DEF 14A of Dynatrace, Inc.
Filed Jul 9, 2024 · FY20240001773383-24-000146
ELECTION OF CLASS II DIRECTORS
ELECTION OF CLASS II DIRECTORS Our Board currently consists of eight members, seven of whom are non-employee, independent directors. In accordance with the terms of our certificate of incorporation and bylaws, our Board is divided into three classes, Class I, Class II, and Class III, with members of each class serving staggered three-year terms. Directors are expected to be elected to hold office for such three-year term or until the election and qualification of their successors in office, subject to their earlier resignation or removal. The members of our Class I, Class II and Class III directors are the following individuals:
ELECTION OF CLASS II DIRECTORS
| Name | Class | Expiration of Term | | Rick McConnell | I | 2026 | | Michael Caponeü | I | 2026 | | Stephen Lifshatzü | I | 2026 | | Jill Wardü | II | 2024 | | Kirsten Wolbergü | II | 2024 | | Amol Kulkarniü | III | 2025 | | Steve Rowlandü | III | 2025 | | Kenneth “Chip” Virnigü | III | (1) |
ELECTION OF CLASS II DIRECTORS
ü = independent (1) On June 20, 2024, Chip Virnig notified the Board of his resignation effective as of July 31, 2024. The Board thanks Chip for his service and contributions as a director over the last nine years.
ELECTION OF CLASS II DIRECTORS
| What are you voting on? At the meeting, you’re being asked to re-elect our two Class II directors - Jill Ward and Kirsten Wolberg - for a term to expire at the annual meeting of stockholders to be held in 2027. | | THE BOARD RECOMMENDS THAT YOU VOTE “FOR” EACH DIRECTOR NOMINEE |
ELECTION OF CLASS II DIRECTORS
Upon the expiration of the term of a class of directors, directors in that class will be eligible to be elected for a new three-year term at the annual meeting of stockholders in the year in which their term expires. Jill Ward and Kirsten Wolberg have each indicated a willingness to continue to serve as directors, if elected. If any of the nominees become unable or unwilling to serve, however, your proxy may be voted for a substitute nominee selected by our Board. The election of directors requires a plurality of the votes properly cast "FOR" each nominee. Votes to "withhold" and broker non-votes will have no effect on the election of the nominees.
Nominees for Election as Class II Directors
Nominees for Election as Class II Directors The following are our two directors who are nominated for election at the Annual Meeting and sets forth their principal occupation and business experience during the last five years and their ages as of June 28, 2024.
Nominees for Election as Class II Directors
| Jill Ward | | | Age: 64 Director Since: 2019 Board Chair Since: 2021 Independent Committees: •Audit •Nominating and Corporate Governance (Chair) | Jill Ward has served on the board of directors of HubSpot (NYSE: HUBS), a provider of a customer management platform for businesses, since October 2017 and on the board of directors of Informatica (NYSE: INFA), an enterprise cloud data management company, since June 2021. Jill served on the board of directors of Carbon Black, Inc. (formerly NASDAQ: CBLK), a cybersecurity company, from December 2018 until its acquisition by VMware, Inc. in October 2019. Jill served as an operating partner of Lead Edge Capital, a growth equity investment firm, from October 2018 to February 2020. Previously, she served as President and Chief Operating Officer of Fleetmatics Group PLC (formerly NYSE: FLTX), a provider of software-as-a-service for fleet management, from April 2015 until its acquisition by Verizon Communications in November 2016. Prior to Fleetmatics, Jill held executive leadership roles at Intuit Inc. (NASDAQ: INTU), most recently serving as Senior Vice President and General Manager. Jill’s experience also includes leadership roles at Telespectrum, Fidelity Investments, and strategy firm Bain & Company. Jill holds an M.B.A. from the Tuck School of Business at Dartmouth College and a B.A. from Wellesley College. Our Board believes that Jill’s board and business experience and her overall knowledge of our industry qualify her to serve on our Board. |
Nominees for Election as Class II Directors
| Kirsten O. Wolberg | | | Age: 56 Director Since: 2021 Independent Committees: •Cybersecurity (Chair) •Nominating and Corporate Governance | Kirsten O. Wolberg has served on the board of directors of lender Sallie Mae, formally SLM Corporation (NASDAQ: SLM), since November 2016 and enterprise technology company CalAmp Corp. (formerly NASDAQ: CAMP) since August 2020. Kirsten also serves on the board of directors of other private and non-profit organizations. Kirsten served as the Chief Technology and Operations Officer for DocuSign, Inc. (NASDAQ: DOCU), a provider of e-signature products and other technology, from November 2017 to February 2021. From January 2012 to October 2017, Kirsten was a Vice President at PayPal, Inc., a subsidiary of PayPal Holdings, Inc. (NASDAQ: PYPL), a technology platform, where she served in various executive roles including as Vice President, Technology from 2012 to 2015. Prior to that, Kirsten was Chief Information Officer for Salesforce (NYSE: CRM), a provider of customer relationship management software and solutions, from May 2008 to September 2011. Kirsten holds an M.B.A. from the J.L. Kellogg Graduate School of Management at Northwestern University and a B.S. in Business Administration from the University of Southern California. Our Board believes that Kirsten’s board, cyber and enterprise technology experience and her overall knowledge of the SaaS software industry qualify her to serve on our Board. |
Directors Continuing in Office
Directors Continuing in Office The following are our five directors continuing in office and sets forth their principal occupation and business experience during the last five years and their ages as of June 28, 2024.
Class I Directors (Term Expires at the 2026 Annual Meeting)
Class I Directors (Term Expires at the 2026 Annual Meeting)
Class I Directors (Term Expires at the 2026 Annual Meeting)
| Rick McConnell | | | Age: 58 Director Since: 2021 Not Independent Committees: None | Rick McConnell has served as our Chief Executive Officer and a director since December 2021. He has over 30 years of experience scaling multi-billion-dollar organizations, developing winning cultures, building broad-based product portfolios and establishing go-to-market strategies and execution plans to drive category leadership. Rick worked at Akamai Technologies (NASDAQ: AKAM), a cloud, security, and content delivery company, from November 2011 to December 2021, where he held multiple positions, including President and General Manager of the Security Technology Group, President and General Manager of Akamai’s Web Division, and President, Products and Development. From 2004 to 2011, he worked at Cisco Systems Inc. (NASDAQ: CSCO), a technology company, in various senior executive roles. He joined Cisco when the company acquired Latitude Communications, a provider of voice and Internet conferencing solutions, where he was President and Chief Executive Officer. Rick holds a B.A. in Quantitative Economics and an M.B.A., both from Stanford University. Our Board believes that based on Rick’s knowledge of our company and our business, and his service as our Chief Executive Officer, Rick is qualified to serve on our Board. |
Class I Directors (Term Expires at the 2026 Annual Meeting)
| Michael Capone | | | Age: 57 Director Since: 2019 Independent Committees: •Compensation (Chair) •Cybersecurity | Michael Capone has served as the Chief Executive Officer of Qlik Technologies, Inc., a provider of data analytics and integration which is owned by certain investment funds advised by Thoma Bravo, since January 2018. Prior to that, Mike served as the Chief Operating Officer of Medidata Solutions, Inc. (formerly NASDAQ: MDSO), a provider of cloud-based solutions for clinical research in life sciences, from October 2014 to December 2017. Prior to joining Medidata, Mike worked in various executive positions at Automatic Data Processing, Inc., or ADP (NASDAQ: ADP), a global technology company providing human capital management solutions, serving as Corporate Vice President of Product Development and Chief Information Officer from July 2008 to September 2014, and Senior Vice President and General Manager of ADP’s Global HR/Payroll Outsourcing Business from July 2005 to June 2008. He also served on the board of directors of Ellie Mae, a provider of technology solutions for the mortgage industry which was previously owned by certain investment funds advised by Thoma Bravo, between May 2019 and September 2020. Mike holds a B.S. in Computer Science from Dickinson College and an M.B.A. in Finance from Pace University. Our Board believes that Mike’s board and business experience and his overall knowledge of our industry qualify him to serve on our Board. |
Class I Directors (Term Expires at the 2026 Annual Meeting)
| Stephen Lifshatz | | | Age: 65 Director Since: 2019 Independent Committees: •Audit (Chair) •Compensation | Stephen Lifshatz has served as Executive Vice President and Chief Financial Officer of CDK Global, a software provider for the automotive industry, since February 2023. Steve served as the Chief Financial Officer for Lytx, a private video telematics company, from May 2018 through September 2021. Prior to joining Lytx, from January 2017 through May 2018, Steve was engaged as an independent consultant by several private equity firms to assist in the development and expansion of certain of their portfolio companies. Prior to that, Steve served as Chief Financial Officer of Fleetmatics Group PLC (formerly NYSE: FLTX), a provider of software-as-a-service for fleet management, from December 2010 to December 2016. Steve has also served as Chief Financial Officer of four additional private and public companies during his career. Steve served on the board of directors of Amicas, Inc. (formerly NASDAQ: AMCS), a provider of imaging IT solutions, from June 2007 until June 2010, as well as on the board or advisory board of several private companies. Steve holds a B.S. in Accounting and Marketing from Skidmore College. Our Board believes that Steve’s board and business experience and his overall knowledge of our industry qualify him to serve on our Board. |
Class III Directors (Term Expires at the 2025 Annual Meeting)
Class III Directors (Term Expires at the 2025 Annual Meeting)
Class III Directors (Term Expires at the 2025 Annual Meeting)
| Age: 54 Director Since: 2023 Independent Committees: • Compensation • Nominating and Corporate Governance | Amol Kulkarni has served as a Senior Advisor to Permira, a private equity firm, since September 2023, and he is also a strategic advisor/advisory board member to other privately held technology companies. Until August 2023, Amol served as Chief Product and Engineering Officer of CrowdStrike (NASDAQ: CRWD), a cybersecurity company, and prior to that as the company’s Senior Vice President of Engineering and Products. Before joining CrowdStrike in 2014, Amol held various product and software leadership roles for 14 years at Microsoft (NASDAQ: MSFT), a global technology company. He currently serves on the boards of directors of JumpCloud, a privately held company focused on managing and securing employee access to organizations’ systems, and xfactor.io, a privately held company that operates an AI-powered revenue platform. He received a Bachelor of Engineering degree from the University of Poona, a Master of Technology degree in Energy Systems Engineering from the Indian Institute of Technology, Bombay, and a Ph.D. in Electrical Engineering from the University of Washington. Our Board believes that Amol’s technology and business experience and his overall knowledge of our industry qualify him to serve on our Board. |
Class III Directors (Term Expires at the 2025 Annual Meeting)
| Steve Rowland | | | Age: 56 Director Since: 2021 Independent Committees: •Audit | Steve Rowland has served as President of Klaviyo (NYSE: KVYO), a company that powers digital relationships, since July 2023. Steve served as Chief Revenue Officer of Okta, Inc. (NASDAQ: OKTA), an independent identity provider, from March 2021 to March 2023 and was a full time advisor to Okta from March 2023 to June 2023. Steve has also been Executive Advisor and Limited Partner at Forté Ventures LP, a venture capital firm, since May 2019. Prior to these roles, from August 2019 to March 2021, he served as Vice President, Americas at Splunk Inc. (formerly NASDAQ: SPLK), a provider of cybersecurity and observability services. From October 2015 to August 2019, he served as President at DataStax, Inc., a technology company. He has also held executive leadership roles at other technology companies including Apigee Corp., Blue Coat Systems LLC and BMC Software Inc. Steve holds a B.S. in Engineering from Texas A&M University. Our Board believes that Steve’s leadership and go-to-market experience and his overall knowledge of our industry qualify him to serve on our Board. |
Non-Continuing Director
Non-Continuing Director On June 20, 2024, Chip Virnig notified the Board of his resignation effective as of July 31, 2024.
Non-Continuing Director
| Kenneth “Chip” Virnig | | | Age: 40 Director Since: 2015 Independent Committees: •Cybersecurity | Kenneth “Chip” Virnig has served as Partner at Thoma Bravo since September 2018 and as Principal at Thoma Bravo from July 2015 to September 2018. Chip joined Thoma Bravo in 2008 and served as Vice President prior to his promotion to Principal. Prior to joining Thoma Bravo, Chip worked as an analyst in the investment banking group at Merrill Lynch & Co. from July 2006 to July 2008. He previously served on the board of directors of SailPoint Technologies Holdings, Inc. (formerly NYSE: SAIL) until March 2019 and currently serves as a director of several software and technology service companies in which certain investment funds advised by Thoma Bravo hold an investment. Chip received a B.A. in Business Economics, Commerce, Organizations and Entrepreneurship from Brown University. Our Board believes that Chip’s board and industry experience and his overall knowledge of our business have qualified him to serve on our Board. |
Director Compensation
Director Compensation
Components of our non-employee director compensation policy
Components of our non-employee director compensation policy Cash retainers are paid in quarterly installments and may be pro-rated based on the number of actual days served by the director during the calendar quarter. The Compensation Committee has discretion to pro-rate the first annual equity award for a director who joins the Board within six months of the next annual meeting of stockholders, based on the number of months served rounded up to the nearest month. Vesting of any equity award ceases if a director resigns from our Board or otherwise ceases to serve as a director, unless the Board determines that circumstances warrant continuation of vesting. In addition, all equity awards will become 100% vested and exercisable in the event of change in control of our company (as defined in the non-employee director compensation policy as a “Sale Event”, which is defined in our 2019 Equity Incentive Plan). Committee members receive the following additional annual retainers due to the workload and broad-based responsibilities of the committees:
Components of our non-employee director compensation policy
| Committee | Member Annual Fee | Chair Annual Fee | | Audit Committee | $10,000 | $20,000 | | Compensation Committee | $7,500 | $15,000 | | Nominating and Corporate Governance Committee | $5,000 | $10,000 | | Cybersecurity Committee | $5,000 | $10,000 |
Components of our non-employee director compensation policy
In setting director compensation for fiscal 2024, the Compensation Committee reviewed benchmarking information provided by the committee’s independent compensation consultant related to director compensation paid by the same peer group utilized for executive compensation benchmarking purposes. That peer group is discussed later in this Proxy Statement. The amount of the Chair’s additional annual retainer was increased from $35,000 to $50,000 effective as of the start of our fiscal 2024 in light of the Chair’s responsibilities and a market review. Directors are also reimbursed for reasonable travel and other out-of-pocket expenses attending Board and committee meetings and otherwise directly related to their service as directors.
Director Compensation – Fiscal 2024
Director Compensation – Fiscal 2024 The table below presents the total compensation for each person who served as a non-employee director during fiscal 2024. During fiscal 2024, Rick McConnell, our current CEO, was a member of our Board and received no additional compensation for his service as a director. Please see the “Executive Compensation” section for more information about Rick McConnell’s compensation for fiscal 2024.
Director Compensation – Fiscal 2024
| Name | Fees Earned or Paid in Cash ($) | Stock Award ($)(1) | Total ($) | | Seth Boro(2) | $31,154 | $200,043 | $231,197 | | Michael Capone | $55,000 | $200,043 | $255,043 | | Ambika Kapur(3) | $6,154 | — | $6,154 | | Amol Kulkarni(4) | $27,622 | $400,025 | $427,647 | | Stephen Lifshatz | $62,500 | $200,043 | $262,543 | | Steve Rowland | $45,000 | $200,043 | $245,043 | | Kenneth “Chip” Virnig(5) | $45,000 | $200,043 | $245,043 | | Jill Ward | $105,000 | $200,043 | $305,043 | | Kirsten Wolberg(6) | $51,046 | $200,043 | $251,089 |
Director Compensation – Fiscal 2024
(1)The amounts represent the aggregate grant date fair value of RSUs granted to our directors during fiscal 2024, computed in accordance with FASB ASC Topic 718. The assumptions used in calculating the grant date fair value of the RSUs reported in this column are set forth in note 14 to our audited consolidated financial statements included in our 2024 Annual Report. On August 23, 2023 (the date of our 2023 annual meeting of stockholders), each non-employee director serving and re-elected as of that date received an annual equity award of 4,290 RSUs that vest on the earlier of the one year anniversary of the grant or the date of the Annual Meeting. As of March 31, 2024, our current non-employee directors held the following amounts of unvested RSUs: Michael Capone – 4,290; Amol Kulkarni – 8,301; Stephen Lifshatz – 4,290; Steve Rowland – 6,877; Kenneth “Chip” Virnig – 4,290; Jill Ward – 4,290; and Kirsten Wolberg – 6,140. (2)Seth Boro is a Managing Partner of Thoma Bravo who resigned from the Board on February 20, 2024. Seth was previously nominated to our Board by one of the Thoma Bravo Funds (as discussed earlier in this section of this Proxy Statement). He received a pro-rated cash retainer for the days that he served during fiscal 2024. Seth's unvested RSUs were forfeited when he resigned from the Board and accordingly, he did not hold any unvested RSUs as of March 31, 2024. (3)Ambika Kapur resigned from the Board on May 26, 2023. She was a member of the Nominating and Corporate Governance Committee for part of fiscal 2024 through her resignation date from the Board. She received a pro-rated cash retainer for the days that she served during fiscal 2024. Ambika's unvested RSUs were forfeited when she resigned from the Board and accordingly, she did not hold any unvested RSUs as of March 31, 2024. (4)Amol Kulkarni was appointed to the Board on September 1, 2023. We granted 8,301 RSUs to him in connection with his appointment. Amol served as a member of the Compensation Committee and Nominating and Corporate Governance Committee for the remainder of fiscal 2024. He received a pro-rated cash retainer for the days that he served during fiscal 2024. (5)Kenneth ”Chip” Virnig is a Partner of Thoma Bravo and was previously nominated to our Board by one of the Thoma Bravo Funds. Chip's unvested RSUs mentioned in note 1 to this table will be forfeited when he resigns from the Board on July 31, 2024. (6)During fiscal 2024, Kirsten Wolberg was a member of the Compensation Committee until September 1, 2023 and then became a member of the Nominating and Corporate Governance Committee for the remainder of fiscal 2024. She was Chair of the Cybersecurity Committee for all of fiscal 2024.
Recent Executive Compensation Developments – Fiscal 2025
Recent Executive Compensation Developments – Fiscal 2025 In June 2024, the Compensation Committee made executive compensation decisions for our fiscal 2025. As discussed in more detail below, the Compensation Committee introduced PSUs based on a relative total stockholder return ("rTSR") performance metric for fiscal 2025 long-term incentive awards. The table below sets forth the composition of fiscal 2025 long-term incentive awards for our named executive officers:
Recent Executive Compensation Developments – Fiscal 2025
| Unit | Basis | Award Weighting | | PSUs | Financial performance | 30% | | | rTSR | 20% | | RSUs | Time | 50% |
Recent Executive Compensation Developments – Fiscal 2025
•PSUs based on financial performance are weighted 75% on revenue and 25% on Non-GAAP Operating Income for fiscal year 2025, which reflects a greater emphasis on revenue performance relative to PSUs granted in fiscal 2024. •PSUs based on rTSR are based on the company’s stock price performance relative to companies that are the constituents of the Russell 3000 index over performance periods of one, two, and three fiscal years that began on April 1, 2024. Time-based RSUs continued to be included in fiscal 2025 long-term incentive awards, reflecting market practice and providing an element of compensation that supports retention and alignment with stockholders. Fiscal 2025 annual short-term incentive awards for our named executive officers are weighted 65%/35% between two financial performance metrics (ARR and Non-GAAP Operating Income). This reflects a greater emphasis on ARR relative to the short-term incentive plan design in fiscal 2024.
Overview of Executive Compensation Program
Overview of Executive Compensation Program Our executive compensation program philosophy is to: We provide our named executive officers with a significant portion of their compensation through cash incentive compensation determined based upon the achievement of financial performance metrics, as well as through equity compensation, half of which is also determined based upon achievement of performance goals. These two elements of executive compensation are aligned with the interests of our stockholders because the amount of compensation ultimately received will be directly related to our financial and operational performance. Equity compensation derives its value from the appreciation of shares of our common stock, which in the future is likely to fluctuate based on our financial and operational performance. Approximately 96% of our Chief Executive Officer’s target fiscal 2024 compensation was variable or "at risk" and provided through short-term and long-term incentive awards. An average of approximately 92% of the target fiscal 2024 compensation for our other four named executive officers was variable and "at risk" and provided through short-term and long-term incentive awards.
Executive Compensation Objectives and Design
| Component | Purpose | Features | Type | Form | | Base salary | Provides a fair and competitive base level of compensation for services rendered. | Fixed annual salary targeted at or around the 50th percentile of our peer group. | Fixed | Cash | | Annual short-term incentive award | Motivates and rewards for achievements relative to our goals and expectations for each fiscal year. | Bonus payment of a targeted amount contingent on achievement of corporate financial results, with payout on a sliding scale depending on over or under-achievement of corporate financial results. | Performance-based | Cash | | Long-term incentive awards | Aligns executives’ interests with those of our stockholders and provides an incentive for our executives to remain with us. | Grants of restricted stock units, which are comprised of time-based RSUs and PSUs vesting over three years (for annual awards) or four years (for sign-on equity awards). PSUs awarded in fiscal 2024 represented 50% of the target value of annual equity awards and could be earned on a sliding scale from 0% up to 200% of target based on the company’s level of achievement of financial goals. | Performance and time-based | Equity | | Other benefits | Provides market-competitive benefits to enable our executives to maintain their health and welfare, and to save for their retirement. | Benefit plans such as medical, dental, and life and disability insurance plans; 401(k) plan, deferred compensation plan, and similar plans. We do not provide material executive perquisites or supplemental executive benefits. | | Various |
Role of the Compensation Consultant
Role of the Compensation Consultant For fiscal 2024, our Compensation Committee engaged Compensia, Inc. as its independent compensation consultant to advise on executive compensation matters including: overall compensation program design, peer group development and updates, and benchmarking executive officer and director compensation programs. Compensia reports directly to our Compensation Committee. Our Compensation Committee has assessed the independence of Compensia consistent with NYSE listing standards and has concluded that the engagement of Compensia does not raise any conflict of interest.
Use of Competitive Market Data and Peer Groups
Use of Competitive Market Data and Peer Groups The Compensation Committee directs Compensia to provide it with competitive market data and analysis based on a select group of peer companies and published compensation survey data, as well as information about current market practices and trends, compensation structures and peer group compensation ranges. The competitive market data Compensia provides is based on a compensation peer group selected and approved by the Compensation Committee with input and guidance from Compensia, and published compensation survey data in cases where there is insufficient data for specific executive positions with the peer group companies. The compensation peer group is comprised of companies that are considered similar to us at the time of selection based on industry, business model and type of software, and various financial criteria, including revenue, profitability, market capitalization and revenue growth rate. Our compensation peer group is reviewed annually and adjusted as the Compensation Committee determines to be appropriate. For fiscal 2024, the selection criteria for our compensation peer group targeted comparable public software companies with annual revenues generally between $500 million and $2 billion, and market capitalization generally between approximately $5.7 billion and $23 billion. When executive compensation for fiscal 2024 was set, our peer group as approved by our Compensation Committee was comprised of the following 19 companies:
Use of Competitive Market Data and Peer Groups
| Cloudflare | Elastic | MongoDB | RingCentral | | Confluent | Fair Isaac | New Relic | Splunk | | Coupa Software | Five9 | Okta | The Trade Desk | | Datadog | HubSpot | Paylocity Holding | Zscaler | | DigitalOcean Holdings | Informatica | PTC | |
Use of Competitive Market Data and Peer Groups
Compared to the peer group, Dynatrace ranked at the 43rd percentile for revenue and 48th percentile for market capitalization. To support fiscal 2025 decision-making, the Compensation Committee reviewed and approved updates in October 2023 to remove Coupa Software, DigitalOcean Holdings, New Relic, RingCentral, and The Trade Desk and to add Nutanix, UIPath, and Samsara. Our executive compensation benchmarking also included survey data provided by Radford, a business unit of Aon Hewitt Consulting, representing publicly traded software companies with revenue levels and market capitalization levels comparable to ours. Radford did not provide compensation consulting services to the Compensation Committee during fiscal 2024. Notwithstanding the similarities of the fiscal 2024 peer group to Dynatrace, due to the nature of our business and our industry, we compete for executive talent with many public companies that are larger and more established than we are or that possess greater resources than we do, and with smaller private companies that may be able to offer greater equity compensation potential. In determining the compensation of our executive officers, our Compensation Committee considered the market data provided by Compensia, peer data supplemented by Radford survey data where peer benchmarks were not available, and other factors outlined below in “Compensation-Setting Factors.” The Compensation Committee generally does not specifically benchmark the compensation of any individual to a precise percentile within the range of compensation found in the market and survey data. In addition, the Compensation Committee does not have a set formula by which it determines how much of the named executive officer’s compensation is fixed rather than variable or at risk. The Compensation Committee and the Board also considered other criteria, including market factors, the experience level of the executive, and the executive’s performance against established company and individual goals in determining variations to this general target range.
Compensation-Setting Factors
Compensation-Setting Factors The Compensation Committee reviews compensation annually for all our executive officers. In setting executive base salaries and bonuses and granting equity incentive awards, the Compensation Committee and the Board consider compensation for comparable positions in the market, the historical compensation levels of our executives, company-wide and individual performance as compared to our expectations and objectives, our desire to motivate our employees to achieve short and long-term results that are in the best interests of our stockholders, and the desire to incent a long-term commitment to our company. We target a general competitive position, based on independent third-party benchmark analytics to inform the mix of base salary, bonus and long-term equity incentives. Our Compensation Committee has historically determined our executives’ compensation and consults with the full Board in determining the compensation of our Chief Executive Officer. Our Compensation Committee typically reviews and discusses management’s proposed compensation with the Chief Executive Officer for all executives other than the Chief Executive Officer. Based on those discussions and its discretion, taking into account the factors noted above, the Compensation Committee discusses and ultimately approves the base salaries and cash incentive bonuses for our executive officers without members of management present. The Compensation Committee also reviews its decisions with the full Board, and considers any input received. When reviewing and approving the amount of each compensation element and the target total compensation opportunity for our executive officers, the Compensation Committee considers the following factors: •Our performance against the annual corporate goals established by the Compensation Committee and our Board in consultation with management; •Each executive officer’s skills, experience, and qualifications relative to other similarly situated executives at the companies in our compensation peer group; •The scope of each executive officer’s role compared to other similarly situated executives at the companies in our compensation peer group; •The performance of each individual executive officer, based on an assessment of their contributions to our overall performance, ability to lead their department, and work as part of a team, all of which reflect our core values; •Compensation parity among our executive officers; •Our retention goals, and the potential difficulty of replacing the executive officer if they were to leave Dynatrace; •Our financial performance relative to our peers; •The compensation practices of our compensation peer group and the positioning of each executive officer’s compensation in a ranking of peer company compensation levels; and •The recommendations provided by our Chief Executive Officer with respect to the compensation of our other executive officers. These factors provide the framework for determining the compensation of each of our executive officers, including our named executive officers. The Compensation Committee does not assign relative weights or rankings to these factors, and does not consider any single factor as determinative in the compensation of our executive officers. Rather, the Compensation Committee and our Board, as applicable, rely on their own knowledge and judgment in assessing these factors and making compensation decisions.
Annual Short-Term Incentive Awards
Annual Short-Term Incentive Awards Our annual STI plan motivates and rewards our executives for achievements relative to our goals and expectations for each fiscal year. Each named executive officer has a target bonus opportunity, defined as a percentage of his annual base salary. Target annual bonuses are determined with respect to the same corporate objectives and formula for all of our executive officers, including our named executive officers, who are at the same level, and represent a specific percentage of annual base salary. Fiscal 2024 Target Annual Bonuses In the first quarter of fiscal 2024, the Compensation Committee reviewed and approved the fiscal 2024 target annual bonuses of our named executive officers below (except for Dan Zugelder, whose target annual bonus was approved when he joined the company later in fiscal 2024). Bernd Greifeneder's target annual bonus (as a percentage of his base salary) for fiscal 2024 increased in part based on his market positioning relative to benchmarks.
Annual Short-Term Incentive Awards
| | Target Annual Bonus (% of Base Salary) | | | Name | Fiscal 2023 | Fiscal 2024 | | Rick McConnell | 100% | 100% | | Jim Benson | 75% | 75% | | Dan Zugelder(1) | - | 100% | | Bernd Greifeneder | 60% | 70% | | Matthias Dollentz-Scharer | 60% | 60% |
Annual Short-Term Incentive Awards
(1)Dan Zugelder was appointed Chief Revenue Officer during our fiscal 2024 on July 5, 2023. Fiscal 2024 STI – Financial Performance Targets When designing our company’s STI plan for fiscal 2024, the Compensation Committee determined that the STI plan should align the interests of our executives with those of our investors, and reward performance that would increase the value of the company to our stockholders. Accordingly, in April 2023, the Compensation Committee decided that payments under the 2024 STI plan would depend on the company's achievement of:
Annual Short-Term Incentive Awards
| Metric | Weighting | Rationale / Why We Use This Metric | | Annual Recurring Revenue (ARR) | 50% | We define ARR as the daily revenue of all subscription agreements that are actively generating revenue as of the last day of the reporting period multiplied by 365. We exclude from our calculation of ARR any revenues derived from month-to-month agreements and/or product usage overage billings, where customers are billed in arrears based on product usage. ARR performance is evaluated on a constant currency basis. | | Non-GAAP Operating Income (NGOI) | 50% | Non-GAAP Operating Income is defined as GAAP operating income adjusted to exclude share-based compensation, employer payroll taxes on employee stock transactions, amortization of intangibles and certain restructuring and other gains and losses. We use non-GAAP Operating Income to measure our profitability as it eliminates the effects of events that either are not part of our core operations or are non-cash. |
Annual Short-Term Incentive Awards
| | Threshold Performance (50% Payout) | | Target Performance (100% Payout) | | Maximum Performance (150% Payout) | | | | Measure | Percentage | Value | Percentage | Value | Percentage | Value | Weighting | | ARR | 95% | $1,467,052,700 | 100% | $1,544,266,000 | 105% | $1,621,479,300 | 50% | | Non-GAAP Operating Income | 90% | $332,436,600 | 100% | $369,374,000 | 110% | $406,311,400 | 50% |
Annual Short-Term Incentive Awards
Under the 2024 STI plan, no bonus was payable with respect to a particular measure (ARR or NGOI) if the percentage achievement was below the threshold indicated above (95% or 90%, respectively). If either ARR or NGOI was achieved at or above the threshold value/percentage indicated above, the payout with respect to those measures was between 50% and 150% of the target bonus, interpolated on a straight-line basis. The maximum total payout could not exceed 150% of the executives' on-target bonuses. Fiscal 2024 STI Results In May 2024, the Compensation Committee determined that our company’s financial performance was equal to 73.5% and 139.1% of ARR and NGOI targets for fiscal 2024, respectively. As a result, the weighted payout for the fiscal 2024 STI plan applicable to our named executive officers was equal to 106.3% of target. Actual performance for ARR is reported based on foreign exchange rates used in our Board-approved fiscal 2024 plan, which differ from rates used in our external reporting of financial results.
Annual Short-Term Incentive Awards
| | Target Performance | Actual Performance | Actual Performance as a Percentage of Target | Payout Percentage | Weighting | Payout Percentage | | ARR | $1,544,266,000 | $1,503,267,000 | 97.4% | 73.5% | 50% | 106.3% | | Non-GAAP Operating Income | $369,374,000 | $398,239,000 | 107.8% | 139.1% | 50% | |
Annual Short-Term Incentive Awards
Fiscal 2024 STI Payouts In light of the achievement under the 2024 STI plan, the percentage of base salary and the actual cash incentive bonus amounts as a percentage of base salary that were approved by our Compensation Committee and paid to our named executive officers are set forth in the table below.
Annual Short-Term Incentive Awards
| Name | Target Award (% of Base Salary) | Target Award Opportunity | Actual Award Payment | Award Payment as a Percentage of Target | | Rick McConnell | 100% | $655,000 | $696,265 | 106.3% | | Jim Benson | 75% | $367,500 | $390,653 | 106.3% | | Dan Zugelder(1) | 100% | $352,292 | $374,486 | 106.3% | | Bernd Greifeneder(2) | 70% | $300,659 | $319,600 | 106.3% | | Matthias Dollentz-Scharer(2) | 60% | $242,533 | $257,812 | 106.3% |
Annual Short-Term Incentive Awards
(1)Dan Zugelder joined Dynatrace on July 5, 2023 and received a pro-rated 2024 STI target award opportunity and payout to reflect his partial year of employment at our company. (2)STI award opportunities for Bernd Greifeneder and Matthias Dollentz-Scharer are paid in Euros. The amounts reported in this table for them are based on an exchange rate of EUR 1.00:USD 1.0811 as of March 31, 2024.
Long-Term Incentive Awards
Long-Term Incentive Awards Our long-term incentive program is designed to: •align executives’ interests with those of our stockholders by providing incentives (restricted stock units) that will increase in value if our share price rises; •align executives' interests with those of our stockholders by providing incentives (PSUs) having a value that depends on achievement of corporate financial measures (ARR and NGOI); and •provide a meaningful retention incentive for our executives to remain with us for the long-term. The market for qualified and talented executives is highly competitive and we compete for talent with many companies that have greater resources than we do. Accordingly, we believe equity compensation is a crucial component of any competitive executive compensation package we offer. In this Proxy Statement, references to “restricted stock units” are to PSUs and time-based RSUs collectively.
Equity Awards: Restricted Stock Units (RSUs and PSUs)
Equity Awards: Restricted Stock Units (RSUs and PSUs) Annual 2024 Equity Awards For annual equity awards to our executives in fiscal 2024, our Compensation Committee granted: •50% in the form of PSUs; and •50% in the form of time-based RSUs. The target long-term incentives for each participant were expressed as a U.S. dollar value, with the final number of PSUs and RSUs granted calculated based on the trailing 30-day average closing price as reported on the NYSE through the date of grant. The following table sets forth the target number of PSUs and the number of RSUs granted to our named executive officers as part of fiscal 2024 annual equity awards and as part of sign-on equity awards:
Equity Awards: Restricted Stock Units (RSUs and PSUs)
| Name | Grant Date | Grant Date Target Value (2) | Performance-Based PSUs (# of Shares at Target) | Time-Based RSUs (# of Shares) | | Rick McConnell | June 5, 2023 | $14,000,000 | 150,538 | 150,538 | | Jim Benson | June 5, 2023 | $4,750,000 | 51,076 | 51,076 | | Dan Zugelder(1) | July 15, 2023 | $13,350,000 | 122,196 | 122,196 | | Bernd Greifeneder | June 5, 2023 | $4,250,000 | 45,699 | 45,699 | | Matthias Dollentz-Scharer | June 5, 2023 | $2,500,000 | 26,882 | 26,882 |
Equity Awards: Restricted Stock Units (RSUs and PSUs)
(1)Reflects a sign on-related equity grant to Dan Zugelder. (2)The amounts in this column differ from amounts reflected in the Summary Compensation Table's "Stock Awards" column due to differences in determining grant date value. The RSUs granted on June 5, 2023 vest over three years, with 33% of the shares vesting on the first anniversary of the date of grant and the remainder vesting in equal quarterly installments over the following two years, provided that the executive officer remains employed by the company through the applicable vesting date. The vesting of Dan Zugelder's sign-on RSUs is discussed later in this Proxy Statement. The PSUs vest over three years and include a one-year financial performance condition, with 33% of the earned PSUs vesting on the first anniversary of the grant date or, if later, the date on which achievement of the PSU metrics is determined for the performance period, and the remainder vesting in equal quarterly installments over the following two years. The number of shares that may be earned pursuant to the PSUs is based 50% upon the company’s achievement of a revenue target, and 50% upon the company’s achievement of an NGOI target. The table below sets forth the threshold, target, and maximum revenue and NGOI goals for the PSUs.
Equity Awards: Restricted Stock Units (RSUs and PSUs)
| | Threshold Performance (0% Payout) | | Target Performance (100% Payout) | | Maximum Performance (200% Payout) | | | | Measure | Percentage | Value | Percentage | Value | Percentage | Value | Weighting | | Revenue | 95% | $1,362,870,000 | 100% | $1,434,600,000 | 105% | $1,506,330,000 | 50% | | Non-GAAP Operating Income | 90% | $332,436,600 | 100% | $369,374,000 | 110% | $406,311,400 | 50% |
Equity Awards: Restricted Stock Units (RSUs and PSUs)
The table below sets forth the actual revenue and NGOI results for fiscal 2024 and achievement of the revenue and NGOI goals as a percentage of target. Actual performance for revenue is reported based on foreign exchange rates used in our Board-approved fiscal 2024 plan, which differ from rates used in our external reporting of financial results.
Equity Awards: Restricted Stock Units (RSUs and PSUs)
| | Target Performance | Actual Performance | Actual Performance as a Percentage of Target | Payout Percentage | Weighting | Payout Percentage | | Revenue | $1,434,600,000 | $1,430,234,957 | 99.7% | 93.9% | 50% | 136.0% | | Non-GAAP Operating Income | $369,374,000 | $398,239,000 | 107.8% | 178.2% | 50% | |
Equity Awards: Restricted Stock Units (RSUs and PSUs)
In May 2024, the Compensation Committee determined that the company performance was equal to 99.7% and 107.8% of revenue and NGOI targets for the fiscal year, respectively. As a result, the weighted payout for the PSUs was equal to 136.0% of target. One-Time Grants of ARR PSUs in Fiscal 2022 During our fiscal 2022, the Compensation Committee approved one-time grants of PSUs tied to ARR goals over a multi-year time horizon (“ARR PSUs”). For Bernd Greifeneder and Matthias Dollentz-Scharer, these PSUs supplemented their annual long-term incentives. These PSUs were tied to challenging ARR targets for fiscal 2022, 2023, and 2024. Our Compensation Committee considered these PSUs to be a valuable and important tool for motivating and retaining executives through a critical phase of our company’s growth, building on the significant stockholder value creation from our IPO in 2019 and providing incentive for future growth. For Rick McConnell, a component of these PSUs (solely in relation to ARR targets for fiscal 2023 and 2024) were granted to him as an element of his sign-on equity in connection with his appointment as our Chief Executive Officer. Jim Benson and Dan Zugelder did not receive ARR PSUs. The table below sets forth the target number of ARR PSUs granted to our named executive officers related to fiscal 2024 performance:
Equity Awards: Restricted Stock Units (RSUs and PSUs)
| Name | ARR PSUs Related to Fiscal 2024 Performance (# of Shares at Target) | | Rick McConnell | 84,400 | | Bernd Greifeneder | 9,900 | | Matthias Dollentz-Scharer | 4,134 |
Equity Awards: Restricted Stock Units (RSUs and PSUs)
ARR PSUs were eligible to vest following completion of the performance period, subject to the company’s achievement of an ARR target for the specified fiscal year and provided that the executive officer remained employed by the company through the applicable vesting date. No ARR PSUs vested with respect to any year if the company failed to achieve threshold performance (95% of the applicable target ARR for that year), and achieving maximum performance (110% of the applicable target ARR for that year) would have resulted in the issuance of 150% of the target number of shares that could be issued for that year. These PSUs were not carried forward from year to year. If they were not earned in any given year, they would be terminated for that year. The table below sets forth the threshold, target, and maximum ARR goals for these PSUs for fiscal 2024 as well as the actual ARR results for fiscal 2024 and achievement of the ARR goal as a percentage of target for fiscal 2024. The ARR targets for these PSUs were set in May 2021 and the fiscal 2024 target for these awards differs slightly from the ARR target set in May 2023 for purposes of fiscal 2024 STI awards (as discussed in more detail earlier in this section). For purposes of these PSUs, ARR performance is reported based on foreign exchange rates used in our Board-approved fiscal 2022 plan, which differ from rates used in our external reporting of financial results. As set forth in the table below, none of the ARR PSUs for fiscal 2024 were paid out as ARR did not achieve threshold performance.
Equity Awards: Restricted Stock Units (RSUs and PSUs)
| | Threshold Payout (50%) | Target Payout (100%) | Maximum Payout (150%) | Actual Achievement | Achievement as a Percentage of Target | Payout Percentage | | Fiscal 2024 | $1,615,000,000 | $1,700,000,000 | $1,870,000,000 | $1,539,700,000 | 90.6% | 0% |
Benefits and Other Compensation
Benefits and Other Compensation Health and Welfare Benefits Our executive officers, including our named executive officers, are eligible to participate in the same employee benefit plans that are generally available to all of our employees working in the same country, subject to the satisfaction of certain eligibility requirements, such as medical, dental, and life and disability insurance plans. We pay, on behalf of our employees, all or a portion of the premiums for health, life, and disability insurance. Retirement Savings Plans We maintain a tax-qualified 401(k) retirement plan for eligible employees in the United States to save for retirement on a tax advantaged basis. Under our 401(k) plan, employees may elect to defer up to 90% of their eligible compensation subject to applicable annual limits set pursuant to the Internal Revenue Code. Our 401(k) plan permits participants to make both pre-tax and certain after-tax (Roth) deferral contributions. The retirement plan is intended to qualify under Section 401(a) of the Internal Revenue Code. We match 50% of employees’ contributions to the 401(k) plan up to 6% of compensation. Employees are 100% vested in their contributions to the 401(k) plan. Matthias Dollentz-Scharer participates in a tax-qualified defined contribution retirement plan made available to eligible employees in Austria. Employees may elect to contribute up to 7% of their eligible compensation to the plan. Our company matches employee contributions up to 3% of eligible compensation. Employees are 100% vested in their contributions to this plan. Deferred Compensation Plan Effective January 1, 2024, we offer a non-qualified deferred compensation plan ("Deferred Compensation Plan") which provides eligible U.S. employees with the opportunity to defer up to 75% of their eligible base salary, up to 100% of their eligible fiscal year bonus (beginning with bonuses for our fiscal 2025), and up to 100% of eligible commissions in excess of the limits imposed on the 401(k) plan by the Internal Revenue Code. Account balances under the Deferred Compensation Plan are credited with income, gains and losses based on the performance of investment funds selected by the participant from a list of funds designated by us. Rick McConnell, Jim Benson, and Dan Zugelder are the only named executive officers eligible to participate in this plan. All of the members of our Board are eligible to participate in this plan. As of March 31, 2024, Jim Benson was the only named executive officer participating in this plan and none of our directors were participating in the plan. Perquisites Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we provide a limited amount of perquisites to our named executive officers. In the future, we may continue to provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual named executive officer in the performance of their duties, to make them more efficient and effective, and for recruitment, motivation or retention purposes. Employment Agreements We have entered into employment agreements with each of our named executive officers, which provide assurances of specified benefits to our named executive officers in the event of an involuntary termination of their employment for reasons other than for death, disability, or in the case of cause or a voluntary termination of their employment for good reason, in either case, under the circumstances described in their employment agreements. The terms of these agreements were developed with input from Compensia regarding severance practices at comparable companies, and are designed to attract, retain, and reward senior level employees. We believe that these protections serve our retention objectives by helping our named executive officers and other key employees maintain continued focus and dedication to their responsibilities to maximize stockholder value, including in the event of a transaction that could result in a change in control of the company. For more information, see the section of this Proxy Statement entitled “Potential Payments Upon Termination or Change in Control.”
Equity Award Grant Policy
Equity Award Grant Policy Under a policy adopted by our Board, we have adopted the following equity award grant practices and procedures. We do not time our equity grants either to take advantage of a depressed stock price, or an anticipated increase in stock price, and we have limited the amount of discretion that can be exercised in connection with the timing of awards. We generally make awards only on pre-determined dates to ensure that equity awards cannot be timed to take advantage of material, nonpublic information. Our annual equity awards are granted after our fourth quarter and fiscal year financial results have been announced publicly, within a trading window under our company's insider trading policy. Grants of annual equity awards to current employees will be made during our first fiscal quarter, effective on June 5, and are approved by the Compensation Committee. Grants of off-cycle equity awards for new hires, promotions, or retention are generally made once per month effective on or around the 15th day of each month. The Compensation Committee also has authority to grant off-cycle equity awards. In April 2024, the Board delegated the Chief Executive Officer with non-exclusive authority to grant up to a specified dollar amount of off-cycle new hire, promotion and retention-related RSUs and PSUs during each fiscal year of the company to employees who are below the Senior Vice President level and not otherwise Section 16 officers of the company (which include all of our executive officers). Unless otherwise approved by the Compensation Committee, any such awards approved by the Chief Executive Officer during a fiscal year may not have a grant date value more than a specified amount per individual (depending on level in our company) and must reflect grants within banding or other award-related guidelines approved from time to time by the Board or the Compensation Committee. For grants of RSUs and PSUs, the number of shares subject to each equity award is calculated by dividing the dollar value of the approved award by the 30-day closing price average of our common stock on the NYSE through the day of grant, rounded up to the nearest one share. For grants of stock options, the exercise price will be equal to (or, if specified in the approval of a stock option award, greater than) the closing market price on the NYSE of one share of our common stock on the effective date of the grant, or, if no closing price is reported for such date, the closing price on the last preceding date for which a closing price is reported. Under our policy, any grants of equity awards that are stock options, stock appreciation rights, or similar option-like awards will only be granted to an executive officer during a trading window under our company's insider trading policy and on a date that is two business days after our company files a Form 10-K, Form 10-Q, or Form 8-K that includes material nonpublic information (including, without limitation, earnings information). We did not grant any stock options, stock appreciation rights, or similar option-like awards in fiscal 2024.
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 officers, 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 We follow Financial Accounting Standards Board Accounting Standards Codification Topic 718 Compensation—Stock Compensation (“ASC 718”) for our stock-based compensation awards. ASC 718 requires us to measure the compensation expense for all share-based payment awards made to our employees and non-employee members of our Board, including stock options and restricted stock unit awards, based on the grant date “fair value” of these awards. This calculation is performed for accounting purposes and reported in the executive compensation tables required by the federal securities laws, even though the recipient of the awards may never realize any value from their awards.
Summary Compensation Table
Summary Compensation Table The following table presents the compensation awarded to, earned by and paid during the fiscal years ended March 31, 2024, 2023, and 2022 for each of our named executive officers.
Summary Compensation Table
| Name and Principal Position | Year | Salary ($) (1) | Bonus ($)(2) | Stock Awards ($)(3) | Non-Equity Incentive Plan Compensation ($)(4) | All Other Compensation ($) (7) | Total ($) | | Rick McConnell Chief Executive Officer | 2024 | 655,000 | - | 15,896,813 | 696,265 | 31,556 | 17,279,634 | | | 2023 | 630,000 | - | 13,234,082 | 670,572 | 28,509 | 14,563,163 | | | 2022 | 184,848 | 250,000 | 20,310,016 | 220,408 | 5,424 | 20,970,696 | | Jim Benson EVP, Chief Financial Officer and Treasurer | 2024 | 490,000 | - | 5,393,626 | 390,653 | 13,637 | 6,287,916 | | | 2023 | 179,924 | - | 11,161,151 | 143,634 | 6,805 | 11,491,514 | | Dan Zugelder EVP, Chief Revenue Officer | 2024 | 352,292 | 250,000 | 13,348,691 | 374,486 | 2,190 | 14,327,659 | | Bernd Greifeneder (5) EVP, Chief Technology Officer | 2024 | 429,512 | - | 4,825,814 | 319,600 | 17,433 | 5,592,359 | | | 2023 | 408,584 | - | 4,411,906 | 260,938 | - | 5,081,428 | | | 2022 | 373,511 | 1,175 | 4,154,520 | 271,156 | - | 4,800,362 | | Matthias Dollentz-Scharer (5) (6) EVP, Chief Customer Officer | 2024 | 404,221 | - | 2,838,739 | 257,812 | 24,681 | 3,525,453 | | | 2023 | 345,875 | - | 2,090,182 | 220,889 | 9,701 | 2,666,647 |
Summary Compensation Table
(1)Reflects base salaries earned for the applicable fiscal year. Rick McConnell's base salary for fiscal 2022 reflects the amount that he earned from his start date at our company through the end of that fiscal year. Jim Benson's base salary for fiscal 2023 reflects the amount that he earned from his start date at our company through the end of that fiscal year. Dan Zugelder's base salary for fiscal 2024 reflects the amount that he earned from his start date at our company through the end of that fiscal year. As disclosed elsewhere in this Proxy Statement, Dan Zugelder’s annualized base salary during fiscal 2024 was $475,000. (2)Reflects a cash sign-on bonus paid to Rick McConnell in fiscal 2022 and Dan Zugelder in fiscal 2024 in connection with joining the company and a patent program bonus paid to Bernd Greifeneder in fiscal 2022. (3)Amounts reported in this column do not reflect stock award compensation actually received by each named executive officer. The amounts reported in this column reflect the aggregate grant date fair value of time-based RSUs and PSUs granted to our named executive officers during the fiscal years ended March 31, 2024, 2023, and 2022, computed in accordance with FASB ASC Topic 718. These aggregate grant date fair values do not take into account any estimated forfeitures related to service-vesting conditions. The assumptions used in calculating the grant date fair value of the restricted stock units reported in this column are set forth in note 14 to our audited consolidated financial statements included in our annual report on Form 10-K for the fiscal year ended March 31, 2024, which was filed with the SEC on May 23, 2024. The amounts reported in this column reflect the accounting cost for these stock awards and may not correspond to the actual economic value that will be received by the named executive officers upon vesting of the awards. In the case of PSUs granted during fiscal 2024, the aggregate grant date fair value is reported at the probable outcome, which is assumed to be the target level of performance. The aggregate grant date fair value of PSUs granted during fiscal 2024, assuming maximum achievement (200%), was $15,896,813 for Rick McConnell, $5,393,626 for Jim Benson, $13,348,691 for Dan Zugelder, $4,825,814 for Bernd Greifeneder, and $2,838,739 for Matthias Dollentz-Scharer. The aggregate grant date fair value of PSUs granted during fiscal 2023, assuming maximum achievement (150%), was $9,925,561 for Rick McConnell, $3,308,930 for Bernd Greifeneder, and $1,567,637 for Matthias Dollentz-Scharer. The aggregate grant date fair value of PSUs granted during fiscal 2022, assuming maximum achievement (150%), was $15,232,512 for Rick McConnell and $4,155,687 for Bernd Greifeneder. (4)The amounts reported in this column represent bonuses paid under our annual STI plan based on company performance for the applicable fiscal year. The amounts reported for Rick McConnell for fiscal 2022, Jim Benson for fiscal 2023, and Dan Zugelder for fiscal 2024 are pro-rated to reflect their respective partial first fiscal year of employment at our company. (5)Bernd Greifeneder and Matthias Dollentz-Scharer are paid their base salaries and annual STI bonuses in Euros. The applicable U.S. dollar amounts in this table for them for fiscal 2024 and fiscal 2023 are based on an exchange rate of 1 EUR:USD 1.0811 and 1 EUR:USD 1.0839, respectively. For Bernd Greifeneder, the U.S. dollar amounts are also based on an exchange rate of 1 EUR:USD 1.1067 for fiscal 2022. (6)Matthias Dollentz-Scharer was not a named executive officer in fiscal 2022. (7)The following table sets forth amounts included in the "All Other Compensation" column for our named executive officers for fiscal 2024.
Summary Compensation Table
| Name | Insurance Premium Contributions (a) | 401(k) Plan - Company Matching Contributions | Telecommunications | All Other Amounts (b) | Total | | Rick McConnell | $3,793 | $10,085 | $1,500 | $16,178 | $31,556 | | Jim Benson | $2,737 | $9,400 | $1,500 | - | $13,637 | | Dan Zugelder | - | $613 | $1,577 | - | $2,190 | | Bernd Greifeneder | - | - | - | $17,433 | $17,433 | | Matthias Dollentz-Scharer | - | - | - | $24,681 | $24,681 |
Summary Compensation Table
(a) Reflects disability insurance premiums. (b) For Rick McConnell, the amount reported reflects expenses of $9,068 related to Rick and his spouse attending the company's annual President's Club (our sales recognition event) and a related tax gross-up of $7,110. For Matthias Dollentz-Scharer, the amount reported reflects $12,366 related to Matthias and his spouse attending the company's annual President's Club event, a company contribution of $12,126 in connection with his participation in an Austrian defined contribution retirement plan, and a local benefit in kind of $189 for parking. For Bernd Greifeneder, the amount reported reflects $17,244 of expenses related to Bernd and his spouse attending the company's annual President's Club event, and a local benefit in kind of $189 for parking.
Grants of Plan-Based Awards for Fiscal 2024
Grants of Plan-Based Awards for Fiscal 2024 The following table shows information regarding grants of plan-based awards during the fiscal year ended March 31, 2024 to the company’s named executive officers.
Grants of Plan-Based Awards for Fiscal 2024
| Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All other Stock Awards: Number of Shares of Stock or Units (#) | All other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | | | Rick McConnell | - | 163,750 | 655,000 | 982,500 | - | - | - | - | - | - | - | | | 6/5/23 | - | - | - | - | 150,538 | 301,076 | - | - | - | 7,948,406 | | | 6/5/23 | - | - | - | - | - | - | 150,538 | - | - | 7,948,406 | | Jim Benson | - | 91,875 | 367,500 | 551,250 | - | - | - | - | - | - | - | | | 6/5/23 | - | - | - | - | 51,076 | 102,152 | - | - | - | 2,696,813 | | | 6/5/23 | - | - | - | - | - | - | 51,076 | - | - | 2,696,813 | | Dan Zugelder(1) | - | 88,073 | 352,292 | 528,438 | - | - | - | - | - | - | - | | | 7/15/23 | - | - | - | - | 122,196 | 244,392 | - | - | - | 6,674,346 | | | 7/15/23 | - | - | - | - | - | - | 122,196 | - | - | 6,674,346 | | Bernd Greifeneder(2) | - | 75,165 | 300,659 | 450,988 | - | - | - | - | - | - | - | | | 6/5/23 | - | - | - | - | 45,699 | 91,398 | - | - | - | 2,412,907 | | | 6/5/23 | - | - | - | - | - | - | 45,699 | - | - | 2,412,907 | | Matthias Dollentz-Scharer(2) | - | 60,633 | 242,533 | 363,799 | - | - | - | - | - | - | - | | | 6/5/23 | - | - | - | - | 26,882 | 53,764 | - | - | - | 1,419,370 | | | 6/5/23 | - | - | - | - | - | - | 26,882 | - | - | 1,419,370 |
Grants of Plan-Based Awards for Fiscal 2024
(1)Dan Zugelder's target non-equity incentive award is reflected as pro-rated based on his start date of July 5, 2023. Dan's equity incentive plan awards reflect PSUs and RSUs granted to him following his start date, as discussed elsewhere in this Proxy Statement. 32,771 of his sign-on RSUs vested in December 2023 and an additional 6,388 sign-on RSUs vested in March 2024 in accordance with his employment agreement. (2)Bernd Greifeneder and Matthias Dollentz-Scharer are paid their annual STI bonuses in Euros. The applicable U.S. dollar amounts in this table for their non-equity incentive plan awards are based on an exchange rate of 1 EUR:USD 1.0811.
Outstanding Equity Awards at 2024 Fiscal Year End Table
Outstanding Equity Awards at 2024 Fiscal Year End Table The following table presents information regarding all outstanding equity-based awards held by each of our named executive officers on March 31, 2024.
Outstanding Equity Awards at 2024 Fiscal Year End Table
| | | Option Awards (1) | | | | Stock Awards | | | | | Name | Grant Date | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(2) | Market Value of Shares or Units of Stock That Have Not Vested ($)(3) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value Of Unearned Shares, Units or Other Rights That Have Not Vested ($) | | Rick McConnell | 12/13/2021 | - | - | - | - | 36,925 (4) | 1,714,797 | - | - | | | 6/5/2022 | - | - | - | - | 139,583 | 6,482,235 | - | - | | | 6/5/2023 | - | - | - | - | 355,269 | 16,498,692 | - | - | | Jim Benson | 12/15/2022 | - | - | - | - | 195,050 (5) | 9,058,122 | - | - | | | 6/5/2023 | - | - | - | - | 120,539 | 5,597,831 | - | - | | Dan Zugelder | 7/15/2023 | - | - | - | - | 249,223 (6) | 11,573,916 | - | - | | Bernd Greifeneder | 7/31/2019 | 243,000 | - | $16.00 | 7/31/2029 | - | - | - | - | | | 5/15/2020 | 106,400 | 6,650 | $33.03 | 5/15/2030 | 2,525 | 117,261 | - | - | | | 5/15/2021 | - | - | - | - | 20,473 | 950,766 | - | - | | | 6/5/2022 | - | - | - | - | 46,532 | 2,160,946 | - | - | | | 6/5/2023 | - | - | - | - | 107,849 | 5,008,508 | - | - | | Matthias Dollentz-Scharer | 7/31/2019 | 6,937 | - | $16.00 | 7/31/2029 | - | - | - | - | | | 5/15/2020 | 39,050 | 3,550 | $33.03 | 5/15/2030 | 1,350 | 62,694 | - | - | | | 5/15/2021 | - | - | - | - | 8,560 | 397,526 | - | - | | | 6/5/2022 | - | - | - | - | 18,612 | 864,341 | - | - | | | 8/15/2022 | - | - | - | - | 3,939 (7) | 182,927 | - | - | | | 6/5/2023 | - | - | - | - | 63,441 | 2,946,200 | - | - |
Outstanding Equity Awards at 2024 Fiscal Year End Table
(1)Stock options granted on July 31, 2019 and May 15, 2020 become vested and exercisable as follows: 25% of each award vested on the first anniversary of the grant date, with the remainder vesting in 12 equal quarterly installments thereafter. (2)RSUs and PSUs granted as part of annual awards on May 15, 2020 in fiscal 2021 and May 15, 2021 in fiscal 2022 vest over four years, with 25% vesting on the first anniversary of the grant date and the remainder vesting in 12 equal quarterly installments thereafter. RSUs and PSUs granted as part of annual awards on June 5, 2022 in fiscal 2023 and on June 5, 2023 in fiscal 2024 vest over three years, with 33% vesting on the first anniversary of the grant date and the remainder vesting in eight equal quarterly installments thereafter. For PSUs granted as part of annual awards on June 5, 2023, this column reflects annual PSUs that were earned as of March 31, 2024, based on the achievement of pre-defined ARR and NGOI goals, which were attained at 136.0% of target. (3)Based on the NYSE closing price on March 31, 2024 of $46.44 per share. (4)Represents the remaining unvested portion of Rick McConnell’s sign-on award of RSUs that he received when he joined our company in December 2021. These units vest in equal quarterly installments through November 15, 2025. (5)Represents the remaining unvested portion of Jim Benson's sign-on award of RSUs that he received after he joined our company in November 2022. These units vest in equal quarterly installments through December 15, 2026. (6)Represents the remaining unvested portion of Dan Zugelder's sign-on equity award that he received after he joined our company in July 2023. These units include 83,037 RSUs that vest in equal quarterly installments through June 5, 2027 and 166,186 PSUs (based on the same fiscal 2024 financial performance metrics applicable to annual awards granted on June 5, 2023 to our other named executive officers), 33% of which vested on June 5, 2024, with the remainder vesting in equal quarterly installments thereafter through June 5, 2026. (7)Represents the remaining unvested portion of Matthias Dollentz-Scharer's promotion-related award of RSUs and PSUs that he received in August 2022. These units vest in equal quarterly installments through August 15, 2025. As discussed in the "Compensation Discussion and Analysis" section of this Proxy Statement, one-time ARR PSUs granted to Rick McConnell, Bernd Greifeneder, and Matthias Dollentz-Scharer which were based on fiscal year 2024 ARR performance did not vest and are not reflected in the table above.
Option Exercises and Stock Vested in Fiscal 2024
Option Exercises and Stock Vested in Fiscal 2024 The following table sets forth, for each of the named executive officers, information with respect to the exercise of stock options and the vesting of restricted stock unit awards during the year ended March 31, 2024.
Option Exercises and Stock Vested in Fiscal 2024
| | Option awards | | Stock awards | | | Name | Number of shares acquired on exercise (#) | Value realized on exercise ($)(1) | Number of shares acquired on vesting (#) | Value realized on vesting ($)(2) | | Rick McConnell | - | - | 337,192 | 17,398,054 | | Jim Benson | - | - | 88,660 | 4,682,844 | | Dan Zugelder | - | - | 39,159 | 2,086,158 | | Bernd Greifeneder | - | - | 104,977 | 5,371,329 | | Matthias Dollentz-Scharer | 48,560 | 1,712,292 | 48,040 | 2,442,326 |
Option Exercises and Stock Vested in Fiscal 2024
(1)Amounts disclosed in this column were calculated based on the difference between the fair market value of our common stock on the date of exercise and the exercise price of the options. (2)Amounts disclosed in this column were calculated based on the fair market value of our common stock on the date upon which the restricted stock unit awards vested or, if the vesting date is not a trading day, based upon the closing price on the last trading day immediately preceding the vesting date.
Non-Qualified Deferred Compensation Plan
Non-Qualified Deferred Compensation Plan Effective January 1, 2024, we offer a non-qualified Deferred Compensation Plan which provides eligible U.S. employees with the opportunity to defer up to 75% of their eligible base salary, up to 100% of their eligible fiscal year bonus (beginning with bonuses for our fiscal 2025), and up to 100% of eligible commissions in excess of the limits imposed on the 401(k) plan by the Internal Revenue Code. Account balances under the Deferred Compensation Plan are credited with income, gains, and losses based on the performance of investment funds selected by the participant from a list of funds designated by our company. We do not make matching contributions under the Deferred Compensation Plan, but are permitted to make discretionary contributions. However, we did not make any contributions to the Deferred Compensation Plan in our fiscal 2024. The following table sets forth information with respect to deferrals made by Jim Benson, who was the only named executive officer participating in the Deferred Compensation Plan during fiscal 2024.
Non-Qualified Deferred Compensation Plan
| Name | Executive contributions in last fiscal year ($)(1) | Registrant contributions in last fiscal year ($) | Aggregate earnings in last fiscal year($)(2) | Aggregate withdrawals/contributions ($) | Aggregate balance at last fiscal year end (3) | | Jim Benson | 51,042 | - | 1,785 | - | 52,827 |
Non-Qualified Deferred Compensation Plan
(1)Amounts disclosed in this column are reflected in the "Salary" column of the Summary Compensation Table. (2)None of the earnings set forth in this column are considered above-market or preferential as determined under SEC rules, and, therefore, none of such amounts are reflected in the Summary Compensation Table. (3)The balance shown represents compensation already reported in the Summary Compensation Table in this Proxy Statement, except for any earnings that were not above-market or preferential as determined under SEC rules.
Potential Payments Upon Termination or Change in Control
Potential Payments Upon Termination or Change in Control
Severance and Potential Payments Upon a Change in Control
Severance and Potential Payments Upon a Change in Control Pursuant to the employment agreements with our named executive officers, if a named executive officer's employment is terminated by us without cause, or good cause as defined in the employment agreements, or by the named executive officer for good reason (for Bernd Greifeneder and Matthias Dollentz-Scharer, good cause), as defined in the employment agreements, or in connection with a change in control (a "Sale Event," as defined in our 2019 Equity Incentive Plan) and subject to the execution and effectiveness of a separation agreement, including a general release of claims in our favor, the named executive officers will be entitled to receive the benefits described below. Pursuant to Rick McConnell’s amended and restated employment agreement, if his employment is terminated without cause, as such term is defined in his employment agreement, or if Rick McConnell terminates his employment for good reason, as such term is defined in the employment agreement, and if he executes a separation and release agreement, we will be obligated to (i) pay him a cash severance payment equal to the sum of 12 months of his then-current base salary, the amount of any bonus earned in respect of the prior fiscal year that would have been paid if his employment had not been terminated and 100% of his target bonus for the then-current year, with payments made ratably over a 12 month period, and (ii) subject to Rick’s copayment of premium amounts, if he elects healthcare continuation coverage under COBRA, pay up to 12-monthly payments equal to the monthly employer contribution that the company would have made to provide health insurance to him if he had remained employed by the company. If Rick McConnell’s employment is terminated without cause or he terminates his employment for good reason either three months before or during the 12-month period after a change in control, and if he executes a separation and release agreement, then in lieu of the payments and benefits set forth above, he would be entitled to (i) a lump-sum cash severance payment equal to the sum of 24 months of his then-current base salary and the amount of any bonus earned in respect of the prior fiscal year that would have been paid if his employment had not been terminated, (ii) acceleration of all unvested equity awards, as of the later of (A) the date of termination or (B) the effective date of a separation and release agreement, and (iii) subject to Rick’s copayment of premium amounts, if he elects healthcare continuation coverage under COBRA, the company will pay up to 18 monthly payments equal to the monthly employer contribution that the company would have made to provide health insurance to him if he had remained employed by the company. Jim Benson Pursuant to Jim Benson’s employment agreement, if his employment is terminated without cause, as such term is defined in his employment agreement, or if Jim Benson terminates his employment for good reason, as such term is defined in the employment agreement, and if he executes a separation and release agreement, we will be obligated to (i) pay him a cash severance payment equal to the sum of 12 months of his then-current base salary and the amount of any bonus earned in respect of the prior fiscal year that would have been paid if his employment had not been terminated, with payments ratably over a 12 month period, and (ii) subject to Jim’s copayment of premium amounts, if he elects healthcare continuation coverage under COBRA, pay up to 12 monthly payments equal to the monthly employer contribution that the company would have made to provide health insurance to him if he had remained employed by the company. If Jim Benson’s employment is terminated without cause or he terminates his employment for good reason either three months before or during the 12-month period after a change in control, and if he executes a separation and release agreement, then in lieu of the payments and benefits set forth above, he would be entitled to (i) a lump-sum cash severance payment equal to the sum of 18 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and the amount of any bonus earned in respect of the prior fiscal year that would have been paid if his employment had not been terminated, (ii) acceleration of all unvested equity awards, as of the later of (A) the date of termination or (B) the effective date of a separation and release agreement, and (iii) subject to Jim’s copayment of premium amounts, if he elects healthcare continuation coverage under COBRA, the company will pay up to 18 monthly payments equal to the monthly employer contribution that the company would have made to provide health insurance to him if he had remained employed by the company. Dan Zugelder Pursuant to Dan Zugelder’s employment agreement, if his employment is terminated without cause, as such term is defined in his employment agreement, or if Dan Zugelder terminates his employment for good reason, as such term is defined in the employment agreement, and if he executes a separation and release agreement, we will be obligated to (i) pay him a cash severance payment equal to the sum of 12 months of his then-current base salary and the amount of any bonus earned in respect of the prior fiscal year that would have been paid if his employment had not been terminated, with payments ratably over a 12 month period, and (ii) subject to Dan’s copayment of premium amounts, if he elects healthcare continuation coverage under COBRA, pay up to 12 monthly payments equal to the monthly employer contribution that the company would have made to provide health insurance to him if he had remained employed by the company. If Dan Zugelder’s employment is terminated without cause or he terminates his employment for good reason either three months before or during the 12-month period after a change in control, and if he executes a separation and release agreement, then in lieu of the payments and benefits set forth above, he would be entitled to (i) a lump-sum cash severance payment equal to the sum of 18 months of his then-current base salary (or his base salary in effect immediately prior to the change in control, if higher) and the amount of any bonus earned in respect of the prior fiscal year that would have been paid if his employment had not been terminated, (ii) acceleration of all unvested equity awards, as of the later of (A) the date of termination or (B) the effective date of a separation and release agreement, and (iii) subject to Dan’s copayment of premium amounts, if he elects healthcare continuation coverage under COBRA, the company will pay up to 18 monthly payments equal to the monthly employer contribution that the company would have made to provide health insurance to him if he had remained employed by the company. Bernd Greifeneder Pursuant to Bernd Greifeneder’s employment agreement, if his employment is terminated by either party, the terminating party must give the other at least six months’ prior notice, which may be waived in the other’s party’s discretion in accordance with Austrian law. In the event that Bernd Greifeneder’s employment is terminated by us without cause, as such term is defined in his employment agreement, or if he terminates his employment for cause, as such term is defined in his employment agreement, and if he executes a separation and release agreement, we will be obligated to (i) pay him a cash severance payment equal to the sum of six months of his then-current base salary, plus (ii) the amount of any accrued statutory claims.
Severance and Potential Payments Upon a Change in Control
If Bernd Greifeneder’s employment with us is terminated by us without cause or by him for cause either three months before or during the 12-month period after a change in control, and if he executes a separation and release agreement, he would be entitled to (i) a lump-sum cash severance payment equal to 12 months of his then-current base salary, (ii) acceleration of all unvested equity awards effective upon the earlier of (A) the date that employment is effectively terminated or (B) the day that he goes on garden leave in lieu of notice, and (iii) the amount of any accrued statutory claims. Matthias Dollentz-Scharer Pursuant to Matthias Dollentz-Scharer’s employment agreement, if his employment is terminated by either party, the terminating party must give the other at least three months’ prior notice, which may be waived in the other’s party’s discretion in accordance with Austrian law. In the event that Matthias Dollentz-Scharer’s employment is terminated by us without cause, as such term is defined in his employment agreement, or if he terminates his employment for cause, as such term is defined in his employment agreement, and if he executes a separation and release agreement, we will be obligated to (i) pay him a cash severance payment equal to the sum of nine months of his then-current base salary, plus (ii) the amount of any accrued statutory claims. If Matthias Dollentz-Scharer’s employment with us is terminated by us without cause or by him for cause either three months before or during the 12-month period after a change in control, and if he executes a separation and release agreement, he would be entitled to (i) a lump-sum cash severance payment equal to 15 months of his then-current base salary, (ii) acceleration of all unvested equity awards effective upon the earlier of (A) the date that employment is effectively terminated or (B) the day that he goes on garden leave in lieu of notice, and (iii) the amount of any accrued statutory claims.
Estimated Payment and Benefits Upon Termination or Change in Control
Estimated Payment and Benefits Upon Termination or Change in Control The amount of compensation and benefits payable to each named executive officer who was employed on March 31, 2024 under our current employment agreements in various termination and change in control situations has been estimated in the table below. Bernd Greifeneder and Matthias Dollentz-Scharer are paid their base salaries in Euros. The applicable U.S. dollar amounts in the table below for their cash severance payments are based on an exchange rate of 1 EUR:USD 1.0811. The value of the equity vesting acceleration was calculated for the table below based on the assumption that the change in control and the named executive officer’s employment termination occurred on March 31, 2024. The per share closing price of the company’s stock on the NYSE on March 28, 2024 (which was the last trading day of the month) was $46.44, which was used as the value of the company’s stock in the Change in Control. The value of the option vesting acceleration was calculated by multiplying the number of unvested option shares subject to vesting acceleration as of March 31, 2024, by the difference between the per share closing price of the company’s stock as of March 31, 2024, and the per share exercise price for such unvested option shares. The value of PSU and RSU vesting acceleration was calculated by multiplying the number of unvested PSUs and RSUs subject to vesting acceleration as of March 31, 2024 by the per share closing price of the company’s stock as of March 31, 2024. Fiscal 2025 short-term incentive awards provide for a pro-rated payment at target in the event of termination of employment due to death or disability. Fiscal 2025 RSUs provide that in the event of termination of employment due to death or disability, all unvested equity awards that are subject solely to time-based vesting (which include time-based RSUs and stock options) will vest with respect to a number of such unvested equity awards that would have vested during the 12-month period following the date of termination (unless otherwise provided in an applicable agreement). For financial PSUs granted in fiscal 2025, in the event of termination due to death or disability, the number of earned financial PSUs that will vest during the 12-month period following the date of termination will depend on whether such date occurs prior to or after the applicable certification date of performance for the financial PSUs (unless otherwise provided in an applicable agreement). For rTSR PSUs granted in fiscal 2025, in the event of termination of employment due to death or disability, the award will remain outstanding and eligible to vest as of the next vesting date based on actual performance with respect to the performance period applicable to such vesting date. This termination treatment has been reflected in the table below for short-term incentive awards and equity awards as if such treatment was effective on March 31, 2024. A qualifying “double trigger” termination refers to involuntary termination by the company without cause or termination by the named executive officer for good reason within three months prior to, or 12 months following, a Change in Control. Also, if our outstanding equity awards are not assumed, continued or substituted by the acquirer in a Change in Control transaction, the acceleration of vesting described below would be effective as of the closing of the Change in Control transaction.
Estimated Payment and Benefits Upon Termination or Change in Control
| Name | Involuntary termination for Cause or voluntary resignation not in connection with a Change in Control | Involuntary termination without Cause or for Good Reason not in connection with a Change in Control | Death or Disability | Change in Control Alone | Qualifying “double trigger” involuntary termination without Cause or voluntary resignation for Good Reason within 3 months prior or 12 months following a Change in Control | | Rick McConnell | | | | | | | Cash severance payment | — | $1,310,000 | — | — | $1,310,000 | | Short-term incentive bonus | — | — | $655,000 | — | $655,000 | | Equity award acceleration | — | — | $17,967,357 | — | $24,695,723 | | Healthcare and benefits | — | $27,596 | — | — | $41,394 | | Total | — | $1,337,596 | $18,622,357 | — | $26,702,117 | | Jim Benson | | | | | | | Cash severance payment | — | $490,000 | — | — | $735,000 | | Short-term incentive bonus | — | — | $367,500 | — | $367,500 | | Equity award acceleration | — | — | $6,051,364 | — | $14,655,953 | | Healthcare and benefits | — | $15,743 | — | — | $23,614 | | Total | — | $505,743 | $6,418,864 | — | $15,782,067 | | Dan Zugelder | | | | | | | Cash severance payment | — | $475,000 | — | — | $712,500 | | Short-term incentive bonus | — | — | $475,000 | — | $475,000 | | Equity award acceleration | — | — | $4,485,036 | — | $11,573,916 | | Healthcare and benefits | — | $27,596 | — | — | $41,394 | | Total | — | $502,596 | $4,960,036 | — | $12,802,810 | | Bernd Greifeneder | | | | | | | Cash severance payment | — | $214,756 | — | — | $429,512 | | Short-term incentive bonus | — | — | $300,659 | — | — | | Equity award acceleration | — | — | $5,315,348 | — | $8,326,657 | | Healthcare and benefits | — | — | — | — | — | | Total | — | $214,756 | $5,616,007 | — | $8,756,169 | | Matthias Dollentz-Scharer | | | | | | | Cash severance payment | — | $303,166 | — | — | $505,276 | | Short-term incentive bonus | — | — | $242,533 | — | — | | Equity award acceleration | — | — | $2,712,426 | — | $4,501,294 | | Healthcare and benefits | — | — | — | — | — | | Total | — | $303,166 | $2,954,959 | — | $5,006,570 |
Pay Versus Performance
Pay Versus Performance The Compensation Committee approves and administers our executive compensation program, which it designs to attract, incentivize, reward, and retain our executive officers. Our program aligns executive pay with shareholder interests and links pay to performance through a blend of short-term and long-term performance measures. In December 2021, our tenured Chief Executive Officer, John Van Siclen (“PEO 2”) retired and transitioned to providing consulting services until May 2022. Upon his departure as CEO, Rick McConnell (“PEO 1”) was appointed to fill the vacancy created by John Van Siclen’s retirement. We provide compensation actually paid for both Chief Executive Officers during the covered years in the following tables. As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between the compensation actually paid to our named executive officers and certain aspects of our financial performance. For further information concerning our pay for performance philosophy and how executive compensation aligns with our performance, please refer to the “Compensation Discussion and Analysis” and "Executive Compensation" sections of this Proxy Statement.
Pay-Versus-Performance Table
| Year | Summary Compensation Table Total for PEO 1(1) | Compensation Actually Paid to PEO 1(2) | Summary Compensation Table Total for PEO 2(1) | Compensation Actually Paid to PEO 2(2) | Average Summary Compensation Table Total for Non-PEO Named Executive Officers(3) | Average Compensation Actually Paid to Non-PEO Named Executive Officers(4) | Value of Initial Fixed $100 Investment Based On: | | Net Income(7) (in millions) | Company-Selected Measure: Revenue (in millions) | | | | | | | | | Total Stockholder Return(5) | Peer Group Total Stockholder Return(6) | | | | (a) | (b1) | (c1) | (b2) | (c2) | (d) | (e) | (f) | (g) | (h) | (i) | | 2024 | $17,279,634 | $17,971,992 | N/A | N/A | $7,433,349 | $8,056,184 | $195 | $278 | $154.632 | $1,430.530 | | 2023 | $14,563,163 | $13,144,670 | N/A | N/A | $5,281,405 | $413,716 | $177 | $191 | $107.959 | $1,158.530 | | 2022 | $20,970,696 | $16,561,640 | $11,063,656 | $12,634,504 | $6,105,139 | $6,838,009 | $198 | $200 | $52.451 | $929.445 | | 2021 | N/A | N/A | $8,448,615 | $25,394,875 | $3,648,473 | $11,377,538 | $202 | $166 | $75.714 | $703.509 |
CEO Pay Ratio
CEO Pay Ratio Our compensation and benefits philosophy and the overall structure of our compensation and benefit programs are broadly similar across the organization to encourage and reward all employees who contribute to our success. Our ongoing commitment to pay equity is critical to our success in supporting a diverse workforce with opportunities for all employees to grow, develop, and contribute. We are required by applicable SEC rules to disclose information about the CEO Pay Ratio, or the ratio of the annual total compensation of our Chief Executive Officer to the annual total compensation of our median employee. Methodology We identified our median employee, the employee with compensation at the median of annual total compensation of all of our employees excluding our CEO, based on the following: •To identify our median employee, we considered the individuals employed by us on March 31, 2024, or our Determination Date, whether employed on a full-time, part-time, or temporary basis. We did not include any contractors or other non-employee workers in our employee population. On March 31, 2024, our global population of full-time, part-time, and temporary employees (including our CEO) consisted of 4,737 employees. •To identify our median employee, we used a consistently applied compensation measure consisting of the annual base salary on March 31, 2024, the target incentive cash compensation for fiscal 2024 (including corporate bonus plan and commission plans under our sales and services incentive plans), and the grant date fair value for equity awards granted during fiscal 2024. We selected these compensation elements because they represent our principal broad-based compensation elements. We did not perform adjustments to the base salaries of part-time employees to calculate what they would have been paid on a full-time basis and did not make any cost-of-living adjustments. We converted all local currencies to U.S. dollars based on the applicable exchange rates in effect on March 31, 2024, similar to how we converted foreign currency amounts into U.S. dollars in the Summary Compensation Table. Using this methodology, we determined that the median employee (excluding our CEO) was a full-time salaried employee working as a sales development representative in the United States who was not awarded equity during fiscal 2024. CEO Pay Ratio Once our median employee was identified, we calculated the median employee’s annual total compensation in accordance with the requirements of the Summary Compensation Table. The annual total compensation of the median employee (excluding our CEO) was $126,463 for fiscal 2024. Our CEO’s annual total compensation as reported in the Summary Compensation Table was $17,279,634 for fiscal 2024. Based on this information, the CEO Pay Ratio was approximately 137:1 for fiscal 2024. This information is being provided for compliance purposes and is a reasonable estimate calculated in a manner consistent with SEC rules, based on our internal records and the methodology described above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices, operate in different countries and may use different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. We are a global company with approximately 67% of our employees located outside the United States as of March 31, 2024. As a result, our employee population is different than other companies. Neither the Compensation Committee nor management of the company used the CEO Pay Ratio measure in making compensation decisions.