DEF 14A of Zoom Communications, Inc., May 5, 2023

DEF 14A of Zoom Communications, Inc.

Filed May 5, 2023 · FY20230001585521-23-000106

Open on EDGAR

  1. TABLE OF CONTENTS

    | Compensation Committee Report | 45 | | Summary Compensation Table for Fiscal Year 2023 | 46 | | Grants of Plan-Based Awards | 46 | | Outstanding Equity Awards at 2023 Fiscal Year-End | 47 | | Option Exercises and Stock Vested | 49 | | Employment, Severance and Change in Control Agreements | 49 | | Potential Payments upon Termination or Change of Control | 50 | | Pay Ratio | 51 | | Item 402(v) Pay Versus Performance | 52 | | EQUITY COMPENSATION PLAN INFORMATION | 57 | | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | 58 | | CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS | 61 | | Policies and Procedures for Related Party Transactions | 61 | | Certain Related Person Transactions | 61 | | Indemnification | 62 | | OTHER MATTERS | 63 | | Legal Matters | 63 | | Fiscal Year 2023 Annual Report and SEC Filings | 63 | | Appendix A | 65 |

  2. Nominees for Director

    Nominees for Director Eric S. Yuan. Mr. Yuan is the founder of our company and has served as the Chairman of our Board of Directors, President and Chief Executive Officer since June 2011. From May 2007 to June 2011, Mr. Yuan served as Corporate Vice President of Engineering at Cisco Systems, Inc. ("Cisco"), a multinational technology company. Mr. Yuan served in various roles, most recently as Vice President of Engineering, at WebEx Communications, Inc. ("WebEx"), an internet company, from August 1997 until its acquisition by Cisco in May 2007. Mr. Yuan holds a Bachelor’s degree in Applied Math from Shandong University of Science & Technology and a Master’s degree in engineering from China University of Mining & Technology. Mr. Yuan was selected to serve on our Board of Directors because of the perspective and experience he brings as our founder, as well as his extensive experience with technology companies. Peter Gassner. Mr. Gassner has served as a member of our Board of Directors since October 2015. Since January 2007, Mr. Gassner has served as Chief Executive Officer and a member of the board of directors of Veeva Systems Inc., a cloud computing company. Prior to that, from July 2003 to June 2005, Mr. Gassner served as Senior Vice President of Technology at salesforce.com, inc., a global leader in CRM. From January 1995 to June 2003, Mr. Gassner served as Chief Architect and General Manager of PeopleTools at PeopleSoft, Inc., a company providing human resources management systems acquired by Oracle. Mr. Gassner previously served on the board of directors of Guidewire Software, Inc., a software publisher. Mr. Gassner holds a B.S. in Computer Science from Oregon State University. We believe Mr. Gassner is qualified to serve as a member of our Board of Directors because of his significant management experience in the technology industry and service on the boards of directors of various public companies. Lieut. Gen. H.R. McMaster, U.S. Army, retired. General McMaster has served as a member of our Board of Directors since May 2020. Since September 2018, he has served at Stanford University as the Fouad and Michelle Ajami Senior Fellow at the Hoover Institution, the Susan and Bernard Liautaud Fellow at the Freeman Spogli Institute and as lecturer at the Graduate School of Business. He served as a commissioned officer in the United States Army for 34 years until his retirement in June 2018. From February 2017 to April 2018, General McMaster was the 26th Assistant to the President for National Security Affairs. General McMaster holds a B.S. from the United States Military Academy at West Point and a M.A. and Ph.D. in History from the University of North Carolina at Chapel Hill. We believe General McMaster is qualified to serve as a member of our Board of Directors because of his significant experience in leading large organizations, his knowledge of foreign affairs, and his expertise in strategic assessment and planning.

  3. Continuing Directors

    Continuing Directors Jonathan Chadwick. Mr. Chadwick has served as a member of our Board of Directors since September 2017. Since April 2016, Mr. Chadwick has been a private investor. From November 2012 to April 2016, Mr. Chadwick served as Chief Financial Officer, Chief Operating Officer and Executive Vice President of VMware. From March 2011 until October 2011, he served as the Chief Financial Officer of Skype Communication S.a.r.l., a voice over IP (VoIP) service company, and from October 2011 until November 2012, as a Corporate Vice President of Microsoft Corporation, a technology company, after its acquisition of Skype Communication S.a.r.l. From June 2010 until February 2011, Mr. Chadwick served as Executive Vice President and Chief Financial Officer of McAfee, Inc., a security software company, until its acquisition by Intel Corporation. From September 1997 until June 2010, Mr. Chadwick served in various executive roles at Cisco. He also worked for Coopers & Lybrand, an accounting firm (now PricewaterhouseCoopers) in various roles in the United States and United Kingdom. He currently serves on the boards of directors of ServiceNow, Inc., a public digital workflow company, Elastic N.V., a search and data analysis company, Confluent, Inc., a data infrastructure company, Samsara Inc., an IoT software company, and various private companies. He previously served on the board of directors of Cognizant Technology Solutions Corporation, an IT business services provider, and F5 Networks, Inc., an application networking delivery company. Mr. Chadwick qualified as a Chartered Accountant in England and holds a B.Sc. degree in Electrical and Electronic Engineering from the University of Bath. We believe Mr. Chadwick is qualified to serve as a member of our Board of Directors because of his significant financial expertise as a Chief Financial Officer and service on the boards of directors of various public companies. Cindy Hoots. Ms. Hoots has served as a member of our Board of Directors since January 2023. Ms. Hoots has served as the Chief Digital Officer and Chief Information Officer at AstraZeneca PLC, a pharmaceutical company, since January 2020. From January 2018 to December 2019, she served as Global Vice President of Technology of Unilever PLC, a multinational consumer goods company. Prior to joining Unilever, Ms. Hoots served as Vice President of Next Generation Products, Commercial and Digital Transformation at British American Tobacco plc, a multinational tobacco manufacturing company, from 2016 to 2018. Ms. Hoots holds a B.S. in computer information systems from DeVry Institute of Technology. We believe Ms. Hoots is qualified to serve as a member of our Board of Directors because of her significant cybersecurity and technology expertise. Dan Scheinman. Mr. Scheinman has served as a member of our Board of Directors since January 2013. Since April 2011, Mr. Scheinman has served as an angel investor. From January 1997 to April 2011, Mr. Scheinman served in various roles at Cisco, most recently as Senior Vice President, Cisco Media Solutions Group. He currently serves on the boards of directors of Arista Networks, Inc., a cloud networking company, SentinelOne, Inc., a cybersecurity company, and several private companies. Mr. Scheinman holds a B.A. degree in Politics from Brandeis University and a J.D. from the Duke University School of Law. We believe Mr. Scheinman is qualified to serve as a member of our Board of Directors because of his significant knowledge of our company and the technology industry. William R. McDermott. Mr. McDermott has served as a member of our Board of Directors since March 2022. Since November 2019, Mr. McDermott has served as the Chief Executive Officer and a member of the board of directors of ServiceNow, Inc. (“ServiceNow”), a public digital workflow company. From 2010 through 2014, Mr. McDermott served as Co-Chief Executive Officer, and from 2014 until October 2019, as sole Chief Executive Officer, of SAP SE (“SAP”), a multinational software company providing enterprise software. Mr. McDermott joined SAP in 2002 as Chief Executive Officer of SAP America, Inc., and served on the SAP Executive Board from 2008 until October 2019. Prior to joining SAP, Mr. McDermott served as Executive Vice President of Worldwide Sales and Operations at Siebel Systems, Inc. from 2001 to 2002 and served as President of Gartner, Inc. from 2000 to 2001. Mr. McDermott currently serves on the board of directors of Fisker Inc., an automotive technology company. Mr. McDermott previously served on the board of directors of Under Armour, Inc., a sporting goods company, ANSYS, Inc., a provider of engineering and simulation software and technologies, and SecureWorks Corp., a provider of intelligence-driven information security solutions. Mr. McDermott holds a B.A. in business management from Dowling College and an M.B.A from Northwestern University’s Kellogg School of Management, and has completed the Executive Development Program at the Wharton School of Business. We believe Mr. McDermott is qualified to serve as a member of our Board of Directors because of his significant expertise as a Chief Executive Officer in the technology industry and service on the boards of directors of various public companies. Janet Napolitano. Ms. Napolitano has served as a member of our Board of Directors since November 2020. Ms. Napolitano is a professor at the University of California Berkeley’s Goldman School of Public Policy. She previously served as President of the University of California from September 2013 until her departure in August 2020. Prior to her time serving as the President of the University of California, she served as the U.S. Secretary of Homeland Security from 2009 to 2013, as governor of the state of Arizona from 2003 to 2009, as attorney general of Arizona from 1998 to 2003 and as U.S. attorney for the District of Arizona from 1993 to 1997. Ms. Napolitano currently serves on the board of directors of Vir Biotechnology, Inc., a clinical-stage immunology company. Ms. Napolitano holds a B.S. in political science from Santa Clara University and a J.D. from the University of Virginia School of Law. We believe Ms. Napolitano is qualified to serve as a member of our Board of Directors because of her extensive leadership experience in both education and government. Santiago Subotovsky. Mr. Subotovsky has served as a member of our Board of Directors since December 2014. Mr. Subotovsky is a General Partner at Emergence Capital, a venture capital firm, and has been with that firm since 2010. In 1999, Mr. Subotovsky founded AXG Tecnonexo, an e-learning vendor in Latin America. Mr. Subotovsky currently serves on the boards of directors of several private companies. He holds a B.S. in Economics from Universidad de San Andrés in Argentina and an MBA from Harvard Business School. Mr. Subotovsky is an Endeavor Entrepreneur and Kauffman Fellow. We believe Mr. Subotovsky is qualified to serve on our Board of Directors because of his market knowledge and his experience serving as a director of various private companies. The table below provides information related to the composition of our Board members and nominees. Each of the categories listed in the below table has the meaning as it is used in Nasdaq Rule 5605(f).

  4. Continuing Directors

    | Board Diversity Matrix (as of May 5, 2023) | | | | | | Total Number of Directors | 9 | | | | | | Female | Male | Non-Binary | Did Not Disclose Gender | | Part I: Gender Identity | | | | | | Directors | 2 | 6 | 0 | 1 | | Part II: Demographic Background | | | | | | African American or Black | 0 | 0 | 0 | 0 | | Alaskan Native or Native American | 0 | 0 | 0 | 0 | | Asian | 0 | 1 | 0 | 0 | | Hispanic or Latinx | 0 | 1 | 0 | 0 | | Native Hawaiian or Pacific Islander | 0 | 0 | 0 | 0 | | White | 2 | 4 | 0 | 0 | | Two or More Races or Ethnicities | 0 | 0 | 0 | 0 | | LGBTQ+ | 0 | 0 | 0 | 0 | | Did Not Disclose Demographic Background | 0 | 0 | 0 | 1 |

  5. Considerations in Evaluating Director Nominees

    Considerations in Evaluating Director Nominees Our Nominating and Corporate Governance Committee uses a variety of methods for identifying and evaluating director nominees. In its evaluation of director candidates, including director candidates nominated by stockholders, our Nominating and Corporate Governance Committee will consider the current size and composition of our Board of Directors and the needs of our Board of Directors and the respective committees of our Board of Directors. Some of the qualifications that our Nominating and Corporate Governance Committee considers include, without limitation, issues of character, integrity, judgment, diversity of experience, independence, area of expertise, corporate experience, length of service, potential conflicts of interest and other commitments. Nominees must also have the ability to offer advice and guidance to our Chief Executive Officer based on past experience in positions with a high degree of responsibility and be leaders in the companies or institutions with which they are affiliated. Director candidates must have sufficient time available in the judgment of our Nominating and Corporate Governance Committee to perform all Board of Directors and committee responsibilities. Members of our Board of Directors are expected to prepare for, attend, and participate in all Board of Directors and applicable committee meetings. Other than the foregoing, there are no stated minimum criteria for director nominees, although our Nominating and Corporate Governance Committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests. Our Board of Directors believes that it should be a diverse body, and our Nominating and Corporate Governance Committee considers a broad range of backgrounds and experiences. As set forth in our Corporate Governance Guidelines, in making determinations regarding nominations of directors, our Nominating and Corporate Governance Committee considers, among other factors, diversity factors, including race, ethnicity, gender, age and sexual orientation, among others. In furtherance of the foregoing, where a third-party search firm is engaged and requested to furnish a list of possible director candidates to us, such firm will be instructed to include women and candidates from underrepresented communities who meet the applicable business and search criteria. Our Nominating and Corporate Governance Committee also considers these and other factors as it oversees the annual Board of Directors and committee evaluations. After completing its review and evaluation of director candidates, our Nominating and Corporate Governance Committee recommends to our full Board of Directors the director nominees for selection.

  6. Non-Employee Director Compensation

    Non-Employee Director Compensation We maintain a Non-Employee Director Compensation Policy which provides for cash and equity compensation to directors who are not also serving as an employee or consultant to us (each an “Eligible Director”). The Non-Employee Director Compensation Policy was originally approved by our Board of Directors and effective in May 2019. Our Compensation Committee and Board of Directors periodically review the compensation for our Eligible Directors, with the assistance of their independent compensation consultant, Aon, including by reference to the peer group of companies used for executive compensation purposes and general trends and best practices in our industry for director compensation. When updating the Non-Employee Director Compensation Policy, our Compensation Committee and Board of Directors carefully consider market data analysis and recommendations from Aon, as well as the increased demands on and time commitment required by our directors. In early fiscal 2023, with the assistance of Aon, our Compensation Committee and Board of Directors reviewed our Non-Employee Director Compensation Policy. This review indicated that our previous structure of granting equity awards intended to compensate our non-employee directors for a three-year period, rather than on an annual basis, was not in line with market and peer practices and the value of such three-year grants, on an annualized basis, fell significantly below the median of our peer companies’ annual grants. Following such a review and after carefully considering the market data analysis and recommendations from Aon, in February 2022, our Compensation Committee recommended, and our Board of Directors approved, shifting our equity compensation approach to structure restricted stock unit awards (“RSUs”) granted to our non-employee directors to generally occur annually, rather than every three years, which we believe aligns more closely with peer company and general market practices and is most appropriate for our Eligible Directors at this time. In November 2022, with the assistance of Aon, our Compensation Committee further reviewed our Non-Employee Director Compensation Policy and, after carefully considering the market data analysis and recommendations from Aon, determined that it was appropriate to increase the service retainer for the chairperson of the Audit Committee by $2,500. The Non-Employee Director Compensation Policy in place during fiscal 2023 is described below. Annual Cash Compensation 1.Annual Board Service Retainer: a.All Eligible Directors: $45,000 b.Chairperson or Lead Independent Director (in lieu of above): $65,000 2.Annual Committee Member Service Retainer: a.Member of the Audit Committee: $12,500 b.Member of the Compensation Committee: $10,000 c.Member of the Nominating and Corporate Governance Committee: $5,000 d.Member of the Cybersecurity Risk Management Committee: $10,000 3.Annual Committee Chair Service Retainer (in lieu of Committee Member Service Retainer): a.Chairperson of the Audit Committee: $25,000 (increased to $27,500 in November 2022) b.Chairperson of the Compensation Committee: $20,000 c.Chairperson of the Nominating and Corporate Governance Committee: $10,000 d.Chairperson of the Cybersecurity Risk Management Committee: $20,000 Equity Compensation Under the Non-Employee Director Compensation Policy terms in place for fiscal 2023, each Eligible Director is eligible to receive an RSU calculated based on a grant value of $275,000 (the “Target RSU”). The RSU is automatically granted to each Eligible Director at the following times and is pro-rated as described below. Initial Appointment: At the time an Eligible Director is first elected or appointed to the Board of Directors, on the date of such Eligible Director’s initial election or appointment to the Board (the “Eligibility Date”), such Eligible Director would receive the Target RSU (the “Initial Grant”), pro-rated by the percentage (not to exceed 100%) obtained by dividing the total number of expected calendar days remaining until the first annual meeting of the Company’s stockholders (the “annual meeting”) occurring after the Eligibility Date by 365. The Initial Grant will become fully vested as of the day immediately preceding the first annual meeting date (or, if sooner, the one year anniversary of the grant date of the Initial Grant), subject to the Eligible Director’s continuous service (as defined in the 2019 Plan) through each such applicable vesting date. If an Eligible Director is first elected or appointed to the Board of Directors on the date of an annual meeting, such Eligible Director would receive the Annual Grant (defined below) instead of an Initial Grant. Re-Election: On the date of each of our annual meetings of stockholders, commencing on the applicable meeting date as described below, each Eligible Director who is (i) nominated at such annual meeting to be re-elected to the Board of Directors to serve a three-year term and (ii) continues to serve as a non-employee member of the Board of Directors following such annual meeting will be granted the Target RSUs (each, an “Annual Grant”). Because certain of our non-employee directors hold outstanding equity awards that were previously granted and structured to provide compensation over a three-year period, the February 2022 shift to annual Target RSUs is phased-in gradually for such directors, to generally correspond to the time when such director’s current outstanding equity awards are expected to be fully vested. Accordingly, the new Annual Grants will begin being granted to our Eligible Directors as follows: at our 2022 annual meeting of stockholders to our Class III Eligible Directors; at the Annual Meeting to our Class I Eligible Directors (and our Class II Eligible Directors who hold Pre-IPO Grants, as described below) and finally at our 2024 annual meeting of stockholders to our remaining Class II Eligible Directors. Any Eligible Directors who join our Board of Directors following the February 2022 amendments to our Non-Employee Director Compensation Policy will receive the Annual Grant beginning with the first annual meeting on or following the date they become Eligible Directors. The Annual Grant will vest in full on the one year anniversary of the grant date (or, if sooner, the day immediately preceding the next annual meeting that occurs following the grant date), subject to the Eligible Director’s continuous service (as defined in the 2019 Plan) through each such applicable vesting date. In addition, to adjust to the above annual grant schedule, each Class II Eligible Director who held an unvested equity award as of the original May 2019 effective date of the Non-Employee Director Compensation Policy that remained partially unvested as of February 23, 2022 (a “Pre-IPO Grant”) would receive, on the date immediately following the date such Pre-IPO Grant becomes fully vested, a Target RSU (the “Interim Grant”), pro-rated by the percentage (not to exceed 100%) obtained by dividing the total number of expected calendar days remaining until the first annual meeting following the grant date of the Interim Grant by 365. The Interim Grant will become fully vested as of the day immediately preceding the first annual meeting date (or, if sooner, the one year anniversary of the grant date of the Interim Grant), subject to the Eligible Director’s continuous service (as defined in the 2019 Plan) through each such applicable vesting date.

  7. Non-Employee Director Compensation

    All of the RSUs granted under the Non-Employee Director Compensation Policy are granted under the 2019 Equity Incentive Plan (the “2019 Plan”). All RSUs granted pursuant to the Non-Employee Director Compensation Policy will accelerate and vest in full upon (i) the Eligible Director’s death or disability (as defined in the 2019 Plan) or (ii) a change in control (as defined in the 2019 Plan), subject to the Eligible Director’s continuous service through such date. The number of shares underlying each RSU granted under the Non-Employee Director Compensation Policy is determined by dividing the applicable grant value for such RSU (as pro-rated if applicable) by a 60-trading day trailing average closing stock price of our Class A common stock. The Compensation Committee uses the 60- trading day trailing average closing price, rather than a single day stock price on the date of grant, in order to provide a more stabilized stock value less susceptible to possible swings in the market. The Compensation Committee understands that this process can result in the ultimate grant date value of an award as required to be reported in the Director Compensation Table under ASC 718 being higher or lower than the Target RSU value, but has considered, in consultation with Aon, various approaches to granting equity awards, each of which have advantages and disadvantages, and determined that the process described above is the most appropriate for Zoom at this time. Non-Employee Director Compensation for Fiscal Year 2023 The following table provides information regarding the total compensation that was earned by each of our non-employee directors in our fiscal year ended January 31, 2023.

  8. Non-Employee Director Compensation

    | Director | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | Jonathan Chadwick(2) | 70,510 | - | 70,510 | | Peter Gassner(3) | 45,000 | - | 45,000 | | Cindy Hoots(4) | 5,007 | 104,533 | 109,540 | | William R. McDermott(5) | 51,984 | 333,110 | 385,094 | | Lieut. Gen. H.R. McMaster(6) | 58,492 | - | 58,492 | | Janet Napolitano(7) | 55,000 | 274,667 | 329,667 | | Dan Scheinman(8) | 97,500 | 141,808 | 239,308 | | Santiago Subotovsky(7) | 65,000 | 274,667 | 339,667 | | Carl M. Eschenbach(9) | 54,375 | 274,667 | 329,042 | | Kimberly L. Hammonds(10) | 28,723 | - | 28,723 |

  9. Non-Employee Director Compensation

    _______________ (1)Amounts reported represent the aggregate grant date fair value of RSUs granted to our directors during the fiscal year ended January 31, 2023 under our 2019 Plan, computed in accordance with ASC Topic 718, excluding the effect of estimated forfeitures. The assumptions used in calculating the grant date fair value of the stock awards reported in this column are set forth in the notes to our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. This amount does not reflect the actual economic value that may be realized by the non-employee director. (2)As of January 31, 2023, Mr. Chadwick held RSUs for 1,514 shares of our Class A common stock, of which 884 shares remained unvested. The award vests in equal quarterly installments over 36 months measured from September 7, 2021 (pursuant to our Non-Employee Director Compensation Policy). Upon a change in control, death or disability (as such terms are defined in the 2019 Plan), the vesting of the RSUs shall accelerate in full. (3)As of January 31, 2023, Mr. Gassner held RSUs for 2,833 shares of our Class A common stock, of which 473 shares remained unvested. The award vests in equal quarterly installments over 36 months measured from June 18, 2020 (pursuant to our Non-Employee Director Compensation Policy). Upon a change in control, death or disability (as such terms are defined in the 2019 Plan), the vesting of the RSUs shall accelerate in full. (4)Pursuant to our Non-Employee Director Compensation Policy, Ms. Hoots received an Initial Grant RSU award with an aggregate grant date fair value of $104,533 upon her appointment to our Board of Directors in January 2023. As of January 31, 2023, Ms. Hoots held RSUs for 1,593 shares of our Class A common stock, all of which remained unvested. The award vests in full on June 14, 2023. (5)Pursuant to our Non-Employee Director Compensation Policy, Mr. McDermott received an Initial Grant RSU award with an aggregate grant date fair value of $58,443 upon his appointment to our Board of Directors in March 2022 and an Annual Grant RSU award with an aggregate grant date fair value of $274,667 upon his re-election to our Board of Directors in June 2022. As of January 31, 2023, Mr. McDermott held RSUs for 2,589 shares of our Class A common stock, all of which remained unvested. The award vests in full on June 14, 2023. (6)As of January 31, 2023, Gen. McMaster held RSUs for 2,833 shares of our Class A common stock, of which 473 shares remained unvested. The award vests in equal quarterly installments over 36 months measured from June 18, 2020 (pursuant to our Non-Employee Director Compensation Policy). Upon a change in control, death or disability (as such terms are defined in the 2019 Plan), the vesting of the RSUs shall accelerate in full. (7)Pursuant to our Non-Employee Director Compensation Policy, the director received an Annual Grant RSU award with an aggregate grant date fair value of $274,667 upon his or her re-election to our Board of Directors in June 2022. As of January 31, 2023, the director held RSUs for 2,589 shares of our Class A common stock, all of which remained unvested. The award vests in full on June 14, 2023. (8)Pursuant to our Non-Employee Director Compensation Policy, Mr. Scheinman received an Interim Grant RSU award with an aggregate grant date fair value of $141,808 when his then-current equity award fully vested in November 2022. As of January 31, 2023, Mr. Scheinman held unexercised stock options for 100,000 shares of our Class B common stock, all of which were fully vested, and RSUs for 1,880 shares of our Class A common stock, all of which remained unvested. The RSU award vests in full on June 14, 2023. (9)Pursuant to our Non-Employee Director Compensation Policy, Mr. Eschenbach received an Annual Grant RSU award with an aggregate grant date fair value of $274,667 upon his re-election to our Board of Directors in June 2022. Mr. Eschenbach resigned from our Board of Directors in January 2023 upon which all shares under his Annual Grant RSU award were cancelled. (10)Ms. Hammonds passed away in June 2022; pursuant to its terms, her then-outstanding stock option award fully accelerated as a result of her death. Mr. Yuan, our Chief Executive Officer, is also a director but does not receive any additional compensation for his service as a director. See the section titled “Executive Compensation” for additional information about the compensation paid to Mr. Yuan.

  10. ELECTION OF DIRECTORS

    ELECTION OF DIRECTORS Our Board of Directors currently consists of nine members. In accordance with our amended and restated certificate of incorporation, our Board of Directors is divided into three staggered classes of directors. At the Annual Meeting, three Class I directors will be elected for a three-year term to succeed the same class whose term is then expiring. Each director’s term continues until the election and qualification of his or her successor, or such director’s earlier death, resignation, or removal. Any increase or decrease in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist of one-third of our directors. This classification of our Board of Directors may have the effect of delaying or preventing changes in control of our company.

  11. Summary of Fiscal 2023 Executive Compensation Program

    Summary of Fiscal 2023 Executive Compensation Program Our Compensation Committee closely considers our performance, business strategy and our transformation as a Company in making executive compensation decisions. The Compensation Committee develops compensation programs that it thinks are the most appropriate to drive results for our Company and our stockholders, and to ensure that our pay program aligns compensation with stockholder interests and our Company performance over the long-term. As our business has transformed significantly in a short period of time since we first became a public company in 2019, our compensation programs have also continued to evolve and transform to be appropriate for a company of our size and stage of business. As such, our compensation has varied and our practices may differ from the typical practices of public companies that have been operating for longer periods of time in a less volatile and dynamic environment. Based on our operational and financial performance, and in light of the other factors described in this Compensation Discussion and Analysis, the Compensation Committee made the following named executive officer compensation decisions for fiscal 2023: –Base Salary: We approved $450,000 annual base salaries for each of our NEOs (other than Mr. Tomb) in order to provide consistent cash compensation across our team. Prior to this, our CEO’s base salary had not changed since 2011 when he founded Zoom. –Annual Performance Incentive: We maintained the current target percentage levels of annual cash incentive awards for each of our NEOs and structured our annual cash incentive program to provide payments upon achievement of two rigorous financial performance goals. After assessing performance in early fiscal 2024 and in light of our Restructuring Plan, we did not pay annual cash incentive awards to any of our NEOs, despite meeting one of our two performance goals. –Long-Term Equity Awards: We granted four-year “refresh” equity awards to our CEO and certain of our other NEOs. We do not grant typical annual refresh equity awards every year as is the practice of most public companies, including our peer companies. The four-year “refresh” awards we granted in fiscal 2023 are intended to be equivalent to four years of typical market-based annual grants. We also granted smaller sized supplemental and retention grants to certain NEOs, and we granted a four-year new hire RSU to our President who joined us mid-year. As of fiscal year-end and the date of filing this proxy statement, the market value (as further described below) of the equity awards we granted to our NEOs during fiscal 2023 was substantially lower than the grant date value reported in the Summary Compensation Table for these awards, due to the decrease in our stock price, demonstrating the direct link between our stock performance and the potential pay outcome. –Total Compensation: Total compensation reported for our NEOs for fiscal 2023 is substantially larger than the last several years primarily due to the long-term equity awards we granted in fiscal 2023 that are intended to deliver compensation over a four-year period. Accordingly, we believe that our executive compensation should be viewed over a multi-year period, rather than over a single prior fiscal year, to best understand how and why it was paid or granted, and how it compares to market practices. The below chart entitled "CEO Total Direct Compensation" reflects our CEO’s total direct compensation* over the past four-year period. When viewed over isolated one year periods, our CEO’s total direct compensation is either very low or very high compared to annual market data. When viewed over a four-year period (fiscal 2020 – fiscal 2023), our CEO’s average annual total direct compensation of $18.9 million fell between the median and 75th percentile of the annual CEO compensation of our fiscal 2023 peer companies, as reflected in the below chart entitled "Annualized CEO Total Direct Compensation vs Peers." CEO Total Direct Compensation Annualized CEO Total Direct Compensation vs Peers *“Total direct compensation” means the base salary and annual performance bonus paid as well as the grant date fair value of equity awards granted, as reported in the Summary Compensation Table. By reference, at the time our Compensation Committee made executive compensation decisions for fiscal 2023, our CEO’s total compensation (as reported in the Summary Compensation Table) over the past four years (fiscal 2019- fiscal 2022) was approximately $7 million, compared to $51 million median total compensation of our peer company CEOs over the same time period. Additionally, the value of equity awards granted in fiscal 2023 to our CEO and other NEOs as reflected in our Summary Compensation Table represents the grant date value, determined in accordance with financial accounting principles. This value is not the value that may ultimately be realized by our NEOs, which will depend on our stock price in the future when the awards vest, our executive’s continued service with us and other factors. As of the end of fiscal 2023, the market value of the RSUs granted in fiscal 2023, based on our stock price at the time (ignoring vesting schedules) was significantly less than the value reported in the Summary Compensation Table as of the date of grant, which demonstrates that the value of this equity compensation is directly aligned with our stockholders’ interests. Mr. Yuan’s equity awards for fiscal 2023 reported in the Summary Compensation Table with an accounting grant date value of $74 million had a market value of approximately $47 million as of the end of fiscal 2023, 88% of which remained subject to vesting in future years.

  12. Early Fiscal 2024 Restructuring and Executive Compensation Changes

    Early Fiscal 2024 Restructuring and Executive Compensation Changes In connection with the Restructuring Plan, we temporarily reduced our CEO’s base salary by 98% to $10,000 for fiscal 2024 and we also reduced the base salaries of our other executive officers, including our NEOs, by 20% for fiscal 2024. In March 2023, we terminated the employment of Mr. Tomb as our President. Mr. Tomb received severance benefits in the form of limited equity vesting, which were payable as described in the terms of his employment agreement and our Severance Benefit Plan.

  13. Executive Compensation Policies and Practices

    | What We Do | What We Don’t Do | | ü Emphasize long-term equity incentives ü Tie performance cash incentive opportunities to defined business objectives ü Provide transparent disclosure of performance incentive targets and payout structure ü Maintain a clawback policy ü Assess risks of our compensation program ü Maintain a Compensation Committee comprised entirely of independent directors ü Retain an independent compensation advisor | û No guaranteed “single-trigger” change in control payments û No tax reimbursements or tax gross-ups on severance or change in control payments û No special executive welfare or health benefits, or retirement plans not available to our employees generally û No guaranteed salary increases or bonuses û No hedging or pledging of our stock |

  14. Elements of Executive Compensation

    Elements of Executive Compensation Our executive compensation program aims to take a holistic approach to compensation and generally consists of, and is intended to strike a balance among, the following three principal components: base salary, performance-based incentive and long-term incentive compensation. We also provide our executive officers with severance and change-in-control related payments and benefits, as well as benefits available to all our employees, including retirement benefits under our 401(k) plan and participation in various employee health and welfare benefit plans. The following chart summarizes the three main elements of our executive compensation, their objectives, and key features.

  15. Elements of Executive Compensation

    | Element | Objectives | Key Features | | Base Salary (fixed cash) | Provides financial stability and security through a fixed amount of cash for performing job responsibilities. | Fixed compensation that is periodically reviewed and adjusted if and when appropriate. | | Performance Incentive (at-risk cash) | Motivates and rewards for attaining performance goals that are key drivers of our annual operating plan. | Incentive opportunities are dependent upon specific performance goals (which may be corporate performance goals and/or individual performance goals or sales goals in the case of executives subject to our sales compensation plan). Each goal has a defined threshold level necessary for any payout and a reasonable cap on payout. Actual incentive amounts earned are determined after the end of the performance period, taking into account the extent to which the performance goals have been achieved (and any relative weightings of such goals). | | Long-Term Incentive (at-risk equity) | Motivates and rewards for long-term Company performance by aligning executives’ interests with stockholder interests and changes in stockholder value. Attracts highly qualified executives and encourages their continued employment over the long term. | We have not historically granted equity incentives on a regular annual "refresh" cadence. Equity incentives may be granted as and when we determine appropriate for new hires, promotions, or other special circumstances, such as to encourage retention, or as a reward for significant achievement. Equity grants since our initial public offering have been provided in the form of restricted stock unit awards. |

  16. Elements of Executive Compensation

    We focus on providing a competitive compensation package to each of our executive officers that provides significant short-term and long-term incentives for the achievement of measurable corporate objectives. We believe that this approach provides an appropriate blend of short-term and long-term incentives to maximize stockholder value. We do not have formal policies for allocating compensation among salary, performance incentive awards and equity grants, short-term and long-term compensation, or among cash and non-cash compensation. Instead, the Compensation Committee uses its judgment to establish a total compensation program for each named executive officer that is a mix of current, short-term and long-term incentive compensation, and cash and non-cash compensation that it believes appropriate to achieve the goals of our executive compensation program and our corporate objectives. However, the Compensation Committee typically structures a significant portion of our named executive officers’ compensation package to be comprised of long-term equity awards in order to align the executive officers’ incentives with the interests of our stockholders and focus our executives on achieving key corporate goals that drive our business.

  17. Role of Our Compensation Committee, Management and the Board

    Role of Our Compensation Committee, Management and the Board The Compensation Committee is appointed by the Board of Directors to assist with the Board’s oversight responsibilities with respect to the Company’s compensation and benefit plans, policies and programs, administration of Company equity plans and its responsibilities related to the compensation of the Company’s executive officers, directors, and senior management, as appropriate. The Compensation Committee is primarily responsible for establishing and reviewing our general compensation strategy. The Compensation Committee meets periodically throughout the year to, among other things, manage and evaluate our executive compensation program and generally determines on an annual basis the principal components of compensation (base salary, performance incentive, and equity awards) for our executive officers which may be subject to final approval by our Board of Directors. However, decisions may occur at other times for new hires, promotions or other special circumstances as our Compensation Committee determines appropriate. The Compensation Committee does not delegate authority to approve executive officer compensation. The Compensation Committee does not maintain a formal policy regarding the timing of equity awards to our executive officers and has not historically provided for annual refresh grants to executive officers each year but instead grants equity awards when it determines appropriate, which typically includes when an executive officer is hired or promoted and at other times the Compensation Committee determines appropriate for retention or other purposes. The Compensation Committee typically grants equity awards on regularly scheduled dates that occur twice a quarter. The Compensation Committee will continue to evaluate its equity grant policies as we continue to evolve and grow as a public company. In addition to its independent compensation consultant, as described below under “Role of Compensation Consultant”, our Compensation Committee works with and receives information and analyses from management, including within our legal, finance and human resources departments, and our Chief Executive Officer, and considers such information and analyses along with the information from its independent compensation consultant, in determining the structure and amount of compensation to be paid to our executive officers, including our named executive officers. Our Chief Executive Officer evaluates and provides to the Compensation Committee executive officer performance assessments and his recommendations and proposals regarding executive officer compensation programs and decisions affecting base salaries, performance incentives, equity compensation and other compensation-related matters outside of the presence of any other named executive officers. Members of management, including our Chief Executive Officer, may attend portions of our Compensation Committee’s meetings. However, our Compensation Committee retains the final authority to make all compensation decisions. While the Chief Executive Officer discusses his recommendations with the Compensation Committee, he does not participate in the deliberations concerning, or the determination of, his own compensation. From time to time, various other members of management and other employees, as well as outside advisors or consultants, may be invited by the Compensation Committee to make presentations, provide financial or other background information or advice, or otherwise participate in Compensation Committee or Board of Directors meetings.

  18. Role of Compensation Consultant

    Role of Compensation Consultant The Compensation Committee continued to retain Aon’s Human Capital Solutions practice (formerly known as Radford), a division of Aon plc (“Aon”), as its independent compensation consultant during fiscal 2023, due to its extensive analytical and compensation expertise relating to technology companies. In this capacity, Aon advised the Compensation Committee on compensation matters related to the executive and director compensation structure. In fiscal 2023, Aon assisted with, among other things: •conducting an executive market pay analysis; •developing a group of peer companies to use as a reference in making executive compensation decisions; •evaluating current executive pay practices and considering alternative compensation programs; •reviewing our director compensation policies and practices; and •assisting in the development of this Compensation Disclosure and Analysis. The Compensation Committee has the sole authority to engage and terminate Aon’s services, as well as to approve its compensation. Aon makes recommendations to the Compensation Committee but has no authority to make compensation decisions on behalf of the Compensation Committee or the Company. Aon reported to the Compensation Committee and had direct access to the chairperson and the other members of the Compensation Committee. Beyond data and advice related to executive and director compensation matters, Aon did not provide other services to the Company in fiscal 2023. The Compensation Committee has analyzed whether the work of Aon as the compensation consultant raised any conflict of interest, considering relevant factors in accordance with SEC guidelines. Based on its analysis, the Compensation Committee determined that the work of Aon and the individual compensation advisors has not created any conflict of interest.

  19. Use of Competitive Market Compensation Data

    Use of Competitive Market Compensation Data The Compensation Committee believes that it is important when making compensation decisions to be informed as to the current practices of comparable public companies with which we compete for top talent. To this end, the Compensation Committee works annually with Aon to review and amend the list of our peer group companies to be used in connection with assessing compensation practices and pay levels. The Compensation Committee believes that the peer and market data provided by Aon, along with other factors, is an important reference point when setting compensation for our named executive officers because competition for executive management is intense in our industry and the retention of our talented leadership team is critical to our success.

  20. Fiscal 2023 Peer Group

    Fiscal 2023 Peer Group In August 2021, with recommendations from Aon, the Compensation Committee identified a group of companies that would be appropriate peers for fiscal 2023 compensation decisions, based on the following criteria: •Industry: communication products/services and software-related companies (with a focus on companies that have gone public in the last five years) •Market Capitalization: 0.3x to 3x of our market value •Revenues: 0.5x to 3x of our revenues In February 2022 ahead of executive compensation decisions, we again reviewed and refined the peer companies to ensure they remained appropriate relative to our updated market value and revenue at the time. The peer group of companies that the Compensation Committee referenced for the purpose of informing fiscal 2023 executive compensation decisions is listed below. At the time of review in February 2022, our trailing 12-month revenue was approximately $4 billion (falling near the 80th percentile of the peers) and our 30-day average market capitalization was approximately $45 billion (falling near the 70th percentile of the peers).

  21. Fiscal 2023 Performance Goals and Achievement

    Fiscal 2023 Performance Goals and Achievement The Compensation Committee established net MRR and non-GAAP income from operations as the corporate performance goals applicable to the fiscal 2023 plan year. The Compensation Committee chose these metrics because they align with the primary drivers of revenue growth and orientation of the Company and our sales compensation plan. Net MRR is an indicator of our future long-term revenue growth, and non-GAAP income from operations is an important indicator of our ability to effectively manage operating expenses given our revenue growth. We believe non-GAAP income from operations, as a supplement to GAAP financial measures, is useful to investors in evaluating our ongoing operational performance and enhancing an overall understanding of our past financial performance and allows for greater transparency with respect to metrics used by our management in its financial and operational decision-making. Each of the annual corporate performance goals, their relative weightings and payout methodology are summarized in the chart below. The incentive payout each participant could receive under the Officer Incentive Plan was capped at 200% of such participant's target incentive.

  22. Fiscal 2023 Performance Goals and Achievement

    | Corporate Performance Goal | Payout Formula(3) | Weight | Actual Achievement | Payout Percentage | Weighted Payout Percentage | | Net MRR(1) | •Less than threshold achievement (70% of target): no payout •Target achievement (100% of target): 100% payout funding •Maximum achievement (150% or greater of target): 200% payout funding | 70% | Below threshold | —% | —% | | Non-GAAP Income from Operations(2) | •Less than threshold achievement ($1,098.7 million): no payout •Target achievement ($1,569.6 million): 100% payout funding •Maximum achievement ($2,040.5 million or above): 200% payout funding | 30% | $1,579.1 million | 102% | 30.6% | | Total | | | | | 30.6% |

  23. Fiscal 2023 Performance Goals and Achievement

    (1) Net MRR is a financial measure that we define as the recurring revenue run-rate of subscription agreements from all customers for the last month of the period, including revenue from monthly subscribers who have not provided any indication that they intend to cancel their subscriptions. Our Net MRR target and actual Net MRR result is an internal measure that we do not disclose for several reasons, including our belief that disclosure would result in competitive harm. If the results were disclosed, we believe the information would provide competitors with insights into our operations and sales programs that would be harmful to us. The Compensation Committee set our Net MRR target in early fiscal 2023 at the amount it felt would require significant effort to achieve given our expectations for fiscal 2023. (2) Non-GAAP Income from Operations is a non-GAAP financial measure, which represents the GAAP income (loss) from operations, excluding stock-based compensation expense and related payroll taxes, expenses related to charitable donation of common stock, acquisition-related expenses, and litigation settlements, net. We exclude stock-based compensation expense and expenses related to charitable donation of common stock because they are non-cash in nature and excluding these expenses provides meaningful supplemental information regarding our operational performance and allows investors the ability to make more meaningful comparisons between our operating results and those of other companies. We exclude the amount of employer payroll taxes related to employee stock plans, which is a cash expense, in order for investors to see the full effect that excluding stock-based compensation expense had on our operating results. In particular, this expense is dependent on the price of our common stock and other factors that are beyond our control and do not correlate to the operation of the business. We view acquisition-related expenses when applicable, such as amortization of acquired intangible assets, transaction costs and acquisition-related retention payments that are directly related to business combinations, as events that are not necessarily reflective of operational performance during a period. We exclude significant litigation settlements, net of amounts covered by insurance, that we deem not to be in the ordinary course of our business. In particular, we believe 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 and assist in the comparison with the results of other companies in the industry. (3) Payout funding for achievement between threshold, target and maximum achievement levels was determined under the following payout scale: for achievement levels between threshold and target, 20% payout funding would occur for each 6% of achievement above threshold; for achievement levels between target and maximum, the 100% target payout funding would be increased by 20% payout funding for each 6% (10% in the case of non-GAAP Income from Operations) of achievement above target, in each case with linear interpolation between such levels. The Compensation Committee assessed the corporate performance goal achievement following the end of fiscal 2023. Although payouts under the Officer Incentive Plan based solely on our performance relative to the corporate performance goals and our payout methodology described above would result in each of our named executive officers receiving a bonus equal to 30.6% of target bonus, the Compensation Committee and our executive officers determined that no bonus should be paid to the named executive officers in light of our Restructuring Plan. As a result, each named executive officer participant did not receive any incentive payment under the Officer Incentive Plan for fiscal 2023.

  24. Equity Awards

    Equity Awards Type of Awards. Since our initial public offering, we have granted equity compensation to our executive officers primarily in the form of RSU awards. The Compensation Committee regularly reviews market trends regarding equity compensation structures in connection with making executive compensation decisions and has considered the use of performance-vesting equity awards. For fiscal 2023, the Compensation Committee determined that RSUs continued to be the most appropriate incentive structure for our executive officers at this time to deliver meaningful incentives over the long-term. The Compensation Committee believes that RSU awards align our named executive officers’ interests with those of our stockholders by providing a return directly in line with our stock price. RSU awards encourage retention through vesting over the recipient’s continued employment with us over a multi-year period, cover fewer shares than stock options, minimize dilution to stockholders, are straightforward and understandable to our employees and are the predominant type of equity award utilized by the peer companies with whom we compete for talent. Grant Cadence. Our general approach to equity compensation is to make grants when existing equity is substantially or fully vested, or otherwise not providing sufficient retention and incentive for our employees. Accordingly, we typically grant equity awards upon an executive officer’s commencement of employment or promotion that vest over a four-year period, followed by “refresh” grants when these awards are substantially vested. We have not adopted the practice of granting substantial equity awards annually to executive officers, which is the practice of most other public companies. As a result, in years where we make these four-year equity grants to our executives, the value of these awards will generally appear higher than grant values of other companies, when viewed on a single year basis. However, our awards should generally be viewed in the context of compensation over a four-year period. 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. Targeted Grant Value and Resulting Shares. The Compensation Committee typically approves a target dollar-denominated grant value for each equity award, which is then translated into the number of RSUs that are granted. We generally determine the number of RSUs underlying each grant by dividing the RSU target grant value by our average closing price over the 30-trading day period ending 14 days prior to the grant date. The Compensation Committee generally uses a historical average closing market price to determine the number of shares subject to each equity award, rather than a single day stock price on the date of grant, in order to provide a more stabilized stock value less susceptible to possible swings in the market. The Compensation Committee understands that using a historical average stock price can result in the ultimate grant date value of an award as required to be reported in the Summary Compensation Table and the Grants of Plan-Based Awards table under ASC 718 being higher or lower than the target grant value but has considered this, in consultation with Aon, and determined that the process described above is the most appropriate as a general practice for us at this time.

  25. Fiscal 2023 NEO RSU Grants

    Fiscal 2023 NEO RSU Grants Four-Year Refresh Awards. In July 2022, the Compensation Committee granted four-year refresh awards to certain of our then-serving NEOs in the amounts reflected below, which vest over a four-year period (“4-year refresh awards”). Mr. Yuan had not received any equity awards since 2018, and those awards fully vested in fiscal 2023. Likewise, our other NEOs who received 4-year refresh awards would be completely vested or substantially vested in their new hire or promotion equity awards in fiscal 2023. The Compensation Committee determined the size of the 4-year refresh award for each NEO in its subjective discretion, using its experience and business judgment, considering various factors, including market data, individual performance, current equity awards granted (including vested and unvested portions), and total target cash and equity compensation opportunity. The Compensation Committee considered the annualized value of the 4-year refresh awards when evaluating the appropriate amounts for the grants. On an annualized basis (i.e., total grant amount divided by four), Mr. Yuan’s 4-year refresh award reflected the 60th percentile of market data for CEO annual equity grant values. The Compensation Committee felt this positioning was appropriate to provide Mr. Yuan incentive to remain fully focused and engaged on the continued growth of our organization for the long-term. Our other NEOs’ annualized 4-year refresh awards ranged from below the 50th percentile of market data to approximately the 75th percentile of market data, based on the variety of factors considered above. Amounts above the 60th percentile of market reflected situations where the NEO’s annualized target compensation prior to the grant fell significantly below the median of market data. The table below reflects the RSU target grant value that the Compensation Committee approved for each of the 4-year refresh equity awards granted in July 2023, in the aggregate and on an annualized basis. Annualizing the 4-year refresh awards is more representative of how the awards are earned and provides a better comparison to the market data that the Compensation Committee reviews in making compensation decisions, which treats other awards similarly and values on an annualized basis.

  26. Fiscal 2023 NEO RSU Grants

    | Executive | 4-Year Refresh RSUs (#) | RSU Target Grant Value (Total) ($) | RSU Target Grant Value (Annualized) ($) | | Eric S. Yuan | 612,499 | $64,000,000 | $16,000,000 | | Kelly Steckelberg | 297,216 | $31,056,000 | $7,764,000 | | Aparna Bawa | 191,406 | $20,000,000 | $5,000,000 | | Velchamy Sankarlingam(1) | ─ | ─ | ─ | | Greg Tomb(2) | ─ | ─ | ─ |

  27. Fiscal 2023 NEO RSU Grants

    _______________ (1) Mr. Sankarlingam was not granted a 4-year refresh award in July because he had received a new hire RSU award in July 2020. (2) Mr. Tomb was not granted a 4-year refresh award because he received a new hire RSU award in June 2022. Retention and Supplemental RSUs. We also made two other types of smaller equity award grants to our NEOs in 2023: retention bonus awards and, in certain cases, supplemental retention awards. The Compensation Committee viewed these retention grants as critical to meet the Company’s retention needs driven by the highly competitive industry within which we operate, which has been intensified in the post-COVID inflationary market, the significant volatility of our stock price and recent changes in macroeconomic conditions that have caused uncertainty in our business. Attracting and retaining executive talent of the caliber of our leaders is both extremely challenging and vitally important. Our ability to execute our strategy, our future success and the promotion and protection of the interests of our stockholders depend to a great extent on our continuing ability to retain highly qualified and skilled employees. The Compensation Committee granted retention bonus award RSUs in fiscal 2023 to each of our non-sales employees, and each of our then-serving NEOs received these awards in April 2022. Our annual incentive target cash opportunity of 8% of base salary for all of our non-sales employees (including our NEOs) is very low compared to the annual incentive compensation offered to executive officers employed by companies with which we compete, and accordingly, each of our NEOs’ target cash annual incentive compensation fell below the 25th percentile of market data. In line with our philosophy of emphasizing equity ownership and aligning our executives’ interests with those of our stockholders, the Compensation Committee determined it was necessary and appropriate to deliver additional annual incentive compensation in the form of RSUs. The Compensation Committee felt these RSU grants were more appropriate than increasing target cash at this time in our business and external environment. RSUs serve as a retention tool because they provide economic value when they vest upon continued service and they serve as an incentive tool because the value they deliver depends directly on the value of our stock. Mr. Yuan received a retention bonus RSU with a target grant value of $1,000,000 and each of our other then-serving NEOs received a retention bonus RSU with a target grant value of $750,000. The grants provided to each of our NEOs reflect amounts that, when combined with the target 8% cash incentive opportunity, make our NEOs’ annual compensation more competitive with those offered by our peer companies. Because bonus RSUs are intended to supplement annual incentive compensation, they vest over a one-year period subject to the employee’s continued service. Our supplemental grant program applies to all employees in good standing (including our NEOs) who were granted certain equity awards in fiscal 2021 and parts of fiscal 2022 at times when our stock price was at extraordinarily high levels. Fiscal 2021 and the first half of fiscal 2022 were unprecedented times for Zoom as the COVID-19 pandemic unfolded, our ability to rapidly respond and execute drove strong financial results, and our stock price increased over 600% from pre-pandemic levels. In recent periods, our stock price has declined in connection with the COVID-19 pandemic recovery and changes in macroeconomic conditions that have caused uncertainty in our business and the broader market. Because of these factors, these RSUs granted during fiscal 2021 and parts of fiscal 2022 have not delivered the retention value that we intended. Accordingly, the Compensation Committee approved special supplemental RSU awards intended to specifically address awards provided during this unprecedented time frame. Each of Ms. Steckelberg and Ms. Bawa received a supplemental RSU award with a target grant value of $15,415 (in respect of their special COVID-19 RSUs granted in June 2020 when our stock price was $210). Ms. Bawa also received a supplemental RSU award with a target grant value of $3,965,008 (in respect of her promotion RSU granted in September 2020 when our stock price was $370). Mr. Sankarlingam received a supplemental RSU award with a target grant value of $7,476,545 (in respect of his new hire RSU granted in July 2020 when our stock price was $266). Supplemental RSU awards described above were granted in April 2022 and vest over the same schedule as the original RSU grant to which they relate. To determine the number of RSUs for these supplemental grants, we used the stock price on the grant date because the Compensation Committee felt it was important from a retention perspective to deliver the precise target grant value as of the grant date. In September 2022, the Compensation Committee also approved a retention grant for Mr. Sankarlingam with a target grant value of $7,000,000 that vests over a four-year period. The Compensation Committee does not generally approve significant equity awards outside of the four-year refresh award cycle other than the supplemental and retention bonus awards described above. However, the Compensation Committee felt this award was important to retain and incentivize Mr. Sankarlingam, whose compensation fell below the market data for his position and determined the amount of the award based on their judgment of what was necessary and appropriate to properly retain Mr. Sankarlingam. New Hire RSUs. The recruitment of Mr. Tomb was a highly competitive process due to his experience as a technology industry leader, most recently at Google Cloud. Mr. Tomb’s new hire RSU award was a heavily negotiated component of the terms of Mr. Tomb’s recruitment to join Zoom in May 2022. In determining the appropriate amount of Mr. Tomb’s RSU award, the Compensation Committee considered Mr. Tomb’s compensation arrangement with Google and the amounts that he was expected to receive in future years. The Compensation Committee also considered our executive compensation program and current executive officer compensation to design a competitive, market-based compensation package appropriate for a senior executive with Mr. Tomb’s skills and experience. The Compensation Committee determined that a RSU award with a target grant value of $45,000,000 that vests over a four-year period provided the appropriate new hire RSU award for Mr. Tomb. This RSU award was intended to be front-loaded to provide Mr. Tomb with a meaningful stake in Zoom for a four-year period. The Compensation Committee believed this new hire RSU was critical to Mr. Tomb’s decision to accept employment with us. As a result of Mr. Tomb’s termination of employment in March 2023, he forfeited a portion of this new hire RSU award, as further described below under “Severance and Change in Control Benefits”.

  28. Severance and Change in Control Benefits

    Severance and Change in Control Benefits Each of our named executive officers is eligible for severance benefits upon certain types of involuntary termination events, including involuntary terminations in connection with a change in control of our Company. The Compensation Committee believes severance benefits are important from a retention perspective to provide some level of protection to our executive officers who might be terminated involuntarily, including in connection with a change in control and that the amounts are reasonable and maintain the competitiveness of our executive compensation and retention program. Further, the Compensation Committee believes this structure serves to mitigate the distraction and loss of key executive officers that may occur in connection with potential or actual change in control. Such payments protect the interests of our stockholders by enhancing executive focus, including during potential change in control activity, retaining executives despite the uncertainty that generally exists while a transaction is under consideration and encouraging the executives responsible for negotiating potential transactions to do so with independence and objectivity. We do not have any agreements with our named executive officers guaranteeing any tax gross-up payments on severance or change in control benefits. We have historically provided “double trigger” severance benefits to each of our named executive officers pursuant to their employee offer letters. In August 2022, we adopted a Severance and Change in Control Plan (the “Severance Plan”) that provides severance protection to certain Company employees, including each of our named executive officers. The Severance Plan provides for “double trigger” benefits consistent with those our named executive officers were previously eligible for under their offer letters (with some clarifications around definitions and the addition of extending benefits to involuntary terminations that occur shortly before the closing of a change in control) and also provides for limited equity acceleration benefits upon an involuntary termination that occurs outside of the change-in-control context. The Compensation Committee approved the Severance Plan as an updated vehicle to provide severance benefits in one comprehensive document that delivers consistent protections to each of our named executive officers. The Compensation Committee reviewed market data in connection with approving these benefits and determined it was advisable to add limited accelerated vesting for involuntary terminations because this benefit was more consistent with market data, would provide reasonable protection to our executives and serve as an important retention tool. The Severance Plan provides that, upon an involuntary termination without cause or resignation for good reason, in each case, within the change-in-control period (3 months prior to, or 12 months following, a change in control), the named executive officer will be entitled to receive, subject to the execution and delivery of an effective release of claims in our favor, (1) a cash payment equal to six months of annual base salary; (2) continued COBRA premium payments for six months following termination; and (3) 100% acceleration of any then-outstanding equity awards. The Severance Plan also provides that upon an involuntary termination without cause or resignation for good reason, in each case, outside of the change in control period, each of our named executive officers will be entitled to 12 months of acceleration of vesting for outstanding and unvested time-based equity awards. The terms “cause,” “good reason” and “change in control” are defined as set forth in the Severance Plan. A more detailed description of the Severance Plan and each of our named executive officer’s potential payments and benefits upon a termination or change in control is provided below under “Potential Payments upon Termination or Change in Control.” In February 2023, we terminated the employment of Mr. Tomb. Mr. Tomb entered into a separation agreement with us that provides for a release of claims in our favor and the severance benefits described above that are payable upon a termination “without cause” outside of the change in control period (i.e., 12 months accelerated vesting of Mr. Tomb’s RSU award).

  29. Pension Benefits

    Pension Benefits Other than with respect to our 401(k) plan, our U.S. employees, including our named executive officers, do not participate in any plan that provides for retirement payments and benefits, or payments and benefits that will be provided primarily following retirement.

  30. Nonqualified Deferred Compensation

    Nonqualified Deferred Compensation During fiscal 2023, our U.S. employees, including our named executive officers, did not contribute to, or earn any amounts with respect to, any defined contribution or other plan sponsored by us that provides for the deferral of compensation on a basis that is not tax-qualified.

  31. Clawback Policy

    Clawback Policy We voluntarily adopted an incentive compensation recoupment, or “clawback,” policy that became effective in connection with our initial public offering in 2019, ahead of final guidance by the SEC regarding the clawback rules required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “SEC Clawback Rules”). Under our clawback policy, if an officer’s misconduct contributes to our having to prepare an accounting restatement to correct an error material to our previously issued financial statements, we may seek to recover incentive compensation (which may include cash bonus or incentive compensation, certain outstanding equity awards or severance or change in control compensation) that was granted, vested or paid during the 12 month period preceding the restatement obligation as noted above. Our Board of Directors has the authority and discretion to determine whether an event covered by our clawback policy has occurred and, depending on the facts and circumstances, may (but need not) require full or partial forfeiture and/or prepayment of the incentive compensation described above. The SEC has recently published finalized SEC Clawback Rules that will require further rulemaking by Nasdaq. We will monitor the listing standards adopted by Nasdaq and will review and amend our clawback policy, as appropriate, to reflect the listing standards expected to be adopted by Nasdaq in calendar year 2023. In addition to the above, as a public company, if we are required to restate our financial results due to our material noncompliance with any financial reporting requirements under the federal securities laws as a result of misconduct, our Chief Executive Officer and Chief Financial Officer may be legally required to reimburse us for any bonus or other incentive-based or equity-based compensation they receive in accordance with the provisions of Section 304 of the Sarbanes-Oxley Act of 2002.

  32. Summary Compensation Table for Fiscal Year 2023

    Summary Compensation Table for Fiscal Year 2023 The following table presents all of the compensation awarded to or earned by or paid to our named executive officers during the fiscal years ended January 31, 2023, 2022, and 2021.

  33. Summary Compensation Table for Fiscal Year 2023

    | Name and Principal Position | Year | Salary ($) | Stock Awards ($)(1) | Non-Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($) | Total ($) | | Eric S. Yuan, President and Chief Executive Officer | 2023 | 402,962 | 74,311,158 | — | 1,245,563(3) | 75,959,683 | | | 2022 | 301,731 | — | 13,224 | 800,134(3) | 1,115,089 | | | 2021 | 300,000 | — | 42,000 | 607,748(3) | 949,748 | | Kelly Steckelberg, Chief Financial Officer | 2023 | 426,196 | 36,322,225 | — | — | 36,748,421 | | | 2022 | 377,164 | — | 16,530 | — | 393,694 | | | 2021 | 375,000 | 94,424 | 52,500 | — | 521,924 | | Aparna Bawa, Chief Operating Officer and Interim Chief Legal Officer | 2023 | 426,923 | 27,611,195 | — | — | 28,038,118 | | | 2022 | 402,308 | — | 17,632 | — | 419,940 | | | 2021 | 356,250 | 10,217,203 | 49,892 | — | 10,623,345 | | Velchamy Sankarlingam, President of Product and Engineering | 2023 | 451,731 | 13,760,601 | — | — | 14,212,332 | | | 2022 | 301,731 | — | 13,224 | — | 314,955 | | | 2021 | 187,500 | 26,962,237 | 26,811 | — | 27,176,548 | | Greg Tomb, Former President(4) | 2023 | 264,615 | 50,813,146 | — | — | 51,077,761 |

  34. Summary Compensation Table for Fiscal Year 2023

    ______________ (1)The amounts reported in this column represent the aggregate grant date fair value of stock awards granted in each respective fiscal year as determined in accordance with FASB ASC Topic 718. These amounts may not actually reflect to the actual value that will be realized by our named executive officers. The assumptions used to calculate the value of stock awards are set forth under Note 9 of the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. (2)The amounts disclosed represent the applicable named executive officer’s total performance incentive bonus earned for each respective fiscal year. There were no bonuses earned for the fiscal year ended January 31, 2023, as further described above under “Compensation Discussion and Analysis.” (3)Represents amounts paid by us for ground transportation, personal and residential security services for Mr. Yuan, as further described above under "Compensation Discussion and Analysis." (4)Mr. Tomb's employment with us commenced in June 2022 and terminated in March 2023.

  35. Grants of Plan-Based Awards

    Grants of Plan-Based Awards The table below shows, for the fiscal year ended January 31, 2023, certain information regarding grants of plan-based awards to our named executive officers.

  36. Grants of Plan-Based Awards

    | Name | Award Type | Approval Date | Grant Date | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | | | | | Threshold ($) | Target ($) | Maximum ($) | | | | Eric S. Yuan | Cash | — | — | 9,261 | 33,074 | 66,148 | — | — | | | RSU | 4/8/2022 | 4/8/2022(4) | — | — | — | 8,420 | 933,778 | | | RSU | 7/7/2022 | 7/8/2022(5) | — | — | — | 612,499 | 73,377,380 | | Kelly Steckelberg | Cash | — | — | 9,528 | 34,027 | 68,055 | — | — | | | RSU | 4/8/2022 | 4/8/2022(6) | — | — | — | 139 | 15,415 | | | RSU | 4/8/2022 | 4/8/2022(4) | — | — | — | 6,315 | 700,334 | | | RSU | 7/7/2022 | 7/8/2022(5) | — | — | — | 297,216 | 35,606,477 | | Aparna Bawa | Cash | — | — | 9,525 | 34,016 | 68,033 | — | — | | | RSU | 4/8/2022 | 4/8/2022(6) | — | — | — | 139 | 15,415 | | | RSU | 4/8/2022 | 4/8/2022(4) | — | — | — | 6,315 | 700,334 | | | RSU | 4/8/2022 | 4/8/2022(7) | — | — | — | 35,753 | 3,965,008 | | | RSU | 7/7/2022 | 7/8/2022(5) | — | — | — | 191,406 | 22,930,439 | | Velchamy Sankarlingam | Cash | — | — | 10,080 | 36,000 | 72,000 | — | — | | | RSU | 4/8/2022 | 4/8/2022(4) | — | — | — | 6,315 | 700,334 | | | RSU | 4/8/2022 | 4/8/2022(7) | — | — | — | 67,417 | 7,476,545 | | | RSU | 9/8/2022 | 9/9/2022(8) | — | — | — | 67,575 | 5,583,722 | | Greg Tomb | Cash | — | — | 5,892 | 21,041 | 42,082 | — | — | | | RSU | 6/8/2022 | 6/9/2022(9) | — | — | — | 460,264 | 50,813,146 |

  37. Grants of Plan-Based Awards

    (1)Represents the range of possible payouts to our named executive officers for fiscal 2023 under the Officer Incentive Plan as further described above under “Compensation Discussion and Analysis.” The dollar value of the actual bonus award earned for fiscal 2023 for each named executive officer was zero. As such, the amounts set forth in this column do not represent either additional or actual compensation earned by the named executive officers for the year ended January 31, 2023. (2)Represents RSU awards granted under the 2019 Plan. (3)The grant date fair value of each equity award is computed in accordance with FASB ASC 718. The amounts reported in this column reflect the accounting cost for these RSUs and do not correspond to the actual economic value that may be received by the NEOs upon the vesting or settlement of the RSUs. (4)Represents a retention bonus RSU award that vests 100% on the one year anniversary of the grant date, subject to each NEO's continuous service with us through such date. (5)Represents a refresh RSU award that vests over a four year period in equal quarterly installments, subject to the NEO's continuous service with us through each such date. (6)Represents a supplemental RSU award that vests 100% on June 8, 2022, subject to each NEO's continuous service with us through such date. (7)Represents a supplemental RSU award that vests over a two year period equal quarterly installments, subject to each NEO's continuous service with us through each such date. (8)Represents a retention RSU award that vests over four years, with 1/4th of the units vesting on the one-year anniversary of the grant date and the remainder vesting in 12 equal quarterly installments thereafter, subject to Mr. Sankarlingam’s continuous service with us through each such date. (9)Represents a new hire RSU award that vests over a four year period, with 1/32 of the shares vesting twice per fiscal quarter on our regularly scheduled quarterly vesting dates, subject to Mr. Tomb’s continuous service with us through each such date. As a result of Mr. Tomb’s termination of employment in February 2023, 273,278 of the RSUs reflected in the table above were cancelled.

  38. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table sets forth the outstanding and exercisable and unexercisable stock options and unvested RSU awards held by our named executive officers as of January 31, 2023. The market value for the stock awards was calculated by multiplying the number of shares of our common stock subject to each award by $75.00, which was the closing market price of our common stock on January 31, 2023.

  39. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | Option Awards | | | | | | | | Stock Awards | | | Name | Grant Date | Number of Securities Underlying Unexercised Options Exercisable | | Number of Securities Underlying Unexercised Options Unexercisable | | Option Exercise Price Per Share(1) | | Option Expiration Date | Number of shares or units of stock that have not vested | Market value of shares or units of stock that have not vested | | Eric S. Yuan | 09/24/2018 | 26,505 | | — | | $4.15 | | 09/24/2023 | — | — | | | 09/24/2018 | 67,245 | | — | | $3.77 | | 09/24/2028 | — | — | | | 04/08/2022(2) | — | — | — | — | — | — | — | 8,420 | $631,500 | | | 07/08/2022(3) | — | — | — | — | — | — | — | 535,937 | $40,195,275 | | Kelly Steckelberg | 09/24/2018 | 100,000 | | — | | $3.77 | | 09/24/2028 | — | — | | | 01/06/2018 | 704,604 | | — | | $1.31 | | 01/06/2028 | — | — | | | 04/08/2022(2) | — | — | — | — | — | — | — | 6,315 | $473,625 | | | 07/08/2022(3) | — | — | — | — | — | — | — | 260,064 | $19,504,800 | | Aparna Bawa | 09/04/2020(4) | — | | — | | — | | — | 11,973 | $897,975 | | | 04/08/2022(2) | — | | — | | — | | — | 6,315 | $473,625 | | | 04/08/2022(5) | — | | — | | — | | — | 22,346 | $1,675,950 | | | 07/08/2022(3) | — | | — | | — | | — | 167,481 | $12,561,075 | | Velchamy Sankarlingam | 07/08/2020(4) | — | | — | | — | | — | 37,965 | $2,847,375 | | | 04/08/2022(2) | — | | — | | — | | — | 6,315 | $473,625 | | | 04/08/2022(5) | — | | — | | — | | — | 42,136 | $3,160,200 | | | 09/09/2022(3) | — | | — | | — | | — | 63,352 | $4,751,400 | | Greg Tomb | 06/09/2022(6) | — | | — | | — | | — | 388,346 | $29,125,950 |

  40. Outstanding Equity Awards at 2023 Fiscal Year-End

    _______________ (1)All of the options were granted with a per share exercise price equal to the fair market value of one share of our common stock on the date of grant, as determined in good faith by our Board of Directors or Compensation Committee, except that Mr. Yuan’s stock option covering 26,505 shares was granted with an exercise price per share equal to 110% of the fair market value of one share of our common stock on the date of grant in order to comply with tax rules governing options intended to be “incentive stock options.” (2)100% of the shares subject to the award will vest on the one-year anniversary of the grant date, subject to the named executive officer's continuous service with us as of such vesting date. (3)6.25% of the shares subject to the award will vest in 16 equal quarterly installments after the grant date, subject to the named executive officer’s continuous service with us as of each such vesting date. (4)One-fourth of the shares subject to the award will vest on the one year anniversary of the grant date and the remaining shares subject to the award vest in 12 equal quarterly installments measured thereafter, subject to the named executive officer’s continuous service with us as of each such vesting date. (5)12.5% of the shares subject to the award will vest in 8 equal quarterly installments after the grant date, subject to the named executive officer’s continuous service with us as of each such vesting date. (6)The shares subject to the award will vest over a four-year period, with 3.125% of the shares vesting twice per fiscal quarter on our regularly scheduled quarterly vesting dates (commencing on the grant date), subject to Mr. Tomb’s continued service with us through each such vesting date. As a result of Mr. Tomb’s termination of employment in February 2023, 115,068 RSUs accelerated vesting and the remaining 273,278 RSUs were cancelled.

  41. Option Exercises and Stock Vested

    Option Exercises and Stock Vested The following table shows for the fiscal year ended January 31, 2023, certain information regarding option exercises and stock vested during the last fiscal year with respect to our named executive officers:

  42. Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | | Eric S. Yuan | 62,500 | 7,772,080 | 76,562 | 5,592,854 | | Kelly Steckelberg | 86,596 | 8,996,139 | 37,516 | 2,755,981 | | Aparna Bawa | — | — | 44,538 | 3,616,853 | | Velchamy Sankarlingam | — | — | 54,814 | 4,929,674 | | Greg Tomb | — | — | 71,918 | 6,059,105 |

  43. Option Exercises and Stock Vested

    _______________ (1)The value realized on exercise is based on the difference between the closing price of our Class A common stock on the date of exercise and the applicable exercise price of those options, and does not represent actual amounts received by our named executive officers as a result of the option exercises. (2)The value realized on vesting is determined by multiplying the number of vested RSUs by the closing price of our Class A common stock on the vesting date. The value realized on vesting does not reflect the actual value received by each named executive officer because a portion of the shares reflected in the table above were withheld by us to satisfy the named executive officer’s tax withholding obligations.

  44. Potential Payments upon Termination or Change of Control

    Potential Payments upon Termination or Change of Control Each of our named executive officers is eligible for severance benefits pursuant to the terms of our Severance and Change in Control Plan, as further described above under “Compensation Discussion and Analysis – Severance and Change in Control Benefits.” In addition, each of our named executive officers hold equity awards that are subject to the terms of the equity incentive plan and award agreement thereunder under which such awards were granted. The following table presents information concerning estimated payments and benefits that would be provided in the circumstances described above for each of the named executive officers serving as of the end of the fiscal year ending January 31, 2023. The payments and benefits set forth below are estimated assuming that the termination or change in control event occurred on the last business day of our fiscal year ending January 31, 2023 using the closing market price of our Class A common stock on that date. Actual payments and benefits could be different if such events were to occur on any other date or at any other price or if any other assumptions are used to estimate potential payments and benefits. Actual payments and benefits that Mr. Tomb received upon his termination in March 2023 are also described below.

  45. Potential Payments upon Termination or Change of Control

    | | Involuntary Termination in Connection with a Change in Control(1) | | | | Involuntary Termination not in Connection with a Change of Control | Certain Change in Control Transactions without Termination ($)(4) | Death or Disability of NEO ($)(5) | | Name | Cash Severance ($)(2) | COBRA Premium Reimbursement ($) | Equity Acceleration ($)(3) | Total ($) | Partial Equity Acceleration ($)(3) | Equity Acceleration ($)(3) | Equity Acceleration ($)(3) | | Eric S. Yuan | 225,000 | 11,400 | 40,826,775 | 41,063,175 | 12,115,875 | 40,826,775 | 40,826,775 | | Kelly Steckelberg | 225,000 | 3,684 | 19,978,425 | 20,207,109 | 6,046,425 | 19,978,425 | 19,978,425 | | Aparna Bawa | 225,000 | 11,400 | 15,608,625 | 15,845,025 | 5,916,300 | 15,608,625 | 15,608,625 | | Velchamy Sankarlingam | 225,000 | 11,400 | 11,232,600 | 11,469,000 | 6,167,025 | 11,232,600 | 11,232,600 | | Greg Tomb(6) | 200,000 | 6,690 | 29,125,950 | 29,332,640 | 8,630,100 | 29,125,950 | 29,125,950 |

  46. Potential Payments upon Termination or Change of Control

    _______________ (1)An “involuntary termination” means a termination without cause or a resignation for good reason and other than due to death or disability. An involuntary termination that occurs three months prior to, or twelve months following a change in control is considered occurring “in connection with” such change in control for purposes of each of the named executive officer’s severance benefits listed above. (2)Represents six months of the named executive officer's annual base salary. (3)The value of equity acceleration is calculated based on the closing price of $75.00 per share of our Class A common stock as of January 31, 2023, multiplied by the number of unvested RSUs subject to acceleration. All of the unvested outstanding equity awards held by our named executive officers as of January 31, 2023 were RSUs. (4)These benefits represent full equity acceleration of all awards under the terms of the 2019 Plan if, upon a corporate transaction (as defined in the 2019 Plan), the equity awards will terminate and will not be assumed or continued by the successor or acquirer entity or substituted for a similar award of the successor or acquirer entity and the named executive officers do not terminate employment prior to such corporate transaction. For a description of the potential vesting acceleration provisions in the 2019 Plan, see “Equity Plans – 2019 Equity Incentive Plan” below. (5)These benefits represent full equity acceleration of all RSU awards upon death or disability of a named executive officer, pursuant to the terms of the RSU agreements provided to named executive officers under the 2019 Plan. (6)In February 2023, we terminated the employment of Mr. Tomb. Mr. Tomb entered into a separation agreement with us that provides for a release of claims in our favor and the severance benefits described above that are payable upon a termination “without cause” not in connection with a change in control. Accordingly, Mr. Tomb received 12 months of accelerated vesting of his RSU award, resulting in 115,068 RSUs accelerating vesting, and the remaining 273,278 RSUs were cancelled. As a result of his termination, Mr. Tomb is no longer eligible for any of the other severance or change in control benefits described above.

  47. Pay Ratio

    Pay Ratio As required by Section 953(b) of the Dodd-Frank Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our median employee and the annual total compensation of our CEO. Our pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules. The SEC’s regulations for identifying the median employee, calculating annual total compensation and determining the pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions. Therefore, our pay ratio disclosure may not be comparable to that reported by other companies, as other companies not only have different employee populations and compensation practices but also may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios. To identify the median of the annual total compensation of all our employees, the methodology and the material assumptions, adjustments and estimates that we used were as follows: •We examined the compensation of all of our full-time and part-time employees (other than our CEO) as of November 1, 2022 including individuals employed through a third-party provider. We did not include any independent contractors or contingent workers in our employee population for purposes of this determination. •To identify our median employee, we utilized a consistently applied compensation measure consisting of base salary paid, bonus or commission payments made and the grant date fair value, calculated in accordance with ASC 718, of equity awards granted, in each case during the period from February 1, 2022 through November 1, 2022. We selected this compensation measure as it captures the principal forms of compensation delivered to our employees and this information is readily available with respect to our employees. •We annualized the base salary and commission payments for employees who were employed for less than the full fiscal year and then pro-rated these amounts to reflect the period from February 1, 2022 through November 1, 2022. •For employees paid other than in U.S. dollars, we converted their compensation to U.S. dollars using foreign exchange rates in effect as of November 1, 2022. We did not make any cost-of-living adjustments for employees outside of the United States. • After applying the methodology described above, we determined the identity of our median employee for fiscal 2023 and then calculated that employee’s annual total compensation in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. As set forth in the Summary Compensation Table, our CEO’s annual total compensation for fiscal 2023 was $75,959,683. The median of the annual total compensation of all of our employees (except for our CEO) for fiscal 2023 was $217,294, resulting in a CEO to median employee pay ratio of approximately 350:1. Our fiscal 2023 pay ratio is substantially greater than our fiscal 2022 pay ratio due to Mr. Yuan’s four-year “refresh” equity award, which is intended to be equivalent to four years of typical market-based annual grants. For purposes of the pay ratio calculation, issuing larger multi-year periodic grants instead of typical annual equity grants results in the compensation for the CEO appearing uneven because the larger multi-year equity compensation is included in Mr. Yuan’s compensation in the year of grant, while little to no equity compensation is included in the other years.

  48. Item 402(v) Pay Versus Performance

    Item 402(v) Pay Versus Performance The disclosure included in this section is prescribed by SEC rules and does not necessarily align with how we or our Compensation Committee view the link between our performance and our named executive officers’ pay. For additional information about our pay-for-performance philosophy and how we align executive compensation with Company performance, refer to the “Compensation Discussion and Analysis” section beginning on page 28.

  49. Required Tabular Disclosure of Pay Versus Performance

    Required Tabular Disclosure of Pay Versus Performance The amounts set forth below under the headings “Compensation Actually Paid to CEO” and “Average Compensation Actually Paid for NEOs” have been calculated in a manner consistent with Item 402(v) of Regulation S-K. Use of the term “compensation actually paid” (“CAP”) is required by the SEC’s rules and as a result of the calculation methodology required by the SEC, such amounts differ from compensation actually received by the individuals and the compensation decisions described in the “Compensation Discussion and Analysis” section above.

  50. Required Tabular Disclosure of Pay Versus Performance

    | Fiscal Year | Summary Compensation Table for PEO(1) | Compensation Actually Paid to PEO(2) | Average Summary Compensation Table Total for non-PEO NEOs(3) | Average Compensation Actually paid to non-PEO NEOs(4) | Value of Initial Fixed $100 Investment Based On: | | | | | | | | | | Total Shareholder Return(5) | Peer Group Total Shareholder Return(6) | Net Income (7) (in thousands) | Non GAAP Income from Operations (in millions)(8) | | (a) | (b) | (c) | (d) | (e) | (f) | (g) | (h) | (i) | | 2023 | $75,959,683 | $43,840,026 | $32,519,158 | $20,324,162 | $98.30 | $142.05 | $103,711 | $1,579.1 | | 2022 | $1,115,089 | ($26,702,869) | $512,500 | ($19,780,384) | $202.20 | $183.20 | $1,375,639 | $1,657.1 | | 2021 | $949,748 | $89,602,053 | $10,281,937 | $78,892,651 | $487.64 | $146.11 | $672,316 | $983.3 |

  51. Required Tabular Disclosure of Pay Versus Performance

    _______________ (1) The dollar amounts reported in column (b) are the amounts of total compensation reported for Mr. Yuan (our PEO) for each corresponding year in the “Total” column of the Summary Compensation Table. Refer to “Summary Compensation table for Fiscal Year 2023.” (2) The dollar amounts reported in column (c) represent the amount of CAP for Mr. Yuan, as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual amount of compensation earned by or paid to Mr. Yuan during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to Mr. Yuan’s total compensation for each year as reported in the Summary Compensation Table to determine the CAP:

  52. Required Tabular Disclosure of Pay Versus Performance

    | Total Compensation for covered fiscal year (FY) reported in Summary Compensation Table | 2023 | 2022 | 2021 | | | $75,959,683 | $1,115,089 | $949,748 | | DEDUCT: grant date fair value of equity awards granted during FY(a) | $74,311,158 | $0 | $0 | | ADD: fair value as of FY-end of equity awards granted during the year that are outstanding and unvested as of FY-end | $40,826,775 | $0 | $0 | | ADD: change as of end of FY in fair value of awards granted in any prior year that are outstanding and unvested as of FY-end | $0 | ($18,136,074) | $61,575,203 | | ADD: fair value at vesting date for any equity awards granted during the FY that vested during FY | $5,592,854 | $0 | $0 | | ADD: change as of the vesting date (from end of prior FY) in fair value for any equity awards granted in any prior year that vested at the end of or during FY | ($4,228,128) | ($9,681,884) | $27,077,103 | | DEDUCT: fair value at the end of the prior FY for awards granted in any prior year that failed to meet applicable vesting conditions during FY | $0 | $0 | $0 | | Compensation Actually Paid (as defined by SEC rule)(b) | $43,840,026 | ($26,702,869) | $89,602,053 |

  53. Required Tabular Disclosure of Pay Versus Performance

    (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (b) Amount of equity award adjustments may differ from amount reported in the table above due to rounding. (3) The dollar amounts reported in column (d) represent the average of the amounts reported for our named executive officers as a group (excluding Mr. Yuan) in the “Total” column of the Summary Compensation Table in each applicable year. The names of each of our named executive officers (excluding Mr. Yuan) included for purposes of calculating the average amounts in each applicable year are as follows: (i) for 2023, Kelly Steckelberg, Aparna Bawa, Velchamy Sankarlingam and Greg Tomb; (ii) for 2022, Kelly Steckelberg, Ryan Azus, Aparna Bawa, and Janine Pelosi; and (iii) for 2021, Kelly Steckelberg, Ryan Azus, Aparna Bawa, and Velchamy Sankarlingam. (4) The dollar amounts reported in column (e) represent the average amount of CAP for our named executive officers as a group (excluding Yuan), as computed in accordance with Item 402(v) of Regulation S-K. The dollar amounts do not reflect the actual average amount of compensation earned by or paid to our named executive officers as a group (excluding Mr. Yuan) during the applicable year. In accordance with the requirements of Item 402(v) of Regulation S-K, the following adjustments were made to average total reported compensation for our named executive officers as a group (excluding Mr. Yuan) for each year to determine the CAP, using the same methodology described above in Note 2:

  54. Required Tabular Disclosure of Pay Versus Performance

    | Total Compensation for covered fiscal year (FY) reported in Summary Compensation Table | 2023 | 2022 | 2021 | | | $32,519,158 | $512,500 | $10,281,937 | | DEDUCT: grant date fair value of equity awards granted during FY(a) | $32,126,792 | $0 | $9,342,072 | | ADD: fair value as of FY-end of equity awards granted during the year that are outstanding and unvested as of FY-end | $18,050,063 | $0 | $12,088,275 | | ADD: change as of end of FY in fair value of awards granted in any prior year that are outstanding and unvested as of FY-end | ($989,771) | ($13,378,120) | $40,277,153 |

  55. Required Tabular Disclosure of Pay Versus Performance

    | ADD: fair value at vesting date for any equity awards granted during the FY that vested during FY | $3,571,663 | $0 | $0 | | ADD: change as of the vesting date (from end of prior FY) in fair value for any equity awards granted in any prior year that vested at the end of or during FY | ($700,159) | ($6,914,765) | $25,587,358 | | DEDUCT: fair value at the end of the prior FY for awards granted in any prior year that failed to meet applicable vesting conditions during FY | $0 | $0 | $0 | | Compensation Actually Paid (as defined by SEC rule)(b) | $20,324,162 | ($19,780,384) | $78,892,651 |

  56. Required Tabular Disclosure of Pay Versus Performance

    (a) The grant date fair value of equity awards represents the total of the amounts reported in the “Stock Awards” and “Option Awards” columns in the Summary Compensation Table for the applicable year. (b) Amount of equity award adjustments may differ from amount reported in the table above due to rounding. (5) TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019. Cumulative TSR is calculated by dividing the sum of the cumulative amount of dividends for the measurement period, assuming dividend reinvestment, and the difference between our stock price at the end and the beginning of the measurement period by our share price at the beginning of the measurement period. (6) Represents the weighted peer group TSR, weighted according to the respective companies’ stock market capitalization at the beginning of each period for which a return is indicated. As permitted by SEC rules, the peer group used for this purpose is the group of companies included in the NASDAQ Computer Index, which is the industry peer group used in our Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K for the fiscal year ended January 31, 2023. The separate peer group used by the Compensation Committee as a reference point in determining compensation arrangements with our executive officers is described on page 35. (7) Net income attributable to Zoom as reported in our consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended January 31, 2023. As required by Item 402(v) of Regulation S-K, we have determined that Non-GAAP Income from Operations is the Company-Selected Measure. Non-GAAP Income from Operations is a non-GAAP financial measure, which represents the GAAP income (loss) from operations, excluding stock-based compensation expense and related payroll taxes, expenses related to charitable donation of common stock and acquisition-related expenses. Non-GAAP Income from Operations may not have been the most important financial performance measure for fiscal years 2022 and 2021 and we may determine a different financial performance measure to be the most important financial performance measure in future years. Non-GAAP Income from Operations is one component of our annual performance bonus program in which named executive officers our NEOs participate and is further described in the “Compensation Discussion and Analysis” section above. Our stock price may have a more prominent impact on our CAP year-over-year than Non-GAAP Income from Operations. As further described in CD&A, our executive compensation program is heavily weighted towards equity-based compensation which vests over time based on our executive officers’ continued service and delivers value directly aligned with our stock price.

  57. 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 required by Item 402(v) of Regulation S-K, we are providing the following graphs to illustrate the relationship between the pay and performance figures that are included in the pay versus performance tabular disclosure above. In addition, the first graph below further illustrates the relationship between Company total shareholder return and that of the NASDAQ Computer Index. As noted above, “compensation actually paid” for purposes of the tabular disclosure and the following graphs were calculated in accordance with SEC rules and do not fully represent the actual final amount of compensation earned by or actually paid to our named executive officers during the applicable years. All information provided above under the “Item 402(v) 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.