of grant, of equity awards granted to our employee population during fiscal year 2025, 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, 2025 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.
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 to our named executive officers (“NEOs”) 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.”
Pay Versus Performance
| Year | Summary Compensation Table Total for PEO (Woodside) (1) | Summary Compensation Table Total for PEO (Mathrubootham) (1) | Compensation Actually Paid to PEO (Woodside)(2) | Compensation Actually Paid to PEO (Mathrubootham)(2) | Average Summary Compensation Table Total for Non-PEO NEOs(3) | Average Compensation Actually Paid to Non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On: | | | Net Income (Loss) (millions)(7) | Non- GAAP Operating Margin(8) | | | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return - S&P 500 IT(6) | Peer Group Total Shareholder Return - S&P 500 System Software(6) | | | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | (j) | (k) | (l) | | 2025 | 15,623,481 | - | 8,297,324 | - | 4,405,886 | (563,621) | $26 | $209 | $107 | $183.7 | 21.2% | | 2024 | $15,022,796 | $18,858,981 | $(11,587,888) | $(61,331,403) | $6,702,542 | $(3,818,037) | $34 | $170 | $108 | $(95.4) | 13.8% | | 2023 | — | $962,184 | — | $47,094,192 | $4,681,721 | $11,981,880 | $49 | $125 | $86 | $(137.4) | 7.5% | | 2022 | — | $516,611 | — | $(96,749,821) | $11,446,469 | $(1,829,320) | $31 | $80 | $62 | $(232.1) | (4.5)% | | 2021 | — | $234,027,721 | — | $241,534,679 | $12,247,122 | $27,731,839 | $55 | $113 | $94 | $(192.0) | (4.9)% |
Pay Versus Performance
________________ (1)The dollar amounts reported in column (c) are the amounts of total compensation reported for our principal executive officer(s) (“PEO”) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Executive Compensation—Summary Compensation Table.” Mr. Mathrubootham served as our PEO from 2010 until May 2024. Mr. Woodside has served as our PEO since May 1, 2024. For purposes of this table, Mr. Woodside was a Non-PEO NEO (as defined in footnote 4 below) in 2022 and 2023 and Mr. Mathrubootham was a Non-PEO NEO in 2025. (2)The dollar amounts reported in column (e) represent the amount of “compensation actually paid” to our PEO(s), 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 the PEO(s) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Woodside’s total compensation for 2025 to determine the compensation actually paid:
Pay Versus Performance
| PEO | 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 | | Woodside | 2025 | $15,623,481 | $(14,304,076) | $6,977,919 | $8,297,324 |
Pay Versus Performance
a.The grant date fair value of equity awards represents the total of the amount reported in the “Stock Awards” column in the Summary Compensation Table for 2025. 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. Woodside’s option award fair values are as follows: •risk-free rates of 3.59% - 4.01% for the pay-versus-performance valuation versus 4.53% for the prior year valuation and 3.37% for grant-date valuation; •the expected option term estimates of 3.5 - 4.2 years for the pay-versus-performance valuation versus 4.3 years for the prior year valuation and 6.1 years for the grant date valuation; •stock price volatility of 50% - 60% for the pay-versus-performance valuation versus 65% for the prior year grant date valuations; •the stock price on the valuation date of $11.85 – $16,33 for the pay-versus-performance valuation versus $16.36 for the prior year valuation and $13.38 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 2025 include the addition (or subtraction, as applicable) of the following: (i) the year-end fair value of any equity awards granted in 2025 that are outstanding and unvested as of the end of the year; (ii) the amount of change as of the end of 2025 (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 2025; (iii) for awards that are granted and vest in 2025, the fair value as of the vesting date; (iv) for awards granted in prior years that vest in 2025, 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 2025, 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 2025 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 2025. The amounts deducted or added in calculating the equity award adjustments are as follows:
Pay Versus Performance
| PEO | 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 from Prior Year End to Vesting Date 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 | | Woodside | 2025 | $8,923,023 | $1,353,390 | $1,488,936 | $(4,787,429) | — | — | $6,977,919 |
Pay Versus Performance
(3) The dollar amounts reported in column (f) represent the average of the amounts reported for our non-PEO NEOs as a group (excluding Mr. Mathrubootham with respect to 2021, 2022 and 2023, excluding Messrs. Mathrubootham and Woodside with respect to 2024, and excluding Mr. Mathrubootham with respect to 2025) (our “Non-PEO NEOs”) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of the Non-PEO NEOs included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2025, Rathna Girish Mathrubootham, Tyler Sloat and Mika Yamamoto; (ii) for 2024, Tyler Sloat, Mika Yamamoto, and Srinivasagopalan Ramamurthy; (iii) for 2023, Dennis Woodside, Tyler Sloat, Srinivasagopalan Ramamurthy, Mika Yamamoto, Stacey Epstein, and Pradeep Rathinam; (iv) for 2022, Dennis Woodside, Tyler Sloat, Stacey Epstein, Srinivasagopalan Ramamurthy and José Morales; and (v) for 2021, Stacey Epstein and Srinivasagopalan Ramamurthy. (4)The dollar amounts reported in column (g) represent the average amount of “compensation actually paid” to the Non-PEO NEOs as a group, 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 Non-PEO NEOs as a group 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 Non-PEO NEOs as a group for each year to determine the compensation actually paid, using the same methodology described above in footnote 3:
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 | | 2025 | $4,405,886 | $(3,607,803) | $(1,361,704) | $(563,621) |
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 that are consistent with those used to estimate fair value at grant under U.S. GAAP. b.The amounts deducted or added in calculating the total average equity award adjustments are shown in the table below.
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 from Prior Year End to Vesting Date 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 | | 2025 | $2,250,582 | $(556,201) | $375,543 | $(939,653) | (2,491,975) | — | $(1,361,704) |
Pay Versus Performance
(5)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. (6)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 Systems Software. The Company transitioned from the S&P 500 Information Technology Sector to the S&P 500 Systems Software index to provide a more precise benchmark against companies with similar SaaS-based business models and enterprise software cycles. This shift minimizes the impact of externalities from unrelated industries like hardware and semiconductors. (7)The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for the applicable year. (8)Non-GAAP Operating Margin is a non-GAAP financial measure, which represents the GAAP income (loss) from operations, excluding the impact of stock-based compensation, amortization of acquired intangibles and acquisition related expenses, as a percentage of total revenue.