DEF 14A of Zscaler, Inc.
Filed Nov 21, 2025 · FY20250001713683-25-000198
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n PROXY SUMMARY Executive Compensation Highlights Our pay practices align with our pay-for-performance philosophy and underscore our commitment to sound compensation and governance practices. We believe that as organizations continue to embrace cloud-based business solutions, they are still in the early stages of adopting the security and networking solutions, including our platform, that are necessary to secure and manage cloud-based operations. To be successful in this emerging market, we believe that delivering growth, capturing market share and delivering annual operating profitability are paramount. Since we strongly believe that establishing and meeting aggressive growth targets in both the short term and the long term is the best way to deliver sustained stockholder value in a highly competitive and emerging market, we focus our performance metrics for our annual executive cash bonuses on achieving growth in each fiscal year but also include performance metrics focused on non-GAAP income from operations. For our long-term incentive equity compensation, we focus our performance metrics on multi-year annual recurring revenue, or ARR, growth targets. Fiscal 2025 Financial Performance Fiscal 2025 was a strong year for us marked by significant achievement and growth across all of our key metrics. Fiscal 2025 highlights were as follows:
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| Revenue Growth | Calculated Billings Growth* | Non-GAAP Income from Operations† | Growth in Large Customers | | 23% Y/Y | 24% Y/Y | 31%Y/Y | 18% Y/Y | | $2.67B Revenue | $3.25B Billings | $580.1M | +664 Enterprises (>$1M ARR) | | | | | |
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*Calculated billings is a non-GAAP financial measure that we believe is a key metric to measure our periodic performance. Calculated billings represents our total revenue plus the change in deferred revenue in a period. See Appendix A for the calculation of calculated billings. †Non-GAAP income from operations is a financial measure that we believe is a key metric to measure our periodic performance. Non-GAAP income from operations represents GAAP loss from operations excluding stock-based compensation expense and related payroll taxes, amortization expense of acquired intangible assets, restructuring and other changes and acquisition-related expenses. See Appendix A for the calculation of non-GAAP income from operations.
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| 2 | 2025 Proxy Statement | |
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Board of Directors and Corporate Governance Our business affairs are managed under the direction of our board of directors, which is currently comprised of nine members. Seven of our nine directors are independent within the meaning of the independent director requirements of the Nasdaq Stock Market LLC, or Nasdaq. Our board of directors is divided into three classes with staggered three-year terms. At each annual meeting of stockholders, a class of directors will be elected for a three-year term to succeed the same class whose term is then expiring. Upon the recommendation of our nominating and corporate governance committee, we are nominating Andrew Brown, Scott Darling and David Schneider as Class II directors at the Annual Meeting. If elected, Mr. Brown, Mr. Darling and Mr. Schneider will each hold office for a three-year term until the 2028 annual meeting of stockholders or until their successors are elected and qualified. The following table sets forth the names, ages as of November 1, 2025 and certain other information for each of the directors with terms expiring at the Annual Meeting (who are also nominees for election as a director at the Annual Meeting) and for each of the continuing directors:
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| Director Nominees | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term for Which Nominated | | Andrew Brown(1)(2) | II | 62 | Director | 2015 | 2025 | 2028 | | Scott Darling(1)(3) | II | 69 | Director | 2016 | 2025 | 2028 | | David Schneider(3) | II | 57 | Director | 2019 | 2025 | 2028 | | Continuing Directors | Class | Age | Position | Director Since | Current Term Expires | Expiration of Term for Which Nominated | | James Beer(1) | III | 64 | Director | 2024 | 2026 | — | | Jay Chaudhry | III | 67 | Chairman of the Board and Chief Executive Officer | 2007 | 2026 | — | | Raj Judge | III | 59 | Director and Executive Vice President of Corporate Strategy | 2025 | 2026 | — | | Karen Blasing(1) | I | 69 | Director | 2017 | 2027 | — | | Charles Giancarlo(2)(3) | I | 67 | Director | 2016 | 2027 | — | | Eileen Naughton(2) | I | 67 | Director | 2021 | 2027 | — |
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(1)Member of our audit committee (2)Member of our compensation committee (3)Member of our nominating and corporate governance committee
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Board Composition
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| Independence | Tenure | Age | Gender |
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Director Skills Matrix The following table summarizes the key qualifications, skills and attributes of our director nominees and the continuing members of our board of directors. A mark indicates a specific area or focus of expertise on which our board of directors particularly relies. Not having a mark does not mean the director does not possess that qualification or skill. Our directors' biographies describe each director's background and relevant experience in greater detail.
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| Director Skills | Chaudhry | Beer | Blasing | Brown | Darling | Giancarlo | Judge | Naughton | Schneider | | Senior Leadership | n | n | n | n | n | n | n | n | n | | Industry Expertise | n | n | n | n | n | n | n | n | n | | Financial Knowledge and Expertise | n | n | n | n | n | n | n | | n | | Public Company Board Experience | n | n | n | n | n | n | n | n | n | | Cybersecurity/Information Security | n | | | n | | n | | | | | Global/International Experience and Knowledge | n | n | n | n | n | n | n | n | n | | Governance, Risk Oversight and Compliance | n | n | n | n | n | n | n | n | n | | Sales, Marketing and Brand Management | n | n | | | n | n | n | n | n | | Human Capital Management | n | n | n | n | n | n | n | n | n | | SaaS Scale | n | n | n | | n | n | n | | n | | Emerging Technologies and Business Models | n | n | n | n | n | n | n | n | n |
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Senior Leadership — Experience in senior leadership positions to analyze, advise and oversee management in decision making, operations and policies Industry Expertise — Insight into the cloud, cybersecurity and software industries to oversee our business and the risks we face related to those industries Financial Knowledge and Expertise — Knowledge of financial markets, financing and accounting and financial reporting processes Public Company Board Experience — Experience to understand the dynamics and operation of a public company Cybersecurity/Information Security — Leadership or significant experience overseeing and managing risks related to the protection and confidentiality of digital systems or data Global/International Experience and Knowledge — Experience and knowledge of global operations, business conditions and culture to advise and oversee our global business Governance, Risk Oversight and Compliance — Experience in public company corporate governance risk oversight and management, compliance, investor relations and creating long term sustainable value Sales, Marketing and Brand Management — Sales, marketing and brand management experience to provide expertise to grow sales and enhance our brand Human Capital Management — Experience attracting and retaining top talent to advise and oversee our people and compensation policies SaaS Scale — Experience building or growing successful SaaS companies, reaching scale and maturity Emerging Technologies and Business Models — Experience identifying and developing emerging technologies and business models to advise, analyze and strategize regarding emerging technologies, business models and potential acquisitions disrupting our industry, business and company
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Director Nominees
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| Andrew Brown Age | 62 Class II Director Since | 2015 | Andrew Brown has served as chief executive officer of Sand Hill East LLC, a strategic management, investment and marketing services firm, since February 2014. Since 2006, he has also been the chief executive officer and co-owner of Biz Tectonics LLC, a privately held consulting company. From September 2010 to October 2013, Mr. Brown served as group chief technology officer of UBS Securities LLC, an investment bank. From 2008 to 2010, he served as head of strategy, architecture and optimization at Bank of America Merrill Lynch, the corporate and investment banking division of Bank of America. From 2006 to 2008, Mr. Brown served as chief technology officer of infrastructure at Credit Suisse Securities (USA) LLC, an investment bank. He currently sits on the board of directors of Pure Storage, Inc., a data storage and management company, where he serves as the chair of the compensation committee and chair of the risk committee. Mr. Brown previously served on the board of directors of Guidewire Software, Inc., a provider of software products for property and casualty insurers. Mr. Brown holds a B.S. (Honors) in chemical physics from University College London. Mr. Brown also, recently, co-authored the book "Cybersecurity: 7 Steps for Boards of Directors". | | | We believe Mr. Brown is qualified to serve as a member of our board of directors based on his extensive experience as chief technology officer of multiple Fortune 500 companies, as well as his service on the board of directors of other publicly traded companies. |
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| Scott Darling Age | 69 Class II Director Since | 2016 | Scott Darling has served as president of Dell Technologies Capital, the venture capital arm of Dell Technologies Inc., since September 2016. Prior to joining Dell Technologies upon its acquisition of EMC Corp., Mr. Darling was president of EMC Corporate Development and Ventures from March 2012 to September 2016, and in this role he was responsible for EMC’s business development and venture capital investment activity. Prior to joining EMC, Mr. Darling was a general partner at Frazier Technology Ventures II, L.P., which he joined in 2007, and was vice president and managing director at Intel Capital Corp., the venture capital arm of Intel Corporation, from 2000 to 2007. Mr. Darling previously served on the board of directors of DocuSign Inc., a provider of electronic signature technology and digital transaction management services. Mr. Darling holds a B.A. in economics from the University of California at Santa Cruz and an M.B.A. from the Stanford University Graduate School of Business. | | | We believe Mr. Darling is qualified to serve as a member of our board of directors based on his experience as a director of and as an investor in multiple technology companies. |
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| David Schneider Age | 57 Class II Director Since | 2019 | David Schneider has served as a General Partner of Coatue Management, an investment firm focusing on technology companies, since February 2021. Mr. Schneider previously served as president, emeritus of ServiceNow, Inc., a cloud computing company, from July 2020 to December 2021, as president, global customer operations from January 2019 to July 2020, as chief revenue officer from June 2014 to January 2019 and as senior vice president of worldwide sales and services from June 2011 to May 2014. From July 2009 to March 2011, Mr. Schneider served as senior vice president of worldwide sales of the backup recovery systems division of EMC Corporation, a computer storage company acquired by Dell Technologies Inc. From January 2004 to July 2009, Mr. Schneider held senior positions at Data Domain, Inc., a data archiving and deduplication company acquired by EMC, most recently as Senior Vice President of Worldwide Sales. Mr. Schneider holds a B.A. in political science from the University of California, Irvine. | | | We believe Mr. Schneider is qualified to serve on our board of directors because of his knowledge and experience in operations and management at various technology companies. |
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Continuing Directors
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| Jay Chaudhry Age | 67 Class III Director Since | 2007 | Jay Chaudhry is our co-founder and has served as our Chief Executive Officer and as Chairman of our board of directors since September 2007. Mr. Chaudhry holds an M.B.A. and an M.S. in electrical engineering and industrial engineering from the University of Cincinnati and a B. Tech in electronics engineering from the Indian Institute of Technology (Banaras Hindu University) Varanasi. | | | We believe Mr. Chaudhry is qualified to serve as a member of our board of directors because he is a security industry pioneer and an accomplished entrepreneur, having founded and built several companies, and based on the perspective, operational insight and expertise he has accumulated as our co-founder and our Chief Executive Officer. |
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| James Beer Age | 64 Class III Director Since | 2024 | James Beer served as chief financial officer of Atlassian Corporation Plc, an enterprise software company, from February 2018 to June 2022. From September 2013 to December 2017, Mr. Beer served as executive vice president and chief financial officer of McKesson Corporation, a healthcare services and information technology company. Prior to McKesson Corporation, Mr. Beer served as executive vice president and chief financial officer of Symantec Corporation, now known as Gen Digital, a cybersecurity company, where he managed the worldwide finance organization. Prior to his work at Symantec, Mr. Beer served as chief financial officer or AMR Corp. and American Airlines Group Inc., AMR's principal subsidiary. Mr. Beer currently serves on the board of directors of Alaska Air Group, parent company of Alaska Airlines, DocuSign Inc. and Redis Ltd., a privately-held infrastructure software company. Mr. Beer previously served on the board of directors of ForeScout Technologies, Inc., a network security software company. Mr. Beer holds a B.S. in Aeronautical Engineering from Imperial College, London University, and an M.B.A. from Harvard University. | | | We believe Mr. Beer is qualified to serve as a member of our board of directors because of his substantial experience in corporate finance with public technology companies as well as his service on the board of directors of publicly traded companies. |
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| Raj Judge Age | 59 Class III Director Since | 2025 | Raj Judge has served as our Executive Vice President of Corporate Strategy since May 2025. Prior to joining Zscaler, Mr. Judge spent over 25 years at Wilson Sonsini Goodrich & Rosati, a law firm, where he advised on corporate securities matters including, venture capital financings, initial public offerings, acquisitions and board governance matters. Mr. Judge was a senior partner and Co-Chair of Emerging Companies and Venture Capital. Mr. Judge holds a B.A. in Economics from the University of California, Los Angeles and a J.D. | | | We believe Mr. Judge is qualified to serve as a member of our board of directors based on his extensive experience with public technology companies, including advising public company corporate strategy and board matters. |
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| Karen Blasing Age | 69 Class I Director Since | 2017 | Karen Blasing served as the chief financial officer of Guidewire from July 2009 to March 2015. Prior to 2009, Ms. Blasing served as the chief financial officer for Force10 Networks, Inc. and as the senior vice president of finance for Salesforce.com, Inc. She has also served as chief financial officer for Nuance Communications, Inc. and Counterpane Internet Security, Inc. and held senior finance roles for Informix Corporation (now IBM Informix) and Oracle Corporation. She currently serves as a director of Autodesk, Inc., a multinational software corporation, where she serves as a chair of the compensation committee, and GitLab Inc., a DevSecOps platform company, where she serves as a member of the audit committee. Ms. Blasing previously served as a director of Ellie Mae, Inc. Ms. Blasing holds a B.A. in economics and business administration from the University of Montana and an M.B.A. from the University of Washington. | | | We believe Ms. Blasing is qualified to serve as a member of our board of directors based on her extensive financial leadership and management experience at numerous SaaS and enterprise software companies. |
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| Charles Giancarlo Age | 67 Class I Director Since | 2016 | Charles Giancarlo has served as chief executive officer of Pure Storage since August 2017. From January 2008 until October 2015, Mr. Giancarlo was a managing director and then strategic advisor of Silver Lake Partners, a private investment firm that focuses on technology-enabled and related growth industries. From May 1993 to December 2007, Mr. Giancarlo served in numerous senior executive roles at Cisco Systems, Inc., a provider of communications and networking products and services, ultimately as the executive vice president and chief development officer from May 2004 to December 2007. Mr. Giancarlo currently serves on the boards of directors of Arista Networks, Inc., a manufacturer of networking products, where he serves as the chair of the compensation committee, and Pure Storage. He previously served on the boards of directors of Accenture plc, Avaya, Inc., Imperva, Inc., ServiceNow, Inc., Netflix, Inc. and Tintri, Inc. Mr. Giancarlo holds a B.S. in electrical engineering and a B.A. in classical studies from Brown University, an M.S. in electrical engineering from the University of California, Berkeley and an M.B.A. from Harvard Business School. | | | We believe Mr. Giancarlo is qualified to serve as a member of our board of directors based on his extensive business expertise, including his current and prior executive level leadership, and his experience on the boards of publicly traded technology companies. |
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| Eileen Naughton Age | 67 Class I Director Since | 2021 | Eileen Naughton served as the Chief People Officer and Vice President of People Operations at Google, Inc. from September 2016 to January 2021. Prior to September 2016, Ms. Naughton served in a variety of senior roles at Google dating back to 2006, including as Vice President and Managing Director for Google UK & Ireland and Vice President of Global Sales. Prior to joining Google in 2006, Ms. Naughton held a number of executive positions at Time Warner, including president of TIME Magazine. Ms. Naughton currently serves on the board of directors of Ares Management Corporation, an alternative investment manager operating in the credit, private equity and real estate markets. She previously served on the boards of directors of L’Oreal S.A. and The XO Group. Ms. Naughton holds a B.A. in international relations from the University of Pennsylvania, a Master of Arts from the Lauder Institute and a M.B.A. from the University of Pennsylvania. | | | We believe Ms. Naughton is qualified to serve on our board of directors because of her extensive director experience and her knowledge and experience in operations and management at multiple sophisticated companies. |
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Director Independence Our common stock is listed on the Nasdaq Global Select Market. Under the rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors within a specified period after the completion of our initial public offering. In addition, the rules of Nasdaq require that, subject to specified exceptions, each member of a listed company’s audit, compensation and nominating and governance committees be independent. Audit committee members and compensation committee members must also satisfy the independence criteria set forth in Rule 10A-3 and Rule 10C-1, respectively, under the Securities Exchange Act of 1934 as amended, or the Exchange Act. Under the rules of Nasdaq, a director will only qualify as an “independent director” if, in the opinion of that company’s board of directors, that person does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. To be considered independent for purposes of Rule 10A-3 and under the rules of Nasdaq, a member of an audit committee of a listed company may not, other than in his or her capacity as a member of our audit committee, our board of directors or any other board committee: (1) accept, directly or indirectly, any consulting, advisory or other compensatory fee from the listed company or any of its subsidiaries; or (2) be an affiliated person of the listed company or any of its subsidiaries. To be considered independent for purposes of Rule 10C-1 and under the rules of Nasdaq, the board of directors must affirmatively determine that the member of the compensation committee is independent, including a consideration of all factors specifically relevant to determining whether the director has a relationship to the company which is material to that director’s ability to be independent from management in connection with the duties of a compensation committee member, including, but not limited to: (i) the source of compensation of such director, including any consulting, advisory or other compensatory fee paid by the company to such director; and (ii) whether such director is affiliated with the company, a subsidiary of the company or an affiliate of a subsidiary of the company. Our board of directors has undertaken a review of its composition, the composition of its committees and the independence of our directors and considered whether any director has a material relationship with us that could compromise his or her ability to exercise independent judgment in carrying out his or her responsibilities. Based upon information requested from and provided by each director concerning his or her background, employment and affiliations, including family relationships, our board of directors has determined that (i) none of Mses. Blasing and Naughton and Messrs. Beer, Brown, Darling, Giancarlo and Schneider, representing seven of our nine directors, has a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and (ii) each of these directors is “independent” as that term is defined under the rules of Nasdaq. Messrs. Chaudhry and Judge are not independent under Nasdaq’s independence standards. Our board of directors also determined that Ms. Blasing (chair) and Messrs. Beer, Brown and Darling, who comprise our audit committee, and Messrs. Brown (chair) and Giancarlo and Ms. Naughton, who comprise our compensation committee, satisfy the independence standards for committee members established by applicable Securities and Exchange Commission, or SEC, rules and the listing standards of Nasdaq. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with the Company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and any transactions involving them described in the section titled “Related Person Transactions.” There are no family relationships among any of our directors or executive officers.
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Board Leadership Structure Mr. Chaudhry currently serves as our Chief Executive Officer and Chairman of the Board. Our board of directors believes that the current board leadership structure, coupled with a strong emphasis on board independence, provides effective independent oversight of management while allowing the board and management to benefit from Mr. Chaudhry’s leadership, Company-specific experience and years of experience as an executive in the network security industry. Serving on our board of directors and as Chief Executive Officer since our founding in 2007, Mr. Chaudhry is best positioned to identify strategic priorities, lead critical discussion and execute our growth strategy and business plans. Mr. Chaudhry possesses detailed in-depth knowledge of the issues, opportunities and challenges facing us. The board of directors believes that Mr. Chaudhry’s combined role enables strong leadership, creates clear accountability and enhances our ability to communicate our message and strategy clearly and consistently to stockholders. The board of directors has not appointed a “lead independent director.” We believe that our board leadership structure is appropriate for our Company, particularly where we have a majority of independent directors who are all actively involved in board meetings. Executive Sessions of Independent Directors In order to encourage and enhance communication among independent directors, and as required under the applicable rules of Nasdaq, our corporate governance guidelines provide that the independent directors of our board of directors will meet in executive sessions without management directors or Company management present on a periodic basis, but no less than twice a year. Board Meetings and Committees During the fiscal year ended July 31, 2025, our board of directors held four meetings (including regularly scheduled and special meetings), and each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she served as a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served. Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we encourage, but do not require, our directors to attend. We have established an audit committee, a compensation committee and a nominating and corporate governance committee with the composition and responsibilities described below. We believe that the composition and the operation of these committees comply with the requirements of the Sarbanes-Oxley Act of 2002, the rules of Nasdaq and SEC rules and regulations.
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Audit Committee
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| Members | Responsibilities | | Ms. Blasing (Chair) Mr. Beer Mr. Brown Mr. Darling | | | | ▪selecting and hiring our registered public accounting firm; ▪evaluating the performance and independence of our registered public accounting firm; ▪approving the audit and pre-approving any non-audit services to be performed by our registered public accounting firm; ▪reviewing our financial statements and related disclosures and reviewing our critical accounting policies and practices; ▪reviewing the adequacy and effectiveness of our internal control policies and procedures and our disclosure controls and procedures; ▪overseeing procedures for the treatment of complaints on accounting, internal accounting controls or audit matters; ▪reviewing and discussing with management and the independent registered public accounting firm the results of our annual audit, our quarterly financial statements and our publicly filed reports; ▪cybersecurity risk assessment and management; ▪privacy risk assessment and management; ▪reviewing and approving any proposed related-person transactions; and ▪preparing the audit committee report that the SEC will require in our annual proxy statement. | | Our board of directors has determined that all members of our audit committee meet the requirements for independence and financial literacy of audit committee members under current Nasdaq listing standards and SEC rules and regulations. Our audit committee chairperson, Ms. Blasing, and Mr. Beer are audit committee financial experts, as that term is defined under the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002, and possess financial sophistication, as defined under Nasdaq listing standards. | |
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Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing requirements of Nasdaq. A copy of the charter of our audit committee is available on our website at http://ir.zscaler.com in the Governance Documents section of our Investor Relations webpage. During the fiscal year ended July 31, 2025, our audit committee held seven meetings.
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Compensation Committee
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| Members | Responsibilities | | Mr. Brown (Chair) Mr. Giancarlo Ms. Naughton | | | | ▪reviewing and approving our chief executive officer’s and other executive officers’ annual base salaries, incentive compensation plans, including the specific goals and amounts, equity compensation, employment agreements, severance arrangements and change in control agreements and any other benefits, compensation or arrangements; ▪administering our equity compensation plans; ▪overseeing our overall compensation philosophy, compensation plans and benefits programs; and ▪preparing the compensation committee report in our annual proxy statement. | | Our board of directors has determined that all members of our compensation committee meet the requirements for independence under the rules of Nasdaq and the SEC and are “non-employee directors” within the meaning of Rule 16b-3 under the Exchange Act. | |
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Our compensation committee operates under a written charter that satisfies the listing standards of Nasdaq. A copy of the charter of our compensation committee is available on our website at http://ir.zscaler.com in the Governance Documents section of our Investor Relations webpage. During the fiscal year ended July 31, 2025, our compensation committee held four meetings. Nominating and Corporate Governance Committee
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| Members | Responsibilities | | Mr. Giancarlo (Chair) Mr. Darling Mr. Schneider | | | | ▪evaluating and making recommendations regarding the composition, organization and governance of our board of directors and its committees; ▪evaluating and making recommendations regarding the creation of additional committees or the change in mandate or dissolution of committees; ▪reviewing and making recommendations with regard to our Corporate Governance Guidelines and compliance with laws and regulations, including corporate responsibility issues and disclosures; and ▪reviewing and approving conflicts of interest of our directors and corporate officers, other than related person transactions reviewed by the audit committee. | | Our board of directors has determined that all members of our nominating and corporate governance committee meet the requirements for independence under the rules of Nasdaq. | |
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Our nominating and corporate governance committee operates under a written charter that satisfies the listing standards of Nasdaq. A copy of the charter of our nominating and corporate governance committee is available on our website at http://ir.zscaler.com in the Governance Documents section of our Investor Relations webpage. During the fiscal year ended July 31, 2025, our nominating and corporate governance committee held three meetings.
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Compensation Committee Interlocks and Insider Participation None of the members of our compensation committee is or has been an officer or employee of the Company. None of our executive officers currently serves, or in the past year has served, as a member of the compensation committee or director (or other board committee performing equivalent functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive officers serving on our compensation committee or our board of directors. Considerations in Evaluating Director Nominees It is the policy of the nominating and corporate governance committee of our board of directors to consider recommendations for candidates to our board of directors from stockholders holding no less than one percent (1%) of the outstanding shares of the Company’s common stock continuously for at least 12 months prior to the date of the submission of the recommendation or nomination. The nominating and corporate governance committee will use the following procedures to identify and evaluate any individual recommended or offered for nomination to our board of directors: ▪The nominating and corporate governance committee will consider candidates recommended by stockholders in the same manner as candidates recommended to the nominating and corporate governance committee from other sources. ▪In its evaluation of director candidates, including the members of our board of directors eligible for re-election, the nominating and corporate governance committee will consider factors such as: ◦business expertise, professional background and experience, education and skills; ◦past attendance at meetings, and participation in, and contributions to, the activities of our board of directors; and ◦other factors that the nominating and corporate governance committee deems appropriate. ▪The nominating and corporate governance committee requires the following minimum qualifications to be satisfied by any nominee for a position on our board of directors: ◦the highest personal and professional ethics and integrity; ◦proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment; ◦skills that are complementary to those of the existing board of directors; ◦the ability to assist and support management and make significant contributions to the Company’s success; and ◦an understanding of the fiduciary responsibilities that are required of a member of our board of directors and the commitment of time and energy necessary to diligently carry out those responsibilities. If the nominating and corporate governance committee determines that an additional or replacement director is required, the nominating and corporate governance committee may take such measures that it considers appropriate in connection with its evaluation of a director candidate, including candidate interviews, inquiry of the person or persons making the recommendation or nomination, engagement of an outside search firm to gather additional information, or reliance on the knowledge of the members of the nominating and corporate governance committee, our board directors or management. The nominating and corporate governance committee may propose to our board of directors a candidate recommended or offered for nomination by a stockholder as a nominee for election to our board of directors. The nominating and corporate governance committee has in the past and may in the future pay fees to third parties to assist in identifying or evaluating director candidates.
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Stockholder Recommendations for Nominations to the Board of Directors A stockholder that wants to recommend a candidate for election to our board of directors should direct the recommendation in writing by letter to the Company, attention of the Secretary, at Zscaler, Inc., 120 Holger Way, San Jose, California 95134. The recommendation must include the candidate’s name, home and business contact information, detailed biographical data, relevant qualifications, a signed letter from the candidate confirming willingness to serve, information regarding any relationships between the candidate and the Company and evidence of the recommending stockholder’s ownership of Company stock. Such recommendations must also include a statement from the recommending stockholder in support of the candidate, particularly within the context of the criteria for board membership, including issues of character, integrity, judgment, diversity of experience, independence, area of expertise, corporate experience, length of service, potential conflicts of interest, other commitments and the like and personal references. A stockholder that instead desires to nominate a person directly for election to our board of directors at an annual meeting of the stockholders must meet the deadlines and other requirements set forth in Section 2.4 of the Company’s bylaws and SEC rules and regulations. Section 2.4 of the Company’s bylaws requires that a stockholder who seeks to nominate a candidate for director must provide a written notice to the Secretary of the Company not later than the close of business on the 45th day nor earlier than the close of business on the 75th day before the one-year anniversary of the date on which the corporation first mailed its proxy materials or a notice of availability of proxy materials (whichever is earlier) for the preceding year’s annual meeting; provided, however, that in the event that no annual meeting was held in the previous year or if the date of the annual meeting is changed by more than 30 days from the one-year anniversary of the date of the previous year’s annual meeting, then, for notice by the stockholder to be timely, it must be so received by the secretary not earlier than the close of business on the 120th day prior to such annual meeting and not later than the close of business on the later of (i) the 90th day prior to such annual meeting, or (ii) the 10th day following the day on which Public Announcement (as defined below) of the date of such annual meeting is first made. In no event shall any adjournment or postponement of an annual meeting or the announcement thereof commence a new time period for the giving of a stockholder’s notice. “Public Announcement” shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or a comparable national news service or in a document publicly filed by the corporation with the SEC pursuant to Section 13, 14 or 15(d) of the Exchange Act, or by such other means as is reasonably designed to inform the public or stockholders of the corporation in general of such information, including, without limitation, posting on the Company's investor relations website. In addition to satisfying the foregoing requirements under our bylaws, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must also comply with the additional requirements of Rule 14a-19 under the Exchange Act.
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n PROXY SUMMARY
Communications with the Board of Directors Our board of directors believes that management speaks for Zscaler, Inc. However, individual board members may, from time to time, communicate with various constituencies that are involved with the Company, but it is expected that board members would do this with knowledge of management and, in most instances, only at the request of management. In cases where stockholders and other interested parties wish to communicate directly with our non-management directors, messages can be sent to our Secretary, at Zscaler, Inc., 120 Holger Way, San Jose, California 95134. Our Secretary monitors these communications and will provide a summary of all received messages to the board of directors, or an appropriate committee of the board of directors, at each regularly scheduled quarterly meeting of the board. Where the nature of a communication warrants, our Secretary may determine, in his or her judgment, to obtain the more immediate attention of the board of directors, independent directors, appropriate committees, or members of committees of the board, independent advisors to the Company or Company management, as our Secretary considers appropriate. Our Secretary may decide in the exercise of his or her judgment whether a response to any stockholder or interested party communication is necessary. This procedure for stockholder and other interested party communications with the non-management directors is overseen by the Company’s nominating and corporate governance committee. This procedure does not apply to communications to non-management directors from officers or directors of the Company who are stockholders, stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act or communications to the audit committee pursuant to the Complaint Procedures for Accounting and Auditing Matters. Stockholder Engagement As part of our year-round stockholder engagement program and a vital component of our overall corporate governance program, Zscaler meets with, and constantly strives to incorporate feedback from, our stockholders. Our Investor Relations team regularly meets with investors, prospective investors and investment analysts to discuss Company performance, technology initiatives and company strategy. Meetings can include participation by our Chief Executive Officer, Chief Financial Officer, Chief Legal Officer, other members of management and members of our board of directors. In addition, our Investor Relations team regularly engages with the governance departments of our stockholders and seeks feedback on topics of interest to them, including on our corporate governance, executive and director compensation and corporate responsibility practices. Our Investor Relations team, Chief Executive Officer, Chief Financial Officer and Chief Legal Officer regularly communicate topics discussed and feedback from stockholders with our senior management and board of directors for consideration.
n PROXY SUMMARY
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n PROXY SUMMARY
In fiscal 2025, our management team held 102 meetings with current and prospective stockholders, including meetings with 52% of our top 25 largest stockholders. We continuously communicate with stockholders and other stakeholders through various media, including our annual report and SEC filings, proxy statement, news releases, quarterly earnings calls, our website and our Annual Meeting. Below is a summary of some of the key feedback on certain governance topics that we received since we filed our fiscal 2024 Proxy Statement:
n PROXY SUMMARY
| Common Discussion Points | Our Viewpoint | | No lead independent director for Zscaler's board of directors | Stockholders have asked why our board does not have a lead independent director to work with our Chairman and CEO. We believe that, while a lead independent director might be valuable in some companies, such a role would undermine our highly effective board culture where all independent directors work directly with our Chairman and CEO on matters within their areas of interest and expertise. Our board consists of a majority of independent directors and regularly meets in executive session as appropriate. Additionally, all three of our board committees are composed entirely of independent directors. We believe all independent board members are empowered to guide the Company, and this fosters a collaborative dynamic which could be impaired by the presence of a single lead independent director. While in the future we may find it beneficial or necessary to appoint a lead independent director, currently, we feel our board structure provides an appropriate check against undue management influence while preserving the board culture that has driven our success. | | Payment of annual cash bonuses | Stockholders have asked about the application of discretion by our CEO in determining the bonuses of our executive officers. As described in the "Executive Compensation" section, the entire cash bonus pool allocated to our executive officers is funded based on attainment of revenue, billings and non-GAAP income from operations performance metrics determined by our compensation committee. However, the actual payment to our Named Executive Officers is subject to downward adjustment by our CEO. Specifically, our CEO considers non-public corporate and individual performance metrics in exercising discretion only to reduce bonus payments below what is allowed by the funded amount of the bonus pool. For example in the first half performance period of fiscal 2024, our CEO exercised his downward discretion such that the actual full year payout to Named Executive Officers was 108.7% of their target bonuses, which was below the full year total funded pool of 118.3%. We believe this gives our CEO latitude to ensure executive pay reflects the best interests of our stockholders and aligns with performance against a wide variety of strategic and performance objectives. | | Charles Giancarlo "Overboarding" | Stockholders have expressed concerns about Mr. Giancarlo sitting on the boards of directors of three public companies including Zscaler while also serving as the chief executive officer of one company. We feel that Mr. Giancarlo provides a unique combination of invaluable experience, skills and perspectives that are relevant for Zscaler's market, technology and stage of growth as a result of his past and, especially, his current roles. During the last five fiscal years, Mr. Giancarlo has missed only one board or committee meeting. In addition, Mr. Giancarlo regularly makes himself available for informal meetings with our CEO and other members of management. During these formal and informal meetings, we believe that Mr. Giancarlo provides critical advice and insights which benefit our stockholders. | | Anti-takeover provisions | Stockholders have asked about our anti-takeover provisions including our classified board and our board's ability to issue preferred shares of stock without a stockholder vote. With cybersecurity taking center-stage for many companies, Zscaler is filling a critical need for our customers. Part of that need centers around long-term stability of our products and our Company as a whole. We feel that the anti-takeover measures, that have been deemed reasonable and appropriate by both our management and board of directors, support this long-term stability, which is increasingly seen as vital by our customers, partners and employees. In addition, and as discussed in our opposition statement to Proposal 5 in this Proxy Statement, our classified board structure enables our directors to prioritize long-term, sustainable growth, supports our customer relationships and long-term innovation commitments and promotes orderly board refreshment. As a result, we believe that our anti-takeover provisions are reasonable for our Company’s size, growth rate and industry and support long-term value creation for our stockholders. |
n PROXY SUMMARY
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n PROXY SUMMARY
Corporate Governance Guidelines and Code of Conduct Our board of directors has adopted Corporate Governance Guidelines. These guidelines address items such as the qualifications and responsibilities of our directors and director candidates and corporate governance policies and standards applicable to us in general. In addition, our board of directors has adopted a Code of Conduct that applies to all of our employees, officers and directors, including our chief executive officer, chief financial officer and other executive and senior financial officers. The full text of our Corporate Governance Guidelines and our Code of Conduct is posted on our website at http://ir.zscaler.com in the Governance Documents section of our Investor Relations webpage. We will post any amendments to our Code of Conduct, and any waivers of our Code of Conduct for directors and executive officers, on the same website. Role of the Board of Directors in Risk Oversight One of the key functions of our board of directors is informed oversight of our risk management process which risks include, among others, strategic, financial, business and operational, cybersecurity, legal and regulatory compliance and reputational risks. Our board of directors does not have a standing risk management committee but rather administers this oversight function directly through the board of directors as a whole, as well as through its standing committees that address risks inherent in their respective areas of oversight. In particular, our board of directors is responsible for monitoring and assessing strategic risk exposure. Our audit committee is responsible for reviewing and discussing our major financial risk exposures and the steps our management has taken to monitor and control these exposures, including guidelines and policies with respect to risk assessment and risk management, including oversight of the performance of our internal audit function. In addition to oversight of the performance of our external and internal audit functions, our audit committee also monitors compliance with legal and regulatory requirements and reviews related party transactions. Our audit committee responsibilities also include oversight of cybersecurity risk management, and, to that end, members of the audit committee meet frequently with management and Company leadership responsible for cybersecurity risk management and receive periodic reports from management, as well as incremental reports as matters arise. Our nominating and corporate governance committee monitors the effectiveness of our corporate governance guidelines and oversees our Corporate Responsibility program. Our compensation committee assesses and monitors whether any of our compensation policies and programs has the potential to encourage excessive risk-taking. Director Compensation Each non-employee director is eligible to receive compensation for his or her service consisting of annual cash retainers and equity awards under our outside director compensation policy. Our outside director compensation policy was crafted in consultation with Compensia, Inc., or Compensia, an independent compensation consulting firm engaged by our compensation committee. Compensia provided us with competitive data, analysis and recommendations regarding non-employee director compensation, which includes a mix of cash and equity-based compensation. After careful consideration of this information and the scope of the duties and responsibilities of our non-employee directors, our board of directors approved our outside director compensation policy. We believe this policy provides reasonable compensation to our non-employee directors that is commensurate with their contributions and appropriately aligned with our peers. We also reimburse our directors for expenses associated with attending meetings of our board of directors and board committees.
n PROXY SUMMARY
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n PROXY SUMMARY
For fiscal 2025, non-employee directors were entitled to receive the following cash compensation for service in the following positions:
n PROXY SUMMARY
| Position | Annual Retainer ($) | | Board Member | 40,000 | | Audit Committee Chair | 25,000 | | Audit Committee Member | 12,500 | | Compensation Committee Chair | 20,000 | | Compensation Committee Member | 10,000 | | Nominating and Corporate Governance Committee Chair | 12,000 | | Nominating and Corporate Governance Committee Member | 6,000 |
n PROXY SUMMARY
In addition, effective as of the date of the 2024 Annual Meeting of Stockholders, non-employee directors were eligible to receive the following equity awards for board service: (1)Annual restricted stock unit, or RSU, grant with target value of $260,000 (automatically granted at the Annual Meeting). These RSU awards vest in four equal quarterly installments over a one-year period; and (2)Initial RSU grant with a target value of $500,000 (automatically granted on the date of appointment or election), pursuant to which one-third of the RSU awards will vest on the first Quarterly Vesting Date (as defined in the FY2018 Equity Incentive Plan or the form of award agreement thereunder) following the one-year anniversary of the effective date of appointment and the remaining RSU awards will vest in eight equal quarterly installments thereafter. Any director elected at the Annual Meeting for a given year will receive both the initial RSU grant and the annual RSU grant. The number of RSU awards for each of the initial and annual RSU grant will be determined by dividing the annual equity value by the average closing price of Zscaler common stock on the Nasdaq Global Select Market for the 30 trading days ending on the date that is five days prior to the grant date, rounded up to the nearest share. All cash payments to non-employee directors who served in the relevant capacity at any point during the immediately preceding prior fiscal quarter will be paid quarterly in arrears on a pro-rated basis. A non-employee director who served in the relevant capacity during only a portion of the prior fiscal quarter will receive a pro-rated payment of the quarterly payment of the applicable cash retainer.
DIRECTOR STOCK OWNERSHIP GUIDELINES
| Name | Fees Earned or Paid in Cash ($) | Stock Awards ($)(1) | Total ($) | | James Beer | 48,875 | 248,684 | 297,558 | | Karen Blasing | 61,250 | 248,684 | 309,934 | | Andrew Brown | 66,875 | 248,684 | 315,559 | | Scott Darling | 54,375 | 248,684 | 303,509 | | Charles Giancarlo | 57,125 | 248,684 | 305,809 | | Eileen Naughton | 46,250 | 248,684 | 294,934 | | David Schneider | 43,000 | 248,684 | 291,684 |
Pay-for-Performance
Pay-for-Performance We believe our executive compensation program is reasonable, competitive and appropriately balances the goals of attracting, motivating, rewarding and retaining our executive officers, with the goal of aligning their interests with those of our stockholders. To ensure this alignment and to motivate and reward individual initiative and effort, a substantial portion of our executive officers’ target annual compensation opportunity is both variable in nature and “at-risk.” We emphasize variable compensation that appropriately rewards our executive officers through two separate compensation elements: ▪First, we provide our executive officers (other than our CEO) the opportunity to participate in our cash bonus plan, which provides cash payments if they produce results that meet or exceed the financial, operational and strategic objectives for the fiscal year, as established by our compensation committee. ▪In addition, we grant RSU and PSU awards that will reward recipients over a multi-year period, with the PSU awards being earned only for achieving long-term aggressive performance objectives established by the compensation committee. The RSU awards and, if earned, PSU awards, comprise a majority of our executive officers’ target total direct compensation opportunities. The future value of these awards depends significantly on our performance and the value of our common stock, thereby incentivizing them to build sustainable long-term value for the benefit of our stockholders. These variable pay elements ensure that, each year, a substantial portion of our executive officers’ target total direct compensation is contingent (rather than fixed) in nature, with the amounts ultimately payable subject to variability above or below target levels commensurate with our actual performance.
Executive Compensation Policies and Practices
| | What We Don't Do | | No Executive Retirement Plans We do not currently offer defined benefit pension plans or any non-qualified deferred compensation plans or arrangements to our Named Executive Officers other than the plans and arrangements that are available to all employees. Our Named Executive Officers are eligible to participate in our Section 401(k) retirement plan on the same basis as our other employees. | | | Limited Perquisites Perquisites or other personal benefits are not a material part of our compensation program for our Named Executive Officers. | | | No Excise Tax Payments on Future Post-Employment Compensation Arrangements We do not provide any excise tax reimbursement payments (including “gross-ups”) on payments or benefits contingent upon a change in control of the Company. | | | No Automatic Executive Compensation Increases We do not provide automatic increases in executive compensation on an annual basis. Our compensation committee conducts an annual review and approval of our compensation strategy and risk profile to ensure that our compensation programs do not encourage excessive or inappropriate risk-taking. | | | No Hedging or Pledging of Our Equity Securities We prohibit our employees, including our Named Executive Officers and the members of our board of directors, from hedging or pledging our equity securities. | |
Setting Target Total Compensation
For new executives, the compensation committee analyzes peer company executive compensation levels, market data for recently hired executives and the executive candidate's existing compensation. New hire compensation packages are designed to attract qualified executives, who often have large existing compensation arrangements, to join our leadership team, retain these executives after they have joined and, in certain cases, provide compensation, including equity compensation, to make these executives whole for compensation forfeited upon departure from prior employers. The compensation committee utilizes a number of factors when formulating the target total direct compensation opportunities of our Named Executive Officers, including the following: ▪our executive compensation program objectives; ▪our performance against the financial, operational and strategic objectives established by the compensation committee and our board of directors; ▪each individual Named Executive Officer’s knowledge, skills, experience, qualifications and tenure relative to other similarly-situated executives at the companies in our compensation peer group and/or Compensia’s proprietary compensation database; ▪the scope of each Named Executive Officer’s role and responsibilities compared to other similarly-situated executives at the companies in our compensation peer group and/or Compensia’s proprietary compensation database; ▪the prior performance of each individual Named Executive Officer, based on a subjective assessment of his or her contributions to our overall performance, ability to lead his or her business unit or function and work as part of a team, all of which reflect our core values; ▪for new hires, the competitive market, taking into account annual compensation levels at our peer companies, the new executive’s qualifications and experience, as well as the compensation received by the executive at their prior employer; ▪the potential of each individual Named Executive Officer to contribute to our long-term financial, operational and strategic objectives; ▪our financial performance relative to our compensation and performance peers; ▪the compensation practices of our compensation peer group and/or the companies in Compensia’s proprietary compensation database and the positioning of each Named Executive Officer’s compensation in a ranking of peer company compensation levels based on an analysis of competitive market data; and ▪the recommendations of our CEO with respect to the compensation of our Named Executive Officers (except with respect to his own compensation). These factors provide the framework for compensation decision-making and final decisions regarding the compensation opportunity for each Named Executive Officer.
Role of Compensation Consultant
Role of Compensation Consultant The compensation committee engaged Compensia as its external compensation consultant to assist it by providing information, analysis and other advice relating to our executive compensation program. The compensation consultant reports directly to the compensation committee and its chair and serves at the discretion of the compensation committee, which reviews the engagement annually. During fiscal 2025, Compensia attended the meetings of the compensation committee (both with and without management present) as requested and provided the following services: ▪consultation with the compensation committee chair and other members between compensation committee meetings; ▪review, research and updating of our compensation peer group; ▪an analysis of competitive market data based on the compensation peer group and Compensia's proprietary compensation database for our Named Executive Officers’ positions and an evaluation of how the compensation we pay our Named Executive Officers compares both to our performance and to how the companies in our compensation peer group compensate their executives; ▪review and analysis of the base salary levels, target annual cash bonus opportunities and long-term incentive compensation opportunities of our Named Executive Officers; ▪review and analysis of the metrics used by the companies in our compensation peer group in their short-term incentive compensation plans; ▪assessment of executive compensation trends within our industry, and updating on corporate governance and regulatory issues and developments; ▪review and analysis of director compensation levels; and ▪support on other ad hoc matters throughout the year. The terms of Compensia’s engagement includes reporting directly to the compensation committee chair. Compensia also coordinated with management for data collection and job matching for our Named Executive Officers. In fiscal 2025, Compensia did not provide any other services to us.
Role of Compensation Consultant
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Role of Compensation Consultant
The compensation committee has evaluated its relationship with Compensia to ensure that it believes that such firm is independent from management. This review process included a review of the services that Compensia provided, the quality of those services and the fees associated with the services provided during fiscal 2025. Based on this review, as well as consideration of the factors affecting independence set forth in Exchange Act Rule 10C-1(b)(4), Rule 5605(d)(3)(D) of the Nasdaq Marketplace Rules and such other factors as were deemed relevant under the circumstances, the compensation committee has determined that no conflict of interest was raised as a result of the work performed by Compensia and that Compensia is independent.
Competitive Positioning
Competitive Positioning For purposes of assessing our executive compensation against the competitive market, the compensation committee reviews and considers the compensation levels and practices of a select group of peer companies. This compensation peer group consists of technology companies that are similar to us in terms of revenue, market capitalization and industry focus. The competitive data drawn from this compensation peer group is only one of several factors that the compensation committee considers in making its decisions with respect to the compensation of our Named Executive Officers. The compensation peer group for fiscal 2025 compensation decisions was determined in March 2024 and was comprised of publicly-traded technology companies against which we compete for executive talent, as well as, in some instances, business opportunities. In evaluating the companies comprising the compensation peer group, we worked with Compensia to establish the following criteria: ▪publicly-traded companies headquartered in the United States and traded on a major United States stock exchange with a preference for California-based companies; ▪companies in the application software and systems software industries; ▪similar revenues – within a range of ~0.5x to ~2.0x our then-current trailing four quarters revenue of approximately $1.8 billion (approximately $879 million to approximately $3.5 billion); and ▪similar market capitalization – within a range of ~0.33x to 3.0x our then-current 30-day average market capitalization of approximately $31.5 billion (approximately $10.5 billion to approximately $94.5 billion). Our fiscal 2025 peer group consisted of the following companies:
Competitive Positioning
| ANSYS | Dynatrace | Paycom Software | | Arista Networks | Fortinet | Snowflake | | Bill.com Holdings | HubSpot | The Trade Desk | | Cloudflare | MongoDB | Twilio | | CrowdStrike Holdings | Okta | Unity Software | | Datadog | Palantir Technologies | Veeva Systems | | DocuSign | Palo Alto Networks | Zoominfo Technologies |
Competitive Positioning
The compensation committee reviews our compensation peer group at least annually and makes adjustments to its composition if warranted, taking into account changes in both our business and the businesses of the companies in the peer group.
Competitive Positioning
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COMPENSATION ELEMENTS
| Element | Type of Element | Compensation Element | Objective | | Base Salary | Fixed | Cash | Designed to attract and retain highly talented executives by providing fixed compensation amounts that are competitive in the market | | Annual Cash Bonuses | Variable | Cash | Designed to provide financial incentives to motivate our executives to achieve semi-annual financial objectives | | Long-Term Incentive Compensation | Variable | Equity awards in the form of PSU awards and RSU awards and occasionally option awards | Designed to align the interests of our executives and our stockholders by motivating them to create sustained long-term stockholder value |
ANNUAL CASH BONUSES
ANNUAL CASH BONUSES We use our Employee Incentive Compensation Plan, a cash bonus plan, to motivate employees selected by the compensation committee, including our Named Executive Officers (other than our CEO), to achieve our annual business goals. Pursuant to the Employee Incentive Compensation Plan, our compensation committee, in its sole discretion, establishes a target award for each executive and a bonus pool for our executives as a group, with actual awards payable from the bonus pool, with respect to the applicable performance period. For each period, our CEO may exercise discretion by evaluating multiple individual and corporate performance metrics, which may include sales performance and results, financial results, corporate objectives, customer satisfaction, product development performance, cloud reliability, bonus pool funding for non-executive employees, people management and development, governance and ethics, environmental objectives, social and individual executive goals, among other factors. For fiscal 2025, the Employee Incentive Compensation Plan included semi-annual award payouts after the end of the first six-months of the fiscal year (for the period from August 1, 2024 through January 31, 2025), and, then again, after the end of the fiscal year (for the period from February 1, 2025 through July 31, 2025).
Fiscal 2025 Target Annual Cash Bonus Award Opportunities
Fiscal 2025 Target Annual Cash Bonus Award Opportunities For purposes of the Employee Incentive Compensation Plan, cash bonus awards were based upon target annual cash bonus award opportunities as determined by the compensation committee. In November 2024, the compensation committee reviewed the target annual cash bonus award opportunities of our Named Executive Officers and determined to adjust the target annual cash bonus opportunities for each of our eligible Named Executive Officers to set their total target annual cash opportunity for fiscal 2025 at a level that was comparable to those of similarly-situated executives in the competitive marketplace. As in prior fiscal years, our CEO did not participate in the Employee Incentive Compensation Plan. The target annual cash bonus award opportunities of our Named Executive Officers for fiscal 2025 were as follows:
Fiscal 2025 Target Annual Cash Bonus Award Opportunities
| Named Executive Officer | Fiscal 2025 Target Annual Cash Bonus Award Opportunity ($) | Fiscal 2024 Target Annual Cash Bonus Award Opportunity ($) | Percentage Adjustment (%) | | Mr. Chaudhry | — | — | — | | Mr. Rubin(1) | 470,000 | — | — | | Mr. Geller(1) | 450,000 | — | — | | Mr. Judge(1) | 318,750 | — | — | | Mr. Rich | 470,000 | 450,000 | 4.4 | | Mr. Canessa | 470,000 | 450,000 | 4.4 |
Fiscal 2025 Target Annual Cash Bonus Award Opportunities
(1)In connection with their respective appointments, the bonus targets for each of Messrs. Rubin, Geller and Judge were established as set forth in the table. The payouts for Messrs. Rubin and Geller were pro-rated during fiscal 2025 to reflect their time of service at the Company. Potential annual cash bonus awards for our Named Executive Officers under the Employee Incentive Compensation Plan could range from zero to 200% of their target annual cash bonus award opportunity. For the full year, eligible Named Executive Officers earned an aggregate of 100.9% of their target performance amounts. The cash bonuses actually paid to our Named Executive Officers for fiscal 2025 are set forth in the “Fiscal 2025 Summary Compensation Table” below.
Fiscal 2025 Target Annual Cash Bonus Award Opportunities
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Incentive Plan Performance Metrics
Incentive Plan Performance Metrics Under the Employee Incentive Compensation Plan, the compensation committee determined the performance metrics and related target levels for the fiscal 2025 annual cash bonus awards. The compensation committee selected revenue, calculated billings and non-GAAP income from operations as the appropriate corporate performance metrics for the Named Executive Officers because, in its view, these metrics were key indicators of our periodic performance and our progress in executing on our business strategy of focusing on growth and gaining market share, while also prioritizing increased profitability as a maturing company. For purposes of the Named Executive Officers’ cash bonus awards: ▪“Revenue” is total revenue calculated in accordance with generally accepted accounting principles, or GAAP, as reported in our audited financial statements. This metric was chosen because it incentivizes revenue growth. ▪“Calculated billings” is our total revenue plus the change in deferred revenue in a given fiscal period. Calculated billings in any particular fiscal period aims to reflect amounts invoiced for subscriptions to access our cloud platform, together with related support services for our new and existing customers. This metric was chosen because it incentivizes calculated billings growth. ▪“Non-GAAP income from operations” is our GAAP loss from operations adjusted to exclude stock-based compensation expense and related employer payroll taxes, amortization expense of acquired intangible assets and restructuring and other charges. This metric was chosen because it incentivizes fiscal discipline and profitability. As reflected in our annual operating plan presented to and approved by our board of directors, the target levels established for revenue, calculated billings and non-GAAP income from operations for the full year of fiscal 2025 by the compensation committee were as follows:
Incentive Plan Performance Metrics
| Performance Metric | Weighting Target | Full Year Fiscal 2025 ($ million) | | Revenue | 30% | 2,678,655 | | Calculated billings | 30% | 3,273,200 | | Non-GAAP income from operations | 40% | 573,247 |
Incentive Plan Performance Metrics
For fiscal 2025, the targets for each of these financial metrics chosen for the Employee Incentive Compensation Plan represented increases ranging from approximately 20% to 50% over the prior year, reflecting very aggressive targets for fiscal 2025.
Incentive Plan Performance Metrics
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Incentive Plan Performance Metrics
The compensation committee determined that the bonus pool would fund, and our Named Executive Officers were eligible to earn, up to 200% of their target cash bonus awards, to the extent that the maximum achievement for each of revenue, calculated billings and non-GAAP income from operations for each performance period in fiscal 2025 was met. The following tables detail the metrics used to fund the cash bonuses paid to our Named Executive Officers, and their bonus attainment results:
Revenue and Calculated Billings
| Bonus Pool Funding Metrics | | | | Metric Achievement | Funded Amount | Bonus Attainment | | Less than 90% | 0% | No payout below 90% achievement | | 90% – 100% | 50% to 100% linear | 90% attainment pays 50% and 100% pays 100% | | 100% –105% | 100% to 200% linear | 100% attainment pays 100% and 105% pays 200% |
Non-GAAP Income from Operations
| Bonus Pool Funding Metrics | | | | Metric Achievement | Funded Amount | Bonus Attainment | | Less than 80% | 0% | No payout below 80% achievement | | 80% – 100% | 50% to 100% linear | 80% attainment pays 50% and 100% pays 100% | | 100% –120% | 100% to 200% linear | 100% attainment pays 100% and 120% pays 200% |
Non-GAAP Income from Operations
| Fiscal 25 Bonus Pool Achievement Results | | | | | Period/Metric | % Achievement | % Funded | Weighted Funded Attainment (% of Target) | | First Fiscal Half | | | 100.9 | | Revenue | 99.9 | 99.5 | 29.9 | | Calculated billings | 99.1 | 95.5 | 28.7 | | Non-GAAP income from operations | 101.2 | 106.0 | 42.4 | | Second Fiscal Half | | | 100.9 | | Revenue | 99.7 | 98.5 | 29.6 | | Calculated billings | 99.3 | 96.5 | 29.0 | | Non-GAAP income from operations | 101.2 | 106.1 | 42.4 |
Cash Bonus Payments
Cash Bonus Payments In March 2025 and September 2025, the compensation committee determined that cash bonus payments to our eligible Named Executive Officers were funded at 100.9% of their target semi-annual cash bonus for each half-year period based on the performance results displayed above. For fiscal 2025, this resulted in a full year bonus payment equal to 100.9% of each eligible Named Executive Officers' annual bonus target, as set forth in the following schedule:
Cash Bonus Payments
| Named Executive Officer | Period | Target Bonus Opportunity ($) | Bonus Payment ($) | | Mr. Rubin | First Half | — | — | | | Second Half(1) | 89,264 | 90,067 | | | Total | 89,264 | 90,067 | | Mr. Geller | First Half(1) | 151,630 | 152,995 | | | Second Half | 225,000 | 227,025 | | | Total | 376,630 | 380,020 | | Mr. Judge | First Half | — | — | | | Second Half | 159,375 | 160,809 | | | Total | 159,375 | 160,809 | | Mr. Rich | First Half | 235,000 | 237,116 | | | Second Half | 235,000 | 237,115 | | | Total | 470,000 | 474,231 | | Mr. Canessa | First Half | 235,000 | 237,116 | | | Second Half(2) | 235,000 | 237,115 | | | Total | 470,000 | 474,231 |
Cash Bonus Payments
(1)The cash bonus award payout for each of Messrs. Rubin and Geller was pro-rated for the half-year period during which they were hired. (2)Mr. Canessa's second half bonus was paid at 100% of attainment.
LONG-TERM INCENTIVE COMPENSATION
LONG-TERM INCENTIVE COMPENSATION We view long-term incentive compensation in the form of equity awards as a critical element of our executive compensation program. We use equity awards to incentivize and reward our Named Executive Officers for long-term corporate performance based on the value of our common stock and, thereby, to align the interests of our Named Executive Officers with those of our stockholders. In fiscal 2025, equity awards were granted to the Named Executive Officers that included both time-based and performance-based stock awards. The compensation committee determined the amount of long-term incentive compensation for our Named Executive Officers as part of its annual compensation review. In making these awards and recommendation, the compensation committee took the following factors into consideration: ▪a competitive market analysis performed by Compensia; ▪the amount of equity compensation held by the Named Executive Officer (including the current economic value of his or her unvested equity and the ability of these unvested holdings to satisfy our retention objectives); ▪the recommendations of our CEO (except with respect to his own equity awards);
LONG-TERM INCENTIVE COMPENSATION
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LONG-TERM INCENTIVE COMPENSATION
▪the projected impact of the proposed awards on our earnings and stock-based compensation as a percentage of revenue; ▪the proportion of our total shares outstanding used for annual employee long-term incentive compensation awards, or our burn rate, in relation to the companies in our compensation peer group; and ▪the potential dilution to our shareholders, or our overhang, in relation to the companies in our compensation peer group.
Performance Equity Award Philosophy
Performance Equity Award Philosophy After considering analysis performed by Compensia, feedback from our stockholders and the compensation committee’s desire to establish long-term performance metrics, the compensation committee determined that PSU performance metrics would be based on achievement of long-term, multi-year ARR metrics. Since we believe staggered ARR targets incentivize our executives to drive continued ARR growth, the compensation committee has approved performance metrics that create a ladder with multiple ARR targets over time. We use aggressive multiples of the preceding fiscal year’s ARR to determine our PSU award ARR targets, with such multiples determined based on target growth rates. The PSU awards are also designed to incentivize executives to achieve rigorous timelines for meeting the ARR targets by providing for over-achievement based on meeting early or exceeding the PSU award ARR targets. To balance the aggressive nature of such targets, these awards provide for extended attainment timelines. We believe that this feature of the PSU awards will provide continued incentive to keep working towards the next milestone. Later achievement of the ARR targets will naturally decrease the value of the PSU awards because they will be earned over a longer than intended time period and the Company’s growth rate will be lower than if the ARR target was achieved sooner. The compensation committee believes this philosophy underscores our commitment to aggressively pursue and incentivize long-term future growth and to establish material stockholder value alignment.
Fiscal 2025 Annual Equity Awards to Continuing NEO
Fiscal 2025 Annual Equity Awards to Continuing NEO In fiscal 2025, we issued annual long-term incentive compensation awards in the form of PSU awards and time-based RSU awards to Mr. Rich, the only continuing Named Executive Officer to receive an award. Mr. Chaudhry did not receive new equity awards because, in fiscal 2023, he was awarded a long-term equity incentive package intended to cover a four year period at the time it was granted.
Fiscal 2025 Equity Awards to New Hire NEOs
Fiscal 2025 Equity Awards to New Hire NEOs The offer letters provided to Messrs. Rubin, Geller and Judge included new hire RSU and PSU awards to incentivize each executive to join our executive leadership team and to compensate them for awards or compensation forfeited in departing his respective prior employer, as applicable. The form and amount of these non-recurring awards were determined by the compensation committee's thorough consideration of each executive's skills and experience, potential contributions to the Company, market compensation for similar roles provided by peer companies, the executive's competitive opportunities and the executive's compensation at his prior employer. In September 2024, upon his appointment as CPO, Mr. Geller received (i) an RSU award with a value of $9,000,000 to acquire shares of our common stock that will vest over approximately a four-year period, (ii) a PSU award with a value of $9,000,000 to acquire shares of our common stock subject to certain performance criteria and (iii) a stock option to purchase 50,000 shares of common stock. For a description of these awards and the specific performance metrics, please see "Employment Offer Letter with Mr. Geller." In May 2025, upon his appointment as CFO, Mr. Rubin received (i) an RSU award with a value of $12,600,000 to acquire shares of our common stock that will vest over approximately a four-year period, (ii) a PSU award with a value of $5,400,000 to acquire shares of our common stock subject to certain performance criteria and (iii) a stock option to purchase 50,000 shares of common stock. For a description of these awards and the specific performance metrics, please see "Employment Offer Letter with Mr. Rubin."
Fiscal 2025 Equity Awards to New Hire NEOs
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Fiscal 2025 Equity Awards to New Hire NEOs
In May 2025, upon his appointment as Executive Vice President of Corporate Strategy, Mr. Judge received (i) an RSU award with a value of $2,000,000 to acquire shares of our common stock that will vest over a one-year period, (ii) an RSU award with a value of $13,500,000 to acquire shares of our common stock that will vest over approximately a four-year period and (iii) a PSU award with a value of $1,500,000 to acquire shares of our common stock subject to certain performance criteria. For a description of these awards and the specific performance metrics, please see "Employment Offer Letter with Mr. Judge." The total equity awards approved for our Named Executive Officers, other than our CEO, in fiscal 2025 were as follows:
Fiscal 2025 Equity Awards to New Hire NEOs
| Named Executive Officers | Restricted Stock Unit Award (Number of shares) (#) | Performance Stock Unit Award (Number of shares) (#) | Options to Purchase Common Stock (Number of shares) (#) | | Mr. Rubin | 51,383 | 21,665 | 50,000 | | Mr. Geller | 53,362 | 53,362 | 50,000 | | Mr. Judge | 77,096 | 6,018 | — | | Mr. Rich | 16,428 | 16,428 | — |
Fiscal 2025 Time-Based Equity Awards
Fiscal 2025 Time-Based Equity Awards In November 2024, Mr. Rich was issued RSUs for shares of our common stock that vest over a four-year period in 16 equal quarterly installments beginning on March 15, 2025.
Fiscal 2025 PSU Awards
Fiscal 2025 PSU Awards As described above, ARR targets for PSU awards are based upon the achievement of aggressive long-term multi-year metrics. For PSU awards granted to Mr. Rich as a continuing executive, the compensation committee set three separate ARR targets at $4 billion, $5 billion and $6 billion. For the new hire PSU awards granted to Mr. Geller and Mr. Judge, the compensation committee set the ARR targets at $3 billion, $4 billion and $5 billion. For the new hire PSU awards granted to Mr. Rubin, the compensation committee set the ARR targets at $4 billion and $5 billion. The fiscal 2025 awards have the potential to earn up to 200% of the target award amounts for over achievement, based on performance ranging between 100% to 125% of target, depending on the award, with such performance determined as of a specific measurement date. If not achieved by the applicable measurement date, the awards will be earned at 100% of the target award amounts upon certification by the compensation committee after completion of the quarter in which the Company meets or exceeds the required PSU award ARR target. For the new hire PSU awards to Mr. Rubin, he will be eligible to receive at minimum 50% of the target PSUs for achievement of minimum ARR targets as of the applicable measurement date. All PSU awards will fully vest following certification, subject to each recipient's continued service to the Company.
Fiscal 2025 PSU Awards
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Fiscal 2025 PSU Award Achievement
Fiscal 2025 PSU Award Achievement In September 2025, the Compensation Committee reviewed the performance and certified the achievement for various ARR-based PSU awards for certain Named Executive Officers. Mr. Rich held an award with a measurement date of January 31, 2025, and Messrs. Geller and Judge each held an award with a measurement date of July 31, 2025. Mr. Rich's award was earned at 100% of target and the awards to Messrs. Geller and Judge were earned at 103% of target. Following certification of achievement, effective September 15, 2025, each recipient received the following number of shares:
Fiscal 2025 PSU Award Achievement
| Named Executive Officers | Performance Stock Units Achieved (Number of shares) (#) | | Mr. Rich | 14,337 | | Mr. Geller | 17,322 | | Mr. Judge | 2,067 |
Legacy CEO Equity Awards
Legacy CEO Equity Awards No equity awards were granted to our CEO in fiscal 2025, and no grants are anticipated to be made in fiscal 2026, because in fiscal 2023, the CEO’s performance award was sized to cover a multi-year period. The performance award target for the fiscal 2023 CEO performance award was set at $5 billion in ARR, which was a 3.4x multiple of the Company's $1.46 billion in ARR at the time of grant, representing a very aggressive long term ARR target.
EMPLOYMENT ARRANGEMENTS
EMPLOYMENT ARRANGEMENTS We entered into a written employment agreement with our CEO and employment offer letters with our other Named Executive Officers in connection with their employment with us. We believe that these arrangements were necessary to induce these individuals to forego other employment opportunities or leave their then-current employer for the uncertainty of a demanding position in a new and unfamiliar organization. In filling each of our executive positions, our board of directors or the compensation committee, as applicable, recognized that it would need to develop competitive compensation packages to attract qualified candidates in a dynamic labor market. At the same time, our board of directors and the compensation committee were sensitive to the need to integrate new executive officers into the executive compensation structure that we were seeking to develop, balancing both competitive and internal equity considerations. Each of these arrangements provides for “at will” employment (meaning that either we or the executive may terminate the employment relationship at any time without cause) and sets forth the initial compensation arrangements for the executive, including their base salary, target annual cash bonus award opportunity (expressed as fixed amount or as a percentage of his or her base salary), participation in our employee benefit programs, eligibility for future equity awards and reimbursement for all reasonable and necessary business expenses. In addition, in the case of our Named Executive Officers, their employment offer letters and other agreements provide that the executive will be eligible to receive certain severance payments and benefits in connection with certain terminations of employment. These post-employment compensation arrangements are discussed in “Post-Employment Compensation” below.
Employment Offer Letter with Mr. Rubin
Employment Offer Letter with Mr. Rubin In connection with his appointment as CFO, we entered into an employment offer letter with Mr. Rubin, or the Rubin Offer Letter. Pursuant to the Rubin Offer Letter, our initial compensation arrangements with Mr. Rubin were as follows: ▪an initial annual base salary of $470,000; ▪a target annual cash bonus award opportunity equal to $470,000; ▪an RSU award with a value of $12,600,000 to acquire shares of our common stock that will vest over approximately a four-year period, with 12.5% vesting on the first Quarterly Vesting Date following his six-month work anniversary and 6.25% vesting on each quarterly vesting date thereafter. The value was to be converted into shares based on the average closing price of our common stock for each of the trading days in May 2025; ▪PSU awards with an aggregate value of $5,400,000 to acquire shares of our common stock subject to performance criteria that are substantially consistent with the performance criteria applicable to the PSU awards granted to our other executive officers in fiscal 2025. The value was to be converted into shares based on the trailing 20-day trading average of stock preceding and ending on the date of approval of each award, rounded up to the nearest whole share;
Employment Offer Letter with Mr. Rubin
▪an option to purchase 50,000 shares of our common stock that will vest over a four-year period from his employment start date; and ▪relocation support including a cash allowance of $25,000 and temporary accommodations for up to 60 days. Mr. Rubin was designated as a participant in our Severance Policy (as defined below), under which he is eligible to receive certain severance payments and benefits as described in the policy and as set forth below. The Rubin Offer Letter was negotiated in fiscal 2025 on our behalf by our CEO and approved by the compensation committee. To receive the severance benefits upon a qualifying termination, Mr. Rubin must sign and not revoke a release of claims within the time specified in his employment offer letter.
Employment Offer Letter with Mr. Geller
Employment Offer Letter with Mr. Geller In connection with his appointment as CPO, we entered into an employment offer letter with Mr. Geller, or the Geller Offer Letter. Pursuant to the Geller Offer Letter, our initial compensation arrangements with Mr. Geller were as follows: ▪an initial annual base salary of $450,000; ▪a target annual cash bonus award opportunity equal to $450,000; ▪an RSU award with a value of $9,000,000 to acquire shares of our common stock that will vest over approximately a four-year period, with 12.5% vesting on the first Quarterly Vesting Date following his six-month work anniversary and 6.25% vesting on each quarterly vesting date thereafter. The value was to be converted into shares based on the average closing price of our common stock for each of the trading days in September 2024; ▪PSU awards with an aggregate value of $9,000,000 to acquire shares of our common stock subject to performance criteria that are substantially consistent with the performance criteria applicable to the PSU awards granted to our other executive officers in fiscal 2025. The value was to be converted into shares based on the average closing price of our common stock for each of the trading days in September 2024; and ▪an option to purchase 50,000 shares of our common stock that will vest over a four-year period from his employment start date. Mr. Geller was designated as a participant in our Severance Policy under which he is eligible to receive certain severance payments and benefits as described in the policy and as set forth below. The Geller Offer Letter was negotiated in fiscal 2025 on our behalf by our CEO and approved by the compensation committee. To receive the severance benefits upon a qualifying termination, Mr. Geller must sign and not revoke a release of claims within the time specified in his employment offer letter.
Employment Offer Letter with Mr. Judge
▪an RSU award with a value of $13,500,000 to acquire shares of our common stock that will vest over approximately a four-year period, with 6.25% vesting on June 15, 2025 and 6.25% vesting on each quarterly vesting date thereafter. The value was to be converted into shares based on the average closing price of our common stock for each of the trading days in May; ▪an RSU award with a value of $2,000,000 to acquire shares of our common stock that will vest over a one-year period, with 25% vesting on June 15, 2025, and 25% vesting on each quarterly vesting date thereafter. The value was to be converted into shares based on the average closing price of our common stock for each of the trading days in May; and ▪PSU awards with an aggregate value of $1,500,000 to acquire shares of our common stock subject to performance criteria that are substantially consistent with the performance criteria applicable to the PSU awards granted to our other executive officers in fiscal 2025. The value was to be converted into shares based on the trailing 20-day trading average of stock preceding and ending on the date of approval of each award, rounded up to the nearest whole share. Mr. Judge was designated as a participant in our Severance Policy under which he is eligible to receive certain severance payments and benefits as described in the policy and as set forth below. The Judge Offer Letter was negotiated in fiscal 2025 on our behalf by our CEO and approved by the compensation committee. To receive the severance benefits upon a qualifying termination, Mr. Judge must sign and not revoke a release of claims within the time specified in his employment offer letter.
POST-EMPLOYMENT COMPENSATION
POST-EMPLOYMENT COMPENSATION The employment offer letters and equity award agreements with our Named Executive Officers provide them with certain protection in the event of their termination of employment other than for “cause,” death or “disability” (as such terms are defined in the employment offer letters). In addition, our Named Executive Officers are participants in our Change of Control and Severance Policy, or the Severance Policy, which provides for certain protections in the event of a termination of employment, depending on the circumstances and timing of the qualifying termination. We believe that these protections were necessary to induce these individuals to leave their former employment for the uncertainty of a demanding position in a new and unfamiliar organization. We also believe that these arrangements help to retain their services on an ongoing basis and to maintain the continued focus and dedication of our Named Executive Officers if there is a potential transaction that could involve a change in control of the Company to maximize stockholder value. These arrangements provide reasonable compensation to a Named Executive Officer if he or she leaves our employ under certain circumstances and facilitates his or her transition to new employment. Further, in some instances we seek to mitigate any potential employer liability and avoid future disputes or litigation by conditioning post-employment compensation and benefits on a departing Named Executive Officer signing a separation and release agreement acceptable to us. If a Named Executive Officer is terminated other than for "cause," "death" or "disability outside of a the period beginning on a "change in control" (as such terms are defined in the Severance Policy) and ending 12 months following the change of control (which we refer to as the change of control period), such Named Executive Officer will be able to receive the following post-employment compensation: ▪accelerated vesting of time-based awards such that each time-based award will immediately vest as to the number of then-unvested shares that would have vested as of the date that is six-months following the date of termination; and ▪a payment equal to 50% of the participant's base salary as of the date of termination, payable pursuant to the Company’s standard payroll procedures over a period of six months.
Policies and Practices Related to the Timing of Option Awards
Policies and Practices Related to the Timing of Option Awards While we do not have a formal written policy in place with regard to the timing of awards of options in relation to the disclosure of material nonpublic information, the compensation committee does not seek to time equity grants to take advantage of information, either positive or negative, about our company that has not been publicly disclosed. It has been our recent practice to grant most of our equity awards in the form of RSUs.
Taxation of “Parachute” Payments
Taxation of “Parachute” Payments Sections 280G and 4999 of the Internal Revenue Code provide that executive officers and directors who hold significant equity interests and certain other service providers may be subject to significant additional taxes if they receive payments or benefits in connection with a change in control of the Company that exceeds certain prescribed limits, and that the Company (or a successor) may forfeit a deduction on the amounts subject to this additional tax. We have not agreed to provide any executive officer, including any Named Executive Officer, with a “gross-up” or other reimbursement payment for any tax liability that the executive officer might owe as a result of the application of Sections 280G or 4999 of the Internal Revenue Code.
Accounting for Stock-Based Compensation
Accounting for Stock-Based Compensation The compensation committee takes accounting considerations into account in designing compensation plans and arrangements for our executive officers and other employees. Chief among these is Financial Accounting Standards Board Accounting Standards Codification Topic 718, or ASC Topic 718, the standard which governs the accounting treatment of certain stock-based compensation. Among other things, ASC Topic 718 requires us to record a compensation expense in our income statement for all equity awards granted to our executive officers and other employees. This compensation expense is based on the grant date “fair value” of the equity award and, in most cases, will be recognized ratably over the award’s requisite service period (which, generally, will correspond to the award’s vesting schedule). This compensation expense is also reported in the compensation tables below, even though recipients may never realize any value from their equity awards. Amended and Restated Change of Control and Severance Policy Our board of directors adopted a Change of Control and Severance Policy, or the Severance Policy, which was amended and restated in fiscal 2025. Each of our current executive officers is a participant in the Severance Policy. The Severance Policy provides two tiers of severance benefits depending on the circumstances and timing of the qualifying termination.
Non-Change of Control Qualified Termination Benefits
Non-Change of Control Qualified Termination Benefits If we terminate a participant other than for "cause," "death" or "disability" outside of a change of control period, such Named Executive Officer will be eligible to receive the following severance benefits: ▪accelerated vesting of time-based awards such that each time-based award will immediately vest as to the number of then-unvested shares that would have vested as of the date that is six-months following the date of termination; and ▪a payment equal to 50% of the participant's base salary as of the date of termination, payable pursuant to the Company’s standard payroll procedures over a period of six months.
Change of Control of Qualified Termination Benefits
Change of Control of Qualified Termination Benefits If we terminate a participant other than for “cause,” death or “disability” or the Named Executive Officer resigns for “good reason” during the period beginning on a “change of control” (as such terms are defined in the Severance Policy) and ending 12 months following the change of control (which we refer to as the change of control period), such Named Executive Officer will be eligible to receive the following severance benefits: ▪100% of the then-unvested shares subject to the participant's then-outstanding equity awards will become vested and exercisable, and in the case of equity awards with performance-based vesting, all performance goals and other vesting criteria will be deemed achieved at the applicable percentage of target levels set forth in the individual performance award agreement; ▪a lump-sum payment equal to 100% of the greatest of (i) a participant's annual base salary as in effect immediately prior to his termination, (ii) if the termination is a resignation for good reason based on a material reduction in base salary, a participant's annual base salary as in effect immediately prior to such reduction or (iii) a participant's annual base salary as in effect immediately prior to the change of control; ▪a lump-sum payment equal to (i) 100% of a participant's target annual bonus award opportunity for the fiscal year in which the termination occurs plus (ii) a pro-rated portion of such target annual bonus award opportunity reduced by any bonus payments made during such fiscal year; ▪the post-termination exercise period for any outstanding vested but unexercised stock option will be extended to the date that is 12 months after the termination date; and ▪a lump-sum health benefit severance payment of $36,000. To receive the severance benefits upon a qualifying termination, a Named Executive Officer must sign and not revoke a release of claims within the time specified in the Severance Policy. If we discover, after a Named Executive Officer receives severance payments or benefits, that grounds for terminating him for cause existed, such Named Executive Officer will not receive any further severance payments or benefits under the Severance Policy, and to the extent permitted by law, the Named Executive Officer will be required to repay to us any severance payments or benefits (or gain derived from such payments or benefits) he received under the Severance Policy. In addition to any benefits available to Named Executive Officers under the Severance Policy, in the event of a change of control of the Company absent a qualified termination (as defined in the Severance Policy), any outstanding PSUs will be deemed to be achieved at 100% of target, subject, in certain circumstances, to continued time-based vesting.
Change of Control of Qualified Termination Benefits
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Change of Control of Qualified Termination Benefits
Amended and Restated FY2018 Equity Incentive Plan and 2007 Stock Plan Our Amended and Restated FY2018 Equity Incentive Plan, or the 2018 Plan, provides that in the event of a merger or change in control, as defined under our 2018 Plan, each outstanding award will be treated as the administrator determines, without a participant’s consent. The administrator is not required to treat all awards or participants similarly. In the event that a successor corporation or its parent or subsidiary does not assume or substitute an equivalent award for any outstanding award, then such award will fully vest, all restrictions on such award will lapse, all performance goals or other vesting criteria applicable to such award will be deemed achieved at 100% of target levels and all other terms and conditions met and such award will become fully exercisable, if applicable. If an option or stock appreciation right is not assumed or substituted, the administrator will notify the participant in writing or electronically that such option or stock appreciation right will be exercisable for a period of time determined by the administrator in its sole discretion and the option or stock appreciation right will terminate upon the expiration of such period. In the event of a change in control, with respect to awards granted to an outside director, his or her options and other equity awards will vest fully and become immediately exercisable, all restrictions on his or her restricted stock and RSU awards will lapse and all performance goals or other vesting requirements for his or her performance shares and units will be deemed achieved at 100% of target levels, and all other terms and conditions met. In addition, the agreements for certain performance-based awards granted to certain employees, including our Named Executive Officers hold that performance shares and units will be deemed achieved at 100% of target levels, and all other terms and conditions met, and be subject to continued time-based vesting as set forth in individual award agreements in the event of a change in control. Our 2007 Stock Plan, or the 2007 Plan, provides that, in the event of a merger or change in control, as defined under our 2007 Plan, each outstanding award may be assumed or substituted for an equivalent award. In the event that awards are not assumed or substituted for, then the vesting of outstanding awards will be accelerated, and stock options will become exercisable in full prior to such transaction. In addition, if an option is not assumed or substituted in the event of a merger or change in control, the administrator will notify the participant that such award will be fully vested and exercisable for a specified period prior to the transaction, and such award will terminate upon the expiration of such period for no consideration, unless otherwise determined by the administrator.
Change of Control of Qualified Termination Benefits
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Change of Control of Qualified Termination Benefits
Fiscal 2025 Summary Compensation Table The following table presents information regarding the compensation awarded to, earned by and paid to each of our Named Executive Officers during fiscal 2025, fiscal 2024 and fiscal 2023.
Change of Control of Qualified Termination Benefits
| Name and Principal Position | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total ($) | | Jay Chaudhry Chief Executive Officer | 2025 | 23,660 | — | — | — | — | 6,093(2) | 29,753 | | | 2024 | 23,660 | — | — | — | — | 1,502(3) | 25,162 | | | 2023 | 23,660 | — | 57,751,823(4) | — | — | — | 57,775,483 | | Kevin Rubin(5) Chief Financial Officer | 2025 | 87,235 | — | 21,551,351(6) | 8,517,865(7) | 90,067 | 42,430(8) | 30,288,948 | | Adam Geller(9) Chief Product Officer | 2025 | 376,705 | — | 21,943,522(6) | 5,940,380(7) | 380,020 | — | 28,640,627 | | Raj Judge(10) Executive Vice President of Corporate Strategy | 2025 | 135,227 | — | 24,521,123(6) | — | 160,809 | — | 24,817,159 | | Mike Rich Chief Revenue Officer | 2025 | 470,000 | — | 6,755,522(6) | — | 474,231 | — | 7,699,753 | | | 2024 | 337,500 | 550,000(11) | 31,670,542(12) | 5,870,305(7) | 374,249 | 550,000(13) | 39,352,596 | | Remo Canessa Former Chief Financial Officer | 2025 | 470,000 | — | — | — | 474,231 | 12,513(2) | 956,744 | | | 2024 | 450,000 | — | 6,165,751(12) | — | 489,195 | 27,909(2) | 7,132,855 | | | 2023 | 430,000 | — | 5,383,820(3) | — | 268,548 | — | 6,082,368 |
Potential Payments Upon Termination Not in Connection with a Change in Control
Potential Payments Upon Termination Not in Connection with a Change in Control
Potential Payments Upon Termination Not in Connection with a Change in Control
| | | Value of Accelerated Equity Awards | | | | Named Executive Officer | Salary Severance ($) | Restricted Stock Units ($)(1) | Options ($)(2) | Total ($) | | Jay Chaudhry | 11,830 | 1,810,165 | — | 1,821,995 | | Kevin Rubin | 235,000 | 1,834,152 | — | 2,069,152 | | Adam Geller | 225,000 | 952,343 | 1,332,447 | 2,509,790 | | Raj Judge | 212,500 | 1,908,683 | — | 2,121,183 | | Mike Rich | 235,000 | 2,084,302 | 1,279,450 | 3,598,752 | | Remo Canessa | 235,000 | 1,291,017 | — | 1,526,017 |
Potential Payments Upon Termination Not in Connection with a Change in Control
(1)Reflects the aggregate market value of the unvested shares of our common stock underlying outstanding RSU awards. The aggregate market value is equal to the product obtained by multiplying (i) the number of unvested shares of our common stock subject to outstanding RSU awards and eligible for accelerated vesting as of July 31, 2025, by (ii) $285.56 per share (the closing market price of our common stock on Nasdaq on July 31, 2025, the last trading day in the fiscal year ended July 31, 2025). (2)These amounts reflect the aggregate market value of the unvested shares of our common stock underlying outstanding options. The aggregate market value is equal to (i) the product obtained by multiplying (x) the number of unvested shares of our common stock subject to outstanding options as of July 31, 2025, by (y) $285.56 per share (the closing market price of our common stock on the Nasdaq Global Select Market on July 31, 2025), minus (ii) the aggregate exercise price for such unvested shares.
Potential Payments Upon Termination in Connection with a Change in Control
Potential Payments Upon Termination in Connection with a Change in Control
Potential Payments Upon Termination in Connection with a Change in Control
| | | | Value of Accelerated Equity Awards | | | | | Named Executive Officer | Salary Severance ($) | Bonus Severance ($) | Restricted Stock Units ($)(1) | Options ($)(2) | Health Benefit Severance Payments ($) | Total ($) | | Jay Chaudhry | 23,000 | — | 124,908,227 | — | 36,000 | 124,967,227 | | Kevin Rubin | 470,000 | 559,267 | 9,280,129 | — | 36,000 | 7,251,924 | | Adam Geller | 450,000 | 670,505 | 28,571,135 | 3,997,500 | 36,000 | 33,725,140 | | Raj Judge | 425,000 | 637,500 | 21,825,351 | — | 36,000 | 22,923,851 | | Mike Rich | 470,000 | 702,884 | 37,493,457 | 4,376,500 | 36,000 | 43,078,841 | | Remo Canessa | 470,000 | 702,884 | 19,799,588 | — | 36,000 | 21,008,472 |
Potential Payments Upon Termination in Connection with a Change in Control
(1)These amounts reflect the aggregate market value of the unvested shares of our common stock underlying outstanding RSU and PSU awards. The aggregate market value is equal to the product obtained by multiplying (i) the number of unvested shares of our common stock subject to outstanding RSU and PSU awards as of July 31, 2025, by (ii) $285.56 per share (the closing market price of our common stock on the Nasdaq Global Select Market on July 31, 2025, the last trading day in the fiscal year ended July 31, 2025). For performance-based restricted stock unit awards, the assumed number of unvested shares is equal to the target number of shares subject to such award. (2)These amounts reflect the aggregate market value of the unvested shares of our common stock underlying outstanding options. The aggregate market value is equal to (i) the product obtained by multiplying (x) the number of unvested shares of our common stock subject to outstanding options as of July 31, 2025, by (y) $285.56 per share (the closing market price of our common stock on the Nasdaq Global Select Market on July 31, 2025), minus (ii) the aggregate exercise price for such unvested shares.
Potential Payments Upon Termination in Connection with a Change in Control
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Potential Payments Solely in Connection with a Change in Control
Potential Payments Solely in Connection with a Change in Control The number of performance-based RSUs in the table below for each of our Named Executive Officers reflects the aggregate market value of the unvested shares of our common stock underlying outstanding performance-based RSU awards at target. The aggregate market value is equal to the product obtained by multiplying (i) the number of unvested shares of our common stock subject to outstanding performance-based RSU awards as of July 31, 2025, by (ii) $285.56 per share (the closing market price of our common stock on the Nasdaq Global Select Market on July 31, 2025, the last trading day in the fiscal year ended July 31, 2025). The unvested shares are equal to the target number of shares subject to such award. A portion of such shares will become 100% vested upon the closing of the change in control event, calculated by multiplying the target number of RSUs by the quotient attained by dividing (i) our ARR as calculated on the date of the closing by (ii) the target ARR. Any remaining RSUs will be subject to time based vesting depending on the progress toward completion of performance metrics as assessed above at the time of the change in control event, such that any remaining RSUs will vest quarterly following the change in control in equal installments, so that all remaining RSUs will be vested four years from the grant date.
Potential Payments Solely in Connection with a Change in Control
| | Value of Accelerated Equity Awards | | | Named Executive Officer | Performance-based Restricted Stock Units ($) | | | Jay Chaudhry | | 115,856,547 | | Kevin Rubin | | 6,186,657 | | Adam Geller | | 15,238,053 | | Raj Judge | | 1,718,500 | | Mike Rich | | 16,973,115 | | Remo Canessa | | 9,049,396 |
Potential Payments Solely in Connection with a Change in Control
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Potential Payments Solely in Connection with a Change in Control
Equity Compensation Plan Information The following table provides information as of July 31, 2025 with respect to shares of our common stock that may be issued under our existing equity compensation plans.
Potential Payments Solely in Connection with a Change in Control
| Plan Category | Number of Securities to be Issued upon Exercise of Outstanding Options, Restricted Stock Units and Rights (#) | Weighted Average Exercise Price of Outstanding Options and Rights ($) | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in the First Column) (#) | | Equity compensation plans approved by security holders | — | — | — | | 2007 Stock Plan(1) | 100 | 5.93 | — | | Fiscal Year 2018 Equity Incentive Plan(2)(3) | 10,252,858 | 221.07 | 35,160,793 | | Fiscal Year 2018 Employee Stock Purchase Plan(4) | — | — | 7,922,972 | | Equity compensation plans not approved by security holders | — | — | — | | Total | 10,252,958 | 220.95 | 43,083,765 |
Potential Payments Solely in Connection with a Change in Control
(1)As a result of the adoption of the 2018 Plan, we no longer grant awards under the 2007 Plan; however, all outstanding options issued pursuant to the 2007 Plan continue to be governed by their existing terms. To the extent that any such awards are forfeited or lapse unexercised or are repurchased, the shares of common stock subject to such awards will become available for issuance under the 2018 Plan. (2)Our 2018 Plan provides that the number of shares available for issuance under the 2018 Plan will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 12,700,000 shares, (ii) five percent (5%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as our board of directors may determine. (3)Includes all outstanding PSU awards as of July 31, 2025 (a) at maximum payout if performance metrics have been determined and (b) at target if no performance metrics have been determined as of the end of fiscal 2025. (4)Our Fiscal Year 2018 Employee Stock Purchase Plan, or the ESPP, provides that the number of shares available for issuance under the ESPP will be increased on the first day of each fiscal year, in an amount equal to the least of (i) 2,200,000 shares, (ii) one percent (1%) of the outstanding shares of common stock on the last day of the immediately preceding fiscal year or (iii) such other amount as may be determined by the administrator of the ESPP. Compensation Committee Report The compensation committee has reviewed and discussed the section titled “Executive Compensation” with management, which includes the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K. Based on such review and discussion, the compensation committee has recommended to the board of directors that the section titled “Executive Compensation” be included in this Proxy Statement. Respectfully submitted by the members of the compensation committee of the board of directors:
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
PAY VERSUS PERFORMANCE
| | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid for PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (3) | Average Compensation Actually Paid for Non-PEO NEOs (4) | Total Shareholder Return (5) | Peer Group Total Shareholder Return (6) | Net Income | Company-Selected Measure: Revenue (7) | | 2025 | $29,753 | $47,444,526 | $18,480,646 | $24,954,394 | $220 | $281 | ($41,478,000) | $2,673,115,000 | | 2024 | $25,162 | $9,529,728 | $14,418,278 | $16,077,033 | $138 | $227 | ($57,706,000) | $2,167,800,000 | | 2023 | $57,775,483 | $85,838,523 | $15,060,085 | $17,984,450 | $124 | $168 | ($202,335,000) | $1,616,952,000 | | 2022 | $41,530,160 | $40,909,340 | $26,408,035 | $6,614,390 | $119 | $132 | ($390,278,000) | $1,090,946,000 | | 2021 | $19,999,160 | $36,864,645 | $5,446,150 | $29,838,915 | $182 | $140 | ($262,029,000) | $673,100,000 |
PAY VERSUS PERFORMANCE
(1)Amounts reported in this column represent the total compensation reported in the Summary Compensation Table for the indicated fiscal year for our PEO. For all years reported, our PEO was Mr. Jay Chaudhry (2)Amounts reported in this column represent the compensation actually paid to our PEO, based on his total compensation reported in the Summary Compensation Table for each of the indicated fiscal years and adjusted as shown in the table below:
PAY VERSUS PERFORMANCE
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PAY VERSUS PERFORMANCE n
PAY VERSUS PERFORMANCE n
n PAY VERSUS PERFORMANCE
n PAY VERSUS PERFORMANCE (4)Amounts reported in this column represent the compensation actually paid to the Reported NEOs in the indicated fiscal year, as calculated under Item 402(v) of Regulation S-K based on the average total compensation for such NEOs reported in the Summary Compensation Table for the indicated fiscal year and adjusted as shown in the table below:
PAY VERSUS PERFORMANCE n
PAY VERSUS PERFORMANCE n Relationship Between Pay and Performance “Compensation actually paid,” as calculated per SEC Item 402(v) of Regulation S-K, reflects cash compensation actually paid as well as changes to the fair values of equity awards during the years shown in the table based on year-end or vesting date stock prices, various accounting valuation assumptions, and projected performance modifiers. Due to how CAP is calculated, the CAP as reported for each year does not reflect the actual amounts earned by our NEOs from their equity awards. CAP generally fluctuates annually due to the change in our stock price from year to year as well as varying levels of actual achievement of performance goals. Because CAP does not reflect the actual amount earned by our NEOs on their equity compensation, we do not use this measure for understanding how NEO pay aligns with our company performance. For a discussion of how our compensation committee assessed “pay-for-performance” and how our executive compensation program is designed to link executive compensation with the achievement of our financial and strategic objectives as well as stockholder value creation each year, see “Executive Compensation—Compensation Discussion and Analysis” in this Proxy Statement and in our proxy statements filed for fiscal 2021, 2022, 2023 and 2024. Below are graphs showing the relationship of “Compensation Actually Paid” to our PEO and non-PEO NEOs for our fiscal years 2021, 2022, 2023, 2024 and 2025 to (1) TSR of both our common stock and S&P 500 Information Technology Index, (2) our net loss, and (3) our total revenue.
PAY VERSUS PERFORMANCE n
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n PAY VERSUS PERFORMANCE
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n PAY VERSUS PERFORMANCE
Security Ownership of Certain Beneficial Owners and Management The following table sets forth certain information with respect to the beneficial ownership of our common stock as of November 1, 2025 for: ▪each person, or group of affiliated persons, who beneficially owned more than 5% of our common stock; ▪each of our Named Executive Officers; ▪each of our directors and nominees for director; and ▪all of our current executive officers and directors as a group. We have determined beneficial ownership in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all shares that they beneficially owned, subject to community property laws where applicable. We have based our calculation of the percentage of beneficial ownership of 159,467,899 shares of our common stock outstanding as of November 1, 2025. We have deemed shares of our common stock subject to stock options that are currently exercisable or exercisable within 60 days of November 1, 2025, to be outstanding and to be beneficially owned by the person holding the stock option for the purpose of computing the percentage ownership of that person. We did not deem these shares outstanding, however, for the purpose of computing the percentage ownership of any other person. Unless otherwise indicated, the address of each beneficial owner listed in the table below is c/o Zscaler, Inc., 120 Holger Way, San Jose, California 95134.
n PAY VERSUS PERFORMANCE
| Name of Beneficial Owner | Number of Shares Beneficially Owned | Percentage of Shares Beneficially Owned | | 5% Stockholders: | | | | Ajay Mangal, as trustee(1) | 29,084,052 | 18.2% | | The Vanguard Group(2) | 11,367,838 | 7.1% | | Named Executive Officers and Directors: | | | | Jay Chaudhry(3) | 26,857,608 | 16.8% | | Kevin Rubin(4) | 6,423 | * | | Adam Geller(5) | 19,082 | * | | Raj Judge(6) | 16,787 | * |
n PAY VERSUS PERFORMANCE
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