DEF 14A of PagerDuty, Inc., May 2, 2024

DEF 14A of PagerDuty, Inc.

Filed May 2, 2024 · FY20240001568100-24-000048

Open on EDGAR

  1. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Teresa Carlson AGE: 61 DIRECTOR SINCE: 2024 | Ms. Carlson has served on our Board since March 2024. Since October 2023, Ms. Carlson has served as an advisor to General Catalyst, a venture capital firm. From January to September 2023, Ms. Carlson served as the President and Chief Commercial Officer of Flexport, a supply chain logistics solutions provider. Prior to that, Ms. Carlson served as Corporate Vice President and Executive-in-Residence at Microsoft Corporation, a global technology company, from May to December 2022. From April 2021 to March 2022, Ms. Carlson served as the President and Chief Growth Officer at Splunk, a big data platform provider. Prior to that, Ms. Carlson was a Vice President at Amazon Web Services, a subsidiary of Amazon from December 2010 through April 2021, where she founded and built the Worldwide Public Sector business along with the Aerospace and Satellite business unit and then picked up the other regulated industries from 2019 through 2021. Since August 2023, Ms. Carlson has served on the board of directors of Optimus Healthcare, a company focused on creating a network of innovative healthcare companies. Ms. Carlson also served on the board of directors of KnightSwan Acquisition Corporation, a special purpose acquisition company, from December 2021 to December 2023. Ms. Carlson received a M.S., and B.S. from Western Kentucky University. Ms. Carlson was selected to serve on our Board because of her extensive leadership experience and her expertise in driving digital transformation in global governments and regulated industries for the technology sector. |

  2. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Rathi Murthy AGE: 58 DIRECTOR SINCE: 2019 | Ms. Murthy has served on our Board since March 2019. Since June 2021, Ms. Murthy has served as the President & Chief Technology Officer of Expedia Group, managing all of product and technology. Ms. Murthy previously served as the Chief Technology Officer of Verizon Media, a division of Verizon Communications, Inc., a telecommunications company, from January 2020 until May 2021. Ms. Murthy served as Chief Technology Officer at Gap Inc., a clothing and accessories retailer, from March 2016 to January 2020. From September 2012 to March 2016, Ms. Murthy served in various roles at American Express Company, a multinational financial services company, including Senior Vice President and Chief Information Officer of Enterprise Growth from January 2015 to March 2016 and Vice President, Technology from September 2012 to January 2015. Ms. Murthy holds a B.S. in Electrical Engineering from Bangalore University and an M.S. in Computer Engineering from Santa Clara University. Ms. Murthy was selected to serve on our Board because of her extensive technology and engineering experience, developing and building platforms and products for emerging technologies, and senior leadership experience in technology at public companies. |

  3. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Alex Solomon AGE: 41 DIRECTOR SINCE: 2010 | Mr. Solomon co-founded our company and has served as our General Manager of Flexible Platform since January 2021, and as a member of our Board since November 2010. Mr. Solomon served as our Chief Technology Officer from July 2016 to January 2021, and as our Chief Executive Officer from May 2010 to July 2016. Mr. Solomon holds a B.S.E. from the University of Waterloo. Mr. Solomon was selected to serve on our Board because of his experience as our co-founder and former Chief Executive Officer. |

  4. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Elena Gomez AGE: 54 DIRECTOR SINCE: 2018 | Ms. Gomez has served on our Board since October 2018. Ms. Gomez has served as the Chief Financial Officer of Toast, Inc., a cloud-based restaurant software company since May 2021. From May 2016 until May 2021, Ms. Gomez served as Chief Financial Officer at Zendesk, Inc., a global company that builds software for customer service and engagement. From July 2010 to April 2016, Ms. Gomez served in senior finance roles at Salesforce, Inc., a global enterprise software company, including Senior Vice President Go To Market Distribution from July 2015 to April 2016, Vice President Sales and Support and Marketing Finance from June 2011 to June 2015, and Senior Director Marketing and General and Administrative Finance from July 2010 to June 2011. Prior to that, she held finance roles at Visa Inc., a financial services company, and The Charles Schwab Corporation, a brokerage and banking company. Ms. Gomez currently serves on the board of directors of Smartsheet Inc. and on the board of directors of the Haas School of Business at the University of California, Berkeley. Ms. Gomez holds a B.S. in Business Administration from the Haas School of Business at the University of California, Berkeley. Ms. Gomez was selected to serve on our Board because of her financial expertise as well as her extensive experience working in the technology sector and senior leadership experience at technology companies and public companies. |

  5. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Zachary Nelson AGE: 62 DIRECTOR SINCE: 2018 | Mr. Nelson has served on our Board since June 2018. Since December 2021, he has served as Chief Executive Officer of ZE Investments, a private investment company. From July 2002 to June 2017, Mr. Nelson served as the Chief Executive Officer at NetSuite Inc., a business management software company that was acquired by Oracle Corporation, a computer technology company, in November 2016. Since August 2021, Mr. Nelson has served on the board of directors as well as the audit committee of Freshworks, Inc., a software solutions company. From January 2022 to October 2023, he served on the board of directors of Snyk Limited, a provider of developer-first tooling and security intelligence. Mr. Nelson holds a B.S. in Biological Sciences and an M.A. in Anthropology from Stanford University. Mr. Nelson was selected to serve on our Board because of his experience building and scaling high-velocity cloud software companies and senior leadership experience at technology companies. |

  6. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Bonita Stewart AGE: 66 DIRECTOR SINCE: 2021 | Ms. Stewart has served on our board of directors since January 2021. She is a member of the Steering Committee of the Black Angel Group, which launched in 2021, and founder and managing partner for BAG Ventures, a venture fund focused on investing in enterprise AI solutions. She is also an advisor at Gradient Ventures, where she advises early-stage artificial intelligence companies on their business development strategies and board practices. Previously at Google, she was Vice President, Global Partnerships, overseeing relationships with the largest US publishers across search, news, media/entertainment, commerce, and mobile apps. Prior to joining Google in 2006, she led Chrysler Group Interactive Communications for DaimlerChrysler AG, Dodge Passenger Cars and Minivans brand management and Chrysler Brand Advertising. Currently, she serves on the Deckers Brands board and the Dance Theatre of Harlem. Ms. Stewart graduated magna cum laude with a Bachelor of Arts from Howard University and an MBA from Harvard Business School. Ms. Stewart was selected to serve on our Board because of her extensive experience leading multi-billion dollar operations, accelerating digital technology adoption and driving business transformation for major corporations in the IT, automotive and technology fields. |

  7. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Jennifer Tejada AGE: 53 DIRECTOR SINCE: 2016 | Ms. Tejada has served as our Chief Executive Officer and as a member of our Board since July 2016. From July 2013 to July 2015, Ms. Tejada served as President and Chief Executive Officer at Keynote Systems, Inc., a software company specializing in digital performance analytics and web and mobile testing. Ms. Tejada currently serves on the board of directors of The Estée Lauder Companies Inc., a multinational manufacturer and marketer of beauty products, and she previously served on the board of directors of UiPath, Inc., global software company that develops a platform for robotic process automation, from September 2020 until April 2023. Prior to her role at PagerDuty, Ms. Tejada was the CEO of Keynote Systems where she led the company to strong profitable growth before its acquisition by Dynatrace in 2015. Before Keynote, Ms. Tejada was Executive Vice President and Chief Strategy Officer at the enterprise software company Mincom leading its global strategy up to its acquisition in late 2011 by ABB. She has also held senior positions at Procter & Gamble and i2 Technologies (acquired by JDA Software). Ms. Tejada holds a B.A. in Business Management and Organizational Behavior from the University of Michigan. Ms. Tejada was selected to serve on our Board because of the experience and perspective she provides as our Chief Executive Officer, as well as her broad executive experience successfully leading, scaling, and optimizing global technology companies. |

  8. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | Sameer Dholakia AGE: 50 DIRECTOR SINCE: 2019 | Mr. Dholakia has served on our Board since December 2019. Mr. Dholakia has served as a partner at Bessemer Venture Partners, a venture capital and private equity firm, since May 2022, and has served as the Chief Executive Officer of Twilio SendGrid at Twilio, Inc., a cloud communication platform, from Twilio’s acquisition of SendGrid, Inc., a customer communication platform, in February 2019 to June 2020. From 2014 to February 2019, he served as the Chief Executive Officer and a member of the board of directors of SendGrid, Inc. and as Chairman of the board from September 2017 to February 2019. Prior to joining SendGrid, Mr. Dholakia served at Citrix Systems, Inc., an enterprise software company, as Group Vice President and General Manager of the Cloud Platforms group from 2011 to 2014 and as the Vice President of Marketing from 2010 to 2011. He joined Citrix in 2010 following Citrix’s acquisition of VMLogix, Inc., a provider of virtualization management software, where he served as Chief Executive Officer from 2007 to 2010. Mr. Dholakia has also served on the board of directors of ServiceTitan, Inc., a software company, since 2021. Mr. Dholakia holds a B.A. in Economics and an M.A. in Organizational Studies from Stanford University and an M.B.A. from Harvard Business School. Mr. Dholakia was selected to serve on our Board because of his wealth of knowledge in building and scaling great companies, extensive experience working in the technology sector, and senior leadership experience at technology companies. |

  9. WHEN ARE STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS DUE FOR NEXT YEAR’S ANNUAL MEETING?

    | William Losch AGE: 62 DIRECTOR SINCE: 2022 | Mr. Losch has served on our Board since August 2022. He has been an advisor to Okta, Inc., an identity management platform for enterprises, since his retirement as Chief Financial Officer of Okta in March 2021. From June 2013 until his retirement in March 2021, he served as Chief Financial Officer of Okta, and from June 2007 to June 2013, he served as Chief Financial Officer at MobiTV, Inc., a technology platform provider of multiscreen video delivery services. From October 2004 to May 2007, he served as the Chief Accounting Officer at DreamWorks Animation, SKG, Inc., an animation company. From March 1998 to July 2003, he served in various finance positions, most recently as Vice President of Finance and Chief Accounting Officer, at Yahoo! Inc., an internet company. Mr. Losch currently serves on the boards of directors of two private companies: Druva, Inc., a cloud data protection and management as a service and Onfido, Inc. an identity verification and authentication provider. Mr. Losch holds a B.A. in Economics from the University of California, Los Angeles. Mr. Losch was selected to serve on our Board because of his more than three decades of successful experience providing financial and operational leadership for high-performing SaaS companies. |

  10. CONSIDERATIONS IN EVALUATING DIRECTOR NOMINEES

    CONSIDERATIONS IN EVALUATING DIRECTOR NOMINEES Our Nominating Committee uses a variety of methods for identifying and evaluating potential director candidates. In its evaluation of director candidates, including the current directors eligible for re-election, our Nominating Committee will consider the current size and composition of our Board and the needs of our Board and the respective committees of our Board. Some of the qualifications that our Nominating Committee considers include, without limitation, experience of particular relevance to us and our Board, accomplishments, superior credentials, independence, area of expertise, and the highest ethical and moral standards. Although our Board does not maintain a specific policy with respect to board diversity, our Board believes that the Board should be a diverse body, and the Nominating Committee considers a broad range of backgrounds and experiences. Our Board regularly assesses the diversity of its members and nominees as part of its annual evaluation process. Our Board believes that our directors represent a diverse and broad range of attributes, qualifications, experiences, and skills to provide an effective mix of viewpoints and knowledge. Our Board includes five female directors and a majority of the directors on our Board are from underrepresented minority groups. In making determinations regarding nominations of directors, the Nominating Committee may take into account the benefits of diverse viewpoints. Any search firm retained by our Nominating Committee to find director candidates would be instructed to take into account all of the considerations used by our Nominating Committee. After completing its review and evaluation of director candidates, our Nominating Committee recommends to our full Board the director nominees for selection.

  11. STOCKHOLDER RECOMMENDATIONS FOR NOMINATIONS TO THE BOARD OF DIRECTORS

    | Name | Fees Earned or Paid in Cash ($) | Option Awards ($)(1)(2) | Stock Awards ($)(1)(2) | All Other Compensation ($) | Total ($) | | Sameer Dholakia | 42,500 | — | 184,980 | — | 227,480 | | Elena Gomez | 55,000 | — | 184,980 | — | 239,980 | | Alec Gallimore | 24,164 | — | — | — | 24,164 | | William Losch | 45,603 | — | 184,980 | — | 230,583 | | Rathi Murthy | 49,295 | — | 184,980 | — | 234,275 | | Zachary Nelson | 54,000 | — | 184,980 | — | 238,980 | | Alex Solomon(3) | — | — | 775,290 | 236,019 | 1,011,309 | | Bonita Stewart | 49,603 | — | 184,980 | — | 234,583 |

  12. FISCAL 2024 EXECUTIVE COMPENSATION RESULTS

    FISCAL 2024 EXECUTIVE COMPENSATION RESULTS To support our growth strategy, we have built an executive team that is composed of highly skilled individuals with experience leading and growing some of the top technology companies. With continued heightened competition for executive talent in the technology sector, our executives remain recruiting targets from both large technology companies and emerging growth companies. The target pay levels for our executives are deliberately designed to address the competitive talent landscape by supporting our ability to attract, motivate and retain top industry talent that is capable of driving efficient growth, fostering innovation and expanding operating margins. Amid macroeconomic volatility and a highly competitive labor market environment, our fiscal 2024 compensation program was specifically focused on further stabilizing our executive team and ensuring that we have diverse talent and a cohesive leadership team to drive the long-term success of our Company. Consistent with our “pay-for-performance” philosophy and our performance and compensation program objectives for fiscal 2024, as discussed below, our Compensation Committee took the following key actions with respect to the compensation of our NEOs for fiscal 2024: •Target Cash Compensation – No increases were made to base salaries or target annual cash bonus opportunities for our NEOs. •Short-Term Incentive Compensation – Our performance-based annual short-term incentive compensation opportunities are dependent on key financial metrics that drive our business. Approved payments for our NEOs, equal to approximately 49.56% of the target annual short-term incentive compensation opportunities, based solely on our achievement of such metrics. •Long-Term Incentive Compensation – PSU Awards – We granted equity compensation opportunities in the form of performance-vesting restricted stock unit (“PSU”) awards under the PagerDuty, Inc. 2019 Equity Incentive Plan (the “2019 Equity Plan”) that were to be earned based on the achievement of the annual net new annual recurring revenue (“nnARR”) growth target weighted at 60% and relative total shareholder return (“TSR”) of the S&P Software & Services Select Industry Index weighted at 40% for fiscal 2024 and satisfaction of a three-year time-based vesting schedule. We granted PSU awards with a target award value of $7,500,000 to Ms. Tejada, a target award value of $1,650,000 to Mr. Wilson and a target award value of $1,275,000 to Ms. Webb. Because we did not meet our threshold performance level of 50% of the nnARR target necessary to earn 12% of the target PSUs or the threshold performance level of the 25th percentile for relative TSR to earn 20% of the target PSUs, our NEOs did not earn any payout under their PSU awards for fiscal 2024, and accordingly, the PSU awards were forfeited for no consideration. •Long-Term Incentive Compensation – RSU Awards – We granted equity compensation opportunities in the form of time-based restricted stock unit (“RSU”) awards with a three-year time-based vesting schedule under the 2019 Equity Plan that may be settled for shares of our common stock with a target award value in the amount of $7,500,000 to Ms. Tejada, with a target award value of $3,850,000 to Mr. Wilson and target award value of $2,975,000 to Ms. Webb.

  13. EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES

    EXECUTIVE COMPENSATION PHILOSOPHY AND OBJECTIVES Our executive compensation program is guided by our overarching philosophy of paying for demonstrable performance. Consistent with this philosophy, we have designed our executive compensation program to achieve the following primary objectives: •Provide market competitive compensation and benefit levels that will attract, motivate and retain highly skilled executives with experience leading and growing top and emerging technology companies and a track record of high impact and success within the context of responsible cost management; •Establish a direct link between our financial, operational, and strategic objectives and results, as well as our values, and the compensation of our executive officers; •Evaluate the market and economic environment to anticipate the unexpected in order to pay our executives competitively while aligning the interests and objectives of our executive officers with those of our stockholders by linking the long-term incentive compensation opportunities to stockholder value creation and their cash incentives to our annual performance; •Ensure that our executive compensation philosophy is built on the foundation of equitable pay, fosters an environment of trust and that we maintain pay equity considering each executive officer’s role, commensurate experience and skills; and •Offer total compensation opportunities to our executive officers that are competitive, fair, and equitable. We structure the annual compensation of our executive officers, including our NEOs, using three principal elements: base salary, annual short-term incentive compensation opportunities and long-term incentive compensation opportunities in the form of equity awards. While the pay mix may vary from year to year, the ultimate goal is to achieve our compensation objectives as described above. While we have not adopted strict year-to-year policies or guidelines for allocating compensation between current and long-term compensation, between cash and non-cash compensation or among different forms of non-cash compensation, we believe our executive compensation program is competitive and appropriately aligns our executive officers’, including our NEOs’, pay to performance and interests with those of our stockholders. To ensure this alignment and to motivate and reward individual initiative and effort, a substantial portion of our executive officers’ annual target total direct compensation opportunity is both variable in nature and “at-risk.” Our compensation philosophy emphasizes variable compensation that appropriately rewards our executive officers, including our NEOs, through two separate compensation elements: •First, we provide the opportunity to participate in our annual short-term incentive compensation plan, which provides cash payments based on the level of attainment of the short-term financial, operational and strategic performance objectives set forth in our annual operating plan. •In addition, equity awards comprise the primary “at-risk” portion of our executive officers’ compensation packages. In order to maintain our “pay-for-performance” philosophy, a significant portion of equity awards are comprised of PSUs, the value of which depends on both a rigorous internal performance metric that drives long-term growth and a new performance metric that relates to the appreciation in the value of our common stock, thereby further incentivizing our executive officers to build sustainable long-term value for the benefit of our stockholders. Each year, these variable pay elements ensure that our executive officers’, including our NEOs’, target total direct compensation is variable (rather than fixed), such that the amounts payable are commensurate with our actual performance and aligned with stockholder value creation. We believe that this design provides balanced incentives for our executive officers to drive financial performance and long-term growth.

  14. SETTING TARGET TOTAL DIRECT COMPENSATION

    SETTING TARGET TOTAL DIRECT COMPENSATION Our Compensation Committee reviews the base salary levels, annual short-term incentive compensation opportunities and long-term incentive compensation opportunities of our executive officers, including our NEOs, and all related performance criteria at the beginning of each year, or more frequently as warranted. Adjustments are generally effective in the first quarter of the fiscal year. In making decisions about the compensation of our executive officers, including our NEOs, our Compensation Committee relies primarily on the general experience of its members and subjective considerations of various factors, including the following: •our executive compensation program objectives; •our performance against the financial, operational, and strategic objectives established by the Compensation Committee and our Board; •each individual executive officer’s knowledge, skills, experience, qualifications and tenure relative to other similarly-situated executives at the companies in our compensation peer group and in selected broad-based compensation surveys; •the scope of each executive officer’s role and responsibilities compared to other similarly-situated executives at the companies in our compensation peer group and in selected broad-based compensation surveys; •the performance of each individual executive officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function and work as part of a team; •the potential of each individual executive officer to contribute to our long-term financial, operational and strategic objectives; •Ms. Tejada’s compensation relative to that of our executive officers, and pay equity among our executive officers; •our financial performance relative to our compensation and performance peers;

  15. ROLE OF MANAGEMENT

    ROLE OF MANAGEMENT In discharging its responsibilities, our Compensation Committee works with members of our management, including Ms. Tejada. Our management assists our Compensation Committee by providing information on corporate and individual performance, competitive market data and management’s perspective and recommendations on compensation matters. Typically, Ms. Tejada will make recommendations to our Compensation Committee regarding compensation matters, including adjustments to annual cash compensation, long-term incentive compensation opportunities and program structures, for our executive officers, including our NEOs, except with respect to her own compensation. At the beginning of each year, Ms. Tejada reviews the performance of our other executive officers based on such individual’s level of success in accomplishing the business objectives established for him or her for the prior year and his or her overall performance during that year, and then shares these evaluations with, and makes recommendations to, our Compensation Committee for each element of compensation as described above. The annual business objectives for each executive officer are developed through mutual discussion and agreement between Ms. Tejada and our other executive officers and are reviewed with our Board. Our Compensation Committee reviews and discusses these recommendations and proposals with Ms. Tejada and uses them as one factor in determining and approving the compensation for our other executive officers. Ms. Tejada often attends meetings of our Board and Compensation Committee at which executive compensation matters are addressed and makes recommendations to our Compensation Committee regarding the total compensation of our other executive officers, including our other NEOs, but is not present during discussion, deliberation and decisions regarding her own compensation. Our Compensation Committee then reviews the recommendations and other data and makes decisions as to the total compensation for each executive officer, as well as the allocation of the amount of total compensation between base salary, annual short-term incentive compensation and long-term incentive compensation.

  16. ROLE OF COMPENSATION CONSULTANT

    ROLE OF COMPENSATION CONSULTANT Our Compensation Committee engages an external compensation consultant to provide information, analysis and other advice relating to our executive compensation program, to assist our Compensation Committee in developing appropriate incentive compensation plans for our executive officers, to provide it with advice and ongoing recommendations regarding material executive compensation decisions resulting from its annual executive compensation review and to review the compensation proposals of management. The compensation consultant reports directly to our Compensation Committee and its chair, and serves at the discretion of our Compensation Committee, which reviews the engagement annually. For fiscal 2024, our Compensation Committee retained Compensia, Inc. (“Compensia”), a national compensation consulting firm, to serve as its compensation advisor to advise on executive compensation matters, including competitive market pay practices for our executive officers, including our NEOs, and with the data analysis and selection of the compensation peer group.

  17. ROLE OF COMPENSATION CONSULTANT

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  18. ROLE OF COMPENSATION CONSULTANT

    During fiscal 2024, Compensia attended the meetings of the Compensation Committee (both with and without management present) as requested and provided various services, including the following: •consulting with the Compensation Committee chair and other members between Compensation Committee meetings; •providing competitive market data based on the compensation peer group and data cuts from selected broad-based compensation surveys for our executive officers, including our NEO positions and evaluating how the compensation we pay our executive officers compares both to our performance and to how the companies in our compensation peer group and the broad-based compensation surveys compensate their executives; •reviewing and analyzing the base salary levels, annual short-term incentive compensation opportunities and long-term incentive compensation opportunities of our executive officers, including our NEOs; •reviewing and analyzing the cash and equity compensation levels for the non-employee members of our Board; •assessing executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments; •reviewing our compensation philosophy: •reviewing competitive market design and practices for annual short-term incentive compensation and long-term incentive compensation programs in the software sector; •conducting a relative TSR analysis for our performance-based equity awards; •reviewing our equity usage and projecting such usage in fiscal 2024 and conducting a “burn rate” and “equity overhang” analysis; •reviewing our post-employment compensation arrangements for our executive officers; •reviewing our executive compensation disclosure and assisting with the preparation of our CEO pay ratio disclosure and our “pay-versus-performance” disclosure; •reviewing and updating the compensation peer group; •assessing compensation risk to determine whether our compensation policies and practices are reasonably likely to have a material adverse impact on our Company; and •supporting other ad hoc matters throughout the year. Compensia did not provide any services to us in fiscal 2024 other than the consulting services to our Compensation Committee. Our Compensation Committee regularly reviews the objectivity and independence of the advice provided by its compensation consultant on executive compensation matters. Our Compensation Committee has evaluated Compensia’s engagement, and based on the six factors for assessing independence and identifying potential conflicts of interest that are set forth in Exchange Act Rule 10C-1(b)(4), the listing standards of the NYSE and such other factors as were deemed relevant under the circumstances, has determined that Compensia is independent and that its relationship with Compensia and the work of Compensia on behalf of our Compensation Committee did not raise any conflict of interest or similar concerns.

  19. ROLE OF COMPENSATION CONSULTANT

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  20. COMPETITIVE POSITIONING

    COMPETITIVE POSITIONING For purposes of assessing our executive compensation against the competitive market, our Compensation Committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization, geographical location and industry sector. The companies in the compensation peer group for fiscal 2024 were approved by the Compensation Committee in December 2022 on the basis of their similarity to us, as determined using the following criteria: •Location – public companies headquartered in the United States, with a preference for California-based companies; •Industry Sector – companies in the software or internet services sector with enterprise applications; •Revenue – approximately 0.4x to approximately 2.5x our projected fiscal 2023 revenue of approximately $370 million (approximately $150 million to $925 million); •Market Capitalization – approximately 0.3x to approximately 3.0x our then current 30-day average market capitalization of approximately $2.1 billion (approximately $600 million to $6.2 billion); •Growth – companies with one-year revenue growth greater than 10%; and •Market Status – preference for companies having recently completed their initial public offering of equity securities. In selecting the fiscal 2024 compensation peer group, our Compensation Committee selected companies that, as a group, have a median revenue and market capitalization similar to our revenue and market capitalization. Our compensation peer group for fiscal 2024 included the following companies:

  21. COMPETITIVE POSITIONING

    | Alteryx | Elastic N.V. | Rapid 7 | | Amplitude | Everbridge | Smartsheet | | AppFolio | Fastly | Sprout Social | | Asana | Gitlab | Sumo Logic | | C3.ai | JFrog | Workiva | | Couchbase | Momentive Global | Yext | | Domo | New Relic | Zuora |

  22. COMPETITIVE POSITIONING

    Our Compensation Committee considered, as a guide, the compensation practices of the compensation peer group to assess the competitiveness of each compensation element and overall compensation levels (base salary, target annual short-term incentive compensation opportunities and long-term incentive compensation opportunities). To analyze the compensation practices of the companies in our compensation peer group, Compensia gathered data from public filings (primarily proxy statements) of the peer group companies, as well as from a peer custom cut of the Radford Global Technology Survey covering our reference peer group and a custom cut covering U.S.-based software companies with revenue between $200 million and $1 billion. This market data was then used as a reference point for our Compensation Committee to assess our current compensation levels in the course of its deliberations on compensation forms and amounts. Our Compensation Committee reviews our compensation peer group each year (unless there have been significant changes to either our business model or market capitalization or our peer companies’ business model or market capitalization or significant merger and acquisition activity involving our peer companies, in which case our Compensation Committee may review our compensation peer group more frequently) and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.

  23. COMPETITIVE POSITIONING

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  24. COMPETITIVE POSITIONING

    Compensation Elements In fiscal 2024, the annual target total direct compensation of Ms. Tejada and our other NEOs was intended to reward performance and retain an effective leadership team while also incentivizing Ms. Tejada and these NEOs to create sustainable, long-term stockholder value. The mix of the following compensation elements, which was almost entirely variable in nature, provided a balanced percentage of performance-based and service-based compensation opportunities for Ms. Tejada and these NEOs. The principal elements of our executive compensation program, and the purpose of each element, were as follows: (1) The target total direct compensation of Mr. Justice is not included in the average compensation presented for our NEOs (excluding our CEO) as the former executive officer did not serve in that capacity for the entire 12 months of fiscal 2024.

  25. SHORT-TERM INCENTIVE AWARDS

    SHORT-TERM INCENTIVE AWARDS In March 2023, our Compensation Committee approved the Fiscal 2024 Short-Term Incentive Program (the “Fiscal 2024 Bonus Plan”) under the PagerDuty, Inc. Cash Incentive Bonus Plan to provide financial incentives to participants (including each NEO) to achieve our key annual financial, operational and strategic objectives as set forth in our fiscal 2024 annual operating plan and to maximize individual performance. Our Compensation Committee approved the Fiscal 2024 Bonus Plan after taking into consideration the objectives set forth in our fiscal 2024 annual operating plan approved by our Board. The Fiscal 2024 Bonus Plan provided for annual short-term incentive compensation award payments to each of our NEO participants based entirely on our level of achievement with respect to designated corporate performance objectives. To be eligible to earn an award payment under the Fiscal 2024 Bonus Plan, a participant had to commence employment with us no later than 90 days from the end of the applicable program period, which aligned to our fiscal year, and remain continually employed by, and in good standing with, us through the applicable payment date of the award.

  26. TARGET ANNUAL CASH BONUS AMOUNTS

    TARGET ANNUAL CASH BONUS AMOUNTS For purposes of the Fiscal 2024 Bonus Plan, the amount of the annual cash bonus payout each participant was eligible to earn was based upon a percentage of such participant’s annual base salary as of the beginning of the fiscal year. In March 2023, our Compensation Committee reviewed the target annual short-term incentive compensation opportunities (the “Target Bonus Amounts”) of our executive leadership team and direct reports to Ms. Tejada, including our other NEOs, (except Mr. Justice, who ceased serving as our Executive Vice President, Chief Revenue Officer effective February 3, 2023) taking into consideration the competitive market analysis prepared by its compensation consultant, the recommendations of Ms. Tejada (except with respect to her own target annual short-term incentive compensation opportunity) and the other factors described in “Compensation-Setting Process – Setting Target Total Direct Compensation” above. Following this review, our Compensation Committee determined that the fiscal 2024 Target Bonus Amounts for Ms. Tejada, Mr. Wilson and Ms. Webb should remain unchanged from their fiscal 2023 levels.

  27. TARGET ANNUAL CASH BONUS AMOUNTS

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  28. TARGET ANNUAL CASH BONUS AMOUNTS

    The Target Bonus Amounts for our NEOs for purposes of the Fiscal 2024 Bonus Plan were as follows:

  29. TARGET ANNUAL CASH BONUS AMOUNTS

    | NEO | Fiscal 2024 Target Bonus (as a Percentage of Base Salary) (%) | Fiscal 2024 Target Bonus (as a Percentage of Total Cash Compensation) (%) (1) | Fiscal 2024 Target Bonus Amount ($)(2) | | Ms. Tejada | 100 | 50 | 600,000 | | Mr. Wilson | 70 | 41 | 319,118 | | Ms. Webb | 55 | 35 | 220,000 |

  30. TARGET ANNUAL CASH BONUS AMOUNTS

    (1)The Target Bonus Amounts for our NEOs were based on each NEO’s ending annual base salary for fiscal 2024. (2)The Target Bonus Amount as a percentage of total cash compensation for our NEOs was based on each NEO’s ending total cash compensation for fiscal 2024 and rounded to the nearest dollar. Potential bonus payments for our NEOs under the Fiscal 2024 Bonus Plan could range from zero to 200% of their Target Bonus Amount, as determined by our Compensation Committee.

  31. CORPORATE PERFORMANCE MEASURES

    CORPORATE PERFORMANCE MEASURES Our Compensation Committee developed two Company objectives using GAAP revenue, non-GAAP operating margin and net customer growth in enterprise and midmarket as the corporate performance measures under the Fiscal 2024 Bonus Plan as it believed that these measures were the best indicators of our successful execution of our annual operating plan. Our Compensation Committee carefully selected rigorous performance targets in order to provide significant incentives to our NEOs if they achieved the target performance levels. For purposes of the Fiscal 2024 Bonus Plan, the two Company Objectives were to be calculated (and weighted) as follows: •“First Company Objective” (70% of Target Bonus Amount): Based on the “Rule of 40” calculated by adding together (i) the annual GAAP Revenue growth rate as defined and reported in our Form 10-K for fiscal 2024 (“Revenue”) and (ii) non-GAAP operating margin, as defined and reported in our Form 10-K for the applicable period (“OpMargin”); provided, however, that the actual first Company Bonus (the “First Company Bonus”) amount was subject to adjustment as determined below. •“Second Company Objective” (30% of Target Bonus Amount): Based on the achievement of Net Customer Growth in Enterprise and Midmarket relative to the number of customers in the segment for the applicable period (“Net Customer Growth”); provided, however, that the actual second Company Bonus (the “Second Company Bonus”) amount was subject to adjustment as determined below. For purposes of the Fiscal 2024 Bonus Plan: •“Revenue” meant our GAAP revenue as defined in our annual report on Form 10-Ks filed with the SEC for fiscal 2024. •“OpMargin” meant our non-GAAP operating margin(1) as defined in our periodic reports filed with the SEC for fiscal 2024 and was defined as GAAP operating margin excluding stock-based compensation expense, employer taxes related to employee stock transactions, amortization of acquired intangible assets, acquisition-related expenses and restructuring costs. Our Compensation Committee believes that these expenses are not necessarily reflective of operational performance during a period. In particular, our Compensation Committee believes the consideration of measures that exclude such expenses can assist in the comparison of operational performance in different periods which may or may not include such expenses. •“Net Customer Growth” meant our year over year growth in the number of Enterprise and Mid-Market customers as compared to the Enterprise and Mid-Market Customers as of year-end fiscal 2023. (1)To supplement our consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, we use certain non-GAAP financial measures. For a full reconciliation of the U.S. GAAP to non-GAAP financial measures, please see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations— Non-GAAP Financial Measures” of our Form 10-K filed with the Securities and Exchange Commission on March 18, 2024.

  32. CORPORATE PERFORMANCE MEASURES

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  33. CORPORATE PERFORMANCE MEASURES

    The achievement and payment matrices for the two Company Objectives were as follows:

  34. FISCAL 2024 SHORT-TERM INCENTIVE AWARD

    FISCAL 2024 SHORT-TERM INCENTIVE AWARD In March 2024, our Compensation Committee determined the annual short-term incentive compensation award payments under the Fiscal 2024 Bonus Plan for our executive officers, including our NEOs. Our Compensation Committee reviewed our actual performance against the aggressive financial and operational goals that it set for fiscal 2024 and certified that we achieved the First Company Objective Rule of 40 (Revenue + Op Margin score) above threshold at a score of 29 which is a 94% attainment level resulting in a payment percentage of 70.8%. Our Compensation Committee also certified that the Second Company Objective Net Customer Growth goal was achieved at 7.3%, which is a 73% attainment level; because this was less than the threshold of 8% achievement, it resulted in a payment percentage of 0%.

  35. FISCAL 2024 SHORT-TERM INCENTIVE AWARD

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  36. FISCAL 2024 SHORT-TERM INCENTIVE AWARD

    Based on the respective weighting of each Company Objective, our Compensation Committee approved annual short-term incentive compensation award payments under the Fiscal 2024 Bonus Plan for each of our NEOs equal to approximately 49.56% of their Target Bonus Amounts, as reflected below:

  37. FISCAL 2024 SHORT-TERM INCENTIVE AWARD

    | Named Executive Officer | Target Bonus Amount ($) | Actual Bonus Payment ($) | Percentage of Target Bonus Amount Actually Paid ($) | | Ms. Tejada | $600,000 | $297,360 | 49.56% | | Mr. Wilson | $319,118 | $158,155 | 49.56% | | Ms. Webb | $220,000 | $109,032 | 49.56% |

  38. FISCAL 2024 SHORT-TERM INCENTIVE AWARD

    (1)The actual annual short-term incentive compensation award payments for our NEOs were based on each NEO’s annualized base salary for fiscal 2024. The annual short-term incentive compensation award payments made to our NEOs for fiscal 2024 are set forth in the “Summary Compensation Table for Fiscal Year 2024” below under the heading “Executive Compensation.”

  39. LONG-TERM INCENTIVE COMPENSATION

    LONG-TERM INCENTIVE COMPENSATION We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. The realized value of these equity awards bears a direct relationship to our stock price, and, therefore, these awards are an incentive for our NEOs to create value for our stockholders. Equity awards also help us retain qualified executive officers in a competitive market. We currently grant equity awards under the 2019 Equity Plan. Long-term incentive compensation opportunities in the form of equity awards are granted to our executive officers, including our NEOs, by the Compensation Committee. The amounts of the equity awards are also intended to provide competitively sized awards and resulting annual target total direct compensation opportunities that the Compensation Committee believes are reasonable and appropriate taking into consideration the factors described above in the section entitled “Setting Target Total Direct Compensation.” In addition, the Compensation Committee’s long-term incentive compensation goal has been to balance stockholder feedback and reinforcement of retention in light of Ms. Tejada’s high vested percentage and low unvested value. The Compensation Committee’s decision to set the ratio of PSU award and RSU award grant mix at its current level has been the result of the Compensation Committee balancing market practice and stockholder value creation.

  40. ANNUAL EQUITY AWARDS

    ANNUAL EQUITY AWARDS In March 2023, the Compensation Committee decided to grant PSU awards and RSU awards that may be settled for shares of our common stock to our NEOs under the 2019 Equity Plan. PSU awards underscore and strengthen our “pay-for-performance” compensation philosophy, because they are only earned upon achievement of key performance goals that drive our business and stockholder value. Therefore, these awards increase the alignment between the interests of our executive officers and stockholders. Payout of the fiscal 2024 PSU awards was directly contingent upon our Company’s achievement of two rigorous performance metrics. RSU awards that vest over a multi-year period also remain an important part of our executive compensation program. Since RSU awards have value to the recipient even in the absence of stock price appreciation, we believe that we are able to incentivize and retain our executive officers during periods of market volatility and that RSUs result in using fewer shares of our common stock than would be necessary if we used other equity vehicles, such as stock options, to provide an equity stake in our Company. While RSU awards also serve as a “pay-for-performance” tool as they appreciate in value as our stock price increases, these awards provide more stability to our long-term incentive compensation program especially in a volatile market, provide incentives to our executive officers that are aligned with the interests of our stockholders and encourage retention over a multi-year period.

  41. ANNUAL EQUITY AWARDS

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  42. ANNUAL EQUITY AWARDS

    The target grant value of the long-term incentive compensation opportunities and the allocation between PSU awards and RSU awards granted to our executive officers, including our NEOs, in March 2023 were determined by our Compensation Committee after considering the intensely competitive talent market in which we operate, the value of our highly experienced executive team led by Ms. Tejada and the following factors: •a competitive market analysis prepared by our Compensation Committee’s compensation consultant; •the outstanding equity holdings of each executive officer (including the current economic value of his or her unvested equity holdings and the ability of these unvested holdings to satisfy our retention objectives); •the projected impact of the proposed equity awards on our earnings; •the proportion of our total shares of common stock outstanding used for annual employee long-term incentive compensation awards (our “burn rate”) in relation to the annual burn rate ranges of the companies in our compensation peer group and other recently-public technology companies; •the potential voting power dilution to our stockholders in relation to the median practice of the companies in our compensation peer group; and •the other factors described in “Compensation-Setting Process — Setting Target Total Direct Compensation” above. Ms. Tejada’s long-term incentive compensation opportunity reflected her overall responsibility for our performance and success. In addition, further differentiation was made among our NEOs based on our Compensation Committee’s review of the competitive market data for their respective positions. The equity awards granted to our NEOs effective April 2, 2023 were as follows:

  43. ANNUAL EQUITY AWARDS

    | Named Executive Officer | PSU Awards (Target number of units) (#) (1) | PSU Awards (Target Grant Value) ($) (2) | RSU Awards (number of units) (#) (1) | RSU Awards (Target Grant Value) ($) (2) | | Ms. Tejada | 246,052 | 7,500,000 | 246,052 | 7,500,000 | | Mr. Wilson | 54,131 | 1,650,000 | 126,306 | 3,850,000 | | Ms. Webb | 41,828 | 1,275,000 | 97,600 | 2,975,000 |

  44. ANNUAL EQUITY AWARDS

    (1)The number of units subject to the PSU awards and the RSU awards was determined by dividing (i) the PSU award target grant value or the RSU award target grant value, as applicable, by (ii) the average of the closing price of our common stock on the NYSE for the 30 trading days prior to the date of grant, rounded down to the nearest whole number of units. We use an average closing price to determine the number of units, rather than the price of our common stock on the date of grant, to mitigate the impact of one-day or short-term stock price fluctuations. Each unit granted pursuant to these PSU awards and RSU awards represents a contingent right to receive one share of our common stock for each unit that is earned and/or vests. (2)Target grant value represents the value used by our Compensation Committee to calculate the number of units subject to each NEO’s equity awards at the target performance level. This target total value differs from the values reflected in the Summary Compensation Table for Fiscal Year 2024 for several reasons, including the manner in which we determine the number of units, as described in the footnote above. The values in the Summary Compensation Table for Fiscal Year 2024 represent the aggregate grant date fair value of each NEO’s equity awards calculated in accordance with the Financial Accounting Standard Board’s Accounting Standard Codification Topic 718 based on the single day closing price of our common stock on the date of grant and, for the PSU awards, (a) with respect to the PSUs subject to a performance condition (nnARR), assuming the probable outcome of the applicable performance condition and (b) with respect to the PSUs subject to a market condition (relative TSR), measured using a Monte Carlo simulation approach. PSU Awards – In the case of the PSU awards granted in April 2023 to our NEOs, the units subject to the awards were to be earned, if at all, based upon our level of achievement of a pre-established, rigorous performance condition – that is, net new annual recurring revenue (“nnARR”) – and achievement of a market condition - that is, relative total shareholder return (“TSR”) compared to the S&P Software & Services Index, and vest, if at all, based upon each NEO’s Continuous Service (as defined in the 2019 Equity Plan) through a three-year time-based vesting schedule as set forth hereafter, and subject to the terms of the 2019 Equity Plan.

  45. ANNUAL EQUITY AWARDS

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  46. DESIGN OF FISCAL 2024 PSU AWARDS

    DESIGN OF FISCAL 2024 PSU AWARDS Performance Metrics. A percentage of the target units set forth in each NEO’s PSU grant notice (the “Target PSUs”) ranging from 0% to 200% were to become eligible to vest on the PSU award certification date based on our level of achievement of the nnARR performance target (weighted at 60%) (the “nnARR Performance Target”) and the relative TSR performance target (weighted at 40%) (the “Relative TSR Performance Target”) over the period commencing February 1, 2023 and ending January 31, 2024. Performance against the nnARR Performance Target was determined as calculated in the following table:

  47. DESIGN OF FISCAL 2024 PSU AWARDS

    | Net New Annual Recurring Revenue | Number of Eligible PSUs (% of Total Target PSUs) | | Less than 50% of the nnARR Performance Target (Below Threshold) | — | | 50% of the nnARR Performance Target (Threshold) | 12% | | 100% of the nnARR Performance Target (“Target”) | 60% | | 110% of the nnARR Performance Target (“10% Stretch”) | 84% | | 125% of the nnARR Performance Target (“15% Stretch”) | 108% | | 137% of the nnARR Performance Target (“Maximum”) | 120% |

  48. DESIGN OF FISCAL 2024 PSU AWARDS

    We used a single year as the nnARR performance period due to challenges in setting reliable longer-term performance targets in a dynamic and fast-moving industry environment in which we operate. Annual goal-setting supports the rigor of our program and enables us to set appropriate goals for each performance period to incentivize consistent year-over-year stretch performance levels that support our long-term growth objectives. We added a relative TSR metric to our PSU awards for fiscal 2024 to incentivize our relative TSR performance as compared to the S&P Software & Services Select Industry Index. The intention of this addition was to strengthen the alignment between the long-term incentive compensation opportunity provided to our CEO and our other named executive officers with creating sustainable long-term stockholder value. Performance against the Relative TSR Performance Target was determined as calculated in the following table:

  49. DESIGN OF FISCAL 2024 PSU AWARDS

    | Relative Total Shareholder Return (relative percentile rank among S&P Software & Services Select Index) | Number of Eligible PSUs (% of Total Target PSUs) | | Less than 25th Percentile (Below Threshold) | — | | 25th Percentile (Threshold) | 20% | | 55th Percentile (Target) | 40% | | 75th Percentile (Maximum) | 80% |

  50. DESIGN OF FISCAL 2024 PSU AWARDS

    The number of units actually eligible to vest based on performance against the nnARR Performance Target and the Relative TSR Performance Target, as determined by the Compensation Committee on the PSU award certification date, are the “Eligible PSUs.” If achievement was between the various achievement levels shown in the tables above, then the resulting number of Eligible PSUs was to be linearly interpolated between such levels set forth in the table above. Any units that did not become Eligible PSUs on the PSU award certification date were to immediately terminate and be forfeited. Time-Based Vesting Condition. To foster alignment with the long-term interests of our stockholders, earned PSU shares, if any, are subject to a three-year time-based vesting requirement. Thirty-three percent of the aggregate number of Eligible PSUs were to vest on April 2, 2024, the first anniversary of the date of grant of the PSU award, and the remainder of the Eligible PSUs were to vest in eight equal quarterly installments on each of January 2nd, April 2nd, July 2nd, and October 2nd, subject to an NEO’s Continuous Service through each applicable vesting date.

  51. DESIGN OF FISCAL 2024 PSU AWARDS

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  52. DESIGN OF FISCAL 2024 PSU AWARDS

    Our fiscal 2024 PSU awards are also subject to potential acceleration, as further described in “Executive Compensation— Potential Payments Upon Termination or Change in Control” below. RSU Awards – In the case of the RSU awards granted in in April 2023 to our NEOs, 1/12th of the total number of units subject to the awards will vest on each quarterly anniversary of April 2, 2023, subject to an NEO’s Continuous Service through each applicable vesting date.

  53. RESULTS OF FISCAL 2024 PSU AWARDS

    RESULTS OF FISCAL 2024 PSU AWARDS On March 12, 2024, our Compensation Committee determined that our nnARR for fiscal 2024 was attained at 49% of the nnARR Performance Target and that our Relative TSR Performance Target for fiscal 2024 was attained at the 20th percentile. As shown in the foregoing table, this resulted in 0% of the Target PSUs granted to our NEOs with zero (“0”) PSUs becoming Eligible PSUs, and as a result, the number of shares of our common stock awarded to each of our NEOs for fiscal 2024 were as follows:

  54. RESULTS OF FISCAL 2024 PSU AWARDS

    | NEO | Eligible PSUs Earned (#) | Percentage of Target PSU (%) | | Ms. Tejada | — | — | | Mr. Wilson | — | — | | Ms. Webb | — | — |

  55. RESULTS OF FISCAL 2024 PSU AWARDS

    Disclosure of the target and actual nnARR amount would cause us meaningful competitive harm, but we have provided the percentage of the nnARR Performance Target attained as a meaningful key metric that conveys the key nature of the goal set and our achievements against it. These aggressive nnARR Performance Target ranges were set with a view to sustainable growth beyond delivering revenue only for fiscal 2024, and hence would require significant effort to achieve. It should be noted that the targets for these PSU awards were even more aggressive than those for the Short-Term Incentive Program. The equity awards granted to our NEOs during fiscal 2024 are set forth in the “Summary Compensation Table for Fiscal Year 2024” and the “Grants of Plan-Based Awards” table below under the heading “Executive Compensation.” Welfare and Health Benefits We maintain a tax-qualified defined contribution retirement savings plan under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”), that provides eligible U.S. employees, including our NEOs, with an opportunity to save for retirement on a tax advantaged basis (the “Section 401(k) Plan”). Eligible employees may defer eligible compensation on a pre-tax and/or post-tax basis, up to the statutory annual limits on contributions under the Code. Employee contributions are allocated to each participant’s individual account and are then invested in selected investment alternatives according to the participant’s directions. Participants are immediately and fully vested in their contributions. Our Section 401(k) Plan provides for discretionary matching of employee contributions. For fiscal 2024, we made employer matching contributions of up to two percent of each participant’s employee contributions of up to two percent of eligible wages during the period as defined in the Section 401(k) Plan. Additional benefits offered to all employees, including our NEOs, include medical, dental and vision insurance, business travel insurance, an employee assistance program, a mental health benefit, health and dependent care flexible spending accounts, basic life insurance, accidental death and dismemberment insurance, short-term and long-term disability insurance, commuter benefits and a monthly electronics allowance. We design our employee benefits programs to be cost effective, scalable and competitive in relation to the market as well as compliant with applicable laws and practices. We adjust our employee benefits programs as needed based upon regular monitoring of applicable laws and practices and the competitive market.

  56. RESULTS OF FISCAL 2024 PSU AWARDS

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  57. RESULTS OF FISCAL 2024 PSU AWARDS

    Perquisites and Other Personal Benefits In general, we do not provide significant perquisites or other personal benefits to our NEOs except as generally made available to our employees, or in special circumstances where our Compensation Committee believes it is appropriate to assist an individual in the performance of his or her duties, to make him or her more efficient and effective, and for recruitment and retention purposes. We offer our NEOs certain health and life insurance, as well as payment of certain transportation costs, and corporate travel fee costs when our Compensation Committee determines that such arrangements are appropriate and consistent with our business objectives. In fiscal 2024, none of our NEOs received perquisites or other personal benefits in amounts equal to or greater than $25,000. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as those described in the preceding paragraph. All future practices with respect to perquisites or other personal benefits will be approved and subject to periodic review by our Compensation Committee. Employment Arrangements We have entered into a written amended and restated employment offer letter with Ms. Tejada (the “Tejada Letter”) and into either a confirmatory employment agreement or employment offer letter with each of our other NEOs. Each of these arrangements was approved on our behalf by our Board (at the recommendation of our Compensation Committee) or Compensation Committee. We believe that these arrangements were necessary to induce these individuals to forgo other employment opportunities or leave their then-current employer for the uncertainty of a demanding position in a new and unfamiliar organization. In filling each of our executive positions, our Board or Compensation Committee, as applicable, recognized that it would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our Board and Compensation Committee were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations. Each of our employment arrangements provides for “at will” employment and sets forth the initial compensation arrangements for the NEO, including an initial base salary, a target annual short-term incentive compensation opportunity, eligibility to participate in our employee benefit programs and severance payments and benefits upon a qualifying termination of employment. Further, each of our NEOs has executed a form of our standard proprietary information and inventions assignment agreement. Under the terms of the Tejada Letter, Ms. Tejada is eligible to receive certain specified severance payments and benefits in connection with certain terminations of her employment, including in connection with a change in control of our Company. This post-employment compensation arrangement is discussed in “Executive Compensation – Potential Payments upon Termination or Change in Control” below. For detailed descriptions of the employment arrangements we maintained with our NEOs during fiscal 2024, see “Executive Compensation – Potential Payments upon Termination or Change in Control” below.

  58. SEVERANCE AND CHANGE IN CONTROL BENEFITS

    SEVERANCE AND CHANGE IN CONTROL BENEFITS Other than Ms. Tejada, each of our NEOs is eligible to participate as a Tier 2 participant in our Amended and Restated Executive Severance and Change in Control Policy (the “Severance Policy”). The Severance Policy provides these individuals with severance payments and benefits in the event of certain terminations of employment, including an involuntary termination following a change in control of our Company. These severance arrangements provide reasonable compensation to our NEOs if they leave our employ under certain circumstances to facilitate their transition to new employment. We also believe that these arrangements help maintain our NEOs’ continued focus and dedication to their assigned duties to maximize stockholder value if there is a potential transaction that could involve a change in control of our Company. Under the Tejada Letter and with respect to the NEOs covered by the Severance Policy, all payments and benefits in the event of a change in control of our Company are payable only if there is a subsequent loss of employment by the executive officer (a so-called “double-trigger” arrangement) or in the case of equity acceleration, with respect to RSU awards, upon a change in control if the acquiring company refuses to assume, continue, substitute for or cancel for a specified per-share amount the outstanding awards. Our fiscal 2024 PSU awards are also subject to potential acceleration, as further described in “Executive Compensation – Potential Payments Upon Termination or Change in Control” below.

  59. SEVERANCE AND CHANGE IN CONTROL BENEFITS

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  60. SEVERANCE AND CHANGE IN CONTROL BENEFITS

    The Severance Policy will remain in effect until October 30, 2027, except that if on the date the Severance Policy is set to expire we have entered into an agreement that would cause a change in control of our Company to occur, the Severance Policy will remain in effect until the consummation of the transaction constituting the change in control. If any of the payments or benefits provided for under the Tejada Letter and the Severance Policy or otherwise payable to a NEO would constitute a “parachute payment” within the meaning of Section 280G of the Code and could be subject to the related excise tax, a NEO would receive either full payment of such payments and benefits or such lesser amount that would cause no portion of the payments and benefits being subject to the excise tax, whichever results in the greater after-tax benefits to the NEO. We do not use excise tax reimbursement payments (or “gross-ups”) relating to a change in control of our Company and have no such obligations in place with respect to any of our executive officers, including our NEOs. The receipt of severance payments and benefits upon a qualifying termination of employment under the Tejada Letter and the Severance Policy is contingent upon each NEO signing and not revoking a general release of claims in favor of our Company. In addition, under the Tejada Letter, in order for Ms. Tejada to receive severance payments and benefits for which she is eligible, she must resign from our Board and return all of our property in her possession. We believe that having in place reasonable and competitive post-employment compensation arrangements in the event of a change in control of our Company is essential to attracting and retaining highly qualified executive officers. The Compensation Committee does not consider the specific amounts payable under the post-employment compensation arrangements when determining the annual target total direct compensation for our NEOs. We do believe, however, that these arrangements are necessary to offer compensation packages that are competitive. For a summary of the material terms and conditions of the post-employment compensation arrangements we maintained with our NEOs during fiscal 2024, as well as an estimate of the potential payments and benefits that they would have been eligible to receive if a hypothetical change in control or other trigger event had occurred on January 31, 2024, see “Executive Compensation — Employment Agreements with our Named Executive Officers” and “Executive Compensations – Potential Payments Upon Termination or Change in Control” below.

  61. OTHER COMPENSATION POLICIES

    Hedging and Pledging Prohibitions Our Insider Trading Policy prohibits our employees (including our NEOs) and the non-employee members of our Board from engaging in derivative securities or hedging transactions. This prohibition extends to publicly traded options, such as puts and calls, and other derivative securities with respect to our securities (other than stock options and other compensatory equity awards issued to our employees (including our officers) and the non-employee members of our Board by our Company). This includes any hedging or similar transaction designed to decrease the risks associated with holding our common stock. Similarly, our Insider Trading Policy prohibits our employees (including our officers) and the non-employee members of our Board from using our securities as collateral for loans, pledging our securities as collateral for loans or holding our common stock in a margin account. Equity Grant Timing Practices We generally grant equity awards on fixed dates determined in advance, although there may be occasions when grants are made on other dates, such as new hires or other special circumstances. The timing of equity award grants to our executive officers is not coordinated in a manner that intentionally benefits our executive officers. Our Compensation Committee approves all equity award grants to our NEOs on or before the grant date. Our Compensation Committee’s general practice is to complete its annual executive compensation review and determine performance goals and target compensation for our NEOs, and then equity awards are granted to our NEOs and become effective. This process is further described above under the section titled “Compensation-Setting Process” above. Accordingly, annual equity awards are typically granted to our NEOs in April of each fiscal year. On a limited occasion, the Compensation Committee may grant equity awards outside of our annual grant cycle for new hires, promotions, recognition, retention or other purposes. While our Compensation Committee has discretionary authority to approve equity awards granted to our NEOs outside of the cycle described above, the committee does not have a practice or policy of granting equity awards in anticipation of the release of material nonpublic information and we do not, in any event, time the release of material non-public information in coordination with grants of equity awards in a manner that intentionally benefits our NEOs.

  62. ACCOUNTING FOR STOCK-BASED COMPENSATION

    ACCOUNTING FOR STOCK-BASED COMPENSATION Our Compensation Committee takes accounting considerations into account in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is Financial Accounting Standards Board Accounting Standard Codification Topic 718 (“ASC Topic 718”), the standard which governs the accounting treatment of certain stock-based compensation. Among other things, ASC Topic 718 requires us to record a compensation expense in our income statement for all equity awards granted to our executive officers and other employees. This compensation expense is based on the grant date “fair value” of the equity award and will be recognized ratably over the award’s requisite service period (which, generally, will correspond to the award’s vesting schedule), with the exception of PSU awards which are recognized using the accelerated attribution method. The Company accounts for forfeitures as they occur. This compensation expense is also reported in the compensation tables below, even though recipients may never realize any value from their equity awards.

  63. COMPENSATION RISK ASSESSMENT

    | Name | Fiscal Year | Salary ($) | Bonus ($) | Options Awards ($)(1) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) | | Jennifer Tejada Chief Executive Officer | 2024 | 600,000 | — | — | 18,910,576 | 297,360 | 14,545 | 19,822,501 | | | 2023 | 586,667 | — | — | 21,286,825 | 828,941 | 14,864 | 22,717,297 | | | 2022 | 508,333 | — | — | 11,867,582 | 884,730 | 7,923 | 13,268,568 | | Howard Wilson Chief Financial Officer | 2024 | 455,882 | — | — | 6,684,967 | 158,155 | 15,091 | 7,314,095 | | | 2023 | 450,735 | — | — | 7,450,378 | 445,660 | 15,698 | 8,362,471 | | | 2022 | 420,833 | — | — | 5,480,722 | 512,507 | 5,032 | 6,419,094 | | Shelley Webb Senior Vice President, Chief Legal & People Officer | 2024 | 400,000 | — | — | 5,165,634 | 109,032 | 8,582 | 5,683,248 | | | 2023 | 308,333 | — | — | 5,603,882 | 240,001 | 7,569 | 6,159,786 | | David Justice(4) Executive Vice President, Chief Revenue Officer | 2024 | 5,114 | — | — | — | — | 89,395 | 94,509 | | | 2023 | 441,667 | — | — | 7,450,378 | 532,467 | 8,125 | 8,432,637 | | | 2022 | 391,667 | — | — | 5,975,214 | 550,737 | 4,384 | 6,922,002 |

  64. CEO PAY RATIO FOR FISCAL 2024

    CEO PAY RATIO FOR FISCAL 2024 •The median of the annual total compensation of all our employees, excluding our CEO, was $310,212; •The annual total compensation of our CEO, as reported in the Summary Compensation Table for Fiscal Year 2024 included in this Proxy Statement, was $19,822,501; and •The ratio of the annual total compensation of our CEO to the median of the annual total compensation of all our employees was 64 to 1. This ratio is a reasonable estimate calculated in a manner consistent with SEC rules.

  65. REQUIRED DISCLOSURE OF THE RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES

    REQUIRED DISCLOSURE OF THE RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES As described in more detail in “Compensation Discussion and Analysis,” our executive compensation program reflects a variable “pay-for-performance” philosophy. While over the years we have used several different performance measures to align executive compensation with our performance, not all of these performance measures are presented in the Pay-Versus-Performance Table. Moreover, while we generally seek to prioritize long-term performance as our primary incentive for our PEO and our other NEOs, we do not specifically align our performance measures with compensation that is actually paid (as computed in accordance with Item 402(v) of Regulation S-K) for a particular year. In accordance with Item 402(v) of Regulation S-K, we are providing the following descriptions of the relationships between the information presented in the Pay Versus Performance Table.

  66. REQUIRED DISCLOSURE OF THE RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND FINANCIAL PERFORMANCE MEASURES

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  67. COMPENSATION ACTUALLY PAID AND COMPANY TSR AND COMPANY TSR AND PEER GROUP TSR

    COMPENSATION ACTUALLY PAID AND COMPANY TSR AND COMPANY TSR AND PEER GROUP TSR The graph below compares our TSR and CEO and other NEO compensation actually paid for the four fiscal years beginning with fiscal 2021. As illustrated in the following graph, the amount of the compensation actually paid to our PEO and the average amount of compensation actually paid to our other NEOs as a group (excluding our PEO) is generally directionally aligned with our TSR for the period presented in the Pay Versus Performance Table. In addition, the graph below compares our cumulative TSR to the cumulative TSR of the selected peer group.

  68. COMPENSATION ACTUALLY PAID AND COMPANY TSR AND COMPANY TSR AND PEER GROUP TSR

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  69. COMPENSATION ACTUALLY PAID AND NET LOSS ATTRIBUTABLE TO PAGERDUTY, INC

    COMPENSATION ACTUALLY PAID AND NET LOSS ATTRIBUTABLE TO PAGERDUTY, INC The graph below compares our net loss attributable to PagerDuty, Inc. and CEO and other NEO compensation actually paid for the four fiscal years beginning with fiscal 2021. We do not use net loss attributable to PagerDuty, Inc. as a financial performance measure in our overall executive compensation program, so there is, at best, only an indirect correlation between our profitability and the various financial performance measures which we use when setting goals in our short-term incentive compensation program.

  70. COMPENSATION ACTUALLY PAID AND NET LOSS ATTRIBUTABLE TO PAGERDUTY, INC

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  71. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN The graph below compares our Non-GAAP Operating Margin and CEO and other NEO compensation actually paid for the four fiscal years beginning with fiscal 2021. As illustrated by the graph, the amount of compensation actually paid to our PEO and the average amount of compensation actually paid to our other NEOs as a group (excluding our PEO) is generally directionally aligned with the changes in our Non-GAAP Operating Margin over the period presented in the Pay-Versus-Performance Table. All information provided above under the “Pay Versus Performance” heading will not be deemed to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing, except to the extent the Company specifically incorporates such information by reference.

  72. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

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  73. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information regarding the ownership of the Company’s common stock as of March 31, 2024 (or as of the date otherwise indicated below) by: (i) each director and nominee for director; (ii) each of the executive officers named in “Executive Compensation—Summary Compensation Table for Fiscal Year 2022; (iii) all executive officers and directors of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more than five percent of its common stock. We have based percentage ownership of our common stock on 95,089,009 shares of our common stock outstanding as of March 31, 2024. Unless otherwise indicated, the address of each beneficial owner listed below is c/o PagerDuty, Inc., 600 Townsend St., Suite 200, San Francisco, CA 94103.

  74. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    | | Common Stock | | | Name of Beneficial Owner | Number (#) | Percentage (%) | | 5% Stockholders | | | | ARK Investment Management LLC(1) | 11,413,423 | 12.0 | | The Vanguard Group, Inc.(3) | 9,598,336 | 10.1 | | BlackRock, Inc.(2) | 8,228,715 | 8.7 | | Named Executive Officers and Directors | | | | Jennifer Tejada(5) | 3,048,980 | 3.2 | | Howard Wilson(6) | 714,155 | 0.8 | | Shelley Webb(7) | 24,147 | * | | David Justice | — | * | | Alex Solomon(8) | 2,753,420 | 2.9 | | Sameer Dholakia | 30,479 | * | | Teresa Carlson | — | * | | William Losch | 5,364 | — | | Elena Gomez(9) | 176,384 | * | | Rathi Murthy(10) | 119,125 | * | | Zachary Nelson | 313,703 | * | | Bonita Stewart | 17,940 | * | | All directors and executive officers as a group(11) (12 persons) | 7,224,549 | 7.6 |

  75. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    * Represents beneficial ownership of less than 1%. (1)Based upon the information provided by ARK Investment Management LLC (“ARK”) in a Schedule 13G/A filed on January 29, 2024. According to the filing, ARK has sole voting power with respect to 10,688,341 shares of common stock, shared voting power over 362,276 shares of common stock, sole dispositive power over 11,413,423 shares of common stock, and no shared dispositive power. The principal business address of ARK is 200 Central Avenue, St. Petersburg, FL 33701.

  76. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

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  77. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    (2)Based upon the information provided by BlackRock, Inc. (“BlackRock”) in a Schedule 13G/A filed on January 25, 2024. According to the filing, BlackRock has sole voting power with respect to 8,106,938 shares of common stock, sole dispositive power over 8,228,715 shares of common stock and no shared voting or dispositive power. The principal business address of BlackRock, Inc. 55 East 52nd Street, New York, NY 10055. (3)Based upon the information provided by The Vanguard Group, Inc. (“Vanguard”) in a Schedule 13G/A filed on February 13, 2024. According to the filing, Vanguard has shared voting power over 166,245 shares of common stock, no sole voting power, sole dispositive power over 9,333,086 shares of common stock, and shared dispositive power with respect to 263,250 shares of common stock. The principal business address of Vanguard is 100 Vanguard Blvd., Malvern, PA 19355. (4)Consists of (i) 26,852 shares each held indirectly by Jennifer Tejada, as Trustee of the Tejada 2022 Grantor Retained Annuity Trust - I and Jennifer Tejada, as Trustee of the Tejada 2022 Grantor Retained Annuity Trust - II, (ii) 144,500 shares held indirectly by Jennifer Tejada, as Trustee of the Langford Island Trust (iii) 45,220 shares each held indirectly by Jennifer Tejada, as Trustee of the Tejada 2023 Grantor Retained Annuity Trust - I and Jennifer Tejada, as Trustee of the Tejada 2023 Grantor Retained Annuity Trust - II, (iiii) 2,532,318 shares subject to options exercisable within 60 days of March 31, 2024, and (iv) 82,341 shares issuable upon the settlement of RSUs and PSUs releasable within 60 days of March 31, 2024. (5)Consists of(i) 403,016 shares subject to options exercisable within 60 days of March 31, 2024, and (ii) 37,797 shares issuable upon the settlement of RSUs and PSUs releasable within 60 days of March 31, 2024. (6)Consists of 17,774 shares issuable upon the settlement of RSUs releasable within 60 days of March 31, 2024. (7)Consists of 2,744 shares issuable upon the settlement of RSUs releasable within 60 days of March 31, 2024. (8)Consists of 161,140 shares subject to options exercisable within 60 days of March 31, 2024, all of which are fully vested as of such date. (9)Consists of 103,881 shares subject to options exercisable within 60 days of March 31, 2024, all of which are fully vested as of such date. (10)Consists of (i) 7,224,549 shares owned by our current executive officers and directors, (ii) 3,200,355 shares subject to options exercisable within 60 days of March 31, 2024 and (iii) 140,656 shares issuable upon the settlement of RSUs releasable within 60 days of March 31, 2024. Delinquent Section 16(a) Reports Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than ten percent of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of the Company. Officers, directors and greater than ten percent stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file. To our knowledge, based solely on our review of the copies of such forms furnished to us and written representations from these officers and directors, we believe that all Section 16(a) filing requirements were met during the year ended January 31, 2024, except that we filed an amended Form 4 for Mr. Wilson to report an option exercise that was inadvertently left off an earlier-filed Form 4.

  78. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

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  79. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    Transactions With Related Persons and Indemnification Related Person Transactions Policy and Procedures We maintain a written related-person transaction policy (the “Related-Person Transaction Policy”) that sets forth our procedures for the identification, review, consideration and approval or ratification of related person transactions. For purposes of our policy only, a related person transaction is a transaction, arrangement or relationship, or any series of similar transactions, arrangements or relationships, in which we and any related person are, were or will be participants and in which the amount involved exceeds $120,000. Transactions involving compensation for services provided to us as an employee or director are not considered related party transactions under this policy. A transaction, arrangement or relationship in which a related person’s participation is solely due to such related person’s position as a director of an entity that is participating in such transaction, arrangement or relationship would not be considered a related party transaction under this policy. A related person is any executive officer, director or beneficial owner of more than 5% of any class of our voting securities, including any of their immediate family members and any entity owned or controlled by such persons. Under the Related-Person Transaction Policy, if a transaction has been identified as a related person transaction, including any transaction that was not a related person transaction when originally consummated or any transaction that was not initially identified as a related person transaction prior to consummation, our management must present information regarding the related person transaction to the Audit Committee, or, if Audit Committee approval would be inappropriate, to another independent body of the Board, for review, consideration and approval or ratification. The presentation must include a description of, among other things: all of the parties to the transaction; the material facts of the proposed transaction; the interests, direct and indirect, of the related persons; the purpose of the transaction; the benefits to us of the transaction; whether the transaction is on terms that are comparable to the terms available to or from, as the case may be, an unrelated third party or to or from employees generally; and management’s recommendation with respect to the proposed transaction. Under the Related-Person Transaction Policy, we will collect information that we deem reasonably necessary from each director, executive officer and, to the extent feasible, significant stockholder to enable us to identify any existing or potential related person transactions and to effectuate the terms of the Related-Person Transaction Policy. In addition, under our Code of Conduct, our employees and directors have an affirmative responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest. In considering related-person transactions, the Audit Committee, or other independent body of the Board, will take into account the relevant available facts and circumstances including, but not limited to: •the risks, costs and benefits to the Company; •the impact on a director’s independence in the event the related person is a director, immediate family member of a director or an entity with which a director is affiliated; •the terms of the transaction; •the availability of other sources for comparable services or products; and •the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. The Related-Person Transaction Policy requires that, in determining whether to approve, ratify or reject a related-person transaction, the Audit Committee, or other independent body of the Board, must consider, in light of known circumstances, whether the transaction is in, or is not inconsistent with, our best interests and those of our stockholders, as the Audit Committee, or other independent body of the Board, determines in the good faith exercise of its discretion.

  80. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

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  81. COMPENSATION ACTUALLY PAID AND NON-GAAP OPERATING MARGIN

    Certain Related-Person Transactions The following is a summary of transactions since February 1, 2023, to which we have been a participant in which the amount involved exceeded or will exceed $120,000, and in which any of our directors, executive officers or holders of more than five percent of our capital stock, or any member of the immediate family of the foregoing persons, had or will have a direct or indirect material interest, other than compensation arrangements which are described in the sections titled “Executive Compensation” and “Director Compensation—Non-Employee Director Compensation.”