DEF 14A of Progress Software Corp /Ma
Filed Mar 26, 2025 · FY20240001552781-25-000108
Table of Contents
| • | Stock Option Grant Policy |
Table of Contents
Mr. Egan currently serves as our independent Board Chair and brings extensive board leadership experience as a director of publicly traded companies, including NetScout Systems, Inc., where he serves as Lead Director, having also previously served as a director of Verint Systems, EMC Corporation and VMWare, Inc. Mr. Egan also serves on the Board of Trilio, a privately held technology company. Mr. Egan has led global technology companies through strategic growth and operational change. His strong integrity and professional credibility with the other directors and executive officers has helped Mr. Egan to effectively oversee management and execute on the Company’s business strategy. Our Corporate Governance Guidelines do not require the separation of the roles of Board Chair and Chief Executive Officer, as our Board believes that it is important that the Board retain flexibility to determine whether these roles should be separate or combined based upon the Board’s assessment of the Company’s needs and Progress’s leadership at a given point in time. We believe that an effective board leadership structure is highly dependent on the experience, skills and personal interaction between those in leadership roles. Our policy is to have a Lead Independent Director if the Board Chair is not independent.
Director Compensation
Director Compensation We pay our non-employee directors a mix of cash and equity compensation. Employee directors receive no compensation for their service as directors. In accordance with the Director Compensation Plan adopted by the Board for 2024, our non-employee directors were paid an annual retainer of $275,000, of which $50,000 was paid in cash and $225,000 in equity in the form of deferred stock units (“DSUs”) or restricted stock units (“RSUs”). Committee members and chairs also received the additional compensation described below. Prior to adopting the 2024 Director Compensation Plan, the Compensation Committee received market data from Pay Governance, the Compensation Committee’s independent compensation consultant, and considered whether any changes in director compensation should be proposed. Based on the market data, the Compensation Committee recommended to the Board no changes to director compensation and the Board adopted this recommendation. The cash retainers for Board and committee services were paid in June 2024 and the equity retainers were issued in June 2024. The number of DSUs or RSUs granted was determined by dividing the equity retainer by the grant-date closing price of our common stock as reported by Nasdaq. The DSUs and RSUs vest in a single installment on the date of the Annual Meeting, subject to continued service on our Board of Directors through such date. DSUs do not convert to shares of common stock until a director terminates service on the Board of Directors. RSUs and DSUs would also convert into shares upon a change in control.
Director Compensation
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Director Compensation
Director Compensation Stock Ownership Guidelines Our Board of Directors has adopted stock ownership guidelines for non-employee directors. These guidelines provide for all non-employee directors to hold an amount of our common stock, restricted shares, restricted stock units and/or vested DSUs having a value equal to at least five times the annual cash retainer. Directors have five years to attain this ownership threshold. As of the date of this Proxy Statement, all non-employee directors are in compliance with the stock ownership guidelines. Director Compensation Table—Fiscal 2024 The following table sets forth a summary of the compensation paid or granted to our non-employee directors for service on our Board in 2024.
Director Compensation
| Name | Unvested DSUs and RSUs Outstanding at November 30, 2024(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Total ($) | | Paul T. Dacier | 4,149 | 62,500 | 225,042 | 287,542 | | John R. Egan | 4,149 | 135,000 | 225,042 | 360,042 | | Rainer Gawlick | 4,149 | 85,000 | 225,042 | 310,042 | | Charles F. Kane | 4,149 | 90,000 | 225,042 | 315,042 | | Samskriti Y. King | 4,149 | 95,000 | 225,042 | 320,042 | | David A. Krall | 4,149 | 75,000 | 225,042 | 300,042 | | Angela T. Tucci | 4,149 | 80,000 | 225,042 | 305,042 | | Vivian M. Vitale | 4,149 | 75,000 | 225,042 | 300,042 |
Director Compensation
| (1) The number of outstanding unvested DSUs and RSUs held by each director as of November 30, 2024, is shown. No director held stock options. |
Director Compensation
| (2) Represents the fair value of the awards measured at the grant date. The number of units granted to each director in 2024 was determined by dividing the grant date value of the award, $225,000, by $54.24, the closing price of our common stock on June 27, 2024, rounded up to the nearest whole unit. |
Director Compensation
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Board Recommendation
Fiscal 2024 Compensation Structure The Compensation Committee’s philosophy is to tie executive pay to Company performance, thereby creating alignment with our stockholders and driving the creation of sustainable long-term stockholder value. During fiscal 2024, our compensation programs continued to reflect this philosophy and compensation earned reflected our business achievements. Our fiscal 2024 budget and operating plan prioritized enhancing customer retention and reflected our expectations for strong recurring revenue and high renewal rates. Consistent with past years, we also prioritized operating our business as efficiently as possible resulting in strong cash flow which allows us to continue to execute our Total Growth Strategy and return capital to Progress stockholders. As was the case in fiscal 2023, the Compensation Committee utilized a combination of short and long-term compensation programs to advance our strategy. 2024 Executive Compensation Highlights Our compensation program for fiscal 2024 remained largely consistent with our fiscal 2023 compensation structure. The Compensation Committee, in consultation with Pay Governance, its independent compensation consultant, reviewed our fiscal 2024 compensation structure in November 2023 and January 2024. Consistent with prior years, our annual and long-term incentive plans were designed to achieve financial goals related to our business plan for fiscal 2024 and in line with our financial guidance to stockholders. The only compensation design change for the fiscal 2024 program was to exclude the financial impacts of acquired businesses during the first year following acquisition from consideration when calculating the 35% annual non-GAAP operating margin threshold applicable to performance-based restricted stock units (“PSUs”). For fiscal 2024, payouts under our Corporate Bonus Plan were made at 127% of target, based on our solid performance. The construct, underlying metrics and resulting performance and payout outcome under the Corporate Bonus Plan are described further in the section below entitled “Cash Incentive Compensation”. The three-year performance period for PSUs awarded under our 2022 Long-Term Incentive Plan (“LTIP”) ended on November 30, 2024. Based on our relative total stockholder return (“TSR”) and cumulative total operating income, 126% of the awarded PSUs were earned, as described further in the section entitled “2024 Executive Compensation Decisions – Equity Compensation – PSUs” below.
Board Recommendation
Annual Bonus Plan Update (applicable to Fiscal Year 2025) For fiscal 2025, the Committee added ARR as a performance metric in our Corporate Bonus Plan to better reflect the Company’s focus on the durability of our recurring revenue. With the addition of ARR, the 2025 Annual Bonus plan includes the following financial metrics (weighted as indicated): ARR (20%), total non-GAAP revenue (20%, reduced from 40% last year), total non-GAAP operating income (40%) and total adjusted free cash flow (20%). Response to 2024 Say-on-Pay Vote and the Evolution of our Executive Compensation Programs
Board Recommendation
Role of Compensation Consultant Our Compensation Committee again retained Pay Governance to advise it on matters related to executive compensation for fiscal 2024. Other than providing limited guidance regarding our broad-based equity plan design for all employees, including advice in connection with the request to add additional shares to the equity plan at the 2024 Annual Meeting of Stockholders, Pay Governance did not provide any services for management in fiscal 2024. Pay Governance consulted with our management when requested by the Compensation Committee and only as necessary to obtain relevant compensation and performance data for the executives, as well as essential business information so that it could effectively support the Compensation Committee with appropriate competitive market information and relevant analyses. During fiscal 2024, Pay Governance provided a range of services to the Compensation Committee to support the Compensation Committee’s agenda and obligations under its charter, including providing advice relating to the impact of regulatory updates, industry trends and peer group compensation data, advice on the structure and competitiveness of our compensation programs, advice on the consistency of our programs with our executive compensation philosophy and advice on director compensation. Representatives of Pay Governance also attended Compensation Committee meetings. The Compensation Committee assessed the independence of Pay Governance and determined that Pay Governance is independent of Progress and has no relationships that could create a conflict of interest with us. As part of its assessment, the Compensation Committee considered the fact that Pay Governance did not provide any other services to us and consults with our management only as necessary to provide the services described above. Peer Group To assist the Compensation Committee in making decisions on total compensation for executives and company-wide equity grants, the Compensation Committee utilizes peer and industry group data and analyses. Each year, as necessary, the Compensation Committee reviews with its independent compensation consultant the list of peer companies as points of comparison to ensure that comparisons are meaningful. With management’s input, and focus on the following considerations, Pay Governance provided recommendations on the composition of our peer group for fiscal 2024. General Description Application Software or Systems Software companies which operate in similar or related businesses and with which Progress competes for business or talent. Criteria Considered
Board Recommendation
For fiscal 2024, the Compensation Committee removed four peer companies utilized in 2023 and added three new peer companies as shown in the table below. The four companies removed (Adeia Inc., OneSpan Inc., SailPoint Technologies Holdings, Inc., Upland Software, Inc.) no longer meet our criteria for inclusion (e.g., public companies with revenues or market caps within the ranges specified above) or have gone through a significant divestiture.
Board Recommendation
| Peer Group List | | | | Appian Corporation | Everbridge, Inc. | Rapid7, Inc. | | Aspen Technology, Inc. | Manhattan Associates, Inc. | SPS Commerce, Inc. | | Avid Technology, Inc. | N-able, Inc.* | Verint Systems, Inc. | | Blackbaud, Inc. | New Relic, Inc. | Xperi Inc.* | | CommVault Systems, Inc. | Pegasystems, Inc. | | | Dynatrace, Inc. | Qualys, Inc.* | |
Board Recommendation
* Added for 2024. Pay Governance then prepared a compensation analysis based on survey data and data gathered from publicly available information for our peer group companies. Pay Governance separately analyzed and advised the Compensation Committee regarding the pay practices of companies engaged in a total growth strategy like ours. Survey Data The executive compensation analysis prepared by Pay Governance also included data from Radford’s 2023 Global Compensation Database for U.S.-based companies with revenues similar to ours. The Compensation Committee used this data to compare the current compensation of our named and other executive officers to the peer group and to determine the relative market value for each position, based on direct, quantitative comparisons of pay levels. The survey data was used when there was a lack of public peer data for an executive’s position and to obtain a general market understanding of current compensation practices. Competitive Positioning Fiscal 2024 target total direct compensation for our named executive officers was set by the Compensation Committee based predominantly on competitive pay practices, as reflected in the peer group and survey data. The Compensation Committee reviews market data at the 25th, 50th and 75th percentile and, for 2024, sought to target total direct compensation for the named executive officers as a group within a competitive range of the 50th percentile of our peer group in setting our executive compensation programs. Additional adjustments were considered based on individual tenure, experience, performance, criticality of role, succession planning, internal pay equity and historical pay levels, as well as the level of an executive officer’s unvested equity awards and incentives. Components of Executive Compensation Compensation for our named executive officers currently consists of three primary components that are designed to reward performance in a simple and straightforward manner: base salary, annual cash bonus and long-term equity awards. The objectives and key attributes of these components, as well as how each element accomplishes the goals and objectives of our overall program are summarized below.
Board Recommendation
| Name | 2024 Annual base salary | YOY change for base salary (%) | 2024 Target annual Cash Incentive Award (% of salary) | YOY Change for Target Annual Cash Incentive (as % of salary) | 2024 Target Value of Equity Awards ($)(1) | YOY change for Target Value of Equity Awards(2) | | Yogesh Gupta | $600,000 | 0.00% | 100.00% | 0.00% | $8,500,000 | 21.43% | | Anthony Folger | $440,000 | 0.00% | 65.00% | 0.00% | $2,850,000 | 9.62% | | John Ainsworth | $425,000 | 0.00% | 60.00% | 0.00% | $1,350,000 | 12.50% | | Loren Jarrett | $425,000 | 0.00% | 60.00% | 0.00% | $1,350,000 | 12.50% | | Sundar Subramanian | $425,000 | 0.00% | 60.00% | 0.00% | $1,350,000 | 12.50% |
Board Recommendation
| (1) Equity Award total split 50% PSUs, 30% RSUs, and 20% Options. |
Annual Cash Bonus
Annual Cash Bonus It is our philosophy to base a significant portion of each executive officer’s total compensation opportunity on performance incentives. Our annual bonus plan is intended to motivate eligible participants toward overall business results, to tie their goals and interests to those of the Company and its stockholders and to enable the Company to attract and retain highly qualified executives. Our bonus plan is administered by our Compensation Committee. The Compensation Committee set the target annual cash incentive opportunity for fiscal 2024 (expressed as a percentage of base salary earned during the year) for each named executive officer in January 2024. The percentages remained unchanged from fiscal 2023. In setting the target levels, the Compensation Committee considered each named executive officer’s 2024 target total cash opportunity against the peer group data provided by our independent compensation consultant, internal pay equity and the roles and responsibilities of the named executive officers. The Compensation Committee believes that the target annual cash bonus opportunity should make up a larger portion of an executive officer’s total target cash compensation as the executive’s level of responsibility increases. In the case of Ms. Jarrett and Messrs. Ainsworth and Subramanian, as named executive officers who served as General Managers in fiscal 2024, five-sixths of their respective target bonus was tied to performance under the fiscal 2024 Corporate Bonus Plan and one-sixth of their respective target was tied to performance under the fiscal to financial objectives with respect to the products for which they are responsible under the Sales Leader Plan.
2024 Plan Design
| | Performance and Payout | | | | Performance Metric | Threshold | Target | Maximum | | Total Revenue (% of performance target) | 97% | 100% | 103% | | Operating Income (% of performance target) | 94% | 100% | 108% | | Adjusted Free Cash Flow (% of performance target) | 96% | 98% | 108% | | Payout Percentage(1) | 25% | 100% | 150% |
2024 Plan Design
| (1) Payout interpolated for performance within stated percentiles. |
Amounts Earned under the 2024 Corporate Bonus Plan
Amounts Earned under the 2024 Corporate Bonus Plan As a result of our performance during fiscal 2024, we achieved an overall payout percentage of 127% under the fiscal 2024 Corporate Bonus Plan. This reflects non-GAAP corporate revenue achievement at 118% of target, non-GAAP operating income achievement at 125% of target and adjusted free cash flow performance at 150% of target. For all Named Executive Officers, the actual bonuses earned were based purely on the financial metrics and no portion of the annual bonuses were based on subjective measures. The following table shows the bonuses earned by our named executive officers under the fiscal 2024 Corporate Bonus Plan.
Amounts Earned under the 2024 Corporate Bonus Plan
| NEO | Target Annual Bonus ($)(1) | Amount Earned ($) | | Yogesh Gupta | 600,000 | 762,000 | | Anthony Folger | 286,000 | 363,220 | | John Ainsworth | 212,500 | 269,875 | | Loren Jarrett | 212,500 | 269,875 | | Sundar Subramanian | 212,500 | 269,875 |
Amounts Earned under the 2024 Corporate Bonus Plan
| (1) Target annual bonus for Messrs. Ainsworth and Subramanian and Ms. Jarrett above reflects the incentive opportunity tied to the Corporate Bonus Plan (50% of base salary). Each of these executives, also received an incremental incentive opportunity equal to 10% of base salary under the Sales Leader Plan. |
Amounts Earned under the 2024 Corporate Bonus Plan
Equity Compensation We use equity compensation to attract, retain, motivate and reward our named executive officers and other employees and to align our executives’ interests with those of our stockholders. Equity-based incentive awards are intended to be the longer-term components of our overall executive compensation program and are designed to encourage performance by our executive officers over several years. The Compensation Committee’s decisions regarding the amount and type of equity incentive compensation, the allocation of equity and relative weighting of these awards within total executive compensation have been based on advice provided by our independent compensation consultant and the Compensation Committee’s understanding and individual experiences with market practices of similarly situated companies. We issue annual and new hire equity awards based on guidelines for awards commensurate with position levels and that reflect grant practices within our peer group and the broader software industry generally. The following is a summary of our fiscal 2024 equity program.
Amounts Earned under the 2024 Corporate Bonus Plan
| Program | Fiscal 2024 Equity Program | | Form of Equity | Performance-Based Stock Units equal to 50% of annual grant value | | | Time-based Restricted Stock Units equal to 30% of annual grant value | | | Non-Qualified Stock Options equal to 20% of annual grant value | | Performance Periods | PSUs have three-year performance period | | Metrics | 75% of PSUs are tied to cumulative non-GAAP operating income and 25% are tied to relative TSR | | Vesting | Time-based RSUs vest in six equal installments over three years Stock options vest in eight equal installments over four years PSUs: three-year cliff vest | | | • With respect to TSR metric, participants can earn between 0% to 200% of target amount of PSUs, with threshold vesting at the 35th percentile achievement, target at 55th percentile and maximum vesting at the 90th percentile | | | • With respect to the non-GAAP operating income metric, participants can earn between 0% and 200% of the target amount of PSUs, subject to a 35% annual operating margin threshold | | Frequency of Grant | Annual |
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
Target Value and Award Determination The Compensation Committee reviews the mix of equity awards granted to our named executive officers on an annual basis. Consistent with the Compensation Committee’s philosophy that a significant portion of the equity mix to named executive officers should be tied to our long-term performance, the Compensation Committee determined that there should be no changes to the equity mix utilized for fiscal 2024. Accordingly, the equity mix for fiscal 2024 was 50% PSUs, 30% RSUs and 20% stock options. For the named and other executive officers, to determine the size of the individual annual equity awards, the Compensation Committee, utilizing data provided by Pay Governance, compared the long-term equity incentive compensation levels of our executives with similar positions within our peer group and survey data to determine the long-term equity incentive compensation amount for each executive. The Compensation Committee reviews market data at the 25th, 50th and 75th percentile. In finalizing the amounts of the annual equity awards, the Compensation Committee considers this market data, the CEO’s recommendations, each executive’s performance over a multi-year period and the Compensation Committee’s assessment of the value the individual delivers to the organization, the burn rate of the executive grants and the degree to which those amounts would be aligned with our goals of motivating and retaining key employees. RSUs RSUs typically vest in six equal installments over a three-year period. In a volatile stock market, RSUs continue to provide value when other forms of equity such as stock options may not, which the Compensation Committee believes is useful in retaining talented executives in unpredictable economic times. The RSUs awarded as part of the fiscal 2024 equity program were issued on January 18, 2024. The Compensation Committee awarded these RSUs as a dollar amount, which were then converted to RSUs based on our closing stock price on the date of grant. Stock Options Stock option awards provide individuals with the right to purchase shares of our common stock at a fixed exercise price following vesting of the award, typically for a period of seven years, subject to continuous employment with the Company. Stock option grants are intended to correlate executive compensation to our long-term success as measured by our stock price. Stock options are tied to our future success because options granted have an exercise price equal to the closing market value at the date of grant and will only provide value to the extent that the price of our stock increases above the exercise price. As a result, the Compensation Committee views stock options as a form of performance equity, but with a longer-term focus than PSUs, which are tied to three-year performance metrics. Stock options vest in eight equal installments over a four-year period. We believe that meaningful vesting periods encourage recipients to remain with the Company over the long term and, because the value of the awards is based on our stock price, stock options encourage recipients to focus on achievement of longer-term goals, such as strategic growth, business innovation and stockholder return. The stock options awarded as part of the fiscal 2024 equity program were issued on January 18, 2024. The Compensation Committee awarded these stock options as a dollar amount, which were then converted to stock options based on the Black-Scholes value of our stock options on the date of grant.
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
PSUs PSUs under our long-term equity incentive compensation plan are subject to three-year performance criteria aligned with our business plan and are earned only to the extent the performance criteria are achieved. These PSUs are awarded to the named executive officers and other executive officers and represent 50% of the total annual equity compensation granted to these individuals. For fiscal 2024, the Compensation Committee, in consultation with Pay Governance and management, reviewed the terms of the fiscal 2023 LTIP to ensure that the plan was aligned with the objectives of the Compensation Committee and with market practices. The Compensation Committee concluded that the fiscal 2023 LTIP met the objectives of the Compensation Committee because the terms of the LTIP tied the vesting of the PSUs to the long-term objectives of achieving both profitable growth and enhanced stockholder value. Pay Governance advised the Compensation Committee that the terms of the fiscal 2023 LTIP were consistent with market practices. Based on this review, the Compensation Committee determined that the metrics and terms of the fiscal 2024 LTIP should remain largely consistent with the fiscal 2023 LTIP. However, as discussed above, the Committee approved a design change for the fiscal 2024 LTIP to exclude the financial impacts of acquired businesses during the first year following acquisition from the annual non-GAAP operating margin threshold. This change is designed to allow management to focus on the successful integration of new businesses while also protecting the organization and stockholders from the volatility that can sometimes be present in the first 12 months following an acquisition. With respect to the relative TSR metric, the Compensation Committee left unchanged the payout scale utilized in fiscal 2023 to reflect current trends and stockholder-friendly practices (e.g., above-median performance required to achieve target payout). Participants can earn between 0% and 200% (the payout cap under the LTIP) of the target number of PSUs attributable to the relative TSR metric. The cumulative three-year TSR measure compares the TSR of our common stock against the TSR of companies included in the S&P Software and Services Select Industry Index during the three-year period. Our relative TSR performance must be at the 55th percentile of the index group for 100% of the target award to be earned. Additionally, regardless of our relative position with respect to the S&P Software and Services Select Industry Index, the award with respect to the TSR metric will be capped at 100% if our absolute TSR over the measurement period is negative. With respect to the operating income metric, participants can earn between 0% and 200% of the target number of PSUs attributable to the operating income metric. In designing the operating income metric to include both operating margin dollar and percentage goals, the Compensation Committee seeks to ensure discipline and reinforce profitable growth and margin expansion/maintenance. The cumulative three-year operating income measure is based on the sum of the operating income amounts for 2024, 2025 and 2026 contained in our 2024 strategic plan. Under the 2024 LTIP, the Company must achieve 100% of the operating income target for a given performance period for management to receive a payout with respect to this metric. Furthermore, with respect to the operating income metric, the 35% annual operating margin threshold “performance gatekeeper” applies at all levels of performance and requires that annual operating margin to be at or above 35% for each of 2024, 2025 and 2026 or no payout can occur with respect to this metric, regardless of cumulative operating income performance (subject to the one-year exclusion of the impacts of acquired businesses described above). The below table sets forth the payout criteria for the 2024 LTIP:
Amounts Earned under the 2024 Corporate Bonus Plan
| | % of Target Earned(1) | | | | | | | Performance Metric | Weight | 0% | 50% | 100% | 150% | 200% | | Relative TSR Performance (% Rank) | 25% | <35% | 35% | 55% | 75% | 90% | | Operating Income (three-year Cumulative)(2) | 75% | <$1,047 | N/A | $1,047 | $1,107 | $1,165 |
Amounts Earned under the 2024 Corporate Bonus Plan
| (1) Award interpolated for performance within stated percentiles. |
Amounts Earned under the 2024 Corporate Bonus Plan
| (2) $ amounts in millions and using budgeted exchange rates. |
Amounts Earned under the 2024 Corporate Bonus Plan
For the fiscal 2024 award under the LTIP, the three-year performance period commenced on December 1, 2023, and will end on November 30, 2026. The Operating Income target was set at the beginning of fiscal 2024 based on the Company’s three-year financial plan, which was aligned with the annual financial guidance released to stockholders in the first quarter of fiscal 2024.
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
The three-year performance period with respect to the LTIP awarded in 2022 (the “2022 PSUs”) finished on November 30, 2024. Based on the price of our common stock for the 30-day trading period ending November 30, 2024, our TSR compared to the S&P Software & Services Index for the same period placed us at the 78th percentile, which resulted in a payout percentage with respect to the TSR metric of 160%. Based on our actual total three-year operating income for fiscal 2022-2024 above our target, the payout percentage with respect to the operating income metric was 115%. The Operating Income target was set at the beginning of fiscal 2022 based on the Company’s three-year financial plan and consistent with the annual financial guidance released to stockholders in the first quarter of fiscal 2022. Following the acquisitions of MarkLogic and ShareFile, respectively, the Committee adjusted the performance targets for performance periods following closing based on financials models for the acquisitions, which projected accretion consistent with the financial criteria of our Total Growth Strategy. Blending the two metrics together, weighting TSR at 25% and operating income metric at 75%, resulted in a 126.25% payout percentage. The following table shows the portion of the 2022 PSUs earned by our named executive officers based on Company performance.
Amounts Earned under the 2024 Corporate Bonus Plan
| Named Executive Officer | Target PSU Value ($) | Target PSUs (#)(1) | PSUs Earned | | Yogesh Gupta | 2,750,000 | 61,812 | 78,036 | | Anthony Folger | 1,000,000 | 22,477 | 28,376 | | John Ainsworth | 500,000 | 11,239 | 14,189 | | Loren Jarrett | 500,000 | 11,239 | 14,189 | | Sundar Subramanian | 500,000 | 11,239 | 14,189 |
Amounts Earned under the 2024 Corporate Bonus Plan
| (1) Target PSUs for the 2022 LTIP were determined by dividing the Target LTIP Value listed above by the closing price on the date of grant, which was $44.49 on January 20, 2022. |
Amounts Earned under the 2024 Corporate Bonus Plan
Other Compensation Elements
Amounts Earned under the 2024 Corporate Bonus Plan
| Compensation Element | Objective | Key Features | | Other Compensation | To provide benefits that promote employee health and welfare, which assists in attracting and retaining our executive officers | Indirect compensation element consisting of programs such as medical, dental and vision insurance, a 401(k) plan with up to a 3% matching contribution, an employee stock purchase plan program and other plans and programs generally made available to employees | | Severance and Change in Control Benefits | To serve our retention and motivational objectives helping our named executive officers maintain continued focus and dedication to their responsibilities and objectivity to maximize stockholder value, including in the event of a transaction that could result in a change in control of the Company; particularly important in a time of increased consolidation in our industry and increased competition for executive talent | Provides protection in the event of an involuntary termination of employment under specified circumstances, including following a change in control of the Company as described below under “Executive Compensation-Severance and Change in Control Agreements” and “Estimate of Severance and Change in Control Benefits.” |
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
Other Executive Compensation Matters Timing of Equity Grants We do not time grants either to take advantage of a depressed stock price or in anticipation of an increase in stock price and have limited the amount of discretion that can be exercised in connection with the timing of awards. We generally make awards only on pre-determined dates to ensure that awards cannot be timed to take advantage of material non-public information. Equity awards may be made only by the Compensation Committee. The Compensation Committee typically makes awards at regularly scheduled Compensation Committee meetings, and awards are not granted during regular quarterly trading blackout periods (at least two days after earnings releases and periodic SEC filings). With respect to our annual equity grants, the Compensation Committee typically approves such grants at its regular meeting held in January of each year. If the Committee’s meeting is held before the filing of our annual report on Form 10-K for the recently completed fiscal year, then such equity grants will typically be granted effective as of the second trading day following the filing of our annual report on Form 10-K for such recently completed fiscal year (with the first day being the day after the filing date), and any options granted will have a per share exercise price equal to the closing price of our common stock on the grant date. Although the Committee may decide, in its sole discretion, to deviate from this equity grant timing depending upon facts and circumstances (i.e., a pending material business development), we did not deviate from this timing during fiscal 2024. Stock Ownership Guidelines Our Board of Directors has adopted stock ownership guidelines for our senior executive officers, including our named executive officers. These guidelines provide for the Chief Executive Officer to hold an amount of our common stock, restricted shares and/or restricted stock units having an aggregate value equal to at least three times their base salary. For other senior executive officers, the stock ownership requirement is at least one times their base salary. Executive officers have five years to attain the applicable ownership threshold. As of the date of this Proxy Statement, all the named executive officers met the applicable ownership threshold. Compensation Recovery Policy Following the SEC’s recent approval of new clawback requirements, our Board of Directors reviewed the applicable Nasdaq and SEC standards and approved an updated clawback policy in compliance with the final SEC rules. This policy applies to current and former Section 16 officers and provides for the recovery by the Company following a financial restatement of any incentive compensation received in excess of what would have been received had such compensation been determined based on our restated financials. The Compensation Committee periodically reviews the Company’s approach to clawbacks. Hedging and Pledging Policy Our directors and executive officers are prohibited from engaging in short sales, transactions in derivative securities such as put or call options, hedging transactions or other inherently speculative transactions with respect to our stock. In addition, no director or executive officer may pledge or margin, or make any offer to pledge or margin, any of our stock, including without limitation, borrowing against such stock, without prior approval. Stock options granted under our stock option plans are not deemed to be derivative securities covered by this policy.
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
Insider Trading Policy We have adopted insider trading policies and procedures applicable to our directors, officers, and employees, and have implemented processes for the Company that we believe are reasonably designed to promote compliance with insider trading laws, rules, and regulations, and the Nasdaq listing standards. Our policy prohibits our employees and related persons and entities from trading in securities of Progress and other companies while in possession of material, nonpublic information. Our policy also prohibits our employees from disclosing material, nonpublic information of Progress, or another publicly traded company, to others who may trade on the basis of that information. Our policy requires that certain employees of the Company (director-level and above) and other designated employees only transact in Progress securities during an open trading window period, subject to limited exceptions. In addition, certain officers of the Company are required to obtain approval in advance of transactions in Progress securities. Our executive officers and directors must also comply with additional trading restrictions. The foregoing summary of our insider trading policies and procedures does not purport to be complete and is qualified by reference to our policy, a copy of which can be found as an exhibit to our Annual Report on Form 10-K for the fiscal year ended November 30, 2024. Tax and Accounting Considerations and Compensation Recovery Policies Section 409A of the Internal Revenue Code Section 409A of the Internal Revenue Code imposes additional significant taxes if an executive officer, director or service provider receives “deferred compensation” that does not satisfy the requirements of Section 409A. Our severance and change in control agreements described below, including the Employee Retention and Motivation Agreements we entered with our named executive officers, contain provisions that are intended to either be exempt from Section 409A or, to the extent doing so is not possible, comply with the applicable Section 409A requirements. The Compensation Committee has the sole discretion to change the severance guidelines applicable to executive officers to the extent necessary to avoid the application of Section 409A or comply with applicable Section 409A requirements. Accounting for Stock-Based Compensation Stock-based compensation expense reflects the fair value of stock-based awards, measured at the grant date and recognized over the relevant service period. We estimate the fair value of each stock-based award on the measurement date using either the current market price of the stock, the Black-Scholes option valuation model or the Monte Carlo Simulation valuation model.
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
Compensation Committee Report This report is submitted by the Compensation Committee of our Board of Directors. The Compensation Committee has reviewed the “Compensation Discussion and Analysis” included in this Proxy Statement and discussed it with management. Based on such review and discussions, the Compensation Committee has recommended to our Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement and in our Proxy Statement for the 2025 Annual Meeting of Stockholders. No portion of this Compensation Committee Report shall be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, through any general statement incorporating by reference in its entirety the Annual Report or Proxy Statement in which this report appears, except to the extent that the Company specifically incorporates this report or a portion of it by reference. In addition, this report shall not be deemed filed under either the Securities Act or the Exchange Act. Respectfully submitted by the Compensation Committee, David A. Krall, Chair Angela T. Tucci Vivian M. Vitale
Amounts Earned under the 2024 Corporate Bonus Plan
| 2025 Proxy Statement | 65 |
Amounts Earned under the 2024 Corporate Bonus Plan
Analysis of Risk Associated with Our Compensation Plans In setting compensation, the Compensation Committee considers the risks to our stockholders and to the achievement of our goals that may be inherent in the compensation plans and programs for all employees, including our executives. When evaluating our overall executive compensation program, the Compensation Committee considers whether the program is based on the appropriate philosophy, benchmarked against the appropriate peer group and balanced between long and short-term performance targets and company and individual performance. Although a significant portion of our executives’ compensation is performance-based and “at-risk,” we believe our compensation plans and programs are appropriately structured so as not to encourage our employees to take excessive or unreasonable risks. We considered the following elements of our compensation plans and policies when evaluating whether such plans and policies are structured to encourage our employees to take unreasonable risks:
Amounts Earned under the 2024 Corporate Bonus Plan
| • | A detailed planning process with executive or Compensation Committee oversight exists for all compensation programs. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | The proportion of an employee’s performance-based pay increases as the responsibility and potential impact of the employee’s position increases, which structure is in line with market practices. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Compensation consists of both fixed and variable components. The fixed portion (i.e., base salary) and variable portion (i.e., performance-based bonus and equity awards) provide a mix of compensation intended to produce corporate performance without encouraging excessive risk. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | We set performance goals that we believe are strategically focused and consistent with building long-term stockholder value. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | We use consistent corporate performance metrics from year-to-year rather than changing the metric to take advantage of changing market conditions. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Our short-term incentive plans are capped as to the maximum potential payout, which we believe mitigates excessive risk taking by limiting bonus payments even if we dramatically exceed the performance targets. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | We modify the short-term and long-term incentive plans to reflect acquisitions consistent with our internal acquisition model, five-year strategic plan and publicly announced expectations. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | The time-based vesting for RSUs and stock options ensures that our executives’ interests align with those of our stockholders for the long-term performance of the Company. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Assuming achievement of at least a minimum level of performance, payouts under our performance-based plans result in some compensation at levels below full target achievement, rather than an “all-or-nothing” approach. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Our long-term performance-based equity awards are based on multi-year criteria that align with our stockholders’ interests that we grow the Company in a highly profitable and disciplined manner. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | In accordance with our written stock option grant policy, all equity grants must occur at a meeting of the Compensation Committee and management has no authority to issue equity. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | The Compensation Committee retains and does not delegate any of its power to determine matters of executive compensation. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | We maintain a system of controls and procedures designed to ensure that amounts are earned and paid in accordance with our plans and programs. |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | We do not allow our executives and directors to hedge their exposure to ownership of, or interest in, our stock. We also do not allow them to engage in speculative transactions with respect to our stock. |
Amounts Earned under the 2024 Corporate Bonus Plan
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Amounts Earned under the 2024 Corporate Bonus Plan
The following table sets forth certain information with respect to compensation for the fiscal years ended November 30, 2024, 2023 and 2022 earned by:
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Mr. Gupta, our Chief Executive Officer; |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Mr. Folger, our Chief Financial Officer; and |
Amounts Earned under the 2024 Corporate Bonus Plan
| • | Ms. Jarrett, Mr. Ainsworth and Mr. Subramaniam, our three other named executive officers. |
Amounts Earned under the 2024 Corporate Bonus Plan
Summary Compensation Table
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| | | | | | Non-Equity | | | | | | | Stock | | Incentive Plan | All Other | | | Name and | | Salary | Awards | Option | Compensation | Compensation | Total | | Principal Position | Year | ($) | ($)(1) | Awards(2) | ($)(3) | ($)(4) | ($) | | Yogesh Gupta, Chief Executive Officer | 2024 | 623,077 | 6,995,912 | 1,700,007 | 762,000 | 293,890 | 10,374,886 | | | 2023 | 598,750 | 5,784,591 | 1,400,004 | 642,000 | 210,189 | 8,635,534 | | | 2022 | 575,000 | 4,542,957 | 1,100,007 | 644,000 | 38,249 | 6,900,213 | | Anthony Folger, Chief Financial Officer | 2024 | 456,923 | 2,345,734 | 570,012 | 363,220 | 108,041 | 3,843,930 | | | 2023 | 438,750 | 2,148,576 | 520,014 | 306,020 | 126,020 | 3,539,380 | | | 2022 | 414,423 | 1,652,016 | 400,004 | 302,120 | 23,055 | 2,791,618 | | John Ainsworth, EVP and General Manager, Application and Data Platform | 2024 | 441,346 | 1,111,199 | 270,010 | 269,875 | 104,518 | 2,196,948 | | | 2023 | 423,250 | 991,659 | 240,013 | 227,375 | 110,441 | 1,992,738 | | | 2022 | 389,231 | 826,054 | 200,007 | 218,400 | 15,195 | 1,648,887 | | Loren Jarrett, EVP and General Manager, Digital Experience | 2024 | 441,346 | 1,111,199 | 270,010 | 269,875 | 98,661 | 2,191,091 | | | 2023 | 423,250 | 991,659 | 240,013 | 227,375 | 101,755 | 1,984,052 | | | 2022 | 389,231 | 826,054 | 200,007 | 218,400 | 54,075 | 1,687,767 | | Sundar Subramanian EVP and General Manager, Infrastructure Management | 2024 | 441,346 | 1,111,199 | 270,010 | 269,875 | 96,357 | 2,188,787 | | | 2023 | 426,586 | 991,659 | 240,013 | 227,375 | 119,054 | 2,004,687 |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| (1) These amounts do not reflect the actual economic value realized by the named executive officer. In accordance with FASB ASC Topic 718, we estimate the fair value of each stock-based award on the measurement date, using either the current market price of the stock or the Monte Carlo Simulation valuation model, assuming the probable outcome of related performance conditions at target levels. See the description of our 2024 Annual Equity Program described in “Compensation Discussion and Analysis” in this Proxy Statement and Note 12 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024. The value at grant date of the PSUs included in the amounts shown in this column, assuming the highest level of performance conditions achieved (payout at 200% at target) are $8,500,085, $7,000,088 and $5,500,032 for Mr. Gupta for fiscal 2024, 2023 and 2022, respectively; $2,850,094, $2,600,009 and $2,000,003 for Mr. Folger for fiscal 2024, 2023 and 2022, respectively; $1,350,099, $1,200,012, and $1,000,046 for Ms. Jarrett and Mr. Ainsworth for fiscal 2024, 2023 and 2022, respectively; and, $1,350,099 and $1,200,012 for Mr. Subramanian for fiscal 2024 and 2023. Such grant-date fair value does not take into account any estimated forfeitures related to service-based vesting conditions. The amounts reported in this column reflect the accounting cost for these awards and do not correspond to the actual economic value that may be received by the NEO upon the exercise of the stock options or any sale of the underlying shares of common stock. |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| (2) Represents the grant date fair value of options on the date of grant. The amounts reported represent the aggregate grant date fair value of the stock options awarded to our NEOs in the years reflected above, calculated in accordance with FASB ASC Topic 718. Such grant-date fair value does not take into account any estimated forfeitures related to service-based vesting conditions. The methodology and assumptions used to calculate the Black-Scholes value of our options are described in Note 12 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended November 30, 2024. The amounts reported in this column reflect the accounting cost for these awards and do not correspond to the actual economic value that may be received by the NEO upon the exercise of the stock options or any sale of the underlying shares of common stock. |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
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Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| (3) The amounts listed reflect the amounts earned under our Corporate Bonus Plan. For all individuals, bonus payments were accrued and earned in the year indicated and paid in the succeeding fiscal year. |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| (4) Amounts listed in this column for 2024 and prior years include: |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| Name | Company Contributions (401(k)) ($) | Insurance Premiums ($) | Sales Leader Plan ($) | Taxable/ Fringe Benefit Expenses ($) | Dividend Equivalents ($) | | Mr. Gupta | | | | | | | 2024 | 9,889 | 720 | — | 24,897* | 258,384 | | 2023 | 30,000 | 720 | — | 707 | 178,762 | | 2022 | 9,150 | 720 | — | — | 28,379 | | Mr. Folger | | | | | | | 2024 | 10,350 | 633 | — | — | 97,058 | | 2023 | 30,000 | 634 | — | — | 95,386 | | 2022 | 9,150 | 633 | — | — | 13,272 | | Mr. Ainsworth | | | | | | | 2024 | 10,350 | 612 | 47,653 | 42 | 45,861 | | 2023 | 30,000 | 612 | 47,031 | 405 | 32,393 | | 2022 | 9,150 | 612 | — | 318 | 5,115 | | Ms. Jarrett | | | | | | | 2024 | 10,350 | 612 | 41,838 | — | 45,861 | | 2023 | 22,500 | 612 | 45,790 | 460 | 32,393 | | 2022 | 9,150 | 612 | 38,703 | 495 | 5,115 | | Mr. Subramanian | | | | | | | 2024 | 9,916 | 612 | 39,626 | 343 | 45,861 | | 2023 | 22,500 | 612 | 35,575 | 31,708 | 28,659 |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| * Attendance at Company-hosted business event, including travel and participation by Mr. Gupta’s spouse. Amount includes $10,312 reimbursement for the payment of taxes by Mr. Gupta related to this event. |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
| (5) Mr. Subramanian was not a named executive officer before fiscal 2023. |
Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
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Summary Compensation Table—Fiscal Years 2024, 2023 and 2022
Grants of Plan-Based Awards
Grants of Plan-Based Awards Table—2024
Grants of Plan-Based Awards Table—2024
Grants of Plan-Based Awards Table—2024
| | | | | | | | | All Other | All Other | | | | | | | | | | | | Stock | Option | Exercise | Grant | | | | | | | | | | Awards: | Awards: | of or | Date Fair | | | | | | | | | | Number of | Number | Base | Value of | | | | Estimated Future Pay-outs | | | Estimated Future Pay-outs | | | Shares of | Securities | Price of | Stock and | | | | Under Non-Equity Incentive | | | Under Equity Incentive | | | Stock | Underlying | Option | Option | | | | Plan Awards | | | Plan Awards | | | or Units | Options | Awards | Awards | | | Grant | Threshold | Target | Maximum | Threshold | Target | Maximum | | | | | | Name | Date(1) | ($)(2) | ($)(2) | ($)(2) | (#)(3) | (#)(3) | (#)(3) | (#)(4) | (#)(5) | ($/Sh) | ($)(6) | | Yogesh Gupta | — | 150,000 | 600,000 | 900,000 | — | — | — | — | — | — | — | | | 1/18/2024 | — | — | — | 9,187 | 73,492 | 146,984 | — | — | — | 4,250,042 | | | 1/18/2024 | — | — | — | — | — | — | 44,095 | — | — | 2,550,014 | | | 1/18/2024 | — | — | — | — | — | — | — | 108,488 | 57.83 | 1,700,007 | | Anthony Folger | — | 71,500 | 286,000 | 429,000 | — | — | — | — | — | — | — | | | 1/18/2024 | — | — | — | 3,080 | 24,642 | 49,284 | — | — | — | 1,425,047 | | | 1/18/2024 | — | — | — | — | — | — | 14,785 | — | — | 855,017 | | | 1/18/2024 | — | — | — | — | — | — | — | 36,376 | 57.83 | 570,012 | | John Ainsworth | — | 63,750 | 255,000 | 382,500 | — | — | — | — | — | — | | | | 1/18/2024 | — | — | — | 1,459 | 11,673 | 23,346 | — | — | — | 675,050 | | | 1/18/2024 | — | — | — | — | — | — | 7,004 | — | — | 405,041 | | | 1/18/2024 | — | — | — | — | — | — | — | 17,231 | 57.83 | 270,010 | | | | — | — | — | — | — | — | | — | — | | | Loren Jarrett | — | 63,750 | 255,000 | 382,500 | — | | | | | | | | | 1/18/2024 | — | — | — | 1,459 | 11,673 | 23,346 | — | — | — | 675,050 | | | 1/18/2024 | — | — | — | — | — | — | 7,004 | — | — | 405,041 | | | 1/18/2024 | — | — | — | — | — | — | — | 17,231 | 57.83 | 270,010 | | Sundar Subramanian | — | 63,750 | 255,000 | 382,500 | — | — | — | — | — | — | — | | | 1/18/2024 | — | — | — | 1,459 | 11,673 | 23,346 | — | — | — | 675,050 | | | 1/18/2024 | — | — | — | | — | — | 7,004 | — | — | 405,041 | | | 1/18/2024 | — | — | — | | — | — | — | 17,231 | 57.83 | 270,010 |
Grants of Plan-Based Awards Table—2024
| (1) Awards granted on January 18, 2024, were approved by the Compensation Committee on January 8, 2024. |
Grants of Plan-Based Awards Table—2024
| (2) These columns indicate the range of payouts (25%, 100% and 150%) targeted for fiscal 2024 performance under our Corporate Bonus Plan as described in “Compensation Discussion and Analysis” in this Proxy Statement. The actual payout with respect to fiscal 2024 for each named executive officer is shown in the Summary Compensation Table in the column titled “Non-Equity Incentive Plan Compensation.” For Messrs. Ainsworth and Subramanian and Ms. Jarrett, one-sixth of amounts are tied to performance under the Sales Leader Plan. |
Grants of Plan-Based Awards Table—2024
| (3) These columns represent performance share units awarded under our Long-Term Incentive Plan (LTIP). The amounts shown indicate the potential performance share units at threshold, target and maximum levels of performance. If the threshold is not achieved, no performance share units will be earned with respect to that performance metric. See “Compensation Discussion and Analysis” section of this Proxy Statement for additional discussion of the LTIP. |
Grants of Plan-Based Awards Table—2024
| (4) Represents RSUs that vest, subject to continuous employment, in six equal installments over three years beginning approximately nine months after the date of issuance. |
Grants of Plan-Based Awards Table—2024
| (5) Represents stock options that vest, subject to continuous employment, in eight equal installments over four years beginning approximately nine months after date of issuance. |
Grants of Plan-Based Awards Table—2024
| (6) For RSUs and PSUs, the value shown is the fair value of the awards, measured at the grant date. For stock options, the grant date fair value is equal to the number of shares subject to the option multiplied by the fair value of our options on the date of grant determined using the Black-Scholes option valuation model. The methodology and assumptions used to calculate the Black-Scholes value of our options are described in Note 12 of the consolidated financial statements contained in our Annual Report. The closing price of our stock on January 18, 2024, was $57.83. |
Grants of Plan-Based Awards Table—2024
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Grants of Plan-Based Awards Table—2024
Narrative Description of Summary Compensation Table and Grants of Plan-Based Awards Table The material terms of our named executive officers’ annual compensation, including base salaries, cash incentive plan, time-based RSUs, stock options and Long-Term Incentive Plan PSUs and the explanations of the amounts of salary, cash incentives and equity values in proportion to total compensation are described under “Compensation Discussion and Analysis” in this Proxy Statement. As discussed in greater detail in “Compensation Discussion and Analysis” in this Proxy Statement, the 2024 non-equity incentive awards were granted pursuant to the fiscal 2024 Corporate Bonus Plan, with amounts to be earned based on the achievement of certain financial targets. In fiscal 2024, we achieved strong performance under our bonus plan with respect to the revenue, non-GAAP operating income and the adjusted free cash flow metrics, which resulted in an overall payout percentage of 127% with respect to the annual cash bonus. As discussed in greater detail in “Compensation Discussion and Analysis” in this Proxy Statement, the PSUs awarded under the Long-Term Incentive Plan will be earned based on the results achieved during the three-year performance period as determined following our 2026 fiscal year, contingent upon each named executive officer’s continued service. The RSUs granted to our named executive officers in 2024 vest in equal installments every six months over three years, subject to continuous employment. There is no purchase price associated with PSU or RSU awards. The stock options granted to our named executive officers in 2024 vest in equal installments every six months over four years, subject to continuous employment. The stock options have an exercise price equal to the closing price of our common stock on the date of grant.
Grants of Plan-Based Awards Table—2024
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Grants of Plan-Based Awards Table—2024
Outstanding Equity Awards The following table sets forth certain information with respect to the outstanding equity awards at November 30, 2024, for each of the named executive officers.
Outstanding Equity Awards at Fiscal Year-End 2024
Outstanding Equity Awards at Fiscal Year-End 2024
Outstanding Equity Awards at Fiscal Year-End 2024
| | | Option Awards | | | | | | | | | | | | | | | | | | Equity | | | | | | | | | | Equity | Incentive | | | | | | | | | | Incentive | Plan | | | | | | | | | | Plan | Awards: | | | | | | | | | | Awards: | Market or | | | | | | | | | | Number of | Payout | | | | | | | | | Market | Unearned | Value of | | | | Number of | | | | Number | Value of | Shares, | Unearned | | | | Securities | | | | of Shares | Shares or | Units or | Shares, | | | | Underlying | | | | or Units of | Units of | Other | Units or | | | | Unexercised | | Option | | Stock That | Stock That | Rights | Other Rights | | | | Options | | Exercise | Option | Have Not | Have Not | That Have | That Have | | | | Exercisable | Unexercisable | Price | Expiration | Vested | Vested | Not Vested | Not Vested | | Name | Grant Date | (#) | (#) | ($) | Date | (#)(1) | ($)(2) | (#)(3) | ($)(4) | | Yogesh Gupta | 1/22/2019 | 100,275(5) | — | 34.73 | 1/21/2026 | — | — | — | — | | | 1/21/2020 | 72,574(6) | — | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 85,136(7) | 12,162 | 42.61 | 1/18/2028 | — | — | — | — | | | 1/20/2022 | 64,075(8) | 38,442 | 44.49 | 1/19/2029 | 6,182(9) | 422,911 | 61,812(10) | 4,228,559 | | | 1/19/2023 | 36,435(11) | 60,720 | 51.41 | 1/18/2030 | 20,425(12) | 1,397,274 | 68,081(13) | 4,657,421 | | | 1/18/2024 | 13,561(14) | 94,927 | 57.83 | 1/17/2031 | 36,746(15) | 2,513,794 | 73,492(16) | 5,027,588 | | Anthony Folger | 3/31/2020 | 32,894(6) | — | 31.49 | 3/30/2027 | — | — | — | — | | | 1/19/2021 | 32,163(7) | 4,594 | 42.61 | 1/18/2028 | — | — | — | — | | | 1/20/2022 | 23,300(8) | 13,979 | 44.49 | 1/19/2029 | 2,248(9) | 153,786 | 22,477(10) | 1,537,652 | | | 1/19/2023 | 13,533(11) | 22,554 | 51.41 | 1/18/2030 | 7,587(12) | 519,027 | 25,287(13) | 1,729,884 | | | 1/18/2024 | 4,547(14) | 31,829 | 57.83 | 1/17/2031 | 12,321(15) | 842,880 | 24,642(16) | 1,685,759 | | John Ainsworth | 1/22/2019 | 19,231(5) | — | 34.73 | 1/21/2026 | — | — | — | — | | | 1/21/2020 | 13,196(6) | — | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 15,136(7) | 2,162 | 42.61 | 1/18/2028 | — | — | — | — | | | 1/20/2022 | 11,650(8) | 6,990 | 44.49 | 1/19/2029 | 1,124(9) | 76,893 | 11,239(10) | 768,860 | | | 1/19/2023 | 6,246(11) | 10,410 | 51.41 | 1/18/2030 | 3,502(12) | 239,572 | 11,671(13) | 798,413 | | | 1/18/2024 | 2,154(14) | 15,077 | 57.83 | 1/17/2031 | 5,837(15) | 399,309 | 11,673(16) | 798,550 | | Loren Jarrett | 1/22/2019 | 19,231(5) | — | 34.73 | 1/21/2026 | — | — | — | — | | | 1/21/2020 | 13,196(6) | — | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 15,136(7) | 2,162 | 42.61 | 1/18/2028 | — | — | — | — | | | 1/20/2022 | 11,650(8) | 6,990 | 44.49 | 1/19/2029 | 1,124(9) | 76,893 | 11,239(10) | 768,860 | | | 1/19/2023 | 6,246(11) | 10,410 | 51.41 | 1/18/2030 | 3,502(12) | 239,572 | 11,671(13) | 798,413 | | | 1/18/2024 | 2,154(14) | 15,077 | 57.83 | 1/17/2031 | 5,837(15) | 399,309 | 11,673(16) | 798,550 | | Sundar Subramani an | 9/30/2019 | 14,617(17) | — | 38.06 | 9/30/2026 | — | — | — | — | | | 1/21/2020 | 11,311(6) | 1,413 | 47.16 | 1/20/2027 | — | — | — | — | | | 1/19/2021 | 15,136(7) | 2,162 | 42.61 | 1/18/2028 | — | — | — | — | | | 1/20/2022 | 11,650(8) | 6,990 | 44.49 | 1/19/2029 | 1,124(9) | 76,893 | 11,239(10) | 768,860 | | | 1/19/2023 | 6,246(11) | 10,410 | 51.41 | 1/18/2030 | 3,502(12) | 239,572 | 11,671(13) | 798,413 | | | 1/18/2024 | 2,154(14) | 15,077 | 57.83 | 1/17/2031 | 5,837(15) | 399,309 | 11,673(16) | 798,550 |
Outstanding Equity Awards at Fiscal Year-End 2024
| (1) The unvested awards shown in this column are RSUs subject to service-based vesting, unless otherwise noted. |
Outstanding Equity Awards at Fiscal Year-End 2024
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Outstanding Equity Awards at Fiscal Year-End 2024
| (2) The market value of unvested RSUs was calculated as of November 29, 2024 (the last trading day of our fiscal 2024), based on the closing price of our common stock on Nasdaq of $68.41 on that date. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (3) The unvested awards shown in this column are PSUs subject to performance-based vesting. PSUs are reported assuming payout at target award levels, unless otherwise noted. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (4) The market value of unvested PSUs was calculated as of November 29, 2024, based on the closing price of our common stock on Nasdaq of $68.41 on that date. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (5) Vested in eight equal semi-annual installments beginning October 1, 2019. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (6) Vest in eight equal semi-annual installments beginning October 1, 2020. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (7) Vest in eight equal semi-annual installments beginning October 1, 2021. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (8) Vest in eight equal semi-annual installments beginning October 1, 2022. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (9) Vest in six equal semi-annual installments beginning October 1, 2022. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (10) Vested on February 1, 2025, based on the Company meeting total stockholder return and operating income criteria over the three-year period ending November 30, 2024. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (11) Vest in eight equal semi-annual installments beginning October 1, 2023. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (12) Vest in six equal semi-annual installments beginning October 1, 2023. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (13) Vest on February 1, 2026, subject to the Company meeting total stockholder return and operating income criteria over the three-year period ending November 30, 2025. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (14) Vest in eight equal semi-annual installments beginning October 1, 2024. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (15) Vest in six equal semi-annual installments beginning October 1, 2024. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (16) Vest on February 1, 2027, subject to the Company meeting total stockholder return and operating income criteria over the three-year period ending November 30, 2026. |
Outstanding Equity Awards at Fiscal Year-End 2024
| (17) Vest in eight equal semi-annual installments beginning April 1, 2020. |
Outstanding Equity Awards at Fiscal Year-End 2024
Option Exercises and Stock Vested The following table sets forth certain information regarding the number of stock options exercised and RSUs that vested in the fiscal year ended November 30, 2024, under our equity incentive plans and the corresponding amounts realized by the named executive officers. The value realized on exercise of stock option awards is calculated as the difference between the closing price of our common stock on Nasdaq on the exercise date and the exercise price of the applicable stock option award. The value realized on vesting for RSUs is calculated as the product of the number of shares subject to the RSUs that vested and the closing price of our common stock on Nasdaq on the vesting date.
Option Exercises and Stock Vested—Fiscal 2024
Option Exercises and Stock Vested—Fiscal 2024
Option Exercises and Stock Vested—Fiscal 2024
| | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise | Value Realized on Exercise | Number of Shares Acquired on Vesting | Value Realized on Vesting | | Name | (#) | ($) | (#) | ($) | | Yogesh Gupta | 69,195 | 1,109,196 | 136,980 | 7,941,736 | | Anthony Folger | 7,500 | 193,665 | 51,178 | 2,964,020 | | John Ainsworth | 13,271 | 98,166 | 24,177 | 1,400,457 | | Loren Jarrett | — | — | 24,177 | 1,400,457 | | Sundar Subramanian | — | — | 24,177 | 1,400,457 |
Option Exercises and Stock Vested—Fiscal 2024
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Option Exercises and Stock Vested—Fiscal 2024
Severance and Change in Control Agreements We have agreements with, or guidelines applicable to, our executive officers that provide the benefits described below in connection with certain terminations of employment or a change in control of the Company. We do not provide excise tax gross-ups to our executive officers under these or any other agreements. The Company is not obligated to pay any enhanced benefits to our executive officers in the event of a voluntary termination by an executive or upon termination by the Company for cause. Mr. Gupta’s Executive Employment Agreement In connection with his appointment as our President and Chief Executive Officer, we and Mr. Gupta entered into an employment agreement, effective as of October 10, 2016, setting forth Mr. Gupta’s compensation and certain other terms. Mr. Gupta’s employment agreement provides that if his employment is terminated because of an “involuntary termination,” he will be entitled to:
Option Exercises and Stock Vested—Fiscal 2024
| (1) the payment of cash severance equal to 18 months of total target cash compensation as of the date of termination, which will be paid over 18 months; |
Option Exercises and Stock Vested—Fiscal 2024
| (2) the payment of his annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; |
Option Exercises and Stock Vested—Fiscal 2024
| (3) the continuation, for a period of 18 months, of benefits that are substantially equivalent to the benefits (medical, dental, vision and life insurance) that were in effect immediately prior to termination; and |
Option Exercises and Stock Vested—Fiscal 2024
| (4) 18 months of acceleration of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). |
Option Exercises and Stock Vested—Fiscal 2024
Receipt of the severance and benefits is subject to Mr. Gupta’s execution of a standard separation and release agreement. Separation payments upon any involuntary termination within 24 months following a change in control would be governed by the Employee Retention and Motivation Agreement (“ERMA”) described below and not by Mr. Gupta’s employment agreement. An “involuntary termination” is defined in the employment agreement as a termination of employment by us other than for cause, disability or death or a termination by Mr. Gupta as a result of certain events occurring without his consent such as an assignment to him of duties or a significant reduction of his duties, either of which is materially inconsistent with his position prior to the assignment or reduction, or the removal of Mr. Gupta from that position, a material reduction in Mr. Gupta’s base salary or target bonus, a relocation of Mr. Gupta to a facility or location more than fifty miles from his then present location, or a material breach of the employment agreement by us. Mr. Gupta’s employment agreement also includes non-competition and related covenants. The non-competition covenant will be in effect for the duration of the period in which severance and other benefits are paid. The non-competition covenant relates to certain businesses with similar product areas and activities as Progress. Mr. Gupta’s Employee Retention and Motivation Agreement We and Mr. Gupta have also entered into an ERMA, which provides certain compensation and benefits if his employment is involuntarily terminated within 24 months of a change in control of the Company. If an involuntary termination of Mr. Gupta’s employment occurs under other circumstances, the severance terms of his employment agreement, as described above, would control and not the ERMA. Change in Control Benefits. Under Mr. Gupta’s ERMA, upon a change in control of the Company, Mr. Gupta would be entitled to:
Option Exercises and Stock Vested—Fiscal 2024
| (1) the payment of his annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; and |
Option Exercises and Stock Vested—Fiscal 2024
| 2025 Proxy Statement | 73 |
Option Exercises and Stock Vested—Fiscal 2024
| (2) 12 months of acceleration of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms), unless the acquirer assumes all such options and restricted equity. If such outstanding stock options and shares of restricted equity held by Mr. Gupta are continued by us or assumed by our successor entity, then vesting will continue in its usual course. |
Option Exercises and Stock Vested—Fiscal 2024
Involuntary Termination Following Change in Control. In the event of an involuntary termination within 24 months following a change in control, Mr. Gupta would be entitled to:
Option Exercises and Stock Vested—Fiscal 2024
| (1) a lump-sum payment of cash severance equal to 24 months of total target cash compensation as of the date of termination; |
Option Exercises and Stock Vested—Fiscal 2024
| (2) the continuation, for a period of 24 months, of benefits that are substantially equivalent to the benefits (medical, dental, vision and life insurance) that were in effect immediately prior to termination; and |
Option Exercises and Stock Vested—Fiscal 2024
| (3) accelerated vesting of all unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). |
Option Exercises and Stock Vested—Fiscal 2024
In the event that any amounts provided for under Mr. Gupta’s ERMA or otherwise payable to Mr. Gupta would constitute “parachute payments” within the meaning of Section 280G of the Internal Revenue Code and be subject to the related excise tax, Mr. Gupta would be entitled to receive either full payment of the benefits under the agreement or such lesser amount that would result in no portion of the benefits being subject to the excise tax, whichever results in the greatest amount of after-tax benefits to Mr. Gupta. Mr. Folger’s Executive Employment Agreement In connection with his appointment as Chief Financial Officer, we and Mr. Folger entered into an employment agreement, effective January 31, 2020, setting forth Mr. Folger’s compensation and certain other terms. Mr. Folger’s employment agreement provides that if his employment is terminated because of an “involuntary termination,” he will be entitled to:
Option Exercises and Stock Vested—Fiscal 2024
| (1) the payment of cash severance equal to 12 months of total target cash compensation as of the date of termination, which will be paid over 12 months; |
Option Exercises and Stock Vested—Fiscal 2024
| (2) the continuation, for a period of 12 months of benefits that are substantially equivalent to the benefits (medical, dental, vision and life insurance) that were in effect immediately prior to termination; and |
Option Exercises and Stock Vested—Fiscal 2024
| (3) 12 months accelerated vesting of unvested stock options and RSUs (but not unvested performance equity, which will vest in accordance with its terms). |
Option Exercises and Stock Vested—Fiscal 2024
Receipt of the severance and benefits is subject to Mr. Folger’s execution of a standard separation and release agreement, which will also include non-competition and related covenants. The non-competition covenant will be in effect for the duration of the period in which severance and other benefits are paid. The non-competition covenant relates to certain businesses with similar product area and activities as the Company. Separation payments upon any involuntary termination within 12 months following a change in control would be governed by the ERMA described below and not by Mr. Folger’s employment agreement. An “involuntary termination” is defined in the employment agreement as a termination of employment by the Company other than for “Cause” (as defined in the agreement), disability or death or a termination by Mr. Folger as a result of certain events occurring without his consent such as an assignment to him of duties, a significant reduction of his duties, either of which is materially inconsistent with his position prior to the assignment or reduction, or the removal of Mr. Folger from such position, a material reduction in Mr. Folger’s base salary or target bonus, a relocation of Mr. Folger to a facility or location more than fifty miles from his then-present location or a material breach of the employment agreement by the Company.
Option Exercises and Stock Vested—Fiscal 2024
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Option Exercises and Stock Vested—Fiscal 2024
Other Employee Retention and Motivation Agreements We have also entered into ERMAs with each of Messrs. Folger, Ainsworth, Subramanian and Ms. Jarrett. Currently, upon the involuntary termination of the executive officer within 12 months following a change in control, the executive officer will be entitled to receive a lump sum payment equal to 18 months of their total target compensation and their benefits will continue for 18 months. In addition, outstanding stock options and shares of restricted stock or restricted units held by the executive officer granted prior to the date of such termination under the Company’s equity plans which would otherwise become fully vested, nonforfeitable and not subject to any restrictions following the date of such termination shall instead become fully vested, nonforfeitable and not subject to restrictions as of the date of such termination. Under no circumstances would any of our executive officers be entitled to a gross-up payment under the ERMAs for any excise taxes to which they may be subject if any of the above payments and benefits are considered to be “parachute payments.” Executive Severance Guidelines We have adopted severance guidelines applicable to our executive officers, including the named executive officers other than Messrs. Gupta and Folger. Any severance payable to Messrs. Gupta and Folger is governed by the employment agreements described above. Our executive severance guidelines provide that upon an involuntary termination and the execution of a standard release of claims, an executive officer is entitled to:
Option Exercises and Stock Vested—Fiscal 2024
| (1) the payment of cash severance equal to 12 months of total target cash compensation as of the date of termination, which will be paid over 12 months; |
Option Exercises and Stock Vested—Fiscal 2024
| (2) the payment of their annual target cash bonus on a pro-rata basis with respect to the elapsed part of the relevant fiscal year; |
Option Exercises and Stock Vested—Fiscal 2024
| (3) the continuation, for a period of 12 months of benefits that are substantially equivalent to the benefits (medical, dental and vision) that were in effect immediately prior to termination; and |
Option Exercises and Stock Vested—Fiscal 2024
| (4) 12 months of acceleration of unvested stock options and RSUs (but not unvested performance equity). |
Option Exercises and Stock Vested—Fiscal 2024
Severance payments and benefits upon any involuntary termination within 12 months following a change in control are governed by the Employee Retention and Motivation Agreement described below. The payment of severance and other benefits is conditioned upon the executive agreeing to non-competition, non-disparagement and related covenants. The non-competition covenant would be in effect for one year following the termination of employment. In connection with the termination of employment of an executive officer, all PSUs awarded to that executive officer are cancelled. Estimate of Severance and Change in Control Benefits at Fiscal-Year End The following table indicates the estimated payments and benefits that each of Messrs. Gupta, Folger, Ainsworth, Subramanian and Ms. Jarrett would have received under (a) their respective employment agreements, in the case of Mr. Gupta, (b) our severance guidelines applicable to executive officers, in the case of Messrs. Ainsworth, Folger, Subramanian and Ms. Jarrett and (c) each of their ERMAs, assuming in each case that the change in control of the Company, termination of their employment and/or retirement occurred at November 30, 2024.
Option Exercises and Stock Vested—Fiscal 2024
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Option Exercises and Stock Vested—Fiscal 2024
These amounts are estimates only and do not necessarily reflect the actual amounts that would be paid to the named executive officer, which amounts would only be known at the time that he or she becomes entitled to such payment.
Option Exercises and Stock Vested—Fiscal 2024
| | Involuntary Termination(1) ($) | Change in Control Only(2) ($) | Involuntary Termination Following Change in Control(2)(3) ($) | | Yogesh Gupta | | | | | Cash Severance | 1,800,000 | — | 2,400,000 | | Pro Rata Bonus | 600,000 | 600,000 | 600,000 | | Stock Options | 2,283,082 | — | 3,269,880 | | Restricted Stock Units | 3,328,420 | — | 4,333,979 | | Benefits(4) | 42,782 | — | 57,042 | | Total | 8,054,284 | 600,000 | 10,660,901 | | Anthony Folger | | | | | Cash Severance | 726,000 | — | 1,089,000 | | Pro Rata Bonus | 286,000 | — | 286,000 | | Stock Options | 591,048 | — | 1,173,072 | | Restricted Stock Units | 836,928 | — | 1,515,692 | | Benefits(4) | 38,417 | — | 57,626 | | Total | 2,478,393 | — | 4,121,390 | | John Ainsworth | | | | | Cash Severance | 680,000 | — | 1,020,000 | | Pro Rata Bonus | 255,000 | — | 255,000 | | Stock Options | 283,613 | — | 559,465 | | Restricted Stock Units | 396,231 | — | 715,774 | | Benefits(4) | 28,575 | — | 42,863 | | Total | 1,643,419 | — | 2,593,102 | | Loren Jarrett | | | | | Cash Severance | 680,000 | — | 1,020,000 | | Pro Rata Bonus | 255,000 | — | 255,000 | | Stock Options | 283,613 | — | 559,465 | | Restricted Stock Units | 396,231 | — | 715,774 | | Benefits(4) | 38,203 | — | 57,304 | | Total | 1,653,047 | — | 2,607,543 | | Sundar Subramanian | | | | | Cash Severance | 680,000 | — | 1,020,000 | | Pro Rata Bonus | 255,000 | — | 255,000 | | Stock Options | 283,613 | — | 559,465 | | Restricted Stock Units | 396,231 | — | 715,774 | | Benefits(4) | 31,076 | — | 46,614 | | Total | 1,645,920 | — | 2,596,853 |
Option Exercises and Stock Vested—Fiscal 2024
| (1) The amounts shown in the first column, with respect to stock options and RSUs, represent the value of certain unvested options and RSUs becoming fully vested and are calculated using the exercise price for each unvested stock option and the closing price of our common stock on November 29, 2024 (the last trading day of our fiscal 2024), which was $68.41. In the event of an involuntary termination, all unvested PSUs awarded to an individual under our Long-Term Incentive Plans (LTIP) are cancelled. |
Option Exercises and Stock Vested—Fiscal 2024
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Option Exercises and Stock Vested—Fiscal 2024
| (2) In the event of a change in control, there is no accelerated vesting of outstanding stock options or shares of restricted stock or restricted units provided that the acquirer assumes all such outstanding stock options and shares of restricted stock or restricted units held by the individual. These tables have been prepared under that assumption. However, if the acquirer does not assume all outstanding stock options and shares of restricted stock or restricted units of the individual, (i) in the case of Mr. Gupta there is limited (12 month) accelerated vesting of stock options and RSUs in the event of a change in control, which values, based on the closing price of our common stock on November 29, 2024, are $1,626,648 and $2,359,871, respectively, and (ii) in the case of Messrs. Folger, Ainsworth, Subramanian and Ms. Jarrett, there is limited (12 month) accelerated vesting of stock options and RSUs, and the values of stock options and RSUs indicated in the first column would apply upon a change in control. The amounts referenced in the foregoing sentence have been calculated using the exercise price for each unvested stock option and the closing price of our common stock on November 29, 2024, which was $68.41. Under the terms of the LTIP, in the event of a change in control, grantees are entitled to accelerated determination of PSUs earned under outstanding LTIP awards, unless the acquirer assumes such LTIP awards. Upon the change in control, our Compensation Committee will determine the number of PSUs that are eligible to be earned based on the actual attainment of the relevant metrics as of the change in control. Those PSUs determined to be earned will not become fully vested until the conclusion of the original three-year performance period, subject to the continued employment of the grantee through such date. Additionally, under the terms of the LTIP, in the event of an involuntary termination following a change in control, grantees are entitled to accelerated payout of PSUs determined to be earned under outstanding LTIP awards as of the change in control. For purposes of computing amounts attributable to accelerated vesting, the columns exclude all unvested PSUs awarded under our LTIP as those amounts are undeterminable. |
Option Exercises and Stock Vested—Fiscal 2024
| (3) The amounts shown reflect the value of certain unvested equity awards becoming fully vested in the event of an involuntary termination within 24 months following a change in control for Mr. Gupta, and involuntary termination within 12 months following a change in control for each of Messrs. Folger, Ainsworth, Subramanian and Ms. Jarrett. |
Option Exercises and Stock Vested—Fiscal 2024
| (4) Represents the estimated value of continuing benefits (medical, dental, vision and life insurance) for: |
Option Exercises and Stock Vested—Fiscal 2024
| a. | 18 months in the case of an involuntary termination of Mr. Gupta’s employment; and |
Option Exercises and Stock Vested—Fiscal 2024
| b. | 12 months in the case of an involuntary termination of employment of Messrs. Folger, Ainsworth and Subramanian and Ms. Jarrett, other than in connection with a change in control; 18 months, in the case of an involuntary termination in connection with a change in control. |
Option Exercises and Stock Vested—Fiscal 2024
| 2025 Proxy Statement | 77 |
Option Exercises and Stock Vested—Fiscal 2024
CEO Pay Ratio In accordance with SEC rules, we are providing the ratio of the annual total compensation of our CEO to the annual total compensation of our median employee. The 2024 annual total compensation of our CEO Mr. Gupta was $10,374,886, the 2024 annual total compensation of our median compensated employee was $103,957, and the ratio of these amounts is 100 to 1. Progress recalculates the median employee each year for purposes of this ratio in order to capture growth and variation in our employee population due to our acquisitive growth strategy. This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our human resources system of record and the methodology described below. Because the SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. We selected November 1, 2024, as the date to identify our median compensated employee based on our human resources system of record; therefore, employees who joined Progress in the ShareFile acquisition were considered in identifying the median employee. We utilized total direct compensation as our consistently applied compensation measure. In this context, total direct compensation means the applicable annual fixed pay determined as of November 1, 2024, the annual incentive cash target amount or commission target amount payable for service in 2024 and the approved value of the annual equity awards granted during 2024. The pay ratio disclosure rules provide an exemption for companies to exclude non-U.S. employees from the median employee determination in an amount of up to five percent (5%) of the company’s total number of employees. We applied this de minimis exemption when identifying the median employee by excluding 17 employees in 8 jurisdictions, as set forth below. After taking into account the de minimis exemption, approximately 2,349 employees (or 99.3% of the population) were considered for identifying the median employee. Our calculation excluded the following approximate number of employees from the following locations: Canada (4); Spain (2); Italy (2); Belgium (2); Finland (2); Hong Kong (2); Hungary (2); and Sweden (1). To identify our median compensated employee, we then calculated the total direct compensation for of the included employee population, converted other currencies to U.S. dollars as of November 30, 2024, and ordered the employees based on their total direct compensation. To compute the pay ratio, we then calculated both the CEO and median employee’s annual total compensation pursuant to the proxy disclosure rules and compared the annual total compensation of the CEO to that of the median employee.
Option Exercises and Stock Vested—Fiscal 2024
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Option Exercises and Stock Vested—Fiscal 2024
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 information about the relationship between executive compensation actually paid to our PEO and the other NEOs (as calculated in accordance with Item 402(v) of Regulation S-K) and certain financial performance measures. The following table sets forth information regarding the Company’s performance and the “compensation actually paid” to our NEOs, as calculated in accordance with applicable SEC rules. For additional information on our compensation programs and philosophy and how we design our compensation programs to align pay with performance, see the Compensation Discussion and Analysis.
Option Exercises and Stock Vested—Fiscal 2024
| | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | | | | Average | | | NASDAQ | | | | | | | Summary | Average | | Computer | | | | | Summary | | Compensation | Compensation | PRGS | Index | | Non-GAAP | | | Compensation | Compensation | Table Total | Actually Paid | Total | Total | Net | Operating | | Fiscal | Table Total | Actually Paid | for non-PEO | to non-PEO | Stockholder | Stockholder | Income | Income | | Year | for PEO($)(1)(2) | to PEO($)(3) | NEOs($)(1)(2) | NEOs($)(3) | Return($)(4) | Return($)(4)(5) | ($M) | ($M)(6) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | 10,374,886 | 9,791,311 | 2,605,189 | 2,524,468 | 172.27 | 206.32 | 219.0 | 298.5 | | 2023 | 8,635,534 | 9,246,854 | 2,380,214 | 2,526,879 | 134.31 | 148.35 | 194.2 | 270.6 | | 2022 | 6,900,213 | 12,820,362 | 1,928,895 | 3,424,464 | 132.97 | 102.36 | 182.8 | 242.1 | | 2021 | 6,019,029 | 13,091,651 | 2,440,870 | 4,036,210 | 120.82 | 142.39 | 172.9 | 229.2 |
Option Exercises and Stock Vested—Fiscal 2024
| (1) The Principal Executive Officer (“PEO”) and non-PEO NEOs for the applicable years were as follows: |
Option Exercises and Stock Vested—Fiscal 2024
| • | 2023 and 2024: Mr. Gupta served as the PEO for the entirety of 2023 and 2024. The Company’s other NEOs for 2023 and 2024 were: Anthony Folger, John Ainsworth, Loren Jarrett and Sundar Subramanian. |
Option Exercises and Stock Vested—Fiscal 2024
| • | 2022: Mr. Gupta served as the PEO for the entirety of 2022. The Company’s other NEOs for 2022 were: Anthony Folger, John Ainsworth, Loren Jarrett and Jeremy Segal. |
Option Exercises and Stock Vested—Fiscal 2024
| • | 2021: Mr. Gupta served as the PEO for the entirety of 2021. The Company’s other NEOs for 2021 were: Anthony Folger, Stephen Faberman, Loren Jarrett and Gary Quinn. |
Option Exercises and Stock Vested—Fiscal 2024
| (2) Amounts reported in this column represent (i) the total compensation reported in the Summary Compensation Table for the applicable year in which the NEO served as PEO in the case of Mr. Gupta and (ii) the average of the total compensation reported in the Summary Compensation Table for the applicable year for the Company’s other NEOs reported for the applicable year. |
Option Exercises and Stock Vested—Fiscal 2024
| (3) To calculate the compensation actually paid (“CAP”), adjustments were made to the amounts reported in the Summary Compensation Table for the applicable year. A reconciliation of the adjustments for Mr. Gupta and for the average of the other NEOs is set forth following the footnotes to this table. |
Option Exercises and Stock Vested—Fiscal 2024
| (4) Pursuant to rules of the SEC, the comparison assumes $100 was invested on November 30, 2020. Historic stock price performance is not necessarily indicative of future stock price performance. |
Option Exercises and Stock Vested—Fiscal 2024
| (5) The TSR Peer Group consists of the NASDAQ Computer Index, an independently prepared index (and which is used for the Company’s stock performance chart in the Annual Report on Form 10-K for the year ended November 30, 2024). |
Option Exercises and Stock Vested—Fiscal 2024
| (6) As noted in “Compensation Discussion and Analysis,” the Compensation Committee selected Non-GAAP Operating Income as a key metric for evaluating and rewarding management’s performance in the 2024 incentive program design. This measure is used to determine the payout of 40% of the 2024 corporate bonus plan, as well as 75% of the LTIP (on a three-year aggregated basis), and is aligned with the earnings we have reported to stockholders on a quarterly basis. |
Option Exercises and Stock Vested—Fiscal 2024
| 2025 Proxy Statement | 79 |
Option Exercises and Stock Vested—Fiscal 2024
The following tables set forth the detailed calculation from SCT Total to Compensation Actually Paid for the PEO and NEOs, respectively:
Option Exercises and Stock Vested—Fiscal 2024
| | PEO | | | | | Fiscal Year | 2021 | 2022 | 2023 | 2024 | | SCT Total | $6,019,029 | $6,900,213 | $8,635,534 | $10,374,886 | | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | ($4,557,407) | ($5,642,964) | ($7,184,594) | ($8,695,919) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | $5,272,547 | $7,164,080 | $6,944,482 | $6,150,287 | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | $5,407,403 | $4,351,106 | $26,379 | $398,911 | | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $452,241 | $419,596 | $553,066 | $761,983 | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $497,837 | ($371,669) | $271,987 | $801,163 | | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | — | | Compensation Actually Paid | $13,091,651 | $12,820,362 | $9,246,854 | $9,791,311 |
Option Exercises and Stock Vested—Fiscal 2024
| | NEO | | | | | Fiscal Year | 2021 | 2022 | 2023 | 2024 | | SCT Total | $2,440,870 | $1,928,895 | $2,380,214 | $2,605,189 | | - Grant Date Fair Value of Option Awards and Stock Awards Granted in Fiscal Year | ($1,688,435) | ($1,282,551) | ($1,590,901) | ($1,764,843) | | + Fair Value at Fiscal Year-End of Outstanding and Unvested Option Awards and Stock Awards Granted in Fiscal Year | $1,922,508 | $1,628,288 | $1,537,748 | $1,248,194 | | + Change in Fair Value of Outstanding and Unvested Option Awards and Stock Awards Granted in Prior Fiscal Years | $1,142,112 | $1,115,953 | $7,467 | $100,546 | | + Fair Value at Vesting of Option Awards and Stock Awards Granted in Fiscal Year That Vested During Fiscal Year | $105,531 | $95,362 | $122,452 | $154,630 | | + Change in Fair Value as of Vesting Date of Option Awards and Stock Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year | $113,625 | ($61,483) | $69,899 | $180,751 | | - Fair Value as of Prior Fiscal Year-End of Option Awards and Stock Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year | — | — | — | — | | Compensation Actually Paid | $4,036,210 | $3,424,464 | $2,526,879 | $2,524,468 |
Option Exercises and Stock Vested—Fiscal 2024
| 80 | |
Option Exercises and Stock Vested—Fiscal 2024
Relationship Between Pay and Performance We believe the “Compensation Actually Paid” in each of the years reported above and over the four-year cumulative period are reflective of the Compensation Committee’s emphasis on “pay-for-performance.” “Compensation Actually Paid” is higher than our Summary Compensation Total figures in each of the first three years presented due to the increased value of performance-based and equity compensation as a result of strong stock price performance. “Compensation Actually Paid” is lower than our Summary Compensation Total figures for 2024 primarily because equity awards granted in 2024 had a lower value at year end than on the date of grant. The following charts provide a description of the relationship between the “Compensation Actually Paid” to the PEO and average of non-PEO NEOs and respective metrics.
Option Exercises and Stock Vested—Fiscal 2024
| 2025 Proxy Statement | 81 |