DEF 14A of Atlassian Corp
Filed Oct 18, 2023 · FY20230001650372-23-000051
Table of Contents
| CEO Pay Ratio | | 56 | | Pay Versus Performance | | 56 | | Report of the Audit Committee of the Board | | 58 | | Proposals To Be Voted On | | 59 | | | Proposal 1 – Election of Directors | 60 | | | Proposal 2 – Ratification of Appointment of Independent Auditor | 61 | | | Proposal 3 – Advisory Vote to Approve Named Executive Officer Compensation | 62 | | | Proposal 4 – Advisory Vote on the Frequency of Holding Future Advisory Votes to Approve Named Executive Officer Compensation | 63 | | Stock Ownership Information | | 64 | | Security Ownership Table | | 64 | | Equity Compensation Plan Information | | 66 | | Information About the Meeting, Voting and Procedural Matters | | 67 | | General | | 67 | | Stockholders Entitled to Vote; Record Date | | 67 | | Quorum; Abstentions; Broker Non-Votes | | 67 | | Voting; Revocability of Proxies | | 68 | | Expenses of Solicitation | | 69 | | Procedure for Introducing Business or Director Nominations at Our 2024 Annual Meeting of Stockholders | | 69 | | Delivery of Proxy Materials | | 70 | | Appendix A – Non-GAAP Financial Measures | | 71 |
Nominees for Election
Nominees for Election Our Board is composed of highly experienced directors who have led, advised and established leading global organizations. Our Board has taken a thoughtful approach to board composition so that our directors have backgrounds that collectively add significant value to the strategic decisions made by Atlassian and that enable them to provide oversight of management and accountability to our stockholders. Our directors have extensive backgrounds as entrepreneurs, technologists, operational and financial experts, investors, executives and advisors. In addition, we have worked hard to strike a balance between long-term understanding of our business and fresh external perspectives, as well as to have a diversity of backgrounds and perspectives within the boardroom. The following table sets forth the names, ages and certain other information for each of our director nominees, as well as the membership of our standing committees that are expected to remain in effect following the Annual Meeting if all of the director nominees are elected.
Nominees for Election
| | | | | | | Committee Membership | | | | Director Nominee | | Age | Director Since | Other Public Company Boards | Independent | Audit | Compensation and Leadership Development | Nominating and Corporate Governance | | | Shona L. Brown Independent Advisor, Former Senior Vice President of Google.org Independent Board Chair | 57 | 2015 | 1 | | | | | | | Michael Cannon-Brookes Co-Founder & Co-CEO, Atlassian Corporation | 43 | 2002 | 0 | | | | | | | Scott Farquhar Co-Founder & Co-CEO, Atlassian Corporation | 43 | 2002 | 0 | | | | | | | Heather M. Fernandez Co-Founder and CEO, Solv., Inc. | 47 | 2015 | 0 | | | | | | | Sasan Goodarzi CEO, Intuit, Inc. | 55 | 2018 | 1 | | | | | | | Jay Parikh CEO, Lacework, Inc. | 50 | 2013 | 0 | | | | | | | Enrique Salem Managing Director, Bain Capital Ventures | 57 | 2013 | 1 | | | | | | | Steven Sordello Former Chief Financial Officer, LinkedIn Corporation | 54 | 2015 | 1 | | | | | | | Richard P. Wong General Partner, Accel Partners | 54 | 2010 | 1 | | | | | | | Michelle Zatlyn Co-Founder, President and Chief Operating Officer, Cloudflare, Inc. | 44 | 2021 | 1 | | | | |
Nominees for Election
| | = Member | | = Chair |
Nominees for Election
| | 2023 Proxy Statement |
Nominees for Election
| Directors and Corporate Governance | 13 |
Nominees for Election
The following matrix highlights the mix of key skills, qualities, attributes, and experiences of the nominees that, among other factors, led the Board and the Nominating and Corporate Governance Committee (the “Nominating Committee”) to recommend these nominees for election to the Board. The matrix is intended to depict notable areas of focus for each director, and not having a mark does not mean that a particular director does not possess that qualification or skill. Nominees have developed these skills through education, direct experience, and oversight responsibilities. Additional biographical information is set out starting on page 15.
Nominees for Election
| | Shona L. Brown | Michael Cannon-Brookes | Scott Farquhar | Heather M. Fernandez | Sasan Goodarzi | Jay Parikh | Enrique Salem | Steven Sordello | Richard P. Wong | Michelle Zatlyn | | Public Company CEO/ President Experience as a CEO or President of a public company. | | | | | | | | | | | | Executive at Scale Experience leading at a company that is operating at scale. | | | | | | | | | | | | Audit / Finance / Accounting Knowledge of financial markets, financing and accounting and financial reporting processes. | | | | | | | | | | | | Technologist Expertise in engineering or development of software products or services, computer science, information technology or technology research and development. | | | | | | | | | | | | Sales and Marketing Experience in sales management, marketing campaign management, marketing/advertising or public relations. | | | | | | | | | | | | Human Capital / Compensation / Employee Development Experience human capital development at an organization, including attracting and retaining top talent. | | | | | | | | | | | | Enterprise Software Industry Experience as a leader at companies operating in the enterprise software industry. | | | | | | | | | | | | Risk / Cyber-security / Privacy Experience in enterprise risk oversight, including directors with experience in cybersecurity and data privacy management. | | | | | | | | | | | | Strategy / Business Development / M&A / Venture Capital Experience in creating long-term value through investment, acquisitions and growth strategies. | | | | | | | | | | |
Nominees for Election
| 2023 Proxy Statement | |
Nominees for Election
| 14 | Directors and Corporate Governance |
Board Diversity Matrix
Board Diversity Matrix The demographic information presented below for our directors is based on voluntary self-identification by each director. Additional biographical information is set out starting on page 15.
Board Diversity Matrix
| | As of June 30, 2023 | | | | As of June 30, 2022 | | | | | Total Number of Directors | 10 | | | | 10 | | | | | Part I: Gender Identity | Female | Male | Non-Binary | Did Not Disclose Gender | Female | Male | Non-Binary | Did Not Disclose Gender | | Directors | 3 | 7 | 0 | 0 | 3 | 7 | 0 | 0 | | Part II: Demographic Background | | | | | | | | | | Asian | 1 | 0 | 0 | 0 | 1 | 1 | 0 | 0 | | Hispanic or Latinx | 0 | 1 | 0 | 0 | 0 | 1 | 0 | 0 | | White | 3 | 3 | 0 | 0 | 3 | 4 | 0 | 0 | | Two or More Races or Ethnicities | 1 | 0 | 0 | 0 | 1 | 0 | 0 | 0 | | Persons Who Identify as Middle Eastern | 1 | | | | 1 | | | | | Did not Disclose Demographic Background | 3 | | | | 1 | | | |
Board Diversity Matrix
| | 2023 Proxy Statement |
Board Diversity Matrix
| Directors and Corporate Governance | 15 |
Biographies
Biographies Set forth below are the names and certain information about our director nominees, all of whom are currently members of the Board. All director nominees were elected by stockholders at the 2021 annual general meeting of Atlassian Corporation Plc and remained as directors in connection with the Redomiciliation. There are no family relationships among any of our directors or executive officers. Our directors serve until the next annual meeting of stockholders and until their successors are elected and qualified, subject to earlier resignation or removal. Please see Proposal 1 in this Proxy Statement for more information about the election of our directors.
Biographies
| Shona L. Brown Independent Advisor | | | Board Chair since 2018 Independent Director Age: 57 Director Since: 2015 Committees: Compensation and Leadership Development Other Public Company Boards: DoorDash, Inc. Prior Public Company Boards (last 5 years): PepsiCo, Inc. | | | | Professional Experience •Senior advisor to Google Inc. (now Alphabet Inc.), an internet search and technology company (2013 to 2015) •Senior Vice President of Google.org, Google’s charitable organization (2011 to 2012) •Vice President and later as Senior Vice President, Business Operations of Google Inc. (2003 to 2011) •Consultant (1995 to 2003) and Partner (2000 to 2003) of McKinsey & Company, a consulting firm Education •Bachelor of Computer Systems Engineering from Carleton University •Master of Arts in philosophy and economics from Oxford University •Ph.D. from the Department of Industrial Engineering and Engineering Management at Stanford University Key Skills and Qualifications •Experience leading and managing at a software company operating at scale •Expertise in people operations and public policy and sustainability-related matters |
Biographies
| Michael Cannon-Brookes Co-Founder & Co-CEO, Atlassian Corporation | | | Age: 43 Director Since: 2002 | | | | Professional Experience •Co-Founder & Co-CEO of Atlassian (2002 to Present) •Adjunct Professor of Computer Science & Engineering at University of New South Wales, Australia (2014 to Present) Education •Bachelor of Science in information systems from the University of New South Wales, Australia Key Skills and Qualifications •Extensive knowledge of Atlassian’s business and culture •In-depth knowledge of the technology industry |
Biographies
| 2023 Proxy Statement | |
Biographies
| 16 | Directors and Corporate Governance |
Biographies
| Scott Farquhar Co-Founder & Co-CEO, Atlassian Corporation | | | Age: 43 Director Since: 2002 | | | | Professional Experience •Co-Founder & Co-CEO of Atlassian (2002 to Present) •Chair of the Board of Atlassian (2016 to 2018) •Interim Chief Financial Officer of Atlassian (July 2022 to September 2022) Education •Bachelor of Science in business information technology from the University of New South Wales, Australia Key Skills and Qualifications •Extensive knowledge of Atlassian’s business and culture •In-depth knowledge of the technology industry |
Biographies
| Heather M. Fernandez CEO, Solv., Inc. | | | Independent Director Age: 47 Director Since: 2015 Committees: Audit; Nominating and Corporate Governance | | | | Professional Experience •CEO and Co-Founder of Solv, Inc., a private company focused on connecting consumers and healthcare providers using technology solutions (2016 to Present) •Various senior management positions in sales and marketing, including most recently Senior Vice President and General Manager of Business Services, of Trulia, Inc., an online residential real estate website, which was acquired by Zillow, Inc. in 2015 (2006 to 2015) Education •Bachelor of Arts in political science from University of California, Berkeley •M.B.A. from Stanford University Graduate School of Business Key Skills and Qualifications •Leadership and management experience, including as CEO, at consumer-facing software companies •Expertise in sales and marketing in the software industry |
Biographies
| | 2023 Proxy Statement |
Biographies
| Directors and Corporate Governance | 17 |
Biographies
| Sasan Goodarzi CEO, Intuit, Inc. | | | Independent Director Age: 55 Director Since: 2018 Committees: Compensation and Leadership Development Other Public Company Boards: Intuit, Inc. | | | | Professional Experience •CEO of Intuit, Inc., a financial software company (2019 to Present) •Executive Vice President and General Manager of Intuit Small Business Group (2016 to 2019) •Senior Vice President and General Manager of Intuit’s ProTax division and Intuit Financial Services (2004 to 2010) •Global President of the Projects Group of Invensys, a global provider of industrial automation, transportation and controls technology (2002 to 2004) •Various senior leadership roles of the automation control division of Honeywell (1993 to 2002) Education •Bachelor of Science in electrical engineering from University of Central Florida •M.B.A. from Kellogg School of Management at Northwestern University Key Skills and Qualifications •Experience as a CEO at a software company operating at scale •Expertise in sales and marketing in the software industry |
Biographies
| Jay Parikh CEO, Lacework, Inc. | | | Independent Director Age: 50 Director Since: 2013 Committees: Compensation and Leadership Development Prior Public Company Boards (last 5 years): Social Capital Hedosophia Holdings Corp. V | | | | Professional Experience •CEO of Lacework, Inc., a cloud security company (2021 to Present) •Vice President of Global Engineering and Infrastructure of Facebook, Inc. (2009 to 2021) •Senior Vice President, Engineering & Operations of Ning, Inc., a social networking company (2007 to 2009) •Vice President of Engineering of Akamai Technologies, Inc., a cloud services provider (1999 to 2007) Education •Bachelor of Science in mechanical engineering from Virginia Tech Key Skills and Qualifications •Experience as an executive at a software company operating at scale •Technical expertise in software technology, particularly in the cybersecurity market |
Biographies
| 2023 Proxy Statement | |
Biographies
| 18 | Directors and Corporate Governance |
Biographies
| Enrique Salem Managing Director, Bain Capital Ventures | | | Independent Director Age: 57 Director Since: 2013 Committees: Audit; Nominating and Corporate Governance Other Public Company Boards: DocuSign, Inc. Prior Public Company Boards (last 5 years): Mandiant, Inc. ForeScout Technologies, Inc. | | | | Professional Experience •Managing Director of Bain Capital Ventures (2014 to Present) •Various senior management positions, including most recently President and CEO, of Symantec Corporation, a cybersecurity company (2004 to 2012) •President and CEO of Brightmail, Inc., an email filtering company, which was acquired by Symantec Corporation in 2004 (2002 to 2004) •Director of several private companies Education •Bachelor of Arts in computer science from Dartmouth College Key Skills and Qualifications •Experience as a CEO at a software company operating at scale •Expertise as a leader at enterprise software companies, particularly in the cybersecurity market |
Biographies
| | 2023 Proxy Statement |
Biographies
| Directors and Corporate Governance | 19 |
Biographies
| Steven Sordello Former SVP and Chief Financial Officer, LinkedIn Corporation | | | Independent Director Age: 54 Director Since: 2015 Committees: Audit Other Public Company Boards: Compass, Inc. Prior Public Company Boards (last 5 years): Cloudera, Inc. | | | | Professional Experience •Senior Vice President and Chief Financial Officer of LinkedIn Corporation, an online business-oriented social networking service, which was acquired by Microsoft in 2016 (2007 to 2022) •Chief Financial Officer of TiVo, Inc., a manufacturer of digital video recorders (2006 to 2007) •Various senior management positions, including most recently Chief Financial Officer, of Ask Jeeves, Inc., an internet search engine company, which was acquired by IAC in 2005 (1999 to 2005) •Various finance roles at Adobe Systems Incorporated, a software company (1994 to 1999) •Various finance roles at Syntex Corporation, a pharmaceuticals company (1992 to 1994) Education •Bachelor of Science in business from Santa Clara University •M.B.A. from Santa Clara University Key Skills and Qualifications •Experience as a finance executive at consumer-facing and enterprise software companies operating at scale •Expertise in strategy and operational and financial management, including qualifying as an “audit committee financial expert” under the SEC rules |
Biographies
| Richard P. Wong General Partner, Accel Partners | | | Independent Director Age: 54 Director Since: 2010 Committees: Nominating and Corporate Governance Other Public Company Boards: UiPath, Inc. | | | | Professional Experience •General Partner of Accel Partners, a venture capital firm (2006 to Present) •Various senior management positions, including Senior Vice President of Products and Chief Marketing Officer, of Openwave Systems Inc., a mobile software company •Director of several private companies Education •Bachelor of Science in materials science and engineering from the Massachusetts Institute of Technology (“MIT”) •Master of Management from the MIT Sloan School of Management Key Skills and Qualifications •Experience in capital markets investing and mergers and acquisitions •Expertise in sales and marketing in the software industry |
Biographies
| 2023 Proxy Statement | |
Biographies
| 20 | Directors and Corporate Governance |
Biographies
| Michelle Zatlyn President and COO, Cloudflare, Inc. | | | Independent Director Age: 44 Director Since: 2021 Committees: Audit Other Public Company Boards: Cloudflare, Inc. | | | | Professional Experience •Co-Founder, Chief Operating Officer (2016 to Present) and President (2020 to Present) of Cloudflare, Inc., a cloud services provider •Head of User Experience of Cloudflare, Inc. (2009 to 2016) Education •Bachelor of Science in chemistry and business from McGill University •M.B.A. from Harvard Business School Key Skills and Qualifications •Leadership and management experience as a top executive of a publicly-traded software company •Expertise as a product development leader in enterprise software |
Biographies
| | 2023 Proxy Statement |
Biographies
| Directors and Corporate Governance | 21 |
Identification, Criteria, and Evaluation of Director Nominees
Identification, Criteria, and Evaluation of Director Nominees The Nominating Committee uses a variety of methods for identifying and evaluating director nominees. Candidates may come to the attention of the Nominating Committee through directors, management, stockholders or third parties. The Nominating Committee and the Board believe it is in the best interests of Atlassian and its stockholders to obtain highly qualified individuals to serve on the Board. The Nominating Committee regularly assesses the appropriate size, composition and needs of the Board and its respective committees and the qualifications of candidates in light of these needs. The Nominating Committee believes that it is important to maintain and consistently refresh a list of qualified potential candidates for nomination. The Nominating Committee will evaluate and recommend candidates for membership on the Board consistent with criteria established by the committee. In identifying prospective director candidates, the Nominating Committee may consider all facts and circumstances that it deems appropriate or advisable, including, among other things, the skills of the prospective director candidate, their independence, their depth and breadth of business experience, the needs of the Board and the diversity of viewpoints, background, experience and other characteristics, such as geographic background, nationality, culture, gender, sexual orientation, ethnicity, race and age, that a candidate would bring (including in light of applicable diversity requirements regarding gender, underrepresented communities or otherwise). While the Nominating Committee does not have a formal policy with respect to diversity; the Board is committed to actively seeking highly qualified women and individuals from minority groups to include in the pool from which director nominees are selected. At a minimum, the Nominating Committee must be satisfied that each Nominating Committee-recommended nominee meets the following minimum qualifications: •The nominee must have experience at a strategic or policymaking level in a business, government, non-profit or academic organization of high standing. •The nominee must be highly accomplished in their respective field, with superior credentials and recognition. •The nominee must be well regarded in the community and must have a long-term reputation for the highest ethical and moral standards. •The nominee must have sufficient time and availability to devote to the affairs of Atlassian, particularly in light of the number of boards on which the nominee may serve. •To the extent such nominee serves or has previously served on other boards, the nominee must have a demonstrated history of actively contributing at board meetings. •The nominee must have skills that are complementary to those of the existing Board. •The nominee must have the ability to assist and support management and make significant contributions to Atlassian’s success. •The nominee must have an understanding of the fiduciary responsibilities that are required of a member of the Board and the commitment of time and energy necessary to diligently carry out those responsibilities. The Nominating Committee will also seek appropriate input from the Co-CEOs from time to time in assessing the needs of the Board for relevant background, experience, diversity and skills of its members.
Identification, Criteria, and Evaluation of Director Nominees
| 2023 Proxy Statement | |
Identification, Criteria, and Evaluation of Director Nominees
| 26 | Directors and Corporate Governance |
Stockholder Recommendations and Nominees for Director
Stockholder Recommendations and Nominees for Director The Nominating Committee considers properly submitted recommendations for candidates to the Board from stockholders. In evaluating such recommendations, the Nominating Committee evaluates candidates recommended by stockholders using the same criteria it applies to evaluate other candidates and seeks to achieve a balance of experience, diversity, knowledge, integrity, and capability on the Board and to address the membership criteria set forth under “Identification, Criteria and Evaluation of Director Nominees” above. Stockholder recommendations to the Board should be sent to the attention of Atlassian’s Corporate Secretary by one of the following two ways:
Stockholder Recommendations and Nominees for Director
| By email: IR@atlassian.com | By mail or expedited delivery service: Atlassian Corporation 350 Bush Street, 13th Floor San Francisco, California 94104 USA Attention: Corporate Secretary |
Stockholder Recommendations and Nominees for Director
In addition, our Bylaws permit stockholders to nominate directors for consideration at an annual meeting of stockholders. For a description of the process for nominating directors in accordance with our Bylaws, see “Information About the Meeting, Voting and Procedural Matters — Procedure for Introducing Business or Director Nominations at Our 2024 Annual Meeting of Stockholders.”
Stockholder Recommendations and Nominees for Director
| | 2023 Proxy Statement |
Stockholder Recommendations and Nominees for Director
| Directors and Corporate Governance | 27 |
Corporate Culture
Corporate Culture Values Our company culture is exemplified by our core values:
Corporate Culture
| | | | | | | Open company, no bullshit | Play, as a team | Build with heart and balance | Be the change you seek | Don’t #@!% the customer |
Corporate Culture
The following are the key elements of our corporate culture that contribute to our ability to drive customer value and achieve competitive differentiation: 1.Openness and Innovation - We value transparency and openness as an organization. We believe that putting product pricing and documentation online promotes trust and makes customers more comfortable engaging with our low-touch model. In addition, we are dedicated to innovation and encourage our employees to invent new capabilities, applications, uses, and improvements for our software. We run Atlassian using our own products, which promotes open communication and transparency throughout the organization. 2.Dedication to the Customer - Customer service and support is at the core of our business. Our customer support teams strive to provide unparalleled service to our customers. We also encourage our service teams to build scalable, self-service solutions that customers will love, as we believe superior service drives greater customer happiness, which in turn breeds positive word-of-mouth. 3.Team-driven - As our mission is to unleash the potential of every team, we value teamwork highly. We encourage our employees to be both team-oriented and entrepreneurial in identifying problems and inventing solutions. Dedication to teamwork starts at the top of our organization with our unique Co-CEO structure, and is celebrated throughout Atlassian. 4.Long-term Focused - We believe that we are building a company that can grow and prosper for decades to come. Our model, in which we expand across our customers’ organizations over time, requires a patient, long-term approach, and a dedication to continuous improvement. This is exemplified by our investment in research and development, which is significant relative to traditional software models and is designed to drive the long-term sustainability of our product leadership. Given the choice between short-term results and building long-term scale, we choose the latter. Atlassian Foundation In Atlassian’s early days, Messrs. Cannon-Brookes and Farquhar built giving back into our business with the creation of the Atlassian Foundation. Atlassian contributes 1% of its equity, profit, employee time, and products to the Atlassian Foundation to do good on a global scale and in our own backyards. One of Atlassian’s values is “Be the change you seek,” and the opportunities the Atlassian Foundation provides are a great way for employees to live this value – and an important part of why many join Atlassian in the first place. The Atlassian Foundation drives impact in three key ways: •Education – The Atlassian Foundation teams up with some of the world’s most impactful education change makers to help to educate millions of disadvantaged young people, equipping them with the skills they need to thrive in the 21st century. •Pledge 1% – Atlassian co-founded the global Pledge 1% movement to inspire businesses to bake social impact into their DNA. •Volunteering and giving – All permanent employees get five paid days of leave every year to volunteer for causes they care about, and Atlassian also offers a donation-matching program.
Corporate Culture
| | 2023 Proxy Statement |
Corporate Culture
| Directors and Corporate Governance | 31 |
Corporate Culture
Team Anywhere Team Anywhere is Atlassian’s approach to distributed work: Employees can work from home, the office, or a combination of the two within 13 countries where we have legal entities, with the option to work outside of an employee’s “home base” for short periods each year. This approach allows for greater flexibility for our employees, opens up new talent pools beyond the urban hubs where our offices are located, and imagines new ways of working for both our workforce and customers.
Director Compensation
Director Compensation
Non-Employee Director Compensation Policy
Non-Employee Director Compensation Policy Our non-employee director compensation policy (as amended and restated from time to time, the “Non-Employee Director Compensation Policy”) is designed to attract, retain and award directors of Atlassian who are not employees or officers of Atlassian and align their long-term interests with those of Atlassian and our stockholders. Employee directors receive no additional compensation for their service as a director. Decisions regarding the Non-Employee Director Compensation Policy are approved by our Board based on recommendations from our CLDC. The CLDC conducts an evaluation of the design and competitiveness of our Non-Employee Director Compensation Policy on an annual basis. The annual review is conducted by Semler Brossy, the CLDC’s independent compensation consultant, and includes an assessment of competitive market practices for pay levels, pay design, and other market trends using the same compensation peer group used for executive pay. We aim to position non-employee director compensation competitively against the compensation peer group that is used for executive pay assessment. The fiscal year 2023 annual review found that the Non-Employee Director Compensation Policy remained competitive and aligned with our intended pay philosophy. We will continue to review non-employee director compensation levels annually and make adjustments as necessary. Our Non-Employee Director Compensation Policy consists of an annual cash retainer for service on the Board, additional retainers for serving as the chair of each of our standing Board committees, an additional cash retainer for the non-employee Board Chair, and an annual equity retainer awarded in the form of restricted stock units (“RSUs”). We reimburse non-employee directors for all reasonable expenses incurred in connection with their service on the Board, including attending Board and committee meetings. However, we do not pay meeting attendance fees. The table below outlines the details of our Non-Employee Director Compensation Policy in effect for fiscal year 2023: Annual Cash Retainers
Non-Employee Director Compensation Policy
| | Cash Amount ($) | | | Annual Cash Retainer for Board Membership | | 55,000 | | Additional Annual Cash Retainer for Independent Board Chair | | 50,000 | | Additional Annual Cash Retainer for Committee Chairs | | | | Annual service as chair of the Audit Committee | | 20,000 | | Annual service as chair of the CLDC | | 15,000 | | Annual service as chair of the Nominating Committee | | 10,000 |
Non-Employee Director Compensation Policy
Annual Equity Grants In addition, on the date of each annual meeting of stockholders, each non-employee director who continues as a member of our Board following such annual meeting of stockholders will receive a grant of RSUs having a value of $265,000, rounded up to the nearest whole share (the “Annual Grant”). The Annual Grant vests in full on the earlier of: (i) the one-year anniversary of the grant date; and (ii) the next annual meeting of stockholders, subject to continued service as a director through the applicable vesting date, unless the CLDC determines that circumstances warrant continuation of vesting. Due to the Redomiciliation, we were not required to hold an annual meeting of stockholders in 2022. In connection with the Redomiciliation, the Board approved an Annual Grant effective December 2, 2022.
Non-Employee Director Compensation Policy
| | 2023 Proxy Statement |
Non-Employee Director Compensation Policy
| Directors and Corporate Governance | 33 |
Fiscal Year 2023 Non-Employee Director Compensation Table
Fiscal Year 2023 Non-Employee Director Compensation Table The following table provides information regarding the total compensation that was earned by or paid to each of our non-employee directors in fiscal year 2023. Our Co-CEOs did not receive any additional compensation for their service as directors.
Fiscal Year 2023 Non-Employee Director Compensation Table
| Name | Fee Earned or Paid in Cash ($) | | Stock Award ($)(1)(2) | | Total ($) | | | Shona L. Brown(3) | | 105,000 | | 265,080 | | 370,080 | | Heather Fernandez | | 55,000 | | 265,080 | | 320,080 | | Sasan Goodarzi(4) | | 70,000 | | 265,080 | | 335,080 | | Jay Parikh | | 55,000 | | 265,080 | | 320,080 | | Enrique Salem | | 55,000 | | 265,080 | | 320,080 | | Steven Sordello(5) | | 75,000 | | 265,080 | | 340,080 | | Rich Wong(6) | | 65,000 | | 265,080 | | 330,080 | | Michelle Zatlyn | | 55,000 | | 265,080 | | 320,080 |
Fiscal Year 2023 Non-Employee Director Compensation Table
(1)The amounts reported in this column represent the aggregate grant date fair value of RSUs calculated in accordance with FASB ASC Topic 718. The grant date fair value of RSUs was calculated by multiplying the closing trading price of our Class A Common Stock on the date of grant by the number of RSUs granted. (2)As of June 30, 2023, each of our non-employee directors held 1,880 unvested RSUs. (3)Dr. Brown served as the Board Chair. (4)Mr. Goodarzi served as the chair of the CLDC. (5)Mr. Sordello served as the chair of the Audit Committee. (6)Mr. Wong served as the chair of the Nominating Committee.
Executive Summary
•Specific Senior Executive Skill Sets. As we continue to grow, sources of potential talent have continued to evolve to include larger companies as well as other innovative companies with a high growth orientation. We seek to recruit and retain executives with specific skills and experiences from other highly innovative and dynamic operating models. We find that these skill sets are in high demand and have required us to be more flexible and competitive with our compensation packages. Leadership Transitions We made a number of changes to our executive team over the past two fiscal years to support our ambitious growth strategy. To help Atlassian’s ability to scale for additional growth and further innovation, we built out our executive ranks with a good mix of new and existing talent by focusing on two main objectives: (i) searching for executives outside of Atlassian with relevant experiences gained from working within larger organizations; and (ii) providing continued engagement and growth opportunities for high-performing Atlassian leaders. Our current compensation programs and philosophy enabled us to successfully attract senior executive talent from both Meta and Microsoft, and to provide experienced Atlassian leaders with the opportunity to expand their roles and impact. We believe these leadership changes will continue to allow us to execute against our largest growth opportunities. •In May 2022, Mr. Rajan was hired as our Chief Technology Officer. Mr. Rajan joined us from Meta where he most recently served as Vice President, Head of Engineering and Head of Office in the Pacific Northwest Region. •In September 2022, Mr. Binz was appointed as our Chief Financial Officer. Mr. Binz joined us from Microsoft where he most recently served as Corporate Vice President, Finance. •In February 2023, Ms. Bharadwaj was promoted to the role of President. Previously, she served as our Chief Operating Officer since August 2021. Co-Founder & Co-CEO Compensation Messrs. Cannon-Brookes and Farquhar, our Co-Founders & Co-CEOs, have agreed to receive a level of compensation that is substantially lower than CEOs at many peer companies. Their annual compensation consists of the following: •Base Salary. Beginning in fiscal year 2020, both Messrs. Cannon-Brookes and Farquhar substantially reduced their salaries to AUD $74,653 (equal to USD $49,442 in fiscal year 2023, converted into U.S. dollars using a monthly average exchange rate for fiscal year 2023 of USD $1.00 to AUD $1.51). •Annual Incentive Compensation. Both Messrs. Cannon-Brookes and Farquhar forgo participation in our annual cash incentive bonus program. •Long-Term Incentive Compensation. Neither Messrs. Cannon-Brookes nor Farquhar receive long-term incentive compensation, in light of their considerable pre-existing Atlassian equity holdings as Co-Founders. Compensation Highlights Highlights of our fiscal year 2023 executive compensation program are below: •Base salary. Did not increase base salaries for NEOs with the exception of Mr. Rajan who received a 5% increase to bring his salary into alignment with that of Mr. Binz, who was appointed CFO in September 2022, and Ms. Bharadwaj, who received a pay increase in connection with the expansion of her role responsibilities following her promotion to President. •Annual incentive compensation outcomes. Paid out at 45% of target, which aligned with Atlassian’s below-target financial performance on cloud revenue. Although we achieved 38% cloud revenue growth for fiscal year 2023, we set ambitious targets that we underachieved for the year. •Long-term incentive one-time actions. Delivered annual market competitive equity award values but also took additional actions (a) for the broader company (including for Ms. Bharadwaj and Mr. Deatsch) to address the risk of reduced employee retention due to macroeconomic disruptions and the related decrease of our stock price and (b) for Ms. Bharadwaj to recognize her role expansion and expected contributions in driving future growth and stockholder value creation (see “Other Fiscal Year 2023 Compensation Actions”). •Post-vesting stock ownership policy. Adopted a rigorous stock ownership policy that requires senior leaders to hold 20% of post-tax shares after vesting, for all equity awards except new-hire awards, for a period of seven years (see “Stock Ownership Guidelines Policy”). •Clawback policy. Adopted a compensation clawback policy applicable to our Section 16 officers, aligned with the SEC and Nasdaq rules (see “Compensation Clawback Policy”).
Compensation Philosophy and Governance Practices
Compensation Philosophy and Governance Practices Executive Compensation Philosophy & Principles Our executive compensation philosophy is based on the understanding that for us to be successful, we must attract, motivate, reward, and retain high-caliber talent. We also recognize the need to create a strong pay-for-performance connection through our compensation programs and establish a long-term ownership mentality. As such, our programs are focused on providing our executives the opportunity to earn competitive pay levels, with the ability to exceed these levels with strong company and individual performance. Further, we deliver the vast majority of each executive’s compensation in the form of equity, which features a multi-year vesting period, and we prioritize ensuring our executives have a meaningful equity stake in Atlassian to further align their long-term wealth creation with that of our stockholders. Our philosophy adheres to the following guiding principles: 1.We aim to foster long-term thinking and an ownership culture. Our Co-Founders have instilled a focus beyond annual results in favor of sustained, long-term performance, with an emphasis on equity ownership. For our NEOs, excluding our Co-CEOs, 92% of pay is tied to long-term incentive awards which creates immediate alignment with our stockholders. We adopted a rigorous stock ownership requirements policy to foster an ownership mentality, go-forward business strategy accountability, and long-term thinking. 2.We strive for simplicity. Our compensation programs are deliberately simple to avoid introducing what we believe to be unnecessary complexity that would undermine the competitiveness or efficacy of these programs. This approach allows us to remain agile and flexible year-to-year to consider adjustments to our compensation programs as our business and talent strategy evolve. 3.We aim to deliver competitive target compensation levels. We annually assess our compensation peer group and pay levels to ensure that our executives have target pay opportunities that are commensurate with their role expectations, reflect their individual experiences and skill sets, and their pay is positioned competitively against appropriate market references to attract and retain talent in a highly competitive market. Actual outcomes for our executives may be higher or lower and are influenced by overall company and individual performance. 4.We reinforce a pay-for-performance orientation. We have a robust performance management process centered on development and growth priorities which support us in directly tying our executive pay to performance in three explicit ways: (1) company-specific financial performance metrics through the annual incentive program, (2) overall team performance via the granting of RSU awards that connect the value of compensation to Atlassian’s stock price, and (3) individual performance which will impact how annual long-term incentive compensation decisions are calibrated. 5.We embrace transparency and consistency. We find value in a transparent, and largely formulaic, decision-making process that we believe enhances executive engagement and trust in how outcomes are determined.
Authority Over Executive Compensation
Authority Over Executive Compensation The CLDC, in consultation with Semler Brossy, its independent compensation consultant, conducts an executive compensation market assessment each year that relies on publicly available data for a group of peer companies and available third-party compensation surveys. This process ensures that our Board and the CLDC have current information when calibrating compensation levels for our executive officers. Beyond the competitive market assessment, the CLDC also reviews talent profiles for each executive officer and considers comparisons against internal peers. Role of the Board of Directors and CLDC The CLDC oversees our executive compensation programs, including executive salaries, payouts under our annual incentive plan, the size and structure of equity awards, and any executive perquisites. The CLDC receives assistance from two sources: (1) an independent compensation consulting firm, Semler Brossy, and (2) our internal executive compensation staff, led by our Chief Administrative Officer & Chief Legal Officer. All decisions regarding executive compensation are made solely by the CLDC. Role of Compensation Consultant The CLDC has the authority to engage its own advisors to assist in carrying out its responsibilities. In fiscal year 2023, Semler Brossy provided guidance regarding the amount and types of compensation that we provide to our executives, how our compensation practices compare to the compensation practices of other companies, including with respect to a peer group of companies developed in consultation with Semler Brossy, governance policy best practices, and other compensation-related matters. Semler Brossy reports directly to the CLDC and its chair and serves at the discretion of the CLDC which reviews the engagement annually. Semler Brossy may meet with members of management for the purposes of gathering information on proposals that management may make to the Board or the CLDC. Semler Brossy does not provide any services to us other than the services relating to executive and director compensation. Semler Brossy maintains a policy that is specifically designed to prevent any conflicts of interest. In addition, the CLDC has assessed the independence of Semler Brossy taking into account, among other things, the factors set forth in Rule 10C-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and the listing standards of Nasdaq and concluded that no conflict of interest exists with respect to the work that Semler Brossy performs for the CLDC.
Authority Over Executive Compensation
Role of Management In setting compensation for fiscal year 2023, our Co-CEOs and Chief Administrative Officer & Chief Legal Officer worked closely with the Board in managing our executive compensation programs and attended CLDC meetings to discuss these topics. Our Co-CEOs made recommendations to the CLDC regarding compensation for our executive officers (other than themselves) because of their daily involvement with our executive team. No executive officer participated directly in the final deliberations or determinations regarding their own compensation package. Use of Comparative Market Data For fiscal year 2023, the CLDC assessed the competitiveness of each element of each executive officer’s total target direct compensation against our executive pay peer group. The CLDC does not use a single method or measure in developing its recommendations, nor does it establish one specific target for the compensation opportunities of our executive officers. The CLDC reviewed and compared our executive compensation to that of executives in similar positions in our peer group. In assessing the peer group, the CLDC first looked at industry and growth and scale fits: •Industry. Companies with similar business models and a preference for innovative, collaboration-oriented environments, enterprise software solutions, cloud and software-as-a-service leaders, and broader product suites. •Growth and Scale. Companies with high revenue and free cash flow growth rates, which were within a similar revenue scale to where Atlassian is today and where we expect to grow. We further narrowed down the list of potential companies by examining the following factors: •Sources of talent in the market (companies where we source and potentially lose executive talent). •Companies with strong historical and projected top-line revenue growth and revenue to valuation multiples which reflect industry leaders and companies with similar talent priorities and business dynamics. •Companies with a significant presence in the San Francisco Bay Area, high research and development spend as a percentage of revenue, and that are highly influential in the talent market. After considering the above factors, the CLDC approved the following peer group for fiscal year 2023 compensation decisions:
Authority Over Executive Compensation
| Fiscal Year 2023 Compensation Peer Companies | | | | | | | Autodesk, Inc. | CrowdStrike Holdings, Inc. | Okta, Inc. | ServiceNow, Inc. | Twilio Inc. | Workday, Inc. | | Block, Inc. | DocuSign, Inc. | Palo Alto Networks, Inc. | Shopify Inc. | Twitter, Inc. | Zendesk, Inc. | | Coupa Software Inc. | Intuit, Inc. | Salesforce, Inc. | Splunk Inc. | Veeva Systems Inc. | Zoom Video Communications, Inc. |
Authority Over Executive Compensation
Against the fiscal year 2023 peer group, we were positioned at the 34th percentile on trailing twelve-month revenues, 54th percentile on historical three-year compounded annual revenue growth, 78th percentile on market value, and 51st percentile on the total number of employees. The CLDC considered the peer group to be an accurate representation of the talent and business markets, with a relatively balanced stance across various factors (i.e., bigger in some metrics and smaller in others).
Average NEO Pay Mix
Base Salary Our base salary program strives for simplicity, embraces transparency and consistency, and delivers competitive compensation to each of our NEOs to reflect their respective positions, duties, and responsibilities. The CLDC reviews the base salaries of our executive officers annually and may adjust them to reflect market conditions or other factors. The base salaries listed below were established in reference to our peer group with input from the Co-CEOs and were reviewed and approved by the CLDC. As noted above, we strive for simplicity and equity within our compensation programs that we strongly encourage our executives to embrace a long-term performance mentality. As a result, we’ve standardized base salaries across our top executive officers, and seek to ensure internal pay equity and have shifted focus from short-term fixed compensation to long-term variable pay. Because of our focus on internal equity, our executive officers receive base salary amounts within a narrow range. We will continue to review base salaries in the context of our compensation peer group, and when appropriate, may adjust the base salary for all applicable executive officers in order to maintain internal equity.
Average NEO Pay Mix
(1)Messrs. Cannon-Brookes and Farquhar are paid in Australian dollars, which have been converted into US dollars using a monthly average exchange rate for fiscal year 2023 of USD $1.00 to AUD $1.51. Effective July 1, 2019, Messrs. Cannon-Brookes and Farquhar each opted to reduce their salaries to AUD $74,653 (or USD $49,442 for fiscal year 2023). (2)In April 2023, Ms. Bharadwaj received a salary increase from $525,000 following her promotion to President. (3)In October 2022, Mr. Rajan received a salary increase from $525,000 to bring his salary into alignment with that of Mr. Binz. As previously noted, our Co-CEOs primarily receive only a salary of AUD $74,653 (or USD $49,442 for fiscal year 2023). Cash Incentive Compensation Approach to Short-Term Cash Incentives Our annual incentive program reinforces our pay-for-performance orientation by focusing our NEOs’ attention on performance of our key business priorities and embraces a simple, clear, and transparent decision-making process. Our annual incentive program is 100% formulaic and measures performance on cloud revenue. For purposes of our annual incentive program, cloud revenue is equal to cloud revenue as reported in the audited financial statements, plus fees received for sales of third-party cloud apps in the Atlassian Marketplace. Cloud revenue remains a critical strategic priority for us to support our customers and seamlessly connect them to a diverse set of products that will enhance their workflow capabilities. We believe that success on cloud revenue is crucial to Atlassian’s ability to scale and continue leading in our industry. Our Co-CEOs do not participate in the annual cash incentive bonus program due to their sizable equity stakes in Atlassian, which we and they feel appropriately aligns their personal financial interests with company performance. Each NEO (excluding our Co-CEOs) is eligible to receive an annual cash incentive award based on a specified target annual bonus award amount, expressed as a percentage of the NEO’s base salary. The potential payout will range from 0% up to 160% of an individual NEO’s target opportunity based on performance against predetermined financial goals. In fiscal year 2023, our NEOs participated in our annual cash incentive bonus program at 60% target percentages of their base salary. The mechanics of the annual cash incentive bonus program are as follows:
Average NEO Pay Mix
| Eligible Earnings(1) | × | Bonus Target % (60%) | × | Company Multiplier % (0% - 160%) | = | Bonus Payout |
Average NEO Pay Mix
Annual Bonus Payments for Fiscal Year 2023 Performance The bonus payout structure is aligned with our top company priority of driving cloud revenue growth and ensures we are incentivizing what we believe is the right outcome. The CLDC references our internal plan when setting targets for the annual cloud revenue metric. The target is intended to be challenging but achievable, while threshold performance is intended to be reasonably achievable, and the maximum represents a stretch goal. The CLDC reviews the appropriateness of threshold, target, and maximum goals annually, with a focus on attempting to ensure that our performance goals will result in stockholder value creation in the long term. The fiscal year 2023 cloud revenue threshold, target, and maximum goals (as well as actual fiscal year 2023 achievement) are shown below ($ in millions):
Average NEO Pay Mix
| Element | Threshold | Target | Maximum | Actual | | Cloud Revenue(1) | $2,133 | $2,370 | $2,607 | $2,144 | | Payout | 40% | 100% | 160% | 45% | | Year-over-year Cloud Revenue Growth | 37% | 53% | 68% | 38% |
Average NEO Pay Mix
| Executive Officer | Fiscal Year 2023 Target(1)(2) | Fiscal Year 2023 Bonus Payment | | Joseph Binz(3) | $271,250 | $122,530 | | Anu Bharadwaj | $326,250 | $147,370 | | Cameron Deatsch | $315,000 | $142,290 | | Rajeev B. Rajan | $326,250 | $147,370 |
Average NEO Pay Mix
(1)These amounts reflect the target dollar amount for fiscal year 2023, which for Ms. Bharadwaj and Mr. Rajan reflects a blended rate based on a prior base salary. (2)Messrs. Cannon-Brookes and Farquhar do not participate in the annual cash incentive bonus program due to their sizable equity stakes in Atlassian. (3)Mr. Binz’s start date with Atlassian was after the beginning of fiscal year 2023 and his target salary and bonus reflect his pro-rated base salary during fiscal year 2023. Equity Compensation Approach to Equity Compensation We view equity-based compensation as a critical component of our balanced total compensation programs. Our equity compensation program design is competitive, simple, and fosters an ownership mentality and a pay-for-performance orientation. Our Co-CEOs do not participate in any annual equity award programs due to their sizable equity stakes in Atlassian, which we and they feel appropriately aligns their personal financial interests with our performance. For our fiscal year 2023 on-going equity awards, we granted 100% time-based RSUs to our non-Co-CEO executives. The CLDC believes that RSUs serve as an effective retention tool for our high-performing executive officers and focus executive officers on completing long-term objectives, which will result in increased stockholder value creation over time. Our RSUs vest quarterly over a four-year vesting period, subject to continued service. To determine the size of the annual equity awards for our NEOs, the CLDC reviewed data provided by Semler Brossy, which estimated the range of competitive grant values among our peer companies. From that data set, individual equity award targets were established that would position our executives competitively against their market reference. Awarded equity values also took into consideration each executive’s performance, impact, the scope of their roles, and unvested equity values at the time of grant.
Average NEO Pay Mix
Performance Management Process and Connection to Fiscal Year 2023 Long-Term Incentive Awards Each September we use our performance management assessment framework and resulting individual assessments from the most recent fiscal year to inform the amounts of equity grants awarded. The fiscal year 2023 awards granted in September 2022 were based on our performance assessment outcomes from fiscal year 2022. Our performance management assessment framework follows a robust process to assess each individual against predetermined performance and development objectives. All performance assessments and long-term incentive outcomes were reviewed by the CLDC in consultation with our Co-CEOs. This approach further reinforced the link between performance and pay, while continuing to deliver compensation that is tied to long-term stockholder value. Annual Equity Awards for Fiscal Year 2023 Performance In September 2022, we granted the following annual equity awards (with four-year ratable quarterly vesting) to our NEOs:
Average NEO Pay Mix
| Named Executive Officer | Target Value of Fiscal Year 2023 Awards(1) | Number of RSUs Granted (Actual)(1) | | Joseph Binz(2) | — | — | | Anu Bharadwaj | $7,000,000 | 26,762 | | Cameron Deatsch | $8,100,000 | 30,968 | | Rajeev B. Rajan(2) | — | — |
Average NEO Pay Mix
(1)The number of RSUs granted is equal to the target dollar value of the award for each NEO divided by the average closing price of Atlassian stock during the month of August 2022, which was $261.57, rounded up to the nearest whole share. The target values of awards do not match exactly the grant date fair values presented in the Fiscal Year 2023 Summary Compensation Table, which were calculated in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation (“ASC Topic 718”) and take into account the price of Atlassian’s Class A Common Stock on the September 15, 2022 grant date. (2)Messrs. Binz and Rajan were not eligible for the fiscal year 2023 equity awards due the timing of their respective hire dates and related new-hire equity awards. The CLDC believes that acknowledging individual performance and ensuring long-term incentive awards constitute a significant portion of compensation is vital to encouraging appropriate behaviors and intended outcomes while reinforcing our pay-for-performance philosophy.
Other Fiscal Year 2023 Compensation Actions
Other Fiscal Year 2023 Compensation Actions Supplemental Equity Awards. In June 2022, the CLDC discussed the impact of the broader market uncertainty for the software and technology sectors, the significant decline in the stock price for Atlassian within a six-month period, and the reduced unvested equity holdings for the entire organization (including the NEOs) to understand the talent retention risks at a critical point in time for the business. In September 2022, the CLDC approved a one-time supplemental equity award for the highest impacted employees (including Ms. Bharadwaj and Mr. Deatsch) which was designed to reinforce equity holdings and maintain stability during a period of uncertainty. The CLDC granted these equity awards across all levels, including Ms. Bharadwaj and Mr. Deatsch. The Co-CEOs did not receive supplemental equity awards. For affected executives, the awards were determined by examining both (a) the aggregate lost value in unvested equity holdings and (b) the resulting current value of retention power for each executive. The vesting schedules for these supplemental equity awards matched the vesting schedules of awards granted during fiscal year 2022 that suffered value loss. Ms. Bharadwaj received a supplemental equity award with an initial grant value of $2.04 million while Mr. Deatsch received a supplemental equity award with an initial grant value of $2.55 million. Messrs. Binz and Rajan did not receive additional equity awards due to the timing of their new-hire awards. Compensation Action for Mr. Binz. In September 2022, upon the appointment of Mr. Binz as Chief Financial Officer, the CLDC approved a one-time new-hire equity award with an initial grant value of $16 million as part of his overall compensation package. This grant vests over four years with the first vesting date occurring six months after the grant and then quarterly thereafter. The award was designed to align Mr. Binz’s interests with those of our stockholders, promote long-term value creation, and recognize the skills and past experience that he brings to Atlassian. The CLDC, its consultants and the company’s compensation team conducted a thorough analysis to ensure that the equity award was competitive against our peer companies, and aligned with our compensation philosophy. When calibrating the magnitude of the award, the CLDC considered several factors including the ongoing competitive target long term equity grant value for chief financial officers in our peer group, and that Mr. Binz would not be eligible for the next annual equity award until September 2023.
Other Fiscal Year 2023 Compensation Actions
Compensation Actions for Ms. Bharadwaj. In November 2022, the CLDC engaged in discussions about the scope, criticality, and impact of Ms. Bharadwaj’s role and contributions (at the time, as our Chief Operating Officer) to Atlassian. The CLDC evaluated Ms. Bharadwaj’s compensation to ensure her continued service as we embarked on a company-wide goal to achieve greater cloud revenue growth. In December 2022, after evaluating Ms. Bharadwaj’s expected go-forward contributions and relative unvested equity holdings, and in light of Ms. Bharadwaj’s increased scope and role driving critical cross-functional strategic priorities and increased job responsibilities, the CLDC granted Ms. Bharadwaj additional RSUs with an initial grant value of $3.6 million. The award vests in equal quarterly installments over four years. In February 2023, as part of Atlassian’s organizational rebalancing, Ms. Bharadwaj was promoted to President. To recognize Ms. Bharadwaj’s expanded role, in April 2023, the CLDC granted Ms. Bharadwaj additional RSUs with an initial grant value of $14 million. The award vests in equal quarterly installments over four years. The CLDC determined this equity award included both a role expansion component as well as the equivalent to Ms. Bharadwaj’s fiscal year 2024 annual equity award, which typically would be granted in September 2023 (i.e., Ms. Bharadwaj will not be eligible to receive her next annual equity award until the beginning of fiscal year 2025). Additionally, as part of the evaluation of Ms. Bharadwaj’s compensation, the CLDC increased her base salary by 14% from $525,000 to $600,000 effective April 1, 2023. These changes were intended to promote her continued engagement during Atlassian’s strategic rebalancing, and to ensure that realized pay is heavily aligned with stockholders’ interests through the creation of stockholder value.
Severance Benefits
Severance Benefits Our executive officers, excluding our Co-CEOs, participate in the Atlassian Corporation Amended and Restated Executive Severance Plan (the “Executive Severance Plan”). The Executive Severance Plan provides for a severance payment equal to six months or nine months of base salary, depending upon the level of the executive officers, upon termination by us without "cause" (as defined in the Executive Severance Plan) or a resignation by the executive officer for "good reason" (as defined in the Executive Severance Plan) or, following a "change in control" (as defined in the Executive Severance Plan), a severance payment equal to twelve months of base salary, plus 100% of the covered executive’s annual target bonus in effect immediately prior to the “date of termination” (as defined in the Executive Severance Plan). In addition, upon such a qualifying termination of employment within 12 months following a "change in control" in which outstanding equity awards of Atlassian will be assumed, continued, or substituted by the successor entity, an executive officer will generally receive 100% (or such lower percentage as may be determined by our Board or the CLDC) accelerated vesting of all unvested and outstanding equity awards held by such executive officer at such time; provided, that any equity awards subject to performance conditions will be deemed satisfied at the target levels specified in the applicable award agreements. Notwithstanding the foregoing, if the outstanding equity awards of Atlassian will not be assumed, continued or substituted by the successor entity in connection with the change in control, then each executive officer will receive accelerated vesting of all unvested and outstanding equity awards held by such executive officer at such time; provided, that any equity awards subject to performance conditions will be deemed satisfied at the target levels specified in the applicable award agreements. Information on the estimated payments and benefits that our NEOs would have been eligible to receive as of June 30, 2023, is set forth in the subsection titled “Potential Payments Upon Termination or Change in Control” below.
Accounting for Stock-Based Compensation
Accounting for Stock-Based Compensation We follow ASC Topic 718 for our stock-based compensation awards. ASC Topic 718 requires companies to measure the compensation expense for all stock-based awards made to employees and directors, including stock options and RSUs, based on the grant-date fair value of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below, even though our executive officers may never realize any value from their awards.
Fiscal Year 2023 Summary Compensation Table
| Name and Principal Position | Year | Salary ($)(1) | Bonus ($) | Stock Awards ($)(2) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($)(3) | Total ($) | | Michael Cannon-Brookes Co-Founder & Co-CEO | 2023 | 49,442 | — | — | — | 5,667 | 55,109 | | Scott Farquhar Co-Founder & Co-CEO | 2023 | 49,442 | — | — | — | 5,667 | 55,109 | | Joseph Binz(4) Chief Financial Officer | 2023 | 452,083 | — | 13,995,130 | 122,530 | 13,583 | 14,583,327 | | Anu Bharadwaj(5) President | 2023 | 543,750 | — | 27,483,145 | 147,370 | 10,525 | 28,184,790 | | Cameron Deatsch Chief Revenue Officer | 2023 | 525,000 | — | 10,298,692 | 142,290 | 13,216 | 10,979,199 | | Rajeev B. Rajan(6) Chief Technology Officer | 2023 | 543,750 | — | — | 147,370 | 12,304 | 703,424 |
Fiscal Year 2023 Grants of Plan-Based Awards Table
Fiscal Year 2023 Grants of Plan-Based Awards Table The following table provides information on the equity grants awarded to our NEOs in fiscal year 2023 and estimated payouts under our non-equity incentive plan.
Fiscal Year 2023 Grants of Plan-Based Awards Table
| | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Stock Awards: Number of Shares of Stock or Units (#)(2) | Grant Date Fair Value of Stock and Option Awards ($)(3) | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | | | Michael Cannon-Brookes | | | | | | | | Annual Incentive Program | | — | — | — | | | | Scott Farquhar | | | | | | | | Annual Incentive Program | | — | — | — | | | | Joseph Binz(4) | | | | | | | | Annual Incentive Program | | 108,500 | 271,250 | 434,000 | | | | New-Hire Grant | 10/15/22 | | | | 68,379 | 13,995,130 | | Anu Bharadwaj(5) | | | | | | | | Annual Incentive Program | | 130,500 | 326,250 | 522,000 | | | | Annual Grant | 9/15/22 | | | | 26,762 | 6,767,842 | | Supplemental Equity Award | 9/15/22 | | | | 7,805 | 1,973,806 | | Retention Grant | 12/15/22 | | | | 30,000 | 4,386,900 | | Role Expansion Grant | 4/15/23 | | | | 86,719 | 14,354,596 | | Cameron Deatsch(6) | | | | | | | | Annual Incentive Program | | 126,000 | 315,000 | 504,000 | | | | Annual Grant | 9/15/22 | | | | 30,968 | 7,831,498 | | Supplemental Equity Award | 9/15/22 | | | | 9,756 | 2,467,195 | | Rajeev B. Rajan(7) | | | | | | | | Annual Incentive Program | | 130,500 | 326,250 | 522,000 | | |
Fiscal Year 2023 Grants of Plan-Based Awards Table
(1)Constitutes threshold, target and the maximum amount payable under our annual cash incentive bonus program. Messrs. Farquhar and Cannon-Brookes were not eligible to participate in our annual cash incentive bonus program for fiscal year 2023. (2)Unless specified otherwise, constitute equity awards in the form of RSUs that vest in equal quarterly installments over four years. All vest events occur on a quarterly schedule during the months of February, May, August, and November. (3)The amounts reported in this column represent the aggregate grant date fair value of RSUs calculated in accordance with ASC 718. The grant date fair value of RSUs was calculated by multiplying the closing trading price of our Class A Common Stock on the date of grant times the number of RSUs. (4)Mr. Binz’s new-hire equity award vests over four years, with 12.5% of the RSUs vesting on the first quarterly vest date and the balance vesting in equal quarterly installments over the remaining period. Mr. Binz was ineligible for an annual performance-based equity compensation award due to the timing of his employment start date. (5)Ms. Bharadwaj’s supplemental equity award vests over four years, with 18.75% of the RSUs vesting on the first quarterly vest date and the balance vesting in equal quarterly installments over the remaining period. For additional details regarding Ms. Bharadwaj’s equity awards please refer to the “Other Fiscal Year 2023 Compensation Actions” section. (6)Mr. Deatsch’s supplemental equity award vests over four years, with 18.75% on the first quarterly vest date and the balance vesting in equal quarterly installments over the remaining period. (7)Mr. Rajan was ineligible for an annual performance-based equity compensation award due to the timing of his employment start date.
Fiscal Year 2023 Grants of Plan-Based Awards Table
| 2023 Proxy Statement | |
Fiscal Year 2023 Grants of Plan-Based Awards Table
| 52 | Executive Compensation |
Fiscal Year 2023 Year-End Outstanding Equity Awards Table
Fiscal Year 2023 Year-End Outstanding Equity Awards Table The following table provides information on the current holdings of unvested RSUs by our NEOs as of June 30, 2023. Our NEOs do not hold any stock options, so that portion of the table is omitted below.
Fiscal Year 2023 Year-End Outstanding Equity Awards Table
| | | Stock Awards | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(1) | | Michael Cannon-Brookes | — | — | — | | Scott Farquhar | — | — | — | | Joseph Binz | 10/15/22(2) | 55,558 | 9,323,188 | | Anu Bharadwaj | 1/15/20(3) | 2,329 | 390,829 | | | 9/16/20(3) | 4,526 | 759,508 | | | 9/15/21(4) | 29,577 | 4,963,316 | | | 9/15/22(4) | 21,745 | 3,649,028 | | | 9/15/22(5) | 5,366 | 900,468 | | | 12/15/22(4) | 26,250 | 4,405,013 | | | 4/15/234) | 81,300 | 13,642,953 | | Cameron Deatsch | 7/15/19(3) | 774 | 129,885 | | | 11/15/19(3) | 1,024 | 171,837 | | | 7/15/20(3) | 8,800 | 1,476,728 | | | 4/15/21(4) | 11,135 | 1,868,564 | | | 9/15/21(4) | 37,957 | 6,369,564 | | | 9/15/22(4) | 25,162 | 4,222,435 | | | 9/15/22(5) | 6,708 | 1,125,669 | | Rajeev B. Rajan | 6/15/22(4) | 90,513 | 15,188,987 |
Fiscal Year 2023 Year-End Outstanding Equity Awards Table
(1)Market value calculated based on $167.81, the closing trading price of our Class A Common Stock on June 30, 2023. (2)RSUs vest on the closest quarterly vesting dates after the date of grant according to the following schedule: 12.5% cliff vesting after six months, followed by 6.25% quarterly vesting for 14 additional quarters, subject to continued employment at each such date. All vest events occur on a quarterly schedule during the months of February, May, August, and November. (3)RSUs vest on the closest quarterly vesting dates after the date of grant according to the following schedule: 25% cliff vesting after 12 months, followed by 6.25% quarterly vesting for 12 additional quarters, subject to continued employment at each such date. All vest events occur on a quarterly schedule during the months of February, May, August, and November. (4)RSUs vest on the closest quarterly vesting dates after the date of grant according to the following schedule: 6.25% quarterly vesting for 16 additional quarters, subject to continued employment at each such date. All vest events occur on a quarterly schedule during the months of February, May, August, and November. (5)Supplemental Equity Award RSUs vest on the closest quarterly vesting dates after the date of the grant according to the following schedule: 18.75% cliff vesting in the first quarter, followed by 6.25% quarterly vesting for 13 additional quarters, subject to continued employment at each such date. All vest events occur on a quarterly schedule during the months of February, May, August, and November.
Fiscal Year 2023 Year-End Outstanding Equity Awards Table
| | 2023 Proxy Statement |
Fiscal Year 2023 Year-End Outstanding Equity Awards Table
| Executive Compensation | 53 |
Fiscal Year 2023 Option Exercises and Stock Vested Table
Fiscal Year 2023 Option Exercises and Stock Vested Table The following table shows the vesting of RSUs for each of our NEOs during fiscal year 2023, including the value realized on vesting. Our NEOs do not hold any options, so that portion of the table is omitted below.
Fiscal Year 2023 Option Exercises and Stock Vested Table
| | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | | Michael Cannon-Brookes | — | — | | Scott Farquhar | — | — | | Joseph Binz | 12,821 | 2,073,576 | | Anu Bharadwaj | 38,378 | 6,359,991 | | Cameron Deatsch | 43,474 | 7,547,416 | | Rajeev B. Rajan | 30,171 | 5,421,399 |
Fiscal Year 2023 Option Exercises and Stock Vested Table
(1)Amount reported calculated by multiplying the closing trading price of our Class A Common Stock on the date of vest by the number of RSUs vesting.
Fiscal Year 2023 Option Exercises and Stock Vested Table
| 2023 Proxy Statement | |
Fiscal Year 2023 Option Exercises and Stock Vested Table
| 54 | Executive Compensation |
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control The Board has adopted the Amended and Restated Executive Severance Plan, as may be amended from time to time (the “Severance Plan”), that provides for the payment of severance benefits for certain of our executives (each a “Covered Executive”), including each of our named executive officers other than Messrs. Farquhar and Cannon-Brookes, in connection with a termination of employment effected by us for other than cause, death or disability or a resignation by the executive for good reason, in each case, as defined in the Severance Plan. The payments of all amounts are subject to the execution of a release by the Covered Executive. The potential payments are shown in the below table and are summarized as follows:
CEO Pay Ratio
CEO Pay Ratio The fiscal year 2023 total compensation of the median employee, based on the compensation of all employees who were employed as of June 30, 2023, other than our Co-CEOs, was $200,582. Scott Farquhar’s fiscal year 2023 annual total compensation was $55,109 and Michael Cannon-Brookes’s fiscal year 2023 annual total compensation was $55,109. The ratio of each of our Co-CEOs’ fiscal year 2023 pay to that of our median employee was approximately 0.27 to 1. To identify the median employee, we used the following methodology and estimates, consistent with all applicable SEC rules: •We selected June 30, 2023 as the date upon which we would identify the “median employee.” •As of this date, we considered a total of 11,248 full- and part-time employees (other than our Co-CEOs). •For purposes of determining our median employee we used target annual base salary, target cash incentive bonus, and grant date fair market value of awards granted to our employees, in each case, for the fiscal year ended June 30, 2023, to calculate our consistently applied compensation measure. We annualized wages and salaries for employees that were not employed for the full year. •Once we identified the median employee, we calculated the annual total compensation for the median employee according to the methodology used to report the annual compensation of our NEOs in the Summary Compensation Table. The pay ratio reported above is a reasonable estimate calculated in a manner consistent with SEC rules based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s total annual compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Therefore, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates, and assumptions in calculating their own pay ratios.
Pay Versus Performance
Pay Versus Performance As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(v) of Regulation S-K, we are providing the following disclosure regarding executive compensation for our principal executive officers (“PEOs”) and our other NEOs (“Non-PEO NEOs”) and our performance for the fiscal year listed below. For further information regarding our pay-for-performance philosophy refer to “Compensation Discussion and Analysis.” The CLDC did not consider the pay versus performance disclosure below as a determining factor for the pay decisions in fiscal year 2023.
Pay Versus Performance
| | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | | Summary Compensation Table Total ($) | Compensation Actually Paid ($) | Total Stockholder Return(1) | Peer Group Total Stockholder Return(2) | GAAP Net Loss (in millions) ($) | Cloud Revenue (in millions) ($)(3) | | 2023 | Mr. Cannon-Brookes (PEO)(4) | $55,109 | $55,109 | $89.5 | $133.7 | -$486.8 | $2,144 | | | Mr. Farquhar (PEO)(4) | $55,109 | $55,109 | | | | | | | Non-PEO NEOs | $13,633,957 | $9,863,039 | | | | |
Pay Versus Performance
(1)Represents the total stockholder return for the period between July 1, 2022 and June 30, 2023. (2)The peer group total stockholder return in this table utilizes the S&P 500 System Software Sub Industry Index which we also include in the stock performance graph required in our Annual Report on Form 10-K for fiscal year 2023. (3)Cloud revenue is equal to cloud revenue as reported in the audited financial statements included in our Annual Report on Form 10-K for fiscal year 2023, plus fees received for sales of third-party cloud apps in the Atlassian Marketplace. (4)Messrs. Cannon-Brookes and Farquhar are paid in Australian dollars, which have been converted into U.S. dollars using a monthly average exchange rate for fiscal year 2023 of USD $1.00 to AUD $1.51. Messrs. Cannon-Brookes and Farquhar do not receive stock awards as part of their compensation, and they do not participate in the annual incentive bonus program.
Pay Versus Performance
| | 2023 Proxy Statement |
Pay Versus Performance
| Executive Compensation | 57 |
Pay Versus Performance
| Fiscal Year 2023 Compensation Actually Paid | Mr. Cannon-Brookes (PEO) | | Mr. Farquhar (PEO) | | Non-PEO NEOs(1) | | | Summary Compensation Table Total | | $55,109 | | $55,109 | | $13,612,685 | | Less - Grant date fair value of awards granted during the fiscal year | | 0 | | 0 | | $12,944,242 | | Plus - Fair value of awards granted during the fiscal year at vest (if vested) or at year-end (if unvested) | | 0 | | 0 | | $10,268,477 | | Plus - Change in fair value of awards granted prior to the fiscal year (2) | | 0 | | 0 | | -$1,075,858 | | Compensation Actually Paid | | $55,109 | | $55,109 | | $9,861,062 |
Pay Versus Performance
(1)All amounts included in this column represent the average for all Non-PEO NEOs. (2)Calculated as fair value at the earlier of vesting date or last day of the fiscal year minus the fair value on the last day of the prior fiscal year.
Pay Versus Performance Tabular List
Pay Versus Performance Tabular List We believe that cloud revenue represents the most important financial performance measure used by us to link compensation actually paid to our NEOs for the fiscal year ended June 30, 2023 to our performance.
Analysis of the Information Presented in the Pay Versus Performance Table
Analysis of the Information Presented in the Pay Versus Performance Table As indicated in the “Compensation Discussion and Analysis,” Atlassian’s executive compensation programs utilize cloud revenue to align company performance with pay outcomes. Other metrics included in the Pay Versus Performance table are not determining factors for pay outcomes. In accordance with Item 402(v) of Regulation S-K of the Exchange Act, Atlassian is providing the following descriptions of the relationships between information presented in the Pay Versus Performance table. Our below-target performance against cloud revenue targets had a direct impact on the overall compensation of our Non-PEO NEOs, as it resulted in reduced bonus payouts for fiscal year 2023. Furthermore, our decline in TSR during fiscal year 2023 reflects the prevailing macroeconomic environment and volatility in the software and technology sectors. These factors collectively resulted in a decrease in the Compensation Actually Paid (as computed in accordance with SEC rules) to our Non-PEO NEOs for fiscal year 2023.
Analysis of the Information Presented in the Pay Versus Performance Table
| 2023 Proxy Statement | |