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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment No. )
|
Filed by the Registrant |
|
Filed by a Party other than the Registrant |
Check the appropriate box: |
|
Preliminary Proxy Statement |
|
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
|
Definitive Proxy Statement |
|
Definitive Additional Materials |
|
Soliciting Material under §240.14a-12 |
NUTANIX,
INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
Payment of Filing Fee (Check all boxes that apply): |
|
No fee required |
|
Fee paid previously with preliminary materials |
|
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11. |
LETTER FROM OUR PRESIDENT AND CHIEF
EXECUTIVE OFFICER
Dear Stockholders,
This past fiscal year has been one with
several milestones at Nutanix. We had another year of 25%+ ACV billings growth, generated more than $200 million of free cash flow, achieved
non-GAAP operating income for the first time in company history, announced a $350 million share repurchase authorization, delivered our
hybrid multicloud offering on Microsoft Azure, and put out a bold long-term vision of portable apps and data with Project Beacon.
A lot was accomplished in what we consider
to be the final year of the transformation phase of the subscription journey. We are now well positioned for a strong fiscal 2024 with
a number of secular tailwinds at our back.
CIOs are Thinking Hybrid Multicloud
With the pandemic behind us, CIOs have
a lot to think about. Depending on where each customer is on the spectrum, they are modernizing legacy infrastructure, building and running
modern apps, managing apps and data across multiple clouds, and in some bleeding edge cases, thinking about building portable apps that
can be built once and run anywhere.
This is a stark contrast from the pandemic
days when seemingly the only thing on every CIO’s mind was “how fast can we go to the public cloud?”. Today, the conversation
has shifted to “what makes the most sense for my business?” and many CIOs are coming to the conclusion that a hybrid multicloud
setup is where they want to be.
Our Mission Aligns with CIO Priorities
As many of you know, our mission is
to delight customers with an open hybrid multicloud platform with rich data services to run and manage apps anywhere. That starts with
on-prem customers modernizing their legacy infrastructure and apps. There continues to be a large opportunity here for Nutanix to help
our customers. According to research by IDC and Bain Capital, just 17% of the total addressable market (TAM) for business critical apps
and data management and 16% of general purpose IT workloads have been modernized.(1) And this is not accounting for the yet-to-be
quantified but rapidly growing generative AI opportunity.
For IT teams building new apps today,
a container-based approach is largely preferred for portability across platforms. Nutanix offers a choice of major Kubernetes platforms
to run on, resulting in improved developer productivity with self-service APIs and tools, lower total cost of ownership with our scale-out
architecture, and faster time to market with pre-validated designs. This differentiation has helped us land some large customer wins recently.
2023 PROXY STATEMENT 01
For those on the bleeding edge, there
is a high level of mindshare today on generative AI, given the possibilities that this technology brings with use cases such as fraud
detection, customer service, and search and analysis. We expect generative AI to be deployed everywhere – training models with large
data sets in the public cloud, fine tuning these models with proprietary datasets at the core data centers, and finally running apps with
compact AI inference at the edge. Through GPT-in-a-Box, Nutanix offers a full AI stack that can be delivered anywhere, from small-scale
edge to large-scale private clouds.
And finally, for customers looking to
run their workloads across private and public clouds, we are able to extend our platform to where the customer wants to be. Today, we
support the leading public cloud platforms of Amazon Web Services (AWS) and Microsoft Azure. Customers are using us to move and run apps
without refactoring or rearchitecting, quickly build out disaster recovery sites, and to rapidly burst into the public cloud for seasonal
demand.
Our vision is to take this flexibility
to the next level by enabling developers to build apps once and run them anywhere. As a company thus far, we’ve largely focused
on the infrastructure layer of the IT stack. With our upcoming Database-as-a-Service offering, we are moving into the Platform-as-a-Service
layer. In the future, we look to provide additional services such as messaging, caching, and search to enable customers to build truly
portable apps that they can build once and run anywhere. Not only would this deliver tremendous flexibility for our customers but also
provide massive incremental opportunities for us as a company.
Customers Love Us
Besides our widely loved products, the
one constant throughout our existence has been our intense customer focus. We are at almost 25,000 customers - not a small feat considering
that we had just 200 customers ten years ago. We have more than 1,000 customers in the Forbes Global 2000 and they have a lifetime dollar
expansion(2) of 26x with us since initial purchase. Our overall Net Retention Rate is greater than 120% combined with a Gross
Retention Rate of greater than 90%. Combined with an industry leading Net Promoter Score of greater than 90 over the last eight years,
we are truly in a good place with our customers.
Market Conditions Aligned for a
Sustainable Multi-Year Growth Story
With our customers supporting us, we’ve
delivered strong topline growth, free cash flow generation, and a clear hybrid multicloud vision over the last few years. As we step into
the scaling phase of our subscription journey, we believe we are positioned for sustainable multi-year profitable growth.
Beyond the clear alignment of our hybrid
multicloud vision with customers, we are building a strong and growing partner ecosystem. On the public cloud, our solution is now available
through the marketplaces of both AWS and Azure. Our expanding partnerships with Red Hat and Citrix are opening up new opportunities for
modern applications and expanding our footprint for VDI.
The changing competitive landscape is
also proving to be a tailwind. We recently announced a strategic and OEM partnership with Cisco. This brings the scale of Cisco’s
go-to-market engine to expand our reach. Finally, the pending acquisition of our leading competitor is increasing customer interest in
our solutions and has been helping build a strong pipeline that we expect will extend for years to come. There are some early wins but
a lot more to come in the next several quarters.
Strong Top and Bottom Line Performance
With this backdrop, we are driving toward
achieving $3 billion of Annual Recurring Revenue (ARR) by fiscal 2027. That would be sustained growth of ~20% CAGR from fiscal 2023 while
generating expected free cash flow of $700-900 million.
Beyond realizing our technology vision,
we continue to relentlessly focus on go-to-market priorities. We are strengthening our go-to-market engine with top talent from the industry,
taking advantage of the competitive landscape. We are moving up the pyramid, focusing our direct sales force on the 25,000 customers where
we believe >90% of our serviceable available market(3) sits. Our channel partners have full autonomy to focus on the next
tier of 75,000 potential customers aided by strong enablement and incentives. In parallel, we are investing in product specialists that
can help sell the full stack and drive adoption with customers.
2023 PROXY STATEMENT 02
Finally, over the last few years, we
have streamlined our sales and marketing spend as a percentage of revenue. From a high of 79% in fiscal 2020, we are now down to 45% through
strong topline growth, purposeful spend and 2x improvement in pipeline generation spend efficiency since fiscal 2021. Our long term target
is to be at 35%, comparable to the best subscription companies aided by a higher mix of efficiently transacted renewals, a growing topline,
and diligent expense management.
Why Nutanix
As we emerge from the transformation
phase of our subscription journey and enter into the scaling phase, I’m more optimistic than ever that we are well-positioned for
multi-year profitable growth. Our product strategy and vision are strongly aligned with customer needs in a hybrid multicloud world. We
are focused on delivering ARR growth of ~20% CAGR for fiscal 2023 to fiscal 2027 and generating $700-900 million of free cash flow in fiscal
2027. Above all, we continue to delight our customers with world class products and support.
With that foundation, I believe Nutanix
is well positioned to become a rule-of-40+(4) company by fiscal 2027 and to continue to deliver strong stockholder value in
the coming years.
Thank you for your continued trust and
faith in us.
Rajiv Ramaswami
President and Chief Executive Officer
(1) |
The total addressable markets are our estimates
derived from IDC and Bain Capital forecasts regarding the component markets with adjustments, some of which are based on our internal
assumptions and market experience and knowledge, made to focus only on the segments of the applicable markets that we believe are
applicable to our business. |
(2) |
Value as of Q4FY23. Global 2000 lifetime
dollar expansion is defined as ACV of total lifetime purchase divided by ACV of initial purchase, for G2K customers that have been
customers for over 18 months. G2K customers are customers who are listed on the Global 2000 list as reported and updated annually
by Forbes. |
(3) |
The serviceable available market is our estimate
derived from IDC and Gartner forecasts regarding the component markets with adjustments, some of which are based on our internal
assumptions and market experience and knowledge, made to focus only on the segments of the applicable markets that we believe are
applicable to our business. |
(4) |
Rule-of-40+ is defined as the sum of revenue
growth rate and free cash flow margin being greater than or equal to 40%. |
(5) |
Certain information contained herein, including projections, may
relate to or be based on studies, publications, surveys and other data obtained from third-party sources and our own internal estimates
and research. While we believe these third-party studies, publications, surveys and other data are reliable as of the date hereof,
they have not been independently verified, and we make no representation as to the adequacy, fairness, accuracy, or completeness
of any information obtained from third-party sources. |
2023 PROXY STATEMENT 03
Cautionary Note Regarding Forward-Looking
Statements. This letter and the accompanying proxy statement contain forward-looking statements, which statements involve substantial
risks and uncertainties. Other than statements of historical fact, all statements contained in this proxy statement, including statements
regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations,
are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,”
“continue,” “anticipate,” “plan,” “intend,” “could,” “would,”
“expect,” “look to” or words or expressions of similar substance or the negative thereof, that convey uncertainty
of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements included in this letter and
the accompanying proxy statement include statements regarding: our vision of, and plans for, enabling portable apps and data with Project
Beacon (including the market opportunities); total addressable and serviceable available markets; generative AI deployment; sustainable
multi-year profitable growth; expanding partnerships; competitive tailwinds; pipeline build; and financial projections (including projections
for ARR, free cash flow, sales and marketing spend, and becoming a rule-of-40+ company). We have based these forward-looking statements
largely on our current expectations and projections about future events and trends that we believe may affect our financial condition,
results of operations, business strategy, short-term and long-term business operations and objectives and financial needs in light of
the information currently available to us. These forward-looking statements are subject to a number of risks, uncertainties and assumptions,
including those described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2023 filed with the Securities and Exchange
Commission on September 21, 2023. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from
time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking
statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and trends discussed in this
proxy statement may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking
statements. You should not rely upon forward-looking statements as predictions of future events.
2023 PROXY STATEMENT 04
NOTICE OF 2023 ANNUAL MEETING OF STOCKHOLDERS
To Be Held Virtually
on
Friday, December 8, 2023
at 9:00 a.m., Pacific Time
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REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS: |
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Internet
Visit the website listed on your proxy card |
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Telephone
Call the telephone number on your proxy card |
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Mail
Sign, date, and return your proxy card in the enclosed envelope |
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Vote during the Meeting
Vote online during the Annual Meeting |
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Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on December 8, 2023: This
Notice, the Proxy Statement and the Annual Report are available at www.proxyvote.com. |
To the Stockholders of Nutanix, Inc.:
On behalf of our Board of Directors,
it is our pleasure to invite you to attend the 2023 annual meeting of stockholders (including any adjournment or postponement thereof,
the “Annual Meeting”) of Nutanix, Inc. The Annual Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/NTNX2023
on Friday, December 8, 2023, at 9:00 a.m., Pacific Time.
We are holding the Annual Meeting for
the following purposes:
Proposals |
|
Board vote recommendation |
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For further
details |
1. |
Election of Three Class I Directors Named in the Proxy Statement |
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FOR |
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Page 21 |
2. |
Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public Accounting
Firm for Fiscal Year 2024 |
|
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FOR |
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Page 30 |
3. |
Advisory Vote to Approve the Compensation of our Named Executive Officers |
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FOR |
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Page 33 |
4. |
Approval of Amendment to Amended and Restated Certificate of Incorporation to Permit the Exculpation
of Officers |
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FOR |
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Page 63 |
We are also holding the Annual Meeting
to conduct any other business properly brought before the meeting.
These items of business are more fully
described in the proxy statement accompanying this Notice.
The record date for the Annual Meeting
is October 10, 2023. Only stockholders of record of our Class A common stock at the close of business on the record date may vote at the
Annual Meeting.
On or about October [xx],
2023, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our
proxy statement and annual report. This notice provides instructions on how to vote via the Internet or by telephone and includes instructions
on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed
directly at the following Internet address: www.proxyvote.com. You will be asked to enter the sixteen-digit control number located on
your notice or proxy card.
2023 PROXY STATEMENT 05
In the event of a technical malfunction
or other situation that the meeting chair determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting
of stockholders to be held by means of remote communication under applicable Delaware corporate law, or that otherwise makes it advisable
to adjourn the Annual Meeting, the chair or secretary of the Annual Meeting will convene the meeting at 12:00 p.m. Pacific Time on the
date specified above and at our address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time
and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information
regarding the announcement on our investor relations website at http://ir.nutanix.com.
By Order of the Board of Directors,
Rajiv Ramaswami
President and Chief Executive
Officer
San Jose, California
October [xx], 2023
You are cordially invited to attend
the virtual Annual Meeting. YOUR VOTE IS IMPORTANT. Whether or not you expect to attend the Annual Meeting, you are urged to vote and
submit your proxy by following the voting procedures described in the proxy card. Even if you have voted by proxy, you may still vote
during the Annual Meeting. If your shares are held of record by a broker, bank or other agent and you wish to vote during the Annual Meeting,
you must follow the instructions from your broker, bank or other agent.
2023 PROXY STATEMENT 06
PROXY STATEMENT
For the 2023 Annual Meeting
of Stockholders
To Be Held on Friday, December
8, 2023 at 9:00 a.m., Pacific Time
Our Board of Directors is soliciting
your proxy to vote at the 2023 annual meeting of stockholders (including any adjournment or postponement thereof, the “Annual
Meeting”) of Nutanix, Inc. to be held via live webcast at www.virtualshareholdermeeting.com/NTNX2023 on Friday, December
8, 2023 at 9:00 a.m., Pacific Time.
For the Annual
Meeting, we have elected to furnish our proxy materials, including this proxy statement and our Annual Report on Form 10-K for
the fiscal year ended July 31, 2023, to our stockholders primarily via the Internet. On or about October [XX],
2023, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) that
contains notice of the Annual Meeting and instructions on how to access our proxy materials on the Internet, how to vote at the
Annual Meeting, and how to request printed copies of the proxy materials. Stockholders may request to receive all future materials
in printed form by mail or electronically by e-mail by following the instructions contained in the Notice. We encourage stockholders
to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact and cost of
our annual meetings.
Only stockholders
of record of our Class A common stock at the close of business on October 10, 2023, the record date for the Annual Meeting, will
be entitled to vote at the Annual Meeting. On the record date, there were 243,416,881 shares
of Class A common stock outstanding and entitled to vote. A list of stockholders entitled to vote at the Annual Meeting will be
available for examination during normal business hours for a period of ten days ending on the day before the Annual Meeting at
our principal place of business at 1740 Technology Dr., Suite 150, San Jose, California 95110.
A copy of our Annual Report
on Form 10-K for the fiscal year ended July 31, 2023, which was filed with the Securities and Exchange Commission (the “SEC”)
on September 21, 2023, accompanies this proxy statement. You also may obtain, without charge, copies of this proxy statement and
our Annual Report by writing to our Secretary at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110 or
by following the directions set forth in the Notice.
In this proxy statement, we
refer to Nutanix, Inc. as “Nutanix,” “we,” “us” or “our company” and the Board
of Directors of Nutanix, Inc. as “our Board.” The content of any websites referred to in this proxy statement are not
deemed to be part of, and are not incorporated by reference into, this proxy statement.
2023 PROXY STATEMENT 08
PROXY VOTING ROADMAP
This roadmap highlights certain
information contained elsewhere in this proxy statement. This roadmap does not contain all of the information that you should consider,
and we encourage you to read the entire proxy statement before voting.
Annual Meeting Information
|
|
|
|
|
Time
and Date |
|
Virtual
Meeting Site |
|
Record
Date |
9:00 a.m. Pacific Time
Friday, December 8, 2023 |
|
www.virtualshareholdermeeting.com/NTNX2023 |
|
October 10, 2023 |
Proposal 1:
Election of Three Class I Directors (See Page 21)
|
OUR
BOARD RECOMMENDS A VOTE FOR MAX DE GROEN, STEVEN J. GOMO, AND MARK TEMPLETON AS CLASS I DIRECTORS. |
Nominees
Our Class I directors currently
consist of Max de Groen, Steven J. Gomo, and Mark Templeton. Mr. de Groen, Mr. Gomo, and Mr. Templeton have each been nominated
to continue to serve as Class I directors, and each of them has agreed to stand for re-election at the Annual Meeting. Mr. Templeton
was appointed to our Board on July 24, 2023 and joined the Compensation Committee and the Security and Privacy Committee on September
13, 2023. The following provides summary information about each Class I director nominee.
Name |
Age |
Audit
Committee |
Compensation
Committee |
Nominating
and
Corporate
Governance
Committee |
Security and Privacy Committee |
Independent |
Director Since |
Max de Groen |
38 |
|
|
|
|
|
2020 |
Steven J. Gomo |
71 |
|
|
|
|
|
2015 |
Mark Templeton |
71 |
|
|
|
|
|
2023 |
|
Chair |
|
Member |
|
2023 PROXY STATEMENT 09
Corporate Governance Highlights
Board Composition |
|
• 8
out of our 9 directors are independent. |
|
|
• 2
out of 9 directors are women. |
Average Tenure |
|
• Average
tenure of our Board is 3.7 years. |
Independent Chair of our Board |
|
• We
have an independent Chair of our Board. |
Independent Board Committees |
|
• We
have an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Security and Privacy
Committee, each of which is composed entirely of independent directors. |
Single Voting Class; One Share, One Vote |
|
• We
have a single class of common stock with equal voting rights. |
|
|
• Each
share of our Class A common stock is entitled to one vote. |
Declassification of our Board |
|
• Our
classified board structure will be phased out beginning with this year’s annual meeting of stockholders so that our Board
will be fully declassified by our 2025 annual meeting of stockholders. |
Majority Voting Standard; Irrevocable Offer to Resign |
|
• Majority
voting standard applies to uncontested director elections. |
|
|
• Directors
tender an irrevocable offer to resign if they do not receive majority vote and our Board will accept such offer to resign absent
a compelling reason. |
No Supermajority Voting Requirements |
|
• Our
certificate of incorporation and bylaws do not contain supermajority voting requirements. |
Annual Board and Committee Self-Assessments |
|
• Our
Board and its committees conduct annual self-assessments. |
No “Poison Pill” |
|
• We
do not have a stockholder rights plan, or “poison pill,” in place. |
Annual Auditor Ratification |
|
• Stockholders
have the opportunity to ratify the Audit Committee’s selection of our independent registered public accounting firm annually. |
Executive Sessions |
|
• Non-Employee
Directors regularly hold executive sessions without management present. |
Stock Ownership Guidelines |
|
• Non-Employee
Directors are subject to stock ownership guidelines. |
Our Board believes
that it is in the best interests of our company and our stockholders to re-elect each Class I director nominee to one-year terms
as Class I directors. Accordingly, our Board unanimously recommends stockholders vote FOR
the election of each Class I director nominee.
The election of
each Class I director nominee requires that the number of shares voted FOR the
nominee’s election exceeds the number of votes cast AGAINST such
nominee’s election.
2023 PROXY STATEMENT 10
Proposal 2:
Ratification of Selection of Independent Registered Public Accounting Firm (See Page 30)
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 2. |
The Audit Committee has re-appointed
Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2024, and has
further directed that management submit this selection for ratification by our stockholders at the Annual Meeting. Although ratification
by our stockholders is not required by law, we have determined that it is good practice to request ratification of this selection
by our stockholders. In the event that Deloitte & Touche LLP is not ratified by our stockholders, the Audit Committee
will review its future selection of Deloitte & Touche LLP as our independent registered public accounting firm.
Principal Accountant Fees
and Services
The following table provides
the aggregate fees for services provided by Deloitte & Touche LLP for the fiscal years ended July 31, 2022 and 2023.
|
Fiscal Year Ended July 31, |
|
2022
($) |
|
2023
($) |
Audit fees(1) |
3,574,000 |
|
5,008,855 |
Audit-related fees(2) |
— |
|
— |
Tax fees(3) |
548,816 |
|
731,810 |
TOTAL FEES |
4,122,816 |
|
5,740,665 |
(1) |
Consists of fees billed for professional services rendered in connection
with the audit of our consolidated financial statements, including audited financial statements presented in our Annual Report
on Form 10-K, review of the interim consolidated financial statements included in our quarterly reports, services normally
provided in connection with regulatory filings and, for the fiscal year ended July 31, 2023, also includes fees incurred in
connection with the Audit Committee’s previously completed investigation. |
(2) |
Consists of fees billed for assurance and related services that are reasonably related
to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit
Fees.” |
(3) |
Consists of fees billed for professional services for tax compliance, tax advice and
tax planning. These services include assistance regarding federal, state and international tax compliance. |
Our Board believes
that it is in the best interests of our company and our stockholders to approve the ratification of the selection of Deloitte &
Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2024. Accordingly, our Board
unanimously recommends a vote FOR the approval of
the ratification of our auditors.
Approval of Proposal
2 requires FOR votes from the holders of a majority
in voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal.
Broker non-votes will not be considered entitled to vote on this proposal, and therefore will not affect the outcome of Proposal
2, but abstentions will have the same effect as a vote AGAINST the
proposal.
2023 PROXY STATEMENT 11
Proposal 3:
Advisory Vote to Approve the Compensation of Our Named Executive Officers (See Page 33)
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 3. |
We endeavor to maintain sound
governance standards consistent with our executive compensation policies and practices. The Compensation Committee evaluates our
executive compensation program on a regular basis to ensure consistency with our short-term and long-term goals, given the dynamic
nature of our business and the market in which we compete for executive talent.
Our executive compensation program
is designed to attract, motivate, and retain highly qualified executive officers who drive our success and to align the interests
of our executive officers with the long-term interests of our stockholders. The section “Compensation Discussion and Analysis”
provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and
each component of the program. In addition, we explain how and why the Compensation Committee arrived at the specific compensation
policies and decisions involving our executive compensation program.
The say-on-pay vote
is advisory, and therefore not binding on us. The say-on-pay vote will, however, provide information to us regarding stockholder
sentiment about our executive compensation philosophy, policies and practices, which the Compensation Committee will be able to
consider when determining executive compensation for the remainder of the current fiscal year and beyond. Our Board believes that
our executive compensation program was designed appropriately and is working to ensure management’s interests are aligned
with our stockholders’ interests to support long-term value creation. Accordingly, our Board unanimously recommends a vote
FOR the approval of the compensation of our named
executive officers.
Approval of Proposal
3 requires FOR votes from the holders of a majority
in voting power of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal.
Broker non-votes will not be considered entitled to vote on this proposal, and therefore will not affect the outcome of Proposal
3, but abstentions will have the same effect as a vote AGAINST the
proposal.
Proposal 4:
Approval of Amendment to Amended and Restated Certificate of Incorporation to Permit the Exculpation of Officers (See Page 63)
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 4. |
Effective August 1, 2022, the
State of Delaware, which is our company’s state of incorporation, enacted legislation that enables Delaware corporations
to limit the liability of certain of their officers in limited circumstances. In light of this update in the law, we are proposing
to amend our Amended and Restated Certificate of Incorporation to provide for the exculpation of certain of our officers from liability
in specific circumstances, as permitted by Delaware law. The amended Delaware statute permits officer exculpation only for direct
claims (and not for, e.g., derivative claims made by stockholders on behalf of the corporation) and does not apply to breaches
of the duty of loyalty, acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law,
or any transaction in which the officer derived an improper personal benefit. Our proposed amendment would permit exculpation of
certain officers only to the extent permitted under Delaware law. After considering the benefits and the consequences of these
updates and the recommendation of the Nominating and Corporate Governance Committee of our Board, our Board believes that amending
our Amended and Restated Certificate of Incorporation to provide for such exculpation remedies the inconsistent treatment of officers
and directors under Delaware law, to the fullest extent permitted by Delaware law, notwithstanding that both officers and directors
have similar fiduciary duties. Our Board also believes this proposed amendment will strike a balance between stockholders’
interest in accountability and their interest in our company being able to attract and retain quality officers to work on its behalf.
Further, our Board has considered the extent of exculpation provided under the law and, accordingly, under this proposed amendment
to our Amended and Restated Certificate of Incorporation, has determined that such amendment is reasonable and does not unduly
impact stockholder rights.
2023 PROXY STATEMENT 12
Taking into account the scope
of claims for which an officer’s liability would be exculpated, and the benefits our board of directors believes would accrue
to our company and our stockholders, including, but not limited to the enhanced ability to attract and retain talented officers,
the Nominating and Corporate Governance Committee of our Board has recommended that our Board approve the amendment of our Amended
and Restated Certificate of Incorporation to permit officer exculpation in certain circumstances. Based on this recommendation
and the review and consideration undertaken by our Board, our Board has unanimously determined and declared that it is advisable
and in the best interests of our company and our stockholders to amend our Amended and Restated Certificate of Incorporation to
provide such exculpation to the extent permitted by Delaware law, and in accordance with Delaware law, hereby seeks approval of
the amendment of our Amended and Restated Certificate of Incorporation as described herein. However, even if the amendment is approved
by our stockholders, our Board may, at any time prior to the effectiveness of the filing of the Certificate of Amendment with the
Delaware Secretary of State, abandon the filing of such amendment without further action by our stockholders.
The proposed Certificate of Amendment
to the Amended and Restated Certificate of Incorporation reflecting the foregoing amendment is attached as Appendix B to this proxy
statement.
Proposal 4 is a
result of the ongoing review of our corporate governance policies by the Nominating and Corporate Governance Committee of our Board
of Directors. Our Board believes that it is in the best interests of our company and our stockholders to approve the Certificate
of Amendment in order to permit officer exculpation in certain circumstances. Accordingly, our Board unanimously recommends a vote
FOR the approval of Proposal 4.
Approval of Proposal
4 requires FOR votes from the holders of at least
a majority of the voting power of the outstanding shares of our capital stock entitled to vote on the proposal. Abstentions and
broker non-votes will have the same effect as a vote AGAINST the
proposal. If Proposal 4 is not approved by the requisite vote of our stockholders, then the Certificate of Amendment will not be
filed with the Secretary of State of the State of Delaware and our Amended and Restated Certificate of Incorporation will remain
as is.
2023 PROXY STATEMENT 13
CORPORATE GOVERNANCE
We are strongly
committed to good corporate governance practices. These practices provide an important framework within which our Board and management
can pursue our strategic objectives for the benefit of our stockholders. Our Board has adopted corporate governance guidelines
that set forth the role of our Board, director independence standards, Board structure and functions, director selection considerations,
and other governance policies. In addition, our Board has adopted written charters for its standing committees (the Audit Committee,
the Compensation Committee, the Nominating and Corporate Governance Committee, and the Security and Privacy Committee), as well
as a code of business conduct and ethics that applies to all of our employees, officers and directors. Agents and contractors of
our company are also expected to abide by our code of business conduct and ethics. The Nominating and Corporate Governance Committee
reviews the corporate governance guidelines annually and recommends changes to our Board as warranted. The corporate governance
guidelines, committee charters, and the code of business conduct and ethics, and any waivers or amendments to the code of business
conduct and ethics, are all available in the “Governance Documents”
section of our investor relations website at http://ir.nutanix.com.
Board of Directors and Its Committees
Current Composition of the Board of Directors
and its Committees
Name |
|
Age |
|
Audit
Committee |
|
Compensation
Committee |
|
Nominating
and Corporate
Governance
Committee |
|
Security
and Privacy
Committee |
|
Independent |
|
Director
Since |
Class I directors whose terms expire at the Annual Meeting |
|
|
|
Max
de Groen |
|
38 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Steven
J. Gomo |
|
71 |
|
|
|
|
|
|
|
|
|
|
|
2015 |
Mark
Templeton |
|
71 |
|
|
|
|
|
|
|
|
|
|
|
2023 |
Class II directors whose terms expire after fiscal year 2024 |
|
|
|
|
|
|
Craig
Conway |
|
68 |
|
|
|
|
|
|
|
|
|
|
|
2017 |
Virginia
Gambale
Chair of the Board |
|
64 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Brian
Stevens |
|
60 |
|
|
|
|
|
|
|
|
|
|
|
2019 |
Class III directors whose terms expire after fiscal year 2025 |
|
|
|
|
|
|
David
Humphrey |
|
46 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Rajiv
Ramaswami
President and CEO |
|
57 |
|
|
|
|
|
|
|
|
|
|
|
2020 |
Gayle
Sheppard |
|
69 |
|
|
|
|
|
|
|
|
|
|
|
2022 |
|
Chair |
|
Member |
|
Independent Directors |
|
Gender and Ethnic Diversity |
|
|
|
|
|
|
|
|
|
|
|
2023 PROXY STATEMENT 14
Director Independence
Our Class A common stock
is listed on the Nasdaq Global Select Market tier of The Nasdaq Stock Market LLC. Under Nasdaq listing rules, a director will only
qualify as an “independent director” if (i) the director meets the objective tests for independence set forth in Nasdaq
listing rules and (ii) the director does not have a relationship that, in the opinion of the company’s board of directors,
would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In addition, under
Nasdaq listing rules, compensation committee members must not have a relationship with the company that is material to the director’s
ability to be independent from management in connection with the duties of a compensation committee member. Additionally, audit
committee members must also satisfy the independence criteria set forth in Rule 10A-3 under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”). In order to be considered independent for purposes of Rule 10A-3, a member of an audit
committee of a listed company may not, other than in his or her capacity as a member of the audit committee, the board of directors
or any other board committee, accept, directly or indirectly, any consulting, advisory or other compensatory fee from the company
or any of its subsidiaries or be an affiliated person of the company or any of its subsidiaries.
Our Board has undertaken
a review of the independence of each of our directors and considered whether each director (i) meets the objective tests for independence
set forth in Nasdaq listing rules and (ii) has a material relationship with us that would interfere with the exercise of independent
judgment in carrying out the responsibilities of a director. As a result of this review, our Board determined that eight out of
our nine current directors are independent directors. Our independent directors are Mr. Conway, Mr. de Groen, Ms. Gambale, Mr.
Gomo, Mr. Humphrey, Ms. Sheppard, Mr. Stevens, and Mr. Templeton.
Board Diversity Matrix
Board Diversity Matrix (As of October [xx],
2023)
Total
Number of Directors |
|
|
|
|
9 |
|
|
|
|
|
|
Female |
|
Male |
|
|
|
Non-Binary |
|
Did Not
Disclose
Gender |
|
Part I: Gender Identity |
|
|
|
|
|
|
|
|
|
|
Directors |
2 |
|
7 |
|
|
|
0 |
|
0 |
|
Part II: Demographic Background |
|
|
|
|
|
|
|
|
|
|
African American or Black |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
Alaskan Native or Native American |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
Asian |
0 |
|
1 |
|
|
|
0 |
|
0 |
|
Hispanic or Latinx |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
Native Hawaiian or Pacific Islander |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
White |
2 |
|
6 |
|
|
|
0 |
|
0 |
|
Two or More Races or Ethnicities |
0 |
|
0 |
|
|
|
0 |
|
0 |
|
LGBTQ+ |
|
|
|
|
0 |
|
|
|
|
|
Did Not Disclose Demographic Background |
|
|
|
|
0 |
|
|
|
|
|
2023 PROXY STATEMENT 15
Board Leadership Structure
The Nominating and Corporate
Governance Committee periodically considers our Board’s leadership structure and makes such recommendations to our Board
as the Nominating and Corporate Governance Committee deems appropriate. Our corporate governance guidelines also provide that if
our Board does not have an independent Chair of the Board, our Board will appoint a lead independent director.
Currently, our board leadership
structure separates the positions of CEO and Chair of the Board. Mr. Ramaswami has served as our President and CEO since December
2020, and Ms. Gambale, an independent director, has served as our Chair of the Board since June 2021. Separating the positions
of CEO and Chair of the Board allows our CEO to focus on our day-to-day business, while allowing our Chair of the Board to lead
our Board in its oversight of management. Our Board believes that its independence and oversight of management are maintained effectively
through this leadership structure, the composition of our Board, and sound corporate governance policies and practices.
Executive Sessions of
Non-Employee Directors
To encourage and enhance
communication among non-employee directors, and as required under applicable Nasdaq rules, our corporate governance guidelines
provide that the non-employee directors will meet in executive sessions without management directors or company management on a
periodic basis, but no less than twice a year.
Communications with our
Board of Directors
Stockholders or interested
parties who wish to communicate with our Board or with an individual director may do so by mail to our Board or the individual
director, care of our Chief Legal Officer at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110. The communication
should indicate that it contains a stockholder or interested party communication. In accordance with our corporate governance guidelines,
all such communication will be reviewed by the Chief Legal Officer, in consultation with appropriate directors as necessary, and,
if appropriate, will be forwarded to the director or directors to whom the communications are addressed or, if none are specified,
to the Chair of the Board.
Committees of the Board
of Directors
Our Board has
established an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee, and a Security and Privacy
Committee. The composition and responsibilities of each of these committees are described below. Our Board may establish other
committees to facilitate the management of our business. Copies of the charters of the Audit Committee, the Compensation Committee,
and the Nominating and Corporate Governance Committee are available in the “Governance
Documents” section of our investor relations website at https://ir.nutanix.com. Members
serve on these committees until their resignation or until otherwise determined by our Board.
2023 PROXY STATEMENT 16
Chair:
Steven J. Gomo
Members:
• Max de Groen
• Virginia Gambale
• Gayle Sheppard
|
Audit
Committee
The
Audit Committee is comprised of Mr. de Groen, Ms. Gambale, Mr. Gomo, and Ms. Sheppard (who joined the committee
in September 2023), each of whom is a non-employee director. Mr. Gomo is the chair of the Audit Committee.
Our Board has determined that each member of the Audit Committee satisfies the requirements for
independence and financial literacy under applicable SEC rules and Nasdaq listing rules. Our Board has also
determined that Mr. de Groen, Ms. Gambale, and Mr. Gomo each satisfies the financial sophistication requirements
of Nasdaq and that Messrs. de Groen and Gomo each qualifies as an “audit committee financial expert,”
as defined in SEC rules. The Audit Committee is responsible for, among other things:
• selecting
and hiring our independent registered public accounting firm;
• evaluating
the performance and independence of our registered public accounting firm;
• pre-approving
the audit and any non-audit services to be performed by our independent registered public accounting
firm;
• reviewing
our internal controls and the integrity of our audited financial statements;
• reviewing
the adequacy and effectiveness of our disclosure controls and procedures;
• overseeing
procedures for the treatment of complaints on accounting, internal accounting controls or audit
matters;
• reviewing
and discussing with management and the independent registered public accounting firm, our audited
and quarterly unaudited financial statements, the results of our annual audit, and our publicly-filed
reports;
• reviewing
and discussing with management and the independent registered public accounting firm, our major
financial risk exposures and the steps management has taken to monitor and control those exposures;
• reviewing
and overseeing any related person transactions; and
• preparing
the audit committee report in our annual proxy statement.
|
Chair:
Max de Groen
Members:
• Craig Conway
• Brian Stevens
• Mark Templeton
|
Compensation
Committee
The Compensation
Committee is comprised of Mr. Conway, Mr. de Groen, Mr. Stevens, and Mr. Templeton (who joined
the committee in September 2023), each of whom is a non-employee director. Mr. de Groen is the chair
of the Compensation Committee. During fiscal year 2023, Ms. Sheppard also served on the Compensation Committee,
and she rotated off the committee in September 2023. Our Board has determined that each member
of the Compensation Committee meets the requirements for independence under applicable SEC rules
and Nasdaq listing rules, including a determination that each member of the Compensation Committee is
a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act. The Compensation Committee
is responsible for, among other things:
• reviewing
and approving our CEO’s and other executive officers’ annual base salaries, incentive compensation
plans, including the specific goals and amounts, equity compensation, employment agreements,
severance arrangements and change of control agreements, and any other benefits, compensation
or arrangements;
• administering
our equity compensation plans;
• overseeing
our overall compensation philosophy, compensation plans and benefits programs;
• reviewing
the compensation disclosures in our annual proxy statement; and
• reviewing
and monitoring matters related to human capital management, including talent acquisition and
retention and diversity. |
Compensation Committee
Interlocks and Insider Participation
None of the members of the
Compensation Committee has been an officer or employee of our company. None of our executive officers currently serves, or during
fiscal year 2023 has served, as a member of the compensation committee or director (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire board of directors) of any entity that has one or more executive
officers serving on the Compensation Committee or our Board.
2023 PROXY STATEMENT 17
Chair:
Virginia Gambale
Members:
• Craig Conway
• Steven J. Gomo
• David Humphrey
|
Nominating
and Corporate Governance Committee
The
Nominating and Corporate Governance Committee is comprised of Mr. Conway, Ms. Gambale, Mr. Gomo, and
Mr. Humphrey, each of whom is a non-employee director. Ms. Gambale is the chair of the Nominating and
Corporate Governance Committee. Our Board has determined that each member of the Nominating and Corporate
Governance Committee meets the requirements for independence under Nasdaq listing rules. The Nominating
and Corporate Governance Committee is responsible for, among other things:
• determining the qualifications required to be a member of our Board and recommending
to our Board the criteria to be considered in selecting director nominees;
• evaluating and making recommendations regarding the composition, organization and
governance of our Board and its committees;
• evaluating and making recommendations regarding the creation of additional committees
or the change in mandate or dissolution of committees;
• developing and monitoring a set of corporate governance guidelines;
• overseeing and periodically reviewing our environmental, social and governance activities,
programs and public disclosure; and
• reviewing and approving conflicts of interest of our directors and officers, other
than related-person transactions reviewed by the Audit Committee.
|
Chair:
Brian Stevens
Members:
• David Humphrey
• Gayle Sheppard
• Mark Templeton
|
Security
and Privacy Committee
The
Security and Privacy Committee assists our Board in its oversight of our management of technology and information
security risks and compliance with data protection and privacy laws. The Security and Privacy Committee
is comprised of Mr. Humphrey, Ms. Sheppard, Mr. Stevens, and Mr. Templeton (who joined the committee
in September 2023), each of whom is a non-employee director. Mr. Stevens is the chair of the Security
and Privacy Committee. The Security and Privacy Committee is responsible for, among other things:
• reviewing information security risk exposures (including cybersecurity and product
security risk exposures) and the strategy, systems, controls and processes to monitor
and control these risk exposures;
• reviewing incident response, business continuity and disaster recovery planning and
capabilities; and
• reviewing compliance with applicable global data protection and privacy laws and regulations. |
Other
Committees
Pursuant to our Amended and
Restated Bylaws, our Board may designate other standing or ad hoc committees to serve at the discretion of our Board from time
to time.
Board and Committee Meetings
and Attendance
Our Board is responsible
for the oversight of our company’s management and strategy and for establishing corporate policies. Our Board and its committees
meet throughout the year on a regular basis and also hold special meetings and act by written consent from time to time. During
fiscal year 2023, our Board met 16 times, the Audit Committee met 34 times (which included 24 meetings to consider and take action
on matters relating to the Audit Committee’s completed investigation into certain third-party software usage), the Compensation
Committee met 7 times, the Nominating and Corporate Governance Committee met 6 times, and the Security and Privacy Committee met
2 times. During fiscal year 2023, each director attended 75% or more of the aggregate of the meetings of our Board and of the committees
on which the director served at the time.
We encourage our directors
and nominees for director to attend our annual meeting of stockholders but do not require that they attend. Seven of our eight
then-incumbent directors attended our 2022 annual meeting of stockholders.
2023 PROXY STATEMENT 18
Risk Oversight
Our Board oversees an enterprise-wide
approach to risk management, which is designed to support the achievement of organizational objectives, including strategic objectives,
to improve long-term organizational performance and to enhance stockholder value. Our Board, as a whole, is responsible for determining
the appropriate level of risk for our company, assessing the specific risks that we face and reviewing management’s strategies
for adequately mitigating and managing the identified risks. Although our Board is responsible for administering this risk management
oversight function, the committees of our Board support our Board in discharging its oversight duties and addressing risks inherent
in their respective areas.
The Audit Committee considers
and discusses our major financial risk exposures and the steps our management has taken to monitor and control these exposures,
including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee
also monitors compliance with legal and regulatory requirements, in addition to oversight of the performance of our internal audit
function. The Nominating and Corporate Governance Committee monitors the effectiveness of our corporate governance guidelines.
The Compensation Committee assesses and monitors whether our compensation philosophy and practices have the potential to encourage
excessive risk-taking and evaluates compensation policies and practices that could mitigate such risks. The Security and Privacy
Committee monitors our technology and information security risk exposures (including cybersecurity and product security risk exposures).
At periodic meetings of our
Board and its committees, management reports to and seeks guidance from our Board and its committees with respect to the most significant
risks that could affect our business, such as legal, financial, tax and audit related risks. In addition, management provides the
Audit Committee with periodic reports on our compliance programs and investment policy and practices.
Environmental, Social, and
Governance
In demonstrating our commitment
to environmental, social, and governance issues and the important part they play in our success, we published our third annual
Environmental, Social, and Governance Report in 2023. We encourage you to read our Environmental, Social, and Governance Report
at https://ir.nutanix.com. The report provides a high-level overview on our views, approach to, and performance around environmental,
social, and governance matters. The report is not incorporated by reference herein and is not a part of this proxy statement.
Nominations Process and
Director Qualifications
Nomination to the Board
of Directors
Candidates for
nomination to our Board are selected by our Board based on the recommendation of the Nominating and Corporate Governance Committee
in accordance with the committee’s charter, our policies, our Amended and Restated Certificate of Incorporation and Amended
and Restated Bylaws, our corporate governance guidelines, the criteria adopted by our Board regarding director candidate qualifications,
and the requirements of applicable law. In recommending candidates for nomination, the Nominating and Corporate Governance Committee
considers candidates recommended by directors, officers, and employees, as well as candidates that are properly submitted by stockholders
in accordance with our policies and Amended and Restated Bylaws, using the same criteria to evaluate all such candidates. A stockholder
that wishes to recommend a candidate for election to our Board may send a letter directed to our Chief Legal Officer at Nutanix,
Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110. The letter must include, among other things, the candidate’s
name, home and business contact information, detailed biographical data, relevant qualifications, a representation and undertaking
from the candidate to serve a full term on our Board if elected, and information regarding any relationships between the candidate
and our company. Additional information regarding the process for properly submitting stockholder nominations for candidates for
membership on our Board is set forth above under “Questions and Answers About Proxy Materials
and Voting” and in our Amended and Restated Bylaws.
Evaluations of candidates
generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate
and, in addition, the Nominating and Corporate Governance Committee may engage consultants or third-party search firms to assist
in identifying and evaluating potential nominees.
2023 PROXY STATEMENT 19
Bain Board Nomination Rights
In August 2020, we entered
into an investment agreement with BCPE Nucleon (DE) SPV, LP (collectively with its affiliates, “Bain”) relating to
the issuance and sale to Bain of $750 million in an initial aggregate principal amount of our 2.50% convertible senior notes
due 2026. Pursuant to this investment agreement, we appointed two Bain nominees, David Humphrey and Max de Groen, to our Board
in September 2020. In general, Bain will continue to be entitled to have two nominees designated to our Board. However, if, at
any time, Bain beneficially owns less than 50% of the common stock underlying the convertible senior notes (on an as-converted
basis, and assuming full physical settlement), Bain will be entitled to have only one nominee designated to our Board, and if,
at any time, Bain beneficially owns less than 25% of the common stock underlying the convertible senior notes (on an as-converted
basis, and assuming full physical settlement), Bain will not be entitled to have any nominee designated to our Board. Further,
Bain will not have a right to nominate (i) a second member to our Board, if Bain beneficially owns less than 9.09% of
all of our common stock then outstanding (on an as-converted basis, and assuming full physical settlement), even if Bain otherwise
beneficially owns at least 50% of the common stock underlying the convertible senior notes (on an as-converted basis, and assuming
full physical settlement), or (ii) any member to our Board, if Bain collectively beneficially owns less than 4.0% of all of
our common stock then outstanding (on an as-converted basis, and assuming full physical settlement), even if Bain otherwise beneficially
owns at least 25% of the common stock underlying the convertible senior notes (on an as-converted basis, and assuming full physical
settlement).
Director Qualifications
With the goal of developing
a diverse, experienced and highly qualified board of directors, the Nominating and Corporate Governance Committee is responsible
for developing and recommending to our Board the desired qualifications, expertise and characteristics of members of our Board,
including qualifications that the committee believes must be met by a committee-recommended nominee for membership on our Board
and specific qualities or skills that the committee believes are necessary for one or more of the members of our Board to possess.
In addition to the qualifications,
qualities, and skills that are necessary to meet U.S. state and federal legal, regulatory and Nasdaq listing requirements and the
provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, corporate governance guidelines,
and charters of the board committees, the Nominating and Corporate Governance Committee requires the following minimum qualifications
to be satisfied by any nominee for a position on our Board: (i) the highest personal and professional ethics and integrity,
(ii) proven achievement and competence in the nominee’s field and the ability to exercise sound business judgment, (iii) skills
that are complementary to those of the existing directors, (iv) the ability to assist and support management and make significant
contributions to our success, and (v) an understanding of the fiduciary responsibilities that are required of a member of
our Board and the commitment of time and energy necessary to diligently carry out those responsibilities. When considering nominees,
the Nominating and Corporate Governance Committee may take into consideration many other factors including, among other things,
the candidates’ character, integrity, judgment, independence, area of expertise, corporate experience, length of service,
and potential conflicts of interest, the candidates’ other commitments, diversity with respect to professional background,
education, race, ethnicity, gender, age and geography, and the size and composition of our Board and the needs of our Board and
its committees. Our Board and the Nominating and Corporate Governance Committee believe that a diverse, experienced and highly
qualified board of directors fosters a robust, comprehensive and balanced decision-making process for the continued effective functioning
of our Board and success of our company. Accordingly, through the nomination process, the Nominating and Corporate Governance Committee
seeks to promote board membership that reflects diversity, factoring in gender, race, ethnicity, differences in professional background,
education, skill, and experience, and other individual qualities and attributes that contribute to the total mix of viewpoints
and experience. The Nominating and Corporate Governance Committee evaluates the foregoing factors, among others, and does not assign
any particular weighting or priority to any of the factors.
The brief biographical
description of each director set forth in “Proposal 1 – Election of Directors”
includes the primary individual experience, qualifications, attributes and skills of each of our directors that led to the conclusion
that each director should serve as a member of our Board at this time.
2023 PROXY STATEMENT 20
Proposal 1: Election of Directors
|
OUR BOARD RECOMMENDS
A VOTE FOR MAX DE GROEN, STEVEN J. GOMO, AND MARK TEMPLETON AS CLASS I DIRECTORS. |
Our Board currently consists of nine members. Our
directors are currently divided into three classes as follows:
• |
Class I directors: Max de Groen,
Steven J. Gomo, and Mark Templeton, whose terms will expire at the Annual Meeting, unless re-elected. |
• |
Class II directors: Craig Conway, Virginia Gambale,
and Brian Stevens, whose terms will expire at the annual meeting of stockholders to be held after the end of the fiscal year
ending July 31, 2024. |
• |
Class III directors: David Humphrey, Rajiv Ramaswami,
and Gayle Sheppard, whose terms will expire at the annual meeting of stockholders to be held after the end of the fiscal year
ending July 31, 2025. |
Any additional directorships resulting from an increase
in the number of directors will be distributed among the three classes so that, as nearly as possible, each class will consist
of one-third of the directors. While our classified board structure may delay or prevent a change of our management or a change
of control of our company, our classified board structure is being phased out starting with the Annual Meeting. Accordingly, the
directors whose terms will expire at the Annual Meeting will stand for election to serve for a one-year term instead of a three-year
term.
Mr. de Groen, Mr. Gomo, and Mr. Templeton have each
been nominated to continue to serve as Class I directors for a one-year term, and each of them has agreed to stand for re-election
at the Annual Meeting. Our management has no reason to believe that Mr. de Groen, Mr. Gomo, and Mr. Templeton will be unable to
serve as Class I directors. If elected at the Annual Meeting, Mr. de Groen, Mr. Gomo, and Mr. Templeton have each been nominated
to continue to serve as Class I directors would each serve until the annual meeting of stockholders to be held after the end of
fiscal year 2024 and until his successor has been duly elected, or if sooner, until his death, resignation or removal.
Vote Required
Directors are elected by the affirmative
vote of a majority of the votes cast, meaning that the number of shares voted FOR a
director’s election exceeds the number of votes cast AGAINST such
director’s election. Withhold votes and broker non-votes have no legal effect on the outcome. Shares represented by executed
proxies will be voted, if authority to do so is not withheld, for the election of the three nominees named above. If any nominee
becomes unavailable for election as a result of an unexpected occurrence, shares that would have been voted for that nominee will
instead be voted for the election of a substitute nominee proposed by us. In October 2022, we amended and restated our Amended
and Restated Bylaws to provide for majority voting in uncontested director elections and updated our corporate governance guidelines
to require directors to tender an irrevocable offer to resign if they do not receive majority vote and our Board to accept such
offer to resign absent a compelling reason.
Nominees
The Nominating and Corporate Governance Committee
seeks to assemble a board of directors that, as a group, can best perpetuate the success of the business and represent stockholder
interests through the exercise of sound judgment using its diversity of background and experience in various areas. To that end,
the committee has identified and evaluated nominees in the broader context of our Board’s overall composition, with the goal
of recruiting members who complement and strengthen the skills of other members and who also exhibit integrity, collegiality, sound
business judgment and other qualities deemed critical to effective functioning of our Board.
Set forth below is biographical information for the
nominees and each person whose term of office as a director will continue after the Annual Meeting. This includes information regarding
each director’s experience, qualifications, attributes or skills that led our Board to recommend them for board service.
2023 PROXY STATEMENT 21
Class I Nominees for Re-Election at the Annual
Meeting
|
Steven J. Gomo |
|
Age: 71
Director since: 2015
Independent
Board Committees:
• Audit (Chair)
• Nominating and Corporate Governance |
Other public boards during the past five
years:
• Enphase
Energy, Inc. (since 2011)
• Micron
Technology, Inc. (since 2018) |
Professional background
Mr. Gomo previously served as Executive Vice
President, Finance and Chief Financial Officer of NetApp, Inc., a computer storage and data management company from October
2004 until December 2011, as well as Senior Vice President, Finance and Chief Financial Officer from August 2002 to September
2004. He has served as chair of the board and a director of Enphase Energy, Inc., a solar energy management device maker,
since March 2011; and a member of the board of directors of Micron Technology, Inc., a developer and manufacturer of semiconductor
memory products, since October 2018. Mr. Gomo also previously served on the board of directors of Solaria Corporation,
a private provider of advanced solar energy products, from October 2019 until May 2023; NetSuite Inc., a business management
software company, from March 2012 until it was acquired by Oracle Corporation in November 2016; and SanDisk Corporation,
a flash memory storage solutions and software company, from December 2005 until the company was acquired by Western Digital
Corporation in May 2016.
Education
B.S. in Business Administration from Oregon
State University; M.B.A. from Santa Clara University.
Key skills and experience
Our Board believes that Mr. Gomo is qualified
to serve as a member of our Board because of his substantial corporate governance, operational and financial expertise
gained from holding various executive positions at publicly-traded technology companies and from serving on the board
of directors of several public companies. |
|
Max de Groen |
|
Age: 38
Director since: 2020
Independent
Board Committees:
• Audit
• Compensation (Chair) |
Other public boards during the past five
years:
• None |
Professional background
Mr. de Groen joined Bain Capital in 2011
and is currently a managing director in the Technology Vertical at Bain. Prior to joining Bain Capital Private Equity,
Mr. de Groen was a consultant at The Boston Consulting Group, where he consulted in healthcare, financial services, and
technology practice areas. Mr. de Groen currently serves on the board of directors of several private companies.
Education
B.S. in Finance from the University of Minnesota;
M.B.A. from Harvard Business School.
Key skills and experience
Our Board believes that Mr. de Groen is qualified
to serve as a member of our Board because of his significant corporate finance and business expertise gained from his
experience in the venture capital and IT industries, including his time spent serving on the boards of directors of technology
companies. |
2023 PROXY STATEMENT 22
|
Mark Templeton |
|
Age: 71
Director since: 2023
Independent
Board Committees:
• Compensation
• Security and Privacy |
Other public boards during the past five
years:
• Arista
Networks, Inc. (since 2017)
• Health
Catalyst, Inc. (since 2020)
• Equifax,
Inc. (2008-2018) |
Professional background
Mr. Templeton previously served as Chief
Executive Officer of DigitalOcean, Inc., a cloud computing company, from June 2018 to August 2019. Prior to that,
he was at Citrix Systems, Inc., a global provider of virtualization, mobility management, networking and software as service
solutions, where he served as Chief Executive Officer from June 2001 to October 2015, President from January 1998 to October
2015, and Vice President, Marketing from June 1995 to January 1998. Mr. Templeton has served as a member of the board
of directors of Health Catalyst, Inc., a provider of data and analytics technology and services to health care organizations,
since July 2020 and Arista Networks, Inc., a cloud networking solutions company, since June 2017. He previously served
as a member of the board of directors of Citrix Systems, Inc. from May 1998 to October 2015, Equifax, Inc., a consumer
credit reporting agency, from February 2008 to November 2018 and Keysight Technologies, Inc., an electronics test and
measurement equipment company, from December 2015 to July 2018. He also currently serves on the board of directors of
several private companies.
Education
B.A. in Industrial and Product design from
North Carolina State University; M.B.A. from the Darden School of Business at the University of Virginia.
Key skills and experience
Our Board believes that Mr. Templeton is
qualified to serve as a member of our Board because of his extensive and broad management experience, gained from his
background as the chief executive officer of multiple technology companies and from serving on the board of directors
of several public companies, including his strong domain knowledge of both cloud and datacenter infrastructure software. |
Class II Directors Continuing in Office Until the
Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2024
|
Craig Conway |
|
Age: 68
Director since: 2017
Independent
Board Committees:
• Compensation
• Nominating and Corporate Governance |
Other public boards during the past five
years:
• Salesforce,
Inc. (since 2005)
• Guidewire
Software, Inc. (2010-2019) |
Professional background
Mr. Conway previously served as President
and Chief Executive Officer of PeopleSoft, Inc., an enterprise application software company, from 1999 to 2004. Mr. Conway
also served as President and Chief Executive Officer of One Touch Systems from 1996 to 1999 and TGV Software from 1993
to 1996. Prior to that, Mr. Conway held executive management positions at a variety of leading technology companies, including
Executive Vice President at Oracle Corporation. Mr. Conway has served as a member of the board of directors of Salesforce,
Inc. (formerly known as salesforce.com, inc.), a cloud-based customer relationship management company, since October 2005.
Mr. Conway previously served as a director of Advanced Micro Devices, Inc., a semiconductor company, from September 2009
until May 2013, and Guidewire Software, Inc., a provider of software products to insurance companies, from December 2010
until January 2019.
Education
B.S. in Computer Science and Mathematics,
the State University of New York at Brockport.
Key skills and experience
Our Board believes that Mr. Conway is qualified
to serve as a member of our Board because of his extensive and broad management experience, gained from his background
as the chief executive officer of multiple technology companies and from serving on the board of directors of several
public companies. |
2023 PROXY STATEMENT 23
|
Virginia Gambale |
|
Age: 64
Director since: 2020
Independent Chair of the Board since June
2021
Board Committees:
• Audit
• Nominating and Corporate
Governance (Chair) |
Other public boards during the past five
years:
• EVERTEC,
Inc. (since 2023)
• Jamf
Holding Corp. (since 2021)
• Virtu
Financial, Inc. (since 2020)
• FD
Technologies plc (since 2015)
• Regis
Corporation (2018-2021)
• JetBlue
Airways Corporation (2006-2021) |
Professional background
Ms. Gambale is Managing Partner of Azimuth
Partners LLC, a technology advisory firm facilitating the growth and adoption of emerging technologies for financial services,
consumer and technology companies. Prior to founding Azimuth Partners in 2003, Ms. Gambale held senior management positions
at Merrill Lynch, Bankers Trust, Deutsche Bank and Marsh & McLennan. She was also the Head of Deutsche Bank Strategic
Ventures, and subsequently a General Partner at Deutsche Bank Capital and ABS Ventures. Ms. Gambale currently serves on
the boards of directors of: EVERTEC, Inc., a provider of merchant acquiring, payment services and business process management
services, since May 2023; FD Technologies plc (formerly known as First Derivatives plc), a provider of software and consulting
services, since March 2015; Virtu Financial, Inc., a financial services company, since January 2020; and Jamf Holding
Corp., a provider of a management and security solution for an Apple-first environment, since May 2021. Ms. Gambale also
currently serves on the board of directors of several private companies. She also previously served on numerous international
public and private boards, including Core BTS, Regis Corporation, JetBlue Airways, Piper Jaffray, Workbrain, Synchronoss
Technologies, IQ Financial, and Avellino Lab USA, Inc.
Education
B.S. in Mathematics and Computer Science
from the New York Institute of Technology.
Key skills and experience
Our Board believes Ms. Gambale is qualified
to serve as a member of our Board because of her extensive prior experience in senior leadership positions in finance
and technology, as well as her time spent serving on the boards of numerous public and private companies. |
|
Brian Stevens |
|
Age: 60
Director since: 2019
Independent
Board Committees:
• Compensation
• Security and Privacy (Chair) |
Other public boards during the past five
years:
• Genpact
Limited (since 2020) |
Professional background
Mr. Stevens has served as Chief Executive
Officer of Neuralmagic, Inc., a private machine learning company, since March 2021, and as its Executive Chairman from
July 2019 until March 2021. Mr. Stevens has also served as a member of the board of directors of Genpact Limited, an IT
services company, since May 2020. He previously served as Chief Technology Officer from April 2017 to May 2019 and as
Vice President of Product from September 2014 to May 2019 of Google Cloud, where he was responsible for leading the technology
vision for Google’s public cloud offering. Prior to Google, from November 2001 until September 2014, Mr. Stevens
served in various positions at Red Hat, Inc., an open source solutions company, including as Chief Technology Officer
and Executive Vice President of Worldwide Engineering from September 2013 until September 2014. Mr. Stevens has also served
on various boards in the past, including the American Red Cross, IEEE, Pentaho, Data Gravity, and the Open Stack Foundation.
Education
B.S. in Computer Science from the University
of New Hampshire; M.S. in Computer Systems from Rensselaer Polytechnic Institute.
Key skills and experience
Our Board believes Mr. Stevens is qualified
to serve as a member of our Board because of his extensive business experience and expertise in our industry, gained from
his substantial leadership roles as well as his time spent serving on the boards of other technology companies. |
2023 PROXY STATEMENT 24
Class III Directors Continuing in Office Until
the Annual Meeting of Stockholders After the End of the Fiscal Year Ending July 31, 2025
|
David Humphrey |
|
Age: 46
Director since: 2020
Independent
Board Committees:
• Nominating and Corporate
Governance
• Security and Privacy |
Other public boards during the past five
years:
• NortonLifeLock
Inc. (2016-2021)
• Genpact
Limited (2012-2019) |
Professional background
Mr. Humphrey is currently a managing director
in the Technology, Media and Telecommunications Vertical and Co-Head of Bain Capital’s North America Private Equity
businesses. Prior to joining Bain Capital Private Equity, Mr. Humphrey was an investment banker in the mergers and acquisitions
group at Lehman Brothers where he advised companies on mergers and acquisitions across a range of industries. Mr. Humphrey
previously served as a member of the boards of directors of NortonLifeLock Inc. (formerly known as Symantec Corporation),
a cybersecurity software and services company, from August 2016 until January 2021, Genpact Limited, an IT services company,
from October 2012 to November 2019, and Bright Horizons Family Solutions Inc., a child-care services company, from May
2008 to June 2017. Mr. Humphrey currently also serves on the board of directors of several private companies.
Education
B.A. in Economics from Harvard College; M.B.A.
from Harvard Business School.
Key skills and experience
Our Board believes that Mr. Humphrey is qualified
to serve as a member of our Board because of his significant corporate finance and business expertise gained from his
experience in the venture capital and IT industries, including his time spent serving on the boards of directors of various
technology companies. |
|
Rajiv Ramaswami |
|
Age: 57
Director since: 2020
President and CEO
Board Committees:
• None |
Other public boards during the past five
years:
• NeoPhotonics
Corporation (2014-2022) |
Professional background
Mr. Ramaswami has served as our President
and Chief Executive Officer since December 2020. A seasoned technology industry executive, Mr. Ramaswami has more than
30 years of experience spanning software, cloud services, and network infrastructure. He brings to our company a proven
track record of building and scaling enterprises and teams, having a strong customer-centric approach, operational execution
and developing innovative products and solutions to drive growth and value creation. Prior to joining Nutanix, Mr. Ramaswami
served as Chief Operating Officer of Products and Cloud Services at VMware from October 2016 until December 2020. From
April 2016 to October 2016, Mr. Ramaswami led VMware’s Networking and Security business as Executive Vice President
and General Manager. Mr. Ramaswami served as Executive Vice President and General Manager, Infrastructure and Networking
at Broadcom from February 2010 to January 2016, where he established Broadcom as a leader in data center, enterprise,
and carrier networking. Prior to Broadcom, he served in multiple General Manager roles at Cisco across switching, data
center, storage and optical networking business units. Earlier in his career, he held various leadership positions at
Nortel, Tellabs, and IBM. Mr. Ramaswami also served as a member of the board of directors of NeoPhotonics Corporation,
a manufacturer of telecommunications circuits, from March 2014 to August 2022. Mr. Ramaswami is an Institute of Electrical
and Electronics Engineers Fellow and holds 36 patents, primarily in optical networking.
Education
B.Tech. in Electrical Engineering from the
Indian Institute of Technology, Madras; M.S. and Ph.D. in Electrical Engineering from the University of California, Berkeley.
Key skills and experience
Our Board believes that Mr. Ramaswami’s
extensive business experience and expertise in the technology industry, gained from his executive leadership roles at
other technology companies, as well as the perspective and experience that Mr. Ramaswami brings as our President and Chief
Executive Officer, uniquely qualify him to serve on our Board. |
2023 PROXY STATEMENT 25
|
Gayle Sheppard |
|
Age: 69
Director since: 2022
Independent
Board Committees:
• Audit
• Security and Privacy |
Other public boards during the past five
years:
• Envista
Holdings Corporation (2020-2021) |
Professional background
Ms. Sheppard previously served as Chief Executive
Officer of Bright Machines, Inc., a software-defined factory automation company. Ms. Sheppard also previously served as
Corporate Vice President and Chief Technology Officer for Microsoft Asia where she was responsible for establishing the
vision, strategy and execution programs for customer and partner co-innovation and digital transformation. Prior to that,
Ms. Sheppard served as the Head of Global Expansion and Digital Transformation for Microsoft Cloud and AI, where she was
responsible for the vision, strategy, and long-range P&L for growing Microsoft’s global Cloud Services and working
with customers who are implementing multiyear digital innovation and modernization strategies and as the Corporate Vice
President of Azure Data at Microsoft. Earlier in her career, she served as Vice President and General Manager of the Saffron
AI/ML Division, Intel Corporation, and held various leadership positions at Saffron Technology, Inc., Ketera Technologies,
Inc., and J.D. Edwards, Inc. She has founded, created, or contributed to start-up and Fortune 100 companies focused on
Artificial Intelligence platforms, solutions in business and consumer markets, and digitization of business in a wide
variety of industries. Ms. Sheppard previously served as a member of the board of directors of Envista Holdings Corporation,
a medical technology holding company, from July 2020 until November 2021.
Education
B.S. in Business Administration from University
of South Florida.
Key skills and experience
Our Board believes that Ms. Sheppard is qualified
to serve as a member of our Board based on her extensive global business experience and deep technology expertise. |
2023 PROXY STATEMENT 26
Director Compensation
Non-Employee Director Compensation Policy
Members of our Board who are
not employees or officers of our company (“non-employee directors”) receive compensation for their service.
The Compensation
Committee reviews the total compensation of our non-employee directors and each element of our outside director compensation policy
annually. At the direction of the Compensation Committee, Compensia, Inc. (“Compensia”), a nationally recognized compensation
consulting firm, annually analyzes the competitive position of our outside director compensation policy against the peer group
used for executive compensation purposes. For a more detailed description of the role of Compensia, the Compensation Committee’s
independent compensation consultant, please refer to the section titled “Executive Compensation – Compensation
Discussion and Analysis – Compensation-Setting Process – Role of Compensation Consultant.”
Under our amended and restated outside director compensation policy, each non-employee director is entitled to receive (i) an annual
RSU award on the date of each annual meeting of stockholders with a total dollar value of $250,000 for the director’s service
as a board member (pro-rated for directors who first become a non-employee director other than at an annual meeting) that will
vest on the earlier to occur of the day prior to the next occurring annual meeting or the one-year anniversary of the date of grant,
subject to continued service, and (ii) annual cash retainers, payable quarterly in arrears, for the director’s service as
follows:
Annual RSU
Award |
|
|
|
|
|
|
|
Board Member |
|
|
|
|
$ |
250,000 |
|
|
|
|
|
|
|
|
|
Annual Cash Retainer |
|
|
|
|
|
|
|
Board Member |
|
|
|
|
$ |
50,000 |
|
|
|
|
|
|
|
|
|
Additional Annual Cash
Retainers |
|
|
|
|
|
|
|
Board Chair |
|
|
|
|
$ |
107,500 |
(1) |
Lead Independent Director |
|
|
|
|
$ |
47,500 |
|
|
|
|
|
|
|
|
|
Additional Annual Cash
Retainers for Committee Service |
|
|
Chair |
|
|
Member |
|
Audit Committee |
|
$ |
30,000 |
|
$ |
12,500 |
|
Compensation Committee |
|
$ |
20,000 |
|
$ |
10,000 |
|
Nominating and Corporate Governance
Committee |
|
$ |
15,000 |
|
$ |
7,500 |
|
Security and Privacy Committee |
|
$ |
15,000 |
|
$ |
7,500 |
|
(1) |
The additional annual cash retainer for service as Board Chair was
increased from $87,500 to $107,500 in September 2022. |
Non-employee directors receive
no other form of remuneration, perquisites or benefits, but are reimbursed for their reasonable travel expenses incurred in attending
board and committee meetings.
Our 2016 Equity Incentive Plan
provides that, in any fiscal year, none of our non-employee directors may be granted cash-settled awards with a grant date fair
value of more than $750,000 (or, in connection with a director’s initial service, $1.5 million) or stock-settled awards with
a grant date fair value of more than $750,000 (or, in connection with a director’s initial service, $1.5 million).
2023 PROXY STATEMENT 27
Fiscal Year 2023 Director Compensation Table
The following table
provides information for all compensation awarded to, earned by or paid to each person who served as a non-employee director for
all, or a portion of the fiscal year ended July 31, 2023, or a portion thereof. Mr. Ramaswami, our President and CEO, did
not receive compensation for his service as a director. The compensation received by Mr. Ramaswami as an employee is shown
in “Executive Compensation – Executive Compensation Tables – Fiscal
Year 2023 Summary Compensation Table.”
Name |
|
Fees
Earned
or Paid in
Cash
($) |
|
Stock
Awards(1)
($) |
|
Option
Awards
($) |
|
Non-Equity
Incentive Plan
Compensation
($) |
|
Change
in
Pension
Value and
Nonqualified
Deferred
Compensation
Earnings
($) |
|
All
Other
Compensation
($) |
|
Total
($) |
Craig Conway |
|
66,616 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
338,536 |
Max de Groen |
|
81,336 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
353,256 |
Virginia Gambale |
|
182,089 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
454,009 |
Steven J. Gomo |
|
87,740 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
359,660 |
David Humphrey |
|
64,359 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
336,279 |
Gayle Sheppard |
|
67,500 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
339,420 |
Brian Stevens |
|
74,096 |
|
271,920 |
|
— |
|
— |
|
— |
|
— |
|
346,016 |
Mark Templeton(2) |
|
1,096 |
|
101,636 |
|
— |
|
— |
|
— |
|
— |
|
102,732 |
(1) |
The amounts reported in this column represent
the aggregate grant date fair value of the RSUs granted, as computed in accordance with ASC Topic 718. The assumptions used
in the valuation of these awards are set forth in the notes to our consolidated financial statements included in our Annual
Report on Form 10-K for our fiscal year ended July 31, 2023 filed with the SEC on September 21, 2023. These amounts do not
necessarily reflect the actual economic value that may ultimately be realized by the director. |
(2) |
Mr. Templeton was appointed to our Board on July 24, 2023
and received a prorated annual RSU grant under our amended and restated outside director compensation policy. |
Outstanding Director Equity Awards at Fiscal Year
2023 Year-End Table
Our non-employee directors held the following
outstanding option and RSU awards as of July 31, 2023. The table excludes Mr. Ramaswami, whose outstanding awards are
reflected in the section titled “Executive Compensation –Executive Compensation
Tables – Outstanding Equity Awards at Fiscal Year 2023 Year-End Table.”
Name |
|
# of Outstanding Options
(in shares) |
|
# of Outstanding RSUs
(in shares) |
Craig Conway |
|
— |
|
8,682 |
Max de Groen |
|
— |
|
8,682 |
Virginia Gambale |
|
— |
|
8,682 |
Steven J. Gomo |
|
— |
|
8,682 |
David Humphrey |
|
— |
|
8,682 |
Gayle Sheppard |
|
— |
|
8,682 |
Brian Stevens |
|
— |
|
8,682 |
Mark Templeton(1) |
|
— |
|
3,389 |
(1) |
Mr. Templeton was appointed to our Board on July 24, 2023, and received
a prorated annual RSU grant under our amended and restated outside director compensation policy. |
2023 PROXY STATEMENT 28
Stock Ownership Guidelines
Our stock ownership guidelines
provide that each non-employee director is expected to attain a minimum share ownership position with an aggregate value equal
to the value of his or her annual equity award for service on our Board (not including any equity awards for serving as lead independent
director or a member or chair of any committees) as follows: (i) for Mr. Conway and Mr. Gomo, by our 2020 annual meeting of stockholders,
(ii) for Mr. Stevens, who joined our Board in June 2019, by our 2022 annual meeting of stockholders, (iii) for each of Ms.
Gambale and Messrs. de Groen and Humphrey, who joined our Board in June 2020, September 2020, and September 2020, respectively,
by the Annual Meeting, (iv) for Ms. Sheppard, by the annual stockholders meeting to occur after our fiscal year ending July 31,
2025, (v) for Mr. Templeton, by the annual stockholders meeting to occur after our fiscal year ending July 31, 2026, and (vi)
for any new directors, by the fourth annual stockholders meeting after the date such director joined our Board.
Certain Relationships and Related Party Transactions
Policies and Procedures for Related Party Transactions
We have a formal written policy
providing that our executive officers, directors, nominees for election as directors, beneficial owners of more than 5% of any
class of our common stock and any member of the immediate family of any of the foregoing persons, is not permitted to enter into
a related party transaction with us without the consent of the Audit Committee, subject to the exceptions described below.
In approving or rejecting any
such proposal, the Audit Committee is to consider the relevant facts and circumstances available and deemed relevant to the Audit
Committee, including, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third
party under the same or similar circumstances, and the extent of the related party’s interest in the transaction. The Audit
Committee has determined that certain transactions will not require audit committee approval, including certain employment arrangements
of executive officers, director compensation, transactions with another company at which a related party’s only relationship
is as a non-executive employee, director or beneficial owner of less than 10% of that company’s shares and the aggregate
amount involved does not exceed the greater of $200,000 or 2% of the recipient’s consolidated gross revenues in any fiscal
year, transactions where a related party’s interest arises solely from the ownership of our common stock and all holders
of our common stock received the same benefit on a pro rata basis, and transactions available to all employees generally.
Related Party Transactions
Except for the executive
officer and director compensation arrangements discussed in the sections titled “Corporate
Governance - Director Compensation” and “Executive
Compensation,” there has not been, nor is there currently proposed any transaction in
which:
• |
we have been or are to be a participant; |
• |
the amounts involved exceeded or will exceed $120,000; and |
• |
any of our directors, nominees for election as directors, executive officers or beneficial
holders of more than 5% of any class of our capital stock, or entities affiliated with them, or any immediate family members
of or person sharing the household with any of these individuals, had or will have a direct or indirect material interest. |
2023 PROXY STATEMENT 29
AUDIT COMMITTEE MATTERS
Proposal 2: Ratification of Selection of Independent
Registered Public Accounting Firm
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 2. |
The Audit Committee has re-appointed
Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2024, and
has further directed that management submit this selection for ratification by our stockholders at the Annual Meeting. Although
ratification by our stockholders is not required by law, we have determined that it is good practice to request ratification of
this selection by our stockholders. In the event that Deloitte & Touche LLP is not ratified by our stockholders, the Audit
Committee will review its future selection of Deloitte & Touche LLP as our independent registered public accounting firm.
Deloitte & Touche LLP
audited our financial statements for the fiscal years ended July 31, 2021, 2022 and 2023. Representatives of Deloitte &
Touche LLP are expected to be present during the Annual Meeting, where they will be available to respond to appropriate questions
and, if they desire, to make a statement.
Our Board is submitting
this selection as a matter of good corporate governance and because we value our stockholders’ views on our independent
registered public accounting firm. Neither our Amended and Restated Bylaws nor other governing documents or law require stockholder
ratification of the selection of our independent registered public accounting firm. If the stockholders fail to
ratify this selection, our Board will reconsider whether or not to retain that firm. Even if the selection is ratified, our Board
may direct the appointment of different independent auditors at any time during the year if they determine that such a change
would be in the best interests of our company and our stockholders. Our Board unanimously recommends a vote FOR
the approval of the ratification of our auditors.
Vote Required
An affirmative vote
from holders of a majority in voting power of the shares present at the Annual Meeting or represented by proxy and entitled to
vote on the proposal will be required to ratify the selection of Deloitte & Touche LLP. Abstentions will have the
effect of a vote AGAINST the proposal and broker
non-votes will have no effect.
Principal Accountant Fees
and Services
The following table provides
the aggregate fees for services provided by Deloitte & Touche LLP for the fiscal years ended July 31, 2022 and 2023.
|
Fiscal Year Ended July 31, |
|
2022
($) |
2023
($) |
Audit fees(1) |
3,574,000 |
5,008,855 |
Audit-related fees(2) |
— |
— |
Tax fees(3) |
548,816 |
731,810 |
TOTAL FEES |
4,122,816 |
5,740,665 |
(1) |
Consists of fees billed for professional services
rendered in connection with the audit of our consolidated financial statements, including audited financial statements presented
in our Annual Report on Form 10-K, review of the interim consolidated financial statements included in our quarterly reports,
services normally provided in connection with regulatory filings and, for the fiscal year ended July 31, 2023, also includes
fees incurred in connection with the Audit Committee’s previously completed investigation. |
(2) |
Consists of fees billed for assurance and related services
that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not
reported under “Audit Fees.” |
(3) |
Consists of fees billed for professional services for tax
compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax
compliance. |
2023 PROXY STATEMENT 30
Pre-Approval Policies and Procedures
Consistent with the requirements
of the SEC and the Public Company Accounting Oversight Board, regarding auditor independence, the Audit Committee has responsibility
for appointing, setting compensation, retaining and overseeing the work of our independent registered public accounting firm. In
recognition of this responsibility, the Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-audit
services rendered by our independent registered public accounting firm, Deloitte & Touche LLP. The policy generally pre-approves
specified services in the defined categories of audit services, audit-related services and tax services up to specified amounts.
Pre-approval may also be given as part of the Audit Committee’s approval of the scope of the engagement of the independent
auditor or on an individual, explicit, case-by-case basis before the independent auditor is engaged to provide each service.
All of the services provided
by Deloitte & Touche LLP for the fiscal years ended July 31, 2022 and 2023 described above were pre-approved by the
Audit Committee. The Audit Committee has determined that the rendering of services other than audit services by Deloitte &
Touche LLP is compatible with maintaining the principal accountant’s independence.
Report of the Audit Committee
The Audit Committee has reviewed
and discussed the audited financial statements for the fiscal year ended July 31, 2023 with the management of Nutanix.
The Audit Committee has discussed with Nutanix’s independent registered public accounting firm, Deloitte & Touche
LLP, the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”)
and the SEC. The Audit Committee has also received the written disclosures and the letter from its independent registered
public accounting firm required by applicable requirements of the PCAOB regarding the independent accountants’ communications
with the audit committee concerning independence and has discussed with the independent registered public accounting firm the accounting
firm’s independence. Based on the foregoing, the Audit Committee has recommended to our Board that the audited financial
statements be included in Nutanix’s Annual Report on Form 10-K for the fiscal year ended July 31, 2023.
The Audit Committee
Steven J. Gomo (Chair)
Max de Groen
Virginia Gambale
Gayle Sheppard (joined the Committee on September 13, 2023)
The material in this report
is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference
in any filing by Nutanix under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date
hereof and irrespective of any general incorporation language in any such filing.
2023 PROXY STATEMENT 31
EXECUTIVE OFFICERS
The following is biographical information for our
current executive officers as of the date of this proxy statement:
Name |
|
Age |
|
Position/Office |
Rajiv Ramaswami |
|
57 |
|
President and Chief Executive
Officer |
Rukmini Sivaraman |
|
42 |
|
Chief Financial Officer |
David Sangster |
|
59 |
|
Chief Operating Officer |
Tyler Wall |
|
57 |
|
Chief Legal Officer |
Our Board chooses our executive
officers, who then serve at our Board’s discretion. There are no family relationships among any of our directors or executive
officers.
For biographical
information regarding Mr. Ramaswami, please refer to the section above titled “Proposal
1 – Election of Directors.”
Rukmini Sivaraman has served as our Chief
Financial Officer since May 2022. Ms. Sivaraman previously served as our Senior Vice President, FP&A and Strategic Finance
from January 2022 to May 2022. Prior to that, she served in various roles at our company, including as Senior Vice President of
Strategic Finance, Chief People Officer and Senior Vice President of People and Business Operations. Prior to joining us,
Ms. Sivaraman served as an investment banker at Goldman Sachs from June 2009 to March 2017. Ms. Sivaraman holds an M.B.A. from
the Kellogg School of Management at Northwestern University and an M.S. in Electrical Engineering from the University of Michigan
at Ann Arbor.
David Sangster
has served as our Chief Operating Officer since March 2019 and was our Executive Vice President,
Engineering & Operations from February 2018 to March 2019, our Executive Vice President, Support & Operations from February
2016 to February 2018, our Senior Vice President, Operations from April 2014 to February 2016, and Vice President, Operations from
December 2011 to April 2014. Prior to joining us, Mr. Sangster served as Vice President, Manufacturing Technology at
EMC Corporation, an IT storage hardware solutions company, from July 2009 to December 2011. Mr. Sangster holds a B.S. in Mechanical
Engineering from Massachusetts Institute of Technology, an M.S. in Manufacturing Systems Engineering from Stanford University,
and an M.B.A. in Operations and Marketing from Santa Clara University.
Tyler Wall has
served as our Chief Legal Officer since November 2017. Prior to joining us, Mr. Wall was the Senior Vice President, General
Counsel, at Red Book Connect, LLC, a restaurant industry SaaS and technology solutions company, from April 2014 to September 2017.
Prior to that, Mr. Wall was the Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary at Brocade,
a supplier of networking hardware, software, and services, from 2005 to April 2014. Mr. Wall holds a B.S. in Economics from
University of Utah, a J.D. from Santa Clara University - School of Law, and an M.B.A. from Santa Clara University – School
of Business.
2023 PROXY STATEMENT 32
EXECUTIVE COMPENSATION
Proposal 3: Advisory Vote to Approve the Compensation
of Our Named Executive Officers
|
OUR
BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 3. |
Section 14A of the Exchange
Act enables our stockholders to vote whether to approve, on an advisory or non-binding basis, the compensation of our named executive
officers. This vote, commonly known as a “say-on-pay” vote, gives our stockholders the opportunity to express their
views on our named executive officers’ compensation as a whole. This vote is not intended to address any specific item of
compensation or any specific named executive officer, but rather the overall compensation of all our named executive officers and
the philosophy, policies and practices described in this proxy statement.
The say-on-pay vote is advisory,
and therefore not binding on us. The say-on-pay vote will, however, provide information to us regarding stockholder sentiment about
our executive compensation philosophy, policies and practices, which the Compensation Committee will be able to consider when determining
executive compensation for the remainder of the current fiscal year and beyond. Our Board and the Compensation Committee value
the opinions of our stockholders and to the extent there is any significant vote against the named executive officer compensation
as disclosed in this proxy statement, we will communicate directly with stockholders to better understand the concerns that influenced
the vote, consider these concerns, and the Compensation Committee will evaluate whether any actions are necessary to address those
concerns.
We believe that
the information provided in the “Executive Compensation”
section of this proxy statement, and in particular the information discussed in “Executive
Compensation – Compensation Discussion and Analysis,” demonstrates that our executive
compensation program was designed appropriately and is working to ensure management’s interests are aligned with our stockholders’
interests to support long-term value creation. Accordingly, our Board unanimously recommends that our stockholders vote FOR
the following resolution at the Annual Meeting:
RESOLVED, that the
stockholders approve, on a non-binding advisory basis, the compensation paid to our named executive officers as disclosed in the
proxy statement for the Annual Meeting pursuant to the compensation disclosure rules of the Securities and Exchange Commission,
including in the Compensation Discussion and Analysis, the compensation tables and the narrative discussions that accompany the
compensation tables.
Vote Required
The non-binding
advisory vote on named executive officer compensation requires the affirmative vote of a majority of the voting power of the shares
present at the Annual Meeting or represented by proxy and entitled to vote on the proposal. Abstentions will have the effect of
a vote AGAINST the proposal and broker non-votes
will have no effect.
Compensation Discussion and Analysis
The compensation
provided to our named executive officers for fiscal year 2023 is set forth in detail in the “Fiscal
Year 2023 Summary Compensation Table” and the other tables that follow this Compensation
Discussion and Analysis. The following discussion provides an overview of our executive compensation philosophy, the overall objectives
of our executive compensation program, and each component of compensation that we provide to our named executive officers. In addition,
we explain how and why the Compensation Committee arrived at the specific compensation policies and decisions for our named executive
officers. The following are our named executive officers for fiscal year 2023:
• |
Rajiv Ramaswami, our President and Chief Executive Officer; |
• |
Rukmini Sivaraman, our Chief Financial Officer; |
• |
David M. Sangster, our Chief Operating Officer; and |
• |
Tyler Wall, our Chief Legal Officer. |
2023 PROXY STATEMENT 33
The Board has delegated to
the Compensation Committee the authority and responsibility for establishing and overseeing base salaries, administering the incentive
compensation programs, and establishing and overseeing other forms of compensation for our executive officers, general remuneration
policies for the balance of our employee population, and for overseeing and administering our equity incentive and benefit plans.
Fiscal Year 2023 Financial and Performance
Highlights
$956.8
million |
$1.56
billion |
$207.0
million |
ACV Billings(1) |
Annual Recurring Revenue(1) |
Free Cash Flow(2) |
|
|
|
▲27% increase compared to FY 2022 |
▲30% increase
compared to the end of FY 2022 |
▲$188.5 million
increase compared to FY 2022 |
(1) |
See Appendix A for details
on how we define ACV billings and annual recurring revenue, why we monitor these performance measures, and limitations on
their use. There is no GAAP measure that is comparable to ACV billings or annual recurring revenue, so we have not reconciled
the ACV billings or annual recurring revenue data included herein to any GAAP measure. |
(2) |
Free cash flow is a non-GAAP financial
measure. See Appendix A for details on how we define free cash flow, why we monitor this measure, and limitations on
its use as well as a reconciliation of free cash flow to net cash provided by operating activities, which is the GAAP measure
most comparable to free cash flow. |
Fiscal year 2023 demonstrated
the benefits of our subscription-based business model, showing healthy year-over-year top line growth and sharp year-over-year
improvements in profitability and free cash flow despite macroeconomic uncertainty. Year-over-year ACV billings growth was 27%
for the second consecutive fiscal year. Annual recurring revenue as of the end of fiscal year 2023 increased to $1.56 billion,
representing a 30% increase compared to the end of fiscal year 2022, and free cash flow was $207.0 million, an increase of $189
million compared to fiscal year 2022.
Beyond these financial accomplishments,
we successfully extended our hybrid multicloud platform with the general availability of Nutanix Cloud Clusters on Microsoft Azure, launched
new products in multiple areas, and defined our data services vision for enabling companies to build portable applications. Our
go-to-market strategy helped us close major deals as we effectively demonstrated our contribution to customer transformation initiatives.
Importantly, we continued to delight our customers, as reflected by our seven-year average Net Promoter Score of 91.
Executive Compensation Practices
We strive to maintain sound
governance standards consistent with our executive compensation policies and practices. The Compensation Committee evaluates our
executive compensation program on a regular basis to ensure consistency with our short-term and long-term goals, given the dynamic
nature of our business and the market in which we compete for executive talent. The following policies and practices were in effect
during fiscal year 2023:
WHAT WE DO |
|
WHAT WE DON’T DO |
|
Emphasize performance-based compensation with a balance between short-term and long-term incentives |
|
|
No retirement or pension-type plans other than the standard 401(k) plan offered to all employees |
|
Maintain a 100% independent compensation committee |
|
|
No perquisites or personal benefits, other than standard benefits typically received by other employees |
|
Engage an independent compensation consultant to advise the Compensation Committee |
|
|
No tax gross-ups for change of control payments and benefits |
|
Review (at least annually) executive compensation strategy, potential risks, and compensation practices/levels of our selected compensation peer companies |
|
|
No short sales, hedging, or pledging of stock ownership positions and transactions involving derivatives of our common stock |
|
Align our compensation program with the interests of our stockholders through a focus on equity-based awards for executives and directors |
|
|
No strict benchmarking of compensation to a specific percentile of our compensation peer group |
2023 PROXY STATEMENT 34
WHAT WE DO |
|
WHAT WE DON’T DO |
|
Emphasize performance-based restricted stock unit (“PRSU”)
awards over a multi-year performance period as a key component of our executive officers’
compensation |
|
|
No “single-trigger” payments or equity acceleration upon
a change of control |
|
Place our executive officers in the same broad-based company
health and welfare benefits programs as other full-time salaried employees |
|
|
No guaranteed salary increases, annual incentive awards,
or long-term incentive awards |
|
Maintain robust director stock ownership guidelines |
|
|
|
|
Hold an annual advisory say-on-pay vote on named executive
officer compensation |
|
|
|
Say-on-Pay Vote on Named Executive Officer
Compensation and Say-on-Pay Frequency Vote and Effect of Most Recent Say-on-Pay Vote
At the Annual Meeting, we
will conduct a non-binding, advisory vote on the compensation of our named executive officers, also known as a “say-on-pay
vote,” as described in Proposal 3 of this proxy statement. We previously determined to hold a say-on-pay vote every year
consistent with our stockholders’ approval, on a non-binding, advisory basis, at our 2018 annual meeting of stockholders,
to hold stockholder advisory votes on the compensation of our named executive officers every year.
Say-on-Pay Vote Results
at 2022 Annual Meeting of Stockholders
The Compensation Committee
considers the results of the say-on-pay vote and stockholder feedback on our executive compensation program as part of its annual
review of executive compensation. Based on stockholders’ strong support of our compensation program at our 2022 annual meeting,
the Compensation Committee determined not to make significant changes to our existing executive compensation program and policies.
The Compensation Committee currently intends to continue to consider the results of the annual say-on-pay vote and stockholder
feedback as data points in making executive compensation decisions.
Executive Compensation Philosophy
Our executive compensation
program is designed to attract, motivate, and retain highly qualified executive officers who drive our success and to align the
interests of our executive officers with the long-term interests of our stockholders. This section provides an overview of our
executive compensation philosophy and the overall objectives of our executive compensation program.
Our goal is to create a premier
enterprise cloud platform software company, and our compensation philosophy is singularly focused on the achievement of that goal.
Our executive compensation program is designed to achieve this goal through four key objectives:
Attracting and Retaining Talent in a Competitive
Industry
• |
We operate in a highly competitive business environment characterized
by a rapidly changing market and frequent technological advances, and we expect competition among companies in our market
to continue to increase. |
• |
We actively compete with many other companies in seeking to attract
and retain skilled executive leaders who have successfully and rapidly scaled and managed multi-billion-dollar software businesses. |
2023 PROXY STATEMENT 35
• |
Attraction and retention are uniquely challenging
in the San Francisco Bay Area and Silicon Valley, where our headquarters are located and where technology companies have a
substantial presence. The competition for highly qualified talent is particularly fierce in the software space, where we often
compete against larger players with substantial resources. |
• |
We have responded to this intense competition for talent by implementing
compensation policies and practices designed to attract and motivate our executive officers to pursue our corporate objectives
while also promoting their retention and incentivizing them to drive long-term value for our stockholders as we grow into
a premiere enterprise cloud platform company. |
Incentivizing Growth Against Strategic Objectives
and Expanding Market Share
• |
We have structured our executive compensation program
to align with our strategy by adopting a mix of short-term and long-term incentives, which we believe will motivate our executive
officers to execute against our short-term and long-term goals. |
Aligning Executive and Stockholder Value
• |
Our executive compensation program combines short-term
and long-term components, including base salary, annual incentives, and long-term equity-based awards. |
• |
We firmly believe our executive officers should share in the
ownership of our company. Therefore, equity compensation represents the substantial majority of our executive compensation
packages, which we believe best aligns the interests of our executives with those of our stockholders. |
Managing the Business Through an Ever-Changing
Operating Landscape
• |
In the past several years, we experienced a high
level of growth while also transitioning to a subscription-based business model. Our current business strategy is focused
on maintaining a good balance of growth and profitability. |
• |
To successfully execute on our strategy in this dynamic environment,
we need to recruit, incentivize, and retain talented and seasoned leaders who can execute at the highest level and deliver
stockholder value. |
• |
The Compensation Committee regularly reviews and adjusts our
executive compensation program to align with the maturity, size, scale, growth, and aspirations of our business. Due to the
dynamic nature of our industry and our business, we expect to continue to adjust our approach to executive compensation to
respond to our needs and market conditions as they evolve. |
Components of our Executive Compensation Program
Our executive compensation program consists of
the following primary components:
• |
base salary; |
• |
annual incentive opportunities targeted as a percentage of base salary and paid based on
actual results; and |
• |
long-term incentive compensation in the form of equity awards. |
We also provide our executive
officers with severance and change of control-related protections, comprehensive employee benefit programs, such as medical, dental,
and vision insurance, a 401(k) plan, life and disability insurance, flexible spending accounts, an employee stock purchase plan,
and other plans and programs generally made available to other full-time salaried employees.
We believe these components
provide a compensation package that attracts and retains qualified individuals, links individual compensation opportunities to
both individual and company performance, focuses the efforts of our named executive officers and other executive officers on the
achievement of both our short-term and long-term objectives and aligns the interests of our executive officers with those of our
stockholders. Further, our executive compensation program encourages a long-term focus by placing a heavy emphasis on equity awards,
the value of which depends on our stock price performance and our ability to execute against our long-term objectives.
2023 PROXY STATEMENT 36
Fiscal Year 2023 Compensation Mix
The mix of target total direct compensation for
Mr. Ramaswami and our other named executive officers for fiscal year 2023 was as follows:
Base Salaries
We pay base salaries to our
executive officers, including our named executive officers, to compensate them for services rendered during the year and provide
predictable income. Generally, we establish the initial base salaries of our executive officers at the time we hire the individual
executive officer, based on a consideration of the executive officer’s experience, skills, knowledge, and scope of responsibilities,
as well as benchmarking against our compensation peer group. In addition, the competition in the market from which we recruit plays
a role in setting salary levels due to the difficulty in recruiting candidates with the level of talent and experience we believe
are necessary for us to execute on our business and growth plans. We do not apply specific formulas to determine changes in salaries.
Our executive officers’ salaries are reviewed on an annual basis by our CEO and the Compensation Committee (other than the
CEO’s salary, which is reviewed and determined solely by the Compensation Committee) and may be adjusted based on a number
of factors, including relevant market data, individual experience and performance, and internal equity.
Fiscal Year 2023 Base Salaries
In August 2022, as part of
its review of our executive compensation program, the Compensation Committee set annual base salaries for our named executive officers
for fiscal year 2023, effective as of August 1, 2022. Based on its review, the Compensation Committee did not change the annual
base salaries for Messrs. Ramaswami, Sangster, and Wall. Ms. Sivaraman’s annual base salary was increased from $420,000 to
$450,000 to reflect her performance in her role as well as the relevant market data for comparable positions among peer group companies.
Named Executive Officer |
|
Fiscal Year 2023
Base Salary(1)
($) |
|
Change From
Fiscal Year 2022 |
Rajiv Ramaswami |
|
800,000 |
|
0% |
Rukmini Sivaraman |
|
450,000 |
|
7.1% |
David Sangster |
|
475,000 |
|
0% |
Tyler Wall |
|
475,000 |
|
0% |
Target and Actual Annual Incentive Compensation
For fiscal year 2023, each
of our named executive officers participated in our Executive Incentive Compensation Plan. The Executive Incentive Compensation
Plan allows the Compensation Committee to establish incentive awards, generally payable in cash, for employees selected by the
Compensation Committee, including our named executive officers. Under the Executive Incentive Compensation Plan, the Compensation
Committee determines the performance goals, if any, applicable to any award or portion of an award and may choose the performance
goals from a wide range of possible metrics as set forth in the Executive Incentive Compensation Plan. The performance goals may
differ from participant to participant and from year to year.
2023 PROXY STATEMENT 37
Each year, the Compensation
Committee determines the terms and conditions for our Executive Incentive Compensation Plan for the year. For fiscal year 2023,
the Compensation Committee adopted and approved target annual incentive amounts for each of our named executive officers, as well
as the terms and conditions for fiscal year 2023. Prior to fiscal year 2023, the Executive Incentive Compensation Plan included
two discrete 6-month performance periods. Fiscal year 2023 was the first year for which our executive officers’ incentive
compensation under the Executive Incentive Compensation Plan was earned based on full-year performance.
Fiscal Year 2023 Target Annual Incentive Opportunities
The Compensation Committee
designed the fiscal year 2023 Executive Incentive Compensation Plan to align with key performance measures that it believes to
be appropriate indicators of our company’s success and reflective of a subscription-based business model. In August 2022,
following its review of a market analysis prepared by Compensia, the Compensation Committee determined the target annual incentive
opportunities for each of Messrs. Ramaswami, Sangster, and Wall, and Ms. Sivaraman as part of its annual compensation review
for our executive officers. Ms. Sivaraman’s target annual incentive opportunity was increased from 70% to 75% for fiscal
year 2023 to generally align with other officers at her level and based on the market data for comparable positions among peer
group companies. The target annual incentive opportunities established under the fiscal year 2023 Executive Incentive Compensation
Plan for our named executive officers were as follows:
Named Executive Officer |
|
FY2023 Annual
Incentive Target
($) |
|
Annual Incentive Target
(as % of Base Salary) |
|
Change From
Fiscal Year 2022 |
Rajiv Ramaswami |
|
800,000 |
|
100% |
|
0% |
Rukmini Sivaraman |
|
337,500 |
|
75% |
|
+5% |
David Sangster |
|
356,250 |
|
75% |
|
0% |
Tyler Wall |
|
356,250 |
|
75% |
|
0% |
Fiscal Year 2023 Executive Incentive Compensation
Plan
Based on a review of market
practices and on consultation with both management and its independent consultant, the committee approved several key design changes
to our fiscal year 2023 Executive Incentive Compensation Plan intended to enhance the pay-for-performance alignment of our program
and better balance growth and profitability metrics:
• |
We transitioned from two discrete performance measurement
periods to one performance period covering the entirety of fiscal year 2023. The Compensation Committee approved annual performance
goals as detailed below. |
• |
Annual Recurring Revenue (“ARR”) was selected as
the performance metric to reflect our topline growth during our transition to a subscription model. ARR is a more widely recognized
measure among our compensation peer companies and other subscription-based software companies, and we believe appropriately
reflects the trajectory of our topline growth. |
• |
We eliminated the use of a gating threshold for achievement of
any payout under the plan. However, each fiscal year 2023 performance metric has a threshold level of performance below which
no payout is earned for that individual metric. The Committee believes this change recognizes the relative importance of the
performance measures and aligns more closely with market-based annual incentive design practices. |
• |
We increased the weighting of the expense performance metric
as we strove to drive profitable growth to create value for our stockholders. |
In the first fiscal quarter
of 2023, the Compensation Committee approved corporate objectives for the fiscal year 2023 Executive Incentive Compensation Plan
that were aligned with our annual operating plan. The fiscal year 2023 Executive Incentive Compensation Plan provided for potential
performance-based incentive payouts to our named executive officers based on three general performance components. The levels of
achievement aligned to a target-level payout were determined to be challenging and requiring substantial skill and effort on the
part of senior management and were weighted based on relative importance. In addition, each named executive officer’s potential
payout was subject to upward or downward adjustment based on a holistic assessment of individual performance.
2023 PROXY STATEMENT 38
The Compensation Committee
approved the use of the performance metrics below for the fiscal year 2023 Executive Incentive Compensation Plan:
Performance Metric |
|
Definition |
|
Importance of the Performance Metric |
Annual Recurring Revenue |
|
For any given period, the sum of the Annual Contract Value
(“ACV”) for all non life-of-device contracts in effect as of the end of a
specific period. For the purposes of this calculation, we assume that the contract
term begins on the date a contract is booked, unless the terms of such contract prevent
us from fulfilling our obligations until a later period, and irrespective
of the periods in which we would recognize revenue for such contract. |
|
An indicator of the topline growth of
our subscription business that only includes non-life-of-device
contracts and takes into account variability in term
lengths. |
Non-GAAP operating expenses excluding
commissions |
|
For any given period, (i) total operating expenses excluding
stock-based compensation, costs associated with our acquisitions (such as amortization
of acquired intangible assets and other acquisition-related costs), impairment
(recovery) and early exit of operating lease-related assets, restructuring charges, litigation
settlement accruals and legal fees related to certain litigation matters, and other non-recurring
transactions, minus (ii) commissions. |
|
An indicator of our ability to manage
expenses in operating our business and growth and to drive
sales and marketing efficiencies. |
Employee engagement |
|
Employee engagement is measured based on employee
responses to a periodic survey administered in partnership with a third-party vendor. |
|
An indicator of employee sentiment
that we believe is closely linked to employee retention,
customer satisfaction, and financial performance. |
The Compensation Committee
believes these performance metrics were objective measures of the success of our growth and business strategy during fiscal year
2023.
The following table describes
the relative weighting of each performance metric and the payout percentages used to calculate payouts under the fiscal year 2023
Executive Incentive Compensation Plan based on achievement of the targets at and between the low end of the target range and the
high end of the target range.
Performance Metric |
|
Weighting |
|
Plan Targets |
|
Payout % |
ARR |
|
|
|
Less than 90% of Target |
|
0% |
|
Between 90% and 100% of Target |
|
Between 0% and 100% |
|
100% of Target |
|
100% |
|
Between 100% and 110% of Target |
|
Between 100% and 200% |
|
110% or More of Target |
|
200% |
Non-GAAP operating expenses excluding commissions |
|
|
|
104% or More of Target |
|
0% |
|
Between 100% and 104% of Target |
|
Between 00% and 100% |
|
100% of Target |
|
100% |
|
Between 96% and 100% of Target |
|
Between 100% and 200% |
|
Less than 96% of Target |
|
200% |
Employee engagement |
|
|
|
Less than 73% |
|
0% |
|
Between 73% and 77% |
|
Between 0% and 100% |
|
77% |
|
100% |
|
Between 77% and 81% |
|
Between 100% and 200% |
|
81% or More |
|
200% |
2023 PROXY STATEMENT 39
Potential payouts under the
fiscal year 2023 Executive Incentive Compensation Plan ranged between 0% to 200%, depending on the level of achievement against
performance objectives. Actual incentive awards were paid in a lump sum during the first quarter of fiscal year 2024. Actual Incentive
award amounts under the fiscal year 2023 Executive Incentive Compensation Plan were calculated as the sum of the weighted payout
percentage for each performance metric multiplied by the target annual opportunity in effect for each named executive officer.
The specific targets for
ARR and non-GAAP operating expenses excluding commissions were derived from our internal annual operating plan, which is not publicly
disclosed for competitive reasons. Any achievement of the plan targets between the low and high end of the target range would correlate
to a lower or higher payout percentage between 0% and 200%. For the fiscal year 2023 Executive Incentive Compensation Plan, each
performance measure is discrete in contributing to the overall payout – there was no requirement to achieve a certain level
of performance with respect to an individual metric to achieve an overall payout. With respect to each performance metric, the
target achievement level was set at a level that the Compensation Committee believed was rigorous, would require stretch performance,
and would drive stockholder value creation. The target achievement levels were not certain to be met at the time they were determined,
and the payout curves require substantial outperformance of each performance metric to receive significantly above the 100% payout
percentage (capped at 200%) for the metric.
Fiscal Year 2023 Executive Incentive Compensation
Plan Payouts
The achievement of each performance metric under
the fiscal year 2023 Executive Incentive Compensation Plan was as follows:
Performance Metric |
|
Achievement |
|
Payout% |
|
Weighting |
|
Weighted Total |
ARR |
|
99.9% of Target |
|
99.4% |
|
60% |
|
59.6% |
Non-GAAP operating expenses excluding commissions(1) |
|
98.7% of Target |
|
131.3% |
|
30% |
|
39.4% |
Employee engagement |
|
78.0% |
|
125.0% |
|
10% |
|
12.5% |
|
TOTAL WEIGHTED ACHIEVEMENT PERCENTAGE: |
|
111.5% |
(1) |
For Non-GAAP operating expenses excluding commissions,
achievement below target (lower expenses) translates to a payout above target. |
2023 PROXY STATEMENT 40
The Compensation Committee
did not modify the calculated payout for any named executive officer. The aggregate payouts received by each named executive officer
under the fiscal year 2023 Executive Incentive Compensation Plan were:
Named Executive Officer |
|
FY2023
Incentive Target
($) |
|
FY2023
Incentive Payout
($) |
Rajiv Ramaswami |
|
800,000 |
|
892,000 |
Rukmini Sivaraman |
|
337,500 |
|
376,313 |
David Sangster |
|
356,250 |
|
397,219 |
Tyler Wall |
|
356,250 |
|
397,219 |
Administration of the Executive Incentive Compensation
Plan
The Compensation Committee
administers our Executive Incentive Compensation Plan and may, in its sole discretion and at any time, increase, reduce, or eliminate
a participant’s actual award, and/or increase, reduce, or eliminate the amount allocated to the annual incentive pool for
a particular performance period. The actual award may be below, at or above a participant’s target award, at the discretion
of the Compensation Committee. The Compensation Committee may determine the amount of any reduction based on such factors it deems
relevant, and it is not required to establish any allocation or weighting with respect to the factors it considers. Actual awards
are paid in cash in a single lump sum only after they are earned, which requires continued employment through the last day of the
performance period. If a participant terminates employment because of death or disability before the actual award is paid, the
award may be paid to the participant’s estate or to the participant, as applicable, subject to the Compensation Committee’s
discretion to reduce or eliminate the award. Payment of awards occurs as soon as administratively practicable after they are earned,
but no later than the dates set forth in our Executive Incentive Compensation Plan. The Board and the Compensation Committee have
the authority to amend, alter, suspend, or terminate our Executive Incentive Compensation Plan, provided such action does not impair
the existing rights of any participant with respect to any earned awards.
Long-Term Equity-Based Compensation
Our corporate
culture encourages our named executive officers to focus on the company’s long-term strategy. In keeping with this culture,
our executive compensation program places a heavy emphasis on equity awards, the value of which depends on our stock price performance,
to promote long-term performance. These equity awards include both time-based RSU awards and performance-based PRSU awards. Time-based
RSU awards offer our named executive officers predictable value delivery while aligning their interests with the long-term interests
of our stockholders. We believe PRSU awards directly link a significant portion of the named executive officer’s target total
direct compensation to our performance based on the returns we deliver for our stockholders relative to those of other companies
in the Nasdaq Composite Index. As discussed under “Fiscal Year 2023 Equity Awards”
below, the Compensation Committee continued the use of performance-based awards (originally implemented in fiscal year 2022) as
a standard component of fiscal year 2023 annual equity awards to our executive officers, including our named executive officers.
The Compensation
Committee, in consultation with our CEO (other than with respect to himself) and its compensation consultant, Compensia, determines
the size, mix, material terms and, in the case of PRSU awards, performance metrics of the equity awards granted to our named executive
officers, taking into account a number of factors as described in the section titled “Executive
Compensation – Compensation Discussion and Analysis – Compensation-Setting Process.”
Fiscal Year 2023 Equity Awards
The Compensation Committee
continued to align pay and performance and tie the interests of our executive officers with the interests of our stockholders by
using PRSUs as a standard component of the equity awards granted to our executive officers. PRSUs comprise 50% of each executive
officer’s target award value. PRSU awards are based on our total shareholder return (“TSR”) relative to the total
shareholder return of companies in the Nasdaq Composite Index over three years with interim measurements after one year and two
years. To mitigate the influence of interim fluctuations in performance during the first two measurement periods, the achievement
percentage is capped at 100% for the first two measurement periods. The Compensation Committee believes relative total shareholder
return is a straightforward and objective metric for evaluating our company’s performance against the performance of other
companies and further aligns pay with performance and the interests of our executive officers with the experience and interests
of our stockholders by promoting the creation of sustainable long-term value.
2023 PROXY STATEMENT 41
The Compensation Committee
considers many factors in determining the value of the annual equity awards made to our named executive officers, including, but
not limited to: competitive total compensation levels (cash and equity) among peer companies for comparable roles, individual performance,
the retention value of current unvested equity holdings of each executive officer, and projected contribution towards the achievement
of our short- and long-term goals. The equity awards granted to our named executive officers in August 2022 subject to our 2016
Equity Incentive Plan were as follows:
Named Executive Officer | |
Total Target Award Value(1) ($) | |
Time-Based RSU Awards (number of units) | |
PRSU Awards (target number of units) |
Rajiv Ramaswami | |
9,575,000 | |
275,302 | |
275,302 |
Rukmini Sivaraman | |
3,000,000 | |
100,000 | |
100,000 |
David Sangster | |
3,000,000 | |
100,000 | |
100,000 |
Tyler Wall | |
2,700,000 | |
90,000 | |
90,000 |
(1) |
The target award values are the values approved by the Compensation Committee and are not the same as the grant date fair values calculated in accordance with Financial Accounting Standards Board, Accounting Standards Codification Topic 718, Compensation - Stock Compensation (“ASC Topic 718”) as reported in the “Fiscal Year 2023 Summary Compensation Table” appearing on page 49 of this proxy statement. |
Each RSU represents a contingent
right to receive one share of our Class A common stock upon vesting.
The elements of each annual
equity award granted to these named executive officers for fiscal year 2023 are as follows:
Element |
|
% of Award |
|
Vesting Terms and Conditions |
Time-Based RSU Awards |
|
|
|
• Time-based
quarterly vesting over four years, subject to continued service to us through each vesting
date. Each RSU represents a contingent right to receive one share of our Class A common
stock upon vesting. |
PRSU Awards |
|
|
|
• PRSU awards become eligible to vest based on the TSR of our company
relative to the TSR of companies in the Nasdaq Composite Index over three years with interim
measurements after one year and two years.
• PRSU awards become eligible to vest based on performance for
each period, with vesting to occur in September following the period, subject to
continued service to us through each vesting date.
• The
total number of units subject to the PRSU awards that may become eligible to vest range from an achievement percentage of
0% to 200% of the target award, except that the achievement percentage is capped at 100% for the first two measurement periods
(up to one-third of the target units may be earned for each of the first two measurement periods, subject to continued service
to us through each vesting date).
• The total number of units subject to the PRSU awards that may
vest are (i) 0% if the TSR of our company ranks below the 25th percentile of the
companies in the index, (ii) 100% if the TSR of our company ranks at the 50th percentile
of the companies in the index, and (iii) 200% if the TSR of our company ranks at the 75th
percentile of the companies in the index. If our TSR ranks between these percentile thresholds,
the achievement percentage of the target number of units subject to the PRSU
awards that may vest is determined using linear interpolation.
• PRSU
awards deemed earned at the end of the third measurement period based on achievement will be adjusted to deduct any PRSU awards
already vested in the first two measurement periods.
• The award is subject to a maximum value cap that limits the total
value that may become eligible to vest at the end of the third measurement period,
with the achievement percentage for the period subject to reduction so that the product
of the ending price per share at the end of the period multiplied by the achievement percentage
cannot exceed $89.70 (i.e., six times the average closing price per share of our Class
A common stock from June 1, 2022 through July 31, 2022, for the awards granted
in August 2022).
|
2023 PROXY STATEMENT |
42 |
PRSU Performance Results
Per the terms detailed above,
the table below details the interim performance period measurement for PRSU awards granted to our executive officers in fiscal
year 2022 and fiscal year 2023. The second interim performance measurement for the PRSU awards granted in fiscal year 2022 and
the first interim performance measurement for the awards granted in fiscal year 2023 determined the number of units (up to 1/3
of the total target award for each grant) vested based on our total shareholder return relative to the TSR of the companies in
the Nasdaq Composite Index through July 31, 2023. A summary of the performance results is as follows:
|
|
FY22-FY24 PRSU Performance Results(1) |
|
|
Year 1(2) |
|
Year 2(2) |
|
Year 3(2) |
Nutanix TSR |
|
-59.02% |
|
-20.83% |
|
|
Percentile Rank |
|
31.32% |
|
64.77% |
|
TBD |
Payout (% of Tranche) |
|
62.64% |
|
100% |
|
Payout (% of Total Target Units) |
|
20.88% |
|
33.33% |
|
|
TOTAL PAYOUT (% OF TARGET) TO DATE |
|
54.21% |
|
|
FY23-FY25 PRSU Performance Results(1) |
|
|
Year 1(2) |
|
Year 2(2) |
|
Year 3(2) |
Nutanix TSR |
|
93.19% |
|
|
|
|
Percentile Rank |
|
95.58% |
|
TBD |
|
TBD |
Payout (% of Tranche) |
|
100.00% |
|
|
Payout (% of Total Target Units) |
|
33.33% |
|
|
|
|
TOTAL PAYOUT (% OF TARGET) TO DATE |
|
33.33% |
(1) |
Performance results are measured from the beginning of the performance period through the end of each respective fiscal year. For example, Year 2 for the PRSU awards granted in fiscal year 2022 represents Nutanix relative TSR performance over a two-year period from August 1, 2021 to July 31, 2023. |
(2) |
The interim measurements for Tranches 1 and 2 are capped at 100%, or 1/3rd of the target shares covered by an award. The payout in Year 3 can be up to 200% of target, less any interim payouts distributed to date. |
Severance and Change of Control-Related Benefits
Our named executive officers
each participate in our Executive Severance Policy and our Change of Control and Severance Policy.
Our Executive Severance Policy
provides eligible employees with protections in the event of the involuntary termination of their employment under circumstances
not related to a change of control of our company. Our Change of Control and Severance Policy provides eligible employees with
protections in the event of their involuntary termination of employment following a change of control of our company. In addition,
certain of our executive officers may have such provisions in their employment agreements.
We believe that these protections
assist us in retaining our executive officers and allow them to maintain continued focus and dedication to their responsibilities
to maximize stockholder value, including any potential transaction that could involve a change of control of our company. The terms
of these agreements, our Executive Severance Policy, and our Change of Control Severance Policy are evaluated periodically by the
Board and the Compensation Committee against our retention objectives, a review of relevant market data prepared by the Compensation
Committee’s compensation consultant, Compensia, and with consideration for our ability to attract and retain critical executive
talent.
For a summary of the material
terms and conditions of these post-employment compensation arrangements, see the section titled “Executive Compensation –
Employment Arrangements.”
2023 PROXY STATEMENT |
43 |
Compensation-Setting Process
Role of the Compensation Committee
Pursuant to
its charter, the Compensation Committee is primarily responsible for establishing, approving, and adjusting compensation arrangements
for our executive officers, including our named executive officers, including our CEO, reviewing and approving corporate goals
and objectives relevant to these compensation arrangements, evaluating executive performance against the backdrop of our corporate
goals and objectives, and determining the long-term incentive component of our executive compensation arrangements in light of
factors related to our performance, including accomplishment of our long-term business and financial goals. For additional information
about the Compensation Committee, see the section titled “Corporate Governance - Board
of Directors and Its Committees -Compensation Committee” in this proxy statement.
Compensation decisions for
our executive officers are made by the Compensation Committee, with the input of its independent compensation consultant and our
CEO and management team (except with respect to their own compensation). The Compensation Committee periodically reviews and, as
necessary, adjusts the cash and equity compensation of our executive officers with the goal of ensuring that our executive officers
are properly incentivized.
The Compensation Committee
considers compensation data from our compensation peer group as one of several factors that inform its judgment of appropriate
parameters for target compensation levels. The Compensation Committee, however, does not strictly benchmark compensation to a specific
percentile of our compensation peer group, nor does it apply a formula or assign relative weights to specific compensation elements.
In addition, while market data is a factor, the Compensation Committee is forward-looking in aligning our executive compensation
program with the unique growth opportunity we believe we have, and the risks associated with pursuing the opportunity, which are
not captured by reviewing peer data.
The Compensation Committee
makes compensation decisions after considering several factors, including:
• |
each executive officer’s performance and experience; |
• |
the scope and strategic impact of the executive officer’s
responsibilities and the criticality of the executive officer’s role to the performance of our company and achievement
of our growth strategy and transition to a subscription-based model; |
• |
our past business performance and future expectations; |
• |
our long-term goals and strategies; |
• |
the performance of our executive team as a whole; |
• |
for each executive officer, other than our CEO, the recommendation
of our CEO based on an evaluation of his or her performance; |
• |
the difficulty and cost of replacing high-performing leaders
with in-demand skills; |
• |
each executive officer’s tenure and past compensation levels,
including existing unvested equity; |
• |
internal equity of executive officers relative to one another;
and |
• |
the competitiveness of compensation relative to our compensation
peer group. |
The Compensation Committee
operates under a written charter adopted by our Board. A copy of the charter is posted on the investor relations section of our
website located at http://ir.nutanix.com.
Role of Management
The Compensation Committee
works with members of our management team, including our CEO and our human resources, finance, and legal professionals (except
with respect to their own compensation). Typically, our CEO makes recommendations to the Compensation Committee, regularly attends
the Compensation Committee’s meetings, and is involved in the determination of compensation for our executive officers, except
that our CEO does not make recommendations as to his own compensation. Because of his direct role overseeing our executive officers,
our CEO makes recommendations to the Compensation Committee regarding short-term and long-term compensation for all executive officers
(other than himself) based on our results and aspirations, an individual executive officer’s actual contribution toward,
and ability to contribute to the achievement of, these results and aspirations, and performance toward individual goal achievement.
The Compensation Committee then reviews the recommendations and other data and makes decisions as to total compensation for each
executive officer, as well as each individual compensation component.
2023 PROXY STATEMENT |
44 |
Role of Compensation Consultant
The Compensation Committee
is authorized, in its sole discretion, to retain the services of one or more compensation consultants, outside legal counsel, and
such other advisors as necessary to assist with the execution of its duties and responsibilities. For fiscal year 2023, the Compensation
Committee engaged Compensia, a national compensation consulting firm, to conduct market research and analysis on our various executive
positions, to assist the Compensation Committee in developing appropriate incentive plans for our executive officers on an annual
basis, to provide the Compensation Committee with advice and ongoing recommendations regarding material executive compensation
decisions, and to review compensation proposals of management. Compensia evaluated the following components to assist the Compensation
Committee in establishing executive compensation for fiscal year 2023:
• |
base salary; |
• |
target and actual annual incentive compensation; |
• |
target and actual total cash compensation (base salary and annual incentive compensation); |
• |
long-term incentive compensation in the form of equity awards; and |
• |
beneficial ownership of our common stock. |
As described
above in the section titled “Corporate Governance – Director Compensation –
Non-Employee Director Compensation Policy,” Compensia also annually provides, at the
direction of the Compensation Committee, an analysis of the competitive position of our non-employee director compensation policy
against the compensation peer group used for executive compensation purposes.
Based on consideration of
the factors specified in the SEC rules and Nasdaq listing standards, the Compensation Committee does not believe that its relationship
with Compensia and the work of Compensia on behalf of the Compensation Committee and our management team has raised any conflicts
of interest. The Compensation Committee reviews these factors on an annual basis. As part of the Compensation Committee’s
determination of Compensia’s independence for fiscal year 2023, it received written confirmation from Compensia addressing
these factors and stating its belief that it remains an independent compensation consultant to the Compensation Committee.
Compensation Peer Group
The Compensation Committee
reviews market data of companies that we believe are comparable to our company. With Compensia’s assistance, the Compensation
Committee developed a peer group for use when making its fiscal year 2023 compensation decisions, which consisted of companies
in information technology industry sectors, with revenues and market capitalizations within ranges similar to that of our company
and generally based in the United States, including companies based in California. While the Compensation Committee considers compensation
practices of the peer companies, the Compensation Committee uses this information as one of many factors in its evaluation of compensation
matters, as described above, and does not set compensation levels to meet specific percentiles.
The Compensation Committee
referred to compensation data from this peer group when making fiscal year 2023 base salary, annual incentive, and equity award
decisions for our executive officers, including our named executive officers. The following is a list of the public companies that
comprised our fiscal year 2023 compensation peer group:
Box |
Citrix Systems |
Commvault Systems |
Dropbox |
Elastic |
F5 Networks |
Guidewire Software |
HubSpot |
Informatica |
New Relic |
Pegasystems |
PTC |
Pure Storage |
SolarWinds |
Splunk |
Teradata |
VMware |
Zendesk |
|
|
In May 2023, the Compensation
Committee reviewed the compensation peer group that would be used for compensation decision-making for fiscal year 2024. With Compensia’s
assistance, the Compensation Committee developed a compensation peer group for use when making its fiscal year 2023 compensation
decisions, which consisted of companies in information technology industry sectors, with revenues and market capitalizations within
ranges similar to that of our company and generally based in the United States, including companies based in California. In light
of our comparable market capitalization and revenues at the time and, in certain cases, the completed acquisition of a peer group
company, the Compensation Committee determined that Citrix Systems (which was taken
2023 PROXY STATEMENT |
45 |
private in September 2022)
and Zendesk (which was taken private in November 2022) should be removed from the peer group and that MongoDB and Twilio should
be added to the peer group. The following is a list of the public companies that comprise our fiscal year 2024 compensation peer
group:
Box |
Commvault Systems |
Dropbox |
Elastic |
F5 Networks |
Guidewire Software |
HubSpot |
Informatica |
MongoDB |
New Relic |
Pegasystems |
PTC |
Pure Storage |
SolarWinds |
Splunk |
Teradata |
Twilio |
VMware |
|
|
Employment Arrangements
We have employment agreements
with our currently employed named executive officers. Each of these arrangements provides for “at-will” employment
and sets forth the initial terms and conditions of employment of the named executive officer, including base salary, target annual
incentive opportunity, standard employee benefit plan participation, a recommendation for an initial grant of an option to purchase
shares of our common stock or other equity awards, opportunities for post-employment compensation and vesting acceleration terms.
These agreements also set forth the rights and responsibilities of each party and may protect both parties’ interests in
the event of a termination of employment by providing for certain payments and benefits under specified circumstances, including
following a change of control of our company. These offers of employment were each subject to the execution of a standard proprietary
information and invention assignment agreement and proof of identity and work eligibility in the United States.
Each of these agreements
was approved on our behalf by the Compensation Committee or the Board at the recommendation of the Compensation Committee. We believe
that these arrangements were necessary to induce these individuals to forgo other employment opportunities or leave their then-current
employer for the uncertainty of a demanding position in a new and unfamiliar organization.
For a summary of the material
terms and conditions of our employment agreements with our named executive officers, see the section titled “Executive Compensation
– Employment Arrangements” below.
Other Compensation Policies and Practices
Employee Benefits
We provide employee benefits
to all eligible employees in the United States, including our currently employed named executive officers, which the Compensation
Committee believes are reasonable and consistent with its overall compensation objective to better enable us to attract and retain
employees. These benefits include medical, dental and vision insurance, health savings accounts, a 401(k) plan, life and disability
insurance, flexible spending accounts, an employee stock purchase plan, and other plans and programs.
Stock Trading Practices; Hedging and Pledging
Policy
We maintain an Insider Trading
Policy that, among other things, prohibits our executive officers, including our named executive officers, directors, and employees
from trading during quarterly and special trading restrictions. We also prohibit short sales, hedging, and similar transactions
designed to decrease the risks associated with holding our securities, as well as pledging our securities as collateral for loans
and transactions involving derivative securities relating to our common stock. Our Insider Trading Policy requires that all directors,
executive officers, and certain other key employees, including our named executive officers, pre-clear with our legal department
any proposed open market transactions.
Compensation Recovery Policy
The Compensation Committee
has adopted a Compensation Recovery Policy that is intended to comply with Section 10D of the Exchange Act, Exchange Act Rule 10D-1,
and Nasdaq listing rules. This policy provides that our company will recover reasonably promptly the amount of erroneously awarded
incentive-based compensation received by our executive officers in the event that our company is required to prepare an accounting
restatement due to the material noncompliance of our company with any financial reporting requirement under the securities laws,
including any required accounting restatement to correct an error in previously issued financial statements that is material to
2023 PROXY STATEMENT |
46 |
the previously issued financial
statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected
in the current period. This policy applies to incentive-based compensation received on or after October 2, 2023, and during the
three completed fiscal years immediately preceding the date that our company is required to prepare an accounting restatement.
Impact of Accounting
and Tax Requirements on Compensation
Deductibility of Executive
Compensation
Generally, Section 162(m)
of the Internal Revenue Code of 1986, as amended (the “Code”), disallows a corporate federal income tax deduction to
any publicly held corporation for any remuneration in excess of $1 million paid in any taxable year to its chief executive officer,
chief financial officer, and certain other highly compensated executive officers. As a result, we expect that compensation awarded
to each of our named executive officers will not be deductible to the extent it is in excess of this $1 million threshold.
The Compensation Committee may, in its judgment, authorize compensation payments that are not fully tax deductible when it believes
that such payments are appropriate to attract and retain executive talent or meet other business objectives. The Compensation Committee
intends to continue to compensate our named executive officers in a manner that it believes to be consistent with the best long-term
interests of our company and our stockholders.
Taxation of “Parachute”
Payments and Deferred Compensation
We do not provide our named
executive officers with a “gross-up” or other reimbursement payment for any tax liability that they might owe as a
result of the application of Sections 280G, 4999, or 409A of the Code. Sections 280G and 4999 of the Code provide that certain
officers and directors, and service providers who hold significant equity interests, and certain highly compensated service providers
may be subject to an excise tax if they receive payments or benefits in connection with a change of control that exceeds certain
prescribed limits, and that our company, or a successor, may forfeit a deduction on the amounts subject to this additional tax.
However, under our Change of Control Severance Policy, if any payment or benefits to a policy participant, including the payments
and benefits under the policy, would constitute a “parachute payment” within the meaning of Section 280G of the Code
and would therefore be subject to an excise tax under Section 4999 of the Code, then such payments and benefits will be either
(i) reduced to the largest portion of the payments and benefits that would result in no portion of the payments and benefits being
subject to the excise tax, or (ii) not reduced, whichever, after taking into account all applicable federal, state, and local employment
and income taxes and the excise tax, results in the participant’s receipt, on an after-tax basis, of the greater payments
and benefits.
Section 409A also imposes
additional significant taxes on the individual in the event that an executive officer, director, or other service provider receives
“deferred compensation” that does not meet certain requirements of Section 409A of the Code.
Accounting for Stock-Based
Compensation
We follow ASC Topic 718 for
our stock-based awards. ASC Topic 718 requires companies to measure the compensation expense for all share-based payment awards
made to employees and directors, including stock options, RSU awards, and PRSU awards, based on the grant date “fair value”
of these awards. This calculation is performed for accounting purposes and reported in the compensation tables below. ASC Topic
718 also requires companies to recognize the compensation cost of their stock-based compensation awards in their income statements
over the period that a named executive officer is required to render service in exchange for the award.
Compensation Risk Assessment
The Compensation Committee
reviews and discusses with management the risks arising from our compensation philosophy and practices applicable to all employees
to determine whether they encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate
such risks. In addition, the Compensation Committee has engaged Compensia to independently review our executive compensation program.
Based on these reviews, the Compensation Committee structures our executive compensation program to encourage our named executive
officers to focus on both short-term and long-term success. We do not believe that our compensation programs create risks that
are reasonably likely to have a material adverse effect on us.
2023 PROXY STATEMENT |
47 |
Report of the Compensation Committee
The Compensation Committee has reviewed and discussed
the Compensation Discussion and Analysis with management. Based on such review and discussions, the Compensation Committee has
recommended to our Board that the Compensation Discussion and Analysis be included in this proxy statement.
Respectfully submitted by the members of the Compensation
Committee:
The Compensation Committee
Max de Groen (Chair)
Craig Conway
Brian Stevens
Mark Templeton (joined the Committee on September 13, 2023)
2023 PROXY STATEMENT |
48 |
Executive Compensation Tables
Fiscal Year 2023 Summary Compensation Table
The following table presents all of the compensation
awarded to, or earned by, our named executive officers during the fiscal year ended July 31, 2023.
Name and Principal Position | |
Fiscal Year | |
Salary ($) | |
Bonus ($) | |
Option Awards ($) | |
Stock Awards ($)(1) | |
Non-Equity Incentive Plan Compensation ($)(2) | |
All Other Compensation ($) | |
Total ($) |
Rajiv Ramaswami President and Chief Executive Officer | |
2023 | |
800,010 | |
— | |
— | |
13,153,930 | |
892,000 | |
— | |
14,845,940 |
|
2022 | |
783,596 | |
— | |
— | |
11,165,080 | |
980,000 | |
— | |
12,928,676 |
|
2021 | |
515,151 | |
— | |
— | |
36,350,054 | |
943,600 | |
— | |
37,808,805 |
Rukmini Sivaraman(3) | |
2023 | |
449,431 | |
— | |
— | |
4,778,000 | |
376,313 | |
— | |
5,603,744 |
Chief Financial Officer | |
2022 | |
366,329 | |
— | |
— | |
5,255,793 | |
291,267 | |
— | |
5,913,389 |
David M. Sangster Chief Operating Officer | |
2023 | |
475,010 | |
— | |
— | |
4,778,000 | |
397,219 | |
— | |
5,650,229 |
|
2022 | |
465,263 | |
— | |
— | |
3,907,717 | |
436,406 | |
— | |
4,809,386 |
|
2021 | |
464,115 | |
— | |
— | |
4,196,306 | |
614,754 | |
— | |
5,275,175 |
Tyler Wall | |
2023 | |
475,010 | |
— | |
— | |
4,300,200 | |
397,219 | |
— | |
5,172,429 |
Chief Legal Officer | |
2022 | |
465,263 | |
— | |
— | |
2,679,554 | |
436,406 | |
— | |
3,581,223 |
|
2021 | |
415,260 | |
— | |
— | |
2,307,970 | |
440,034 | |
— | |
3,163,264 |
(1) |
The amounts reported in this column represent
the aggregate grant date fair value of equity awards, as computed in accordance with ASC Topic 718. These amounts do not necessarily
reflect the actual economic value that may ultimately be realized by the named executive officers. The grant date fair value
for time-based RSUs reported in the table is calculated in accordance with ASC Topic 718 based on the closing price per share
of our Class A common stock as reported on The Nasdaq Global Select Market on the date of grant. The grant date fair value
for PRSUs reported in the table is calculated in accordance with ASC Topic 718 using Monte Carlo simulations. A Monte Carlo
simulation requires the use of various assumptions, including the stock price volatility and risk-free interest rate as of
the valuation date corresponding to the length of time remaining in the performance period and expected dividend yield. |
(2) |
The amounts reported in this column represent the amounts
earned under our Executive Incentive Compensation Plan. |
(3) |
Ms. Sivaraman was appointed as our Chief Financial Officer
on May 1, 2022. Ms. Sivaraman was not a named executive officer for fiscal year 2021. Therefore, no compensation information
for fiscal year 2021 is presented for Ms. Sivaraman. |
2023 PROXY STATEMENT 49
Grants of Plan-Based Awards
The following table presents, for
each of our named executive officers, information concerning plan-based awards granted during the fiscal year ended July 31, 2023.
This information supplements the information about these awards set forth in the “Fiscal
Year 2023 Summary Compensation Table” above.
| |
| |
|
|
Estimated Future Payouts Under
Non-Equity Incentive Plan Awards(1) | |
Estimated Future Payouts Under Equity Incentive Plan Awards(2) | |
All Other Stock Awards: | |
Grant Date Fair Value of |
Name | |
Award Type | |
Grant Date | |
Threshold ($) | |
Target ($) | |
Maximum ($) | |
Threshold (#) | |
Target (#) | |
Maximum (#) | |
Number of Shares of Stock or Units(3) (#) | |
Stock and Option Awards(4) ($) |
Rajiv Ramaswami | |
Cash incentive | |
— | |
— | |
800,000 | |
1,600,000 | |
— | |
— | |
— | |
— | |
— |
| |
Time-based RSUs | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
275,302 | |
5,343,612 |
| |
PRSUs | |
8/25/2022 | |
— | |
— | |
— | |
137,651 | |
275,302 | |
550,604 | |
— | |
7,810,318 |
Rukmini Sivaraman | |
Cash incentive | |
— | |
— | |
337,500 | |
675,000 | |
— | |
— | |
— | |
— | |
— |
| |
Time-based RSUs | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
100,000 | |
1,941,000 |
| |
PRSUs | |
8/25/2022 | |
— | |
— | |
— | |
50,000 | |
100,000 | |
200,000 | |
— | |
2,837,000 |
David M. Sangster | |
Cash incentive | |
— | |
— | |
356,250 | |
712,500 | |
— | |
— | |
— | |
— | |
— |
| |
Time-based RSUs | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
100,000 | |
1,941,000 |
| |
PRSUs | |
8/25/2022 | |
— | |
— | |
— | |
50,000 | |
100,000 | |
200,000 | |
— | |
2,837,000 |
Tyler Wall | |
Cash incentive | |
— | |
— | |
356,250 | |
712,500 | |
— | |
— | |
— | |
— | |
— |
| |
Time-based RSUs | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
90,000 | |
1,746,900 |
| |
PRSUs | |
8/25/2022 | |
— | |
— | |
— | |
45,000 | |
90,000 | |
180,000 | |
— | |
2,553,300 |
(1) |
The amounts reported in this
column represent cash incentive compensation opportunities under the fiscal year 2023 Executive Incentive Compensation Plan
at target levels for our corporate objectives. For achievement in excess of target, overperformance could be rewarded with
a payout of up to an additional 100% of each named executive officer’s target (for a maximum payment of 200% of each
named executive officer’s target). |
(2) |
The PRSUs are eligible to vest in up to
three installments based on the total shareholder return of our company relative to the TSR of companies in the Nasdaq Composite
Index over three performance periods: (i) August 1, 2022 to July 31, 2023, (ii) August 1, 2022 to July 31, 2024, and (iii)
August 1, 2022 to July 31, 2025. PRSUs that become eligible to vest based on performance for a performance period vest on
September 15 following the period, subject to continued service to us through the vesting date. The total number of PRSUs
that are eligible to vest range from an achievement percentage of 0% to 200% of the target number of PRSUs, except that the
achievement percentage is capped at 100% for the first two performance periods. Up to one-third of the target number of PRSUs
are eligible to vest as a result of performance for each of the first two performance periods. The achievement percentage
is (i) 0%, if our TSR ranks below the 25th percentile of the indexed companies, (ii) 100%, if our TSR ranks at the 50th
percentile of the indexed companies, and (iii) 200%, if our TSR ranks at the 75th percentile of the indexed companies. If
our TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation. 100%
of the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will be
eligible to vest with respect to the third performance period, less any PRSUs already vested in the first two performance
periods. The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the
end of the third performance period, with the achievement percentage for the period subject to reduction so that the product
of the ending price per share at the end of the period multiplied by the achievement percentage cannot exceed $89.70. |
(3) |
The RSUs vest in 16 equal quarterly installments,
with the first quarterly installment having vested on December 15, 2022, subject to continued service to us through each vesting
date. |
(4) |
The amounts reported in this column represent
the aggregate grant date fair value of equity awards, as computed in accordance with ASC Topic 718. These amounts do
not necessarily reflect the actual economic value that may ultimately be realized by the named executive officers. The grant
date fair value for time-based RSUs reported in the table is calculated in accordance with ASC Topic 718 based on the closing
price per share of our Class A common stock as reported on The Nasdaq Global Select Market on the date of grant. The grant
date fair value for PRSUs reported in the table is calculated in accordance with ASC Topic 718 using Monte Carlo simulations.
A Monte Carlo simulation requires the use of various assumptions, including the stock price volatility and risk-free interest
rate as of the valuation date corresponding to the length of time remaining in the performance period and expected dividend
yield. |
2023 PROXY STATEMENT 50
Outstanding Equity Awards At Fiscal Year 2023
Year-End Table
The following table presents, for
each of our named executive officers, information concerning each outstanding equity award held by such named executive officer
as of July 31, 2023. This information supplements the information about these awards set forth in the “Fiscal
Year 2023 Summary Compensation Table” above.
| |
| |
Option Awards | |
Stock Awards |
|
|
|
Name | |
Grant Date | |
Number of Securities Underlying Unexercised
Options Exercisable (#) | |
Number of Securities Underlying Unexercised
Options Unexercisable (#) | |
Option Exercise Price ($) | |
Option Expiration Date | |
Number of Shares or Units of Stock That Have Not Vested (#) | | |
Market
Value of Shares
or Units of Stock
That Have Not
Vested(1) ($) | |
|
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Yet Vested (#) |
|
|
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(1) ($) |
Rajiv
Ramaswami | |
12/9/2020 | |
— | |
— | |
— | |
— | |
141,976 | (2) | |
4,287,675 | |
| — | | |
— |
| |
12/9/2020 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 350,679 | (3) | |
10,590,506 |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
77,651 | (4) | |
2,345,060 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 92,030 | (5) | |
2,779,306 |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
223,683 | (6) | |
6,755,227 | |
| — | | |
— |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 275,302 | (7) | |
8,314,120 |
Rukmini
Sivaraman | |
8/27/2019 | |
— | |
— | |
— | |
— | |
3,750 | (8) | |
113,250 | |
| — | | |
— |
| |
10/2/2020 | |
— | |
— | |
— | |
— | |
38,309 | (9) | |
1,156,932 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
23,295 | (4) | |
703,509 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 27,609 | (5) | |
833,792 |
| |
5/1/2022 | |
— | |
— | |
— | |
— | |
57,121 | (10) | |
1,725,054 | |
| — | | |
— |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
81,250 | (6) | |
2,453,750 | |
| — | | |
— |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 100,000 | (7) | |
3,020,000 |
David Sangster | |
8/27/2019 | |
— | |
— | |
— | |
— | |
15,625 | (8) | |
471,875 | |
| — | | |
— |
| |
10/2/2020 | |
— | |
— | |
— | |
— | |
58,937 | (9) | |
1,779,897 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
27,178 | (4) | |
820,776 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 32,210 | (5) | |
972,742 |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
81,250 | (6) | |
2,453,750 | |
| — | | |
— |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 100,000 | (7) | |
3,020,000 |
Tyler
Wall | |
8/27/2019 | |
— | |
— | |
— | |
— | |
4,688 | (8) | |
141,578 | |
| — | | |
— |
| |
10/2/2020 | |
— | |
— | |
— | |
— | |
32,416 | (9) | |
978,963 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
18,636 | (4) | |
562,807 | |
| — | | |
— |
| |
10/11/2021 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 22,087 | (5) | |
667,027 |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
73,125 | (6) | |
2,208,375 | |
| — | | |
— |
| |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | | |
— | |
| 90,000 | (7) | |
2,718,000 |
(1) |
Based on the closing price per share of our
Class A common stock as reported on The Nasdaq Global Select Market on July 31, 2023, which was $30.20. |
(2) |
25% of the RSUs vested on December 15, 2022, with 1/16th
of the RSUs vesting quarterly thereafter, subject to continued service to us through each vesting date. |
2023 PROXY STATEMENT 51
(3) |
The PRSUs were subject to stock price-based
milestones. The first milestone required achievement of an average closing price per share of our Class A common stock of
$32.09 for a 30 consecutive calendar day period. The second milestone required achievement of an average closing price per
share of our Class A common stock of $38.51 for a 30 consecutive calendar day period. Achievement of the first milestone resulted
in 67% of the 703,117 PRSUs becoming eligible to vest. Achievement of both milestones resulted in 133% of the 703,117 PRSUs
becoming eligible to vest. Upon achievement, 25% of the eligible PRSUs vested on December 15, 2021, with 1/16th of the eligible
PRSUs vesting quarterly thereafter, subject to continued service to us through each vesting date. |
(4) |
The RSUs vest in 16 equal quarterly installments, with
the first quarterly installment having vested on December 15, 2021 subject to continued service to us through each vesting
date. |
(5) |
The PRSUs are eligible to vest in up to three installments
based on the total shareholder return (“TSR”) of our company relative to the TSR of companies in the Nasdaq Composite
Index over three performance periods: (i) August 1, 2021 to July 31, 2022, (ii) August 1, 2021 to July 31, 2023, and (iii)
August 1, 2021 to July 31, 2024. PRSUs that become eligible to vest based on performance for a performance period vest on
September 15 following the period, subject to continued service to us through the vesting date. The total number of PRSUs
that are eligible to vest range from an achievement percentage of 0% to 200% of the target number of PRSUs, except that the
achievement percentage is capped at 100% for the first two performance periods. Up to one-third of the target number
of PRSUs are eligible to vest as a result of performance for each of the first two performance periods. The achievement
percentage is (i) 0%, if our TSR ranks below the 25th percentile of the indexed companies, (ii) 100%, if our TSR ranks at
the 50th percentile of the indexed companies, and (iii) 200%, if our TSR ranks at the 75th percentile of the indexed companies.
If our TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation.
100% of the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will
be eligible to vest with respect to the third performance period, less any PRSUs already vested in the first two performance
periods. The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the
end of the third performance period, with the achievement percentage for the period subject to reduction so that the product
of the ending price per share at the end of the period multiplied by the achievement percentage cannot exceed $145.92. |
(6) |
The RSUs vest in 16 equal quarterly installments, with
the first quarterly installment having vested on December 15, 2022, subject to continued service to us through each vesting
date. |
(7) |
The PRSUs are eligible to vest in up to three installments
based on the total shareholder return (“TSR”) of our company relative to the TSR of companies in the Nasdaq Composite
Index over three performance periods: (i) August 1, 2022 to July 31, 2023, (ii) August 1, 2022 to July 31, 2024, and (iii)
August 1, 2022 to July 31, 2025. PRSUs that become eligible to vest based on performance for a performance period vest on
September 15 following the period, subject to continued service to us through the vesting date. The total number of PRSUs
that are eligible to vest range from an achievement percentage of 0% to 200% of the target number of PRSUs, except that the
achievement percentage is capped at 100% for the first two performance periods. Up to one-third of the target number
of PRSUs are eligible to vest as a result of performance for each of the first two performance periods. The achievement
percentage is (i) 0%, if our TSR ranks below the 25th percentile of the indexed companies, (ii) 100%, if our TSR ranks at
the 50th percentile of the indexed companies, and (iii) 200%, if our TSR ranks at the 75th percentile of the indexed companies.
If our TSR ranks between these percentile thresholds, the achievement percentage is determined using linear interpolation.
100% of the target number of PRSUs (as may be increased as a result of any achievement percentage in excess of target) will
be eligible to vest with respect to the third performance period, less any PRSUs already vested in the first two performance
periods. The PRSUs are subject to a maximum value cap that limits the total value that may become eligible to vest at the
end of the third performance period, with the achievement percentage for the period subject to reduction so that the product
of the ending price per share at the end of the period multiplied by the achievement percentage cannot exceed $89.70. |
(8) |
The RSUs vest in 16 equal quarterly installments, with
the first quarterly installment having vested on December 15, 2019, subject to continued service to us through each vesting
date. |
(9) |
The RSUs vest in 16 equal quarterly installments, with
the first quarterly installment having vested on December 15, 2020, subject to continued service to us through each vesting
date. |
(10) |
The RSUs vest in 16 equal quarterly installments, with
the first quarterly installment having vested on September 15, 2022, subject to continued service to us through each vesting
date. |
2023 Option Exercises and Stock Vested Value
The following table presents, for each of our
named executive officers, the shares of our Class A common stock that were acquired upon the exercise of stock options and vesting
of RSU and PRSU awards and the related value realized during fiscal year 2023.
| |
Option Awards |
|
Stock Awards |
|
Name | |
Number of Shares Acquired on Exercise (#) |
|
Value Realized
on Exercise(1)
($) |
|
Number of Shares Acquired on Vesting (#) |
|
Value Realized
on Vesting(2)
($) |
|
Rajiv Ramaswami | |
— | |
— | |
443,390 | |
12,164,323 | |
Rukmini Sivaraman | |
— | |
— | |
102,438 | |
2,811,456 | |
David M. Sangster | |
— | |
— | |
163,066 | |
4,477,717 | |
Tyler Wall | |
— | |
— | |
76,758 | |
2,108,582 | |
(1) |
The value realized upon the exercise of stock
options is calculated by (i) subtracting the option exercise price from the closing price per share (or the sale price per
share in the event of a same day sale) of our Class A common stock on the date of exercise, multiplied by (ii) the number
of shares underlying the stock option exercised. |
(2) |
The value realized upon vesting of RSUs or PRSUs is calculated
by multiplying the number of shares vested by the closing price per share of our Class A common stock as reported on The Nasdaq
Global Select Market on the applicable vesting date (or, in the event the applicable vesting date occurs on a holiday or weekend,
the closing price per share of our Class A common stock as reported on The Nasdaq Global Select Market on the immediately
preceding trading day). |
2023 PROXY STATEMENT 52
Employment Arrangements
Employment Arrangements with Named Executive
Officers
We have entered into employment
agreements with each of our currently employed named executive officers. Each of these arrangements was negotiated on our behalf
by the Compensation Committee or our then current CEO.
Typically, these arrangements
provide for at-will employment and set forth the initial terms and conditions of employment of each named executive officer, including
base salary, target annual incentive opportunity, standard employee benefit plan participation, a recommendation for initial equity
awards and in certain cases the circumstances, if applicable, under which post-employment compensation or vesting acceleration
terms might apply. These offers of employment were each subject to execution of a standard proprietary information and invention
agreement and proof of identity and work eligibility in the United States.
Rajiv Ramaswami
We entered into an employment
letter with Rajiv Ramaswami, our President and CEO, on December 7, 2020. The employment letter has an indefinite term and Mr. Ramaswami’s
employment is at-will. Mr. Ramaswami’s current annual base salary is $800,000, and he is currently eligible to earn annual
incentive compensation with a target equal to 100% of annual base salary based upon achievement of targets determined by our Board
or the Compensation Committee for each fiscal year.
In connection
with his hire, Mr. Ramaswami was granted 378,601 RSUs and a target number of 703,117 PRSUs under our 2016 Equity Incentive Plan.
25% of the RSUs vested on December 15, 2021, with 1/16th of the RSUs vesting quarterly thereafter, subject to continued
service to us through each vesting date. The PRSUs were subject to stock price-based milestones. The first milestone required achievement
of an average closing price per share of our Class A common stock of $32.09 for a 30 consecutive calendar day period. The second
milestone required achievement of an average closing price per share of our Class A common stock of $38.51 for a 30 consecutive
calendar day period. In October 2021, the Compensation Committee determined that the second milestone was achieved, resulting in
133% of the 703,117 PRSUs becoming eligible to vest. Upon achievement, 25% of the eligible PRSUs vested on December 15, 2021, with
1/16th of the eligible PRSUs vesting quarterly thereafter, subject to continued service to us through each vesting date.
For additional details regarding Mr. Ramaswami’s equity awards, see “Executive
Compensation – Executive Compensation Tables” above.
Mr. Ramaswami is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
Rukmini Sivaraman
We entered into an employment
letter with Rukmini Sivaraman in connection with her promotion to Chief Financial Officer on April 10, 2022. The employment letter
has an indefinite term and Ms. Sivaraman’s employment is at-will. Ms. Sivaraman’s current annual base salary is
$475,000, and she is currently eligible to earn annual incentive compensation with a target equal to 75% of annual base salary
based upon achievement of targets determined by our Board or the Compensation Committee for each fiscal year.
In connection
with her promotion, Ms. Sivaraman was granted 76,161 RSUs under our 2016 Equity Incentive Plan. 1/16th of the RSUs vested
on September 15, 2022, with 1/16th of the RSUs vesting quarterly thereafter, subject to continued service to us through
each vesting date. For additional details regarding Ms. Sivaraman’s outstanding equity awards, see “Executive
Compensation – Executive Compensation Tables” above.
Ms. Sivaraman is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
David M. Sangster
We entered into an employment
letter with David Sangster, our Chief Operating Officer, on October 17, 2011. The employment letter has an indefinite term and
Mr. Sangster’s employment is at-will. Mr. Sangster’s current annual base salary is $475,000, and he is currently eligible
to earn annual incentive compensation with a target equal to 75% of annual base salary based upon achievement of targets determined
by our Board or the Compensation Committee for each fiscal year.
In connection
with his hire, Mr. Sangster was granted a stock option under our 2010 Plan and option agreement to purchase 350,000 shares of our
Class A common stock. That option has since vested in full and has been exercised by Mr. Sangster. For additional details regarding
Mr. Sangster’s equity awards, see “Executive Compensation – Executive Compensation
Tables” above.
2023 PROXY STATEMENT 53
Mr. Sangster is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
Tyler Wall
We entered into an employment
letter with Tyler Wall, our Chief Legal Officer, on November 20, 2017. The employment letter has an indefinite term and Mr. Wall’s
employment is at-will. Mr. Wall’s current annual base salary is $475,000, and he is currently eligible to earn annual incentive
compensation with a target equal to 75% of annual base salary based upon achievement of targets determined by our Board or the
Compensation Committee for each fiscal year.
In connection
with his hire, Mr. Wall was granted 300,000 RSUs under our 2016 Equity Incentive Plan, which have since vested in full. For additional
details regarding Mr. Wall’s equity awards, see “Executive Compensation –
Executive Compensation Tables” above.
Mr. Wall is a participant
in our Executive Severance Policy and our Change of Control Severance Policy, both of which are described below.
Severance and Change of Control-Related Benefits
Executive Severance Policy
We
have an Executive Severance Policy, pursuant to which a designated employee is eligible to receive severance benefits in lieu of
any other severance payments and benefits, subject to the employee signing a participation agreement, in connection with the involuntary
termination of their employment under the circumstances described in our Executive Severance Policy. Generally, upon a termination
of the eligible employee either (i) by us, other than for Cause, death, or disability, or (ii) by the applicable eligible employee
on account of a Constructive Termination (such termination, “Qualified Termination”), then our Executive Severance
Policy provides for:
(1) |
a lump sum payment equal to the participant’s annual base salary, as in effect immediately
prior to the participant’s Qualified Termination or, if the termination is due to a resignation for Constructive Termination
based on a material reduction in annual base salary, immediately prior to such reduction, multiplied by 100% for each of our
named executive officers, and |
(2) |
payment or reimbursement, at our sole discretion, of the cost of continued health benefits
for a period of up to twelve months for each of our named executive officers. |
In order to receive severance
benefits under our Executive Severance Policy, a participant must timely execute, and not revoke, a release of claims in favor
of us.
For
purposes of our Executive Severance Policy, constructive termination (“Constructive Termination”) means the eligible
employee’s termination of his or her employment after the occurrence of one or more of the following events without the applicable
eligible employee’s express written consent:
(1) |
a reduction in substantially all of the applicable eligible employee’s responsibilities
relative to his or her responsibilities in effect immediately prior to such reduction (provided, however, that, a change in
title or reporting structure, without more, shall not constitute a Constructive Termination), and |
(2) |
a reduction by us in the applicable eligible employee’s rate of annual base salary by
more than 25% within a single calendar year (provided, however, that, a reduction of annual base salary that also applies
to substantially all other similarly situated employees of our company shall not constitute a Constructive Termination). |
In order for the applicable
eligible employee’s termination of his or her employment to be a Constructive Termination, the eligible employee must not
terminate employment with us without first providing us with written notice of the acts or omissions constituting the grounds for
“Constructive Termination” within 90 days of the initial existence of the grounds for “Constructive Termination”
and a cure period of 30 days following our receipt of written notice, such grounds must not have been cured during such time, and
the eligible employee must terminate his or her employment within 30 days following such cure period.
Change of Control Severance Policy
We have a Change of Control
and Severance Policy, pursuant to which a designated employee is eligible to receive severance benefits in lieu of any other severance
payments and benefits, subject to the employee signing a participation agreement, in connection with a change of control of our
company or in connection with the involuntary termination of their employment under the circumstances described in our Change of
Control Severance Policy. Each of our named executive officers is a participant in our Change of Control Severance Policy. Generally,
if a participant’s employment
2023 PROXY STATEMENT 54
is terminated within three
months prior to or 12 months following the consummation of a change of control, which such period is referred to as the change
of control period, either by us or a subsidiary of ours other than for cause, death or disability or by the participant for good
reason, then our Change of Control Severance Policy provides that:
(1) |
the applicable percentage of the then-unvested shares subject to each of the participant’s then-outstanding time-based equity awards will immediately vest and become exercisable, with such percentage being 100% for each of our named executive officers, |
(2) |
for performance-based equity, the equity vesting benefit will be the amount that would have vested (a) based on actual performance, if performance has been measured or is measurable at the change of control; otherwise (b) at target level of performance, |
(3) |
a lump sum payment equal to the participant’s annual base salary, as in effect immediately prior to the participant’s termination or, if the termination is due to a resignation for good reason based on a material reduction in base salary, immediately prior to such reduction, or immediately prior to the change of control, whichever is greater, multiplied by 100% for each of our named executive officers, |
(4) |
a lump sum payment equal to the participant’s target annual incentive as in effect for the fiscal year in which his or her termination of employment occurs, multiplied by 100% for each of our named executive officers, and |
(5) |
payment or reimbursement of the cost of continued health benefits for a period of up to 12 months for each of our named executive officers. |
In order to receive severance
benefits under our Change of Control Severance Policy, a participant must timely execute and not revoke a release of claims in
favor of us. In addition, our Change of Control Severance Policy provides that, if any payment or benefits to a participant, including
the payments and benefits under our Change of Control Severance Policy, would constitute a parachute payment within the meaning
of Section 280G of the U.S. Internal Revenue Code of 1986, as amended, or the Code, and would therefore be subject to an excise
tax under Section 4999 of the Code, then such payments and benefits will be either (i) reduced to the largest portion of the payments
and benefits that would result in no portion of the payments and benefits being subject to the excise tax, or (ii) not reduced,
whichever, after taking into account all applicable federal, state and local employment and income taxes and the excise tax, results
in the participant’s receipt, on an after-tax basis, of the greater payments and benefits.
For purposes of each of our Change of Control
Severance Policy and our Executive Severance Policy, cause (“Cause”) means any of the following reasons (with any references
to us interpreted to include any subsidiary, parent, affiliate or successor of ours):
• |
the participant’s repeated
willful failure to perform his or her duties and responsibilities to us or the participant’s material violation of any
material written policy of ours; |
• |
the participant’s commission of any act
of fraud, embezzlement or any other willful misconduct that has caused or is reasonably expected to result in injury to us; |
• |
the participant’s unauthorized use or disclosure
of any proprietary information or trade secrets of ours or any other party to whom the participant owes an obligation of nondisclosure
as a result of his or her relationship with us; or |
• |
the participant’s material breach of any
of his or her obligations under any written agreement or covenant with us. |
Where the facts giving rise
to Cause are capable of being remedied, we are required to provide written notice to the participant of the facts giving rise to
Cause and provide the participant with 30 calendar days with which to reasonably remedy such facts.
For purposes of our Change
of Control Severance Policy, good reason means the participant’s termination of his or her employment in accordance with
the next sentence after the occurrence of one or more of the following events without the participant’s express written consent:
• |
a material reduction of the participant’s duties,
authorities or responsibilities relative to the participant’s duties, authorities or responsibilities in effect immediately
prior to such reduction (which, in the case of our CEO, includes ceasing to act as the CEO of the combined entity following the
change of control); |
• |
a material reduction by us in the participant’s
rate of annual base salary; provided, however, that, a reduction of annual base salary that also applies to substantially
all other similarly situated employees of ours will not constitute good reason; |
• |
a material change in the geographic location
of the participant’s primary work facility or location; provided, that a relocation of less than 35 miles from the participant’s
then present location will not be considered a material change in geographic location; or |
• |
our failure to obtain from any successor or transferee
of ours an express written and unconditional assumption of our obligations to the participant under our Change of Control
Severance Policy. |
2023 PROXY STATEMENT 55
In order for the participant’s termination
of his or her employment to be for good reason, the participant must not terminate employment with us without first providing us
with written notice of the acts or omissions constituting the grounds for good reason within 90 days of the initial existence of
the grounds for good reason and a cure period of 30 days following the date of written notice, such grounds must not have been
cured during such time, and the participant must terminate his or her employment within 30 days following the expiration of our
30-day cure period.
Potential Payments Upon Termination or Change
of Control
The following table sets forth the estimated payments
that would be received by each of our named executive officers who remained employed with us as of July 31, 2023 if (i) pursuant
to the terms of our Executive Severance Policy, a hypothetical termination of employment by us (other than for cause, death, or
disability) or a hypothetical termination by the officer on account of a constructive termination had occurred on July 31, 2023
and (ii) pursuant to the terms of our Change of Control and Severance Policy, a hypothetical termination of employment by us (other
than for cause, death, or disability) or a hypothetical termination by the officer for good reason in connection with a change
of control of our company had occurred on July 31, 2023. The table below reflects amounts that would have been payable to the named
executive officer assuming that, if applicable, the hypothetical termination occurred on July 31, 2023, and, if applicable, a change
of control of our company also occurred on that date.
Name | |
Salary Severance(1) ($) | |
Annual Incentive Severance(2) ($) | |
Value of Accelerated Vesting(3) ($) | |
Continuation of Medical Benefits(4) ($) | |
Total
($) |
Rajiv Ramaswami | |
| |
| |
| |
| |
|
Termination by us (other than for cause, death, or disability) or termination by officer on account of constructive termination | |
800,000 | |
— | |
— | |
31,319 | |
831,319 |
Termination by us without cause or resignation for good reason during change of control period | |
800,000 | |
800,000 | |
35,071,894 | |
31,319 | |
36,703,213 |
Rukmini Sivaraman | |
| |
| |
| |
| |
|
Termination by us (other than for cause, death, or disability) or termination by officer on account of constructive termination | |
450,000 | |
— | |
— | |
31,319 | |
481,319 |
Termination by us (other than for cause, death, or disability) or termination by officer for good reason during change of control period | |
450,000 | |
337,500 | |
10,006,287 | |
31,319 | |
10,825,106 |
David M. Sangster | |
| |
| |
| |
| |
|
Termination by us (other than for cause, death, or disability) or termination by officer on account of constructive termination | |
475,000 | |
— | |
— | |
31,319 | |
506,319 |
Termination by us (other than for cause, death, or disability) or termination by officer for good reason during change of control period | |
475,000 | |
356,250 | |
9,519,040 | |
31,319 | |
10,381,609 |
Tyler Wall | |
| |
| |
| |
| |
|
Termination by us (other than for cause, death, or disability) or termination by officer on account of constructive termination | |
475,000 | |
— | |
— | |
31,319 | |
506,319 |
Termination by us (other than for cause, death, or disability) or termination by officer for good reason during change of control period | |
475,000 | |
356,250 | |
7,276,750 | |
31,319 | |
8,139,319 |
(1) |
The amounts reported in this column reflect a lump-sum payment equal
to 100% of the named executive officer’s annual base salary as of July 31, 2023 under our Executive Severance Policy
and a lump-sum payment equal to 100% of the named executive officer’s annual base salary as of July 31, 2023 under our
Change of Control and Severance Policy. |
(2) |
The amounts reported in this column reflect a lump-sum payment equal to 100% of the
named executive officer’s annual incentive target for fiscal year 2023 under our Change of Control and Severance Policy. |
(3) |
The amounts reported in this column reflect RSU and PRSU payment values based upon
the closing price of our Class A common stock of $30.20 as reported on The Nasdaq Global Select Market on July 31, 2023. |
(4) |
The amounts reported in this column reflect the cost of COBRA continuation coverage
based on elected level of healthcare coverage (medical, dental and vision) for twelve months under our Executive Severance
Policy and for twelve months under our Change of Control and Severance Policy. |
2023 PROXY STATEMENT 56
CEO Pay Ratio
In accordance with Item 402(u)
of Regulation S-K, promulgated under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we are providing (i)
the ratio of the annual total compensation of our President and CEO, Rajiv Ramaswami, to (ii) the annual total compensation of
our median employee, both calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K.
For fiscal year 2023:
• |
the annual total compensation of our President and CEO
was $14,845,940; |
• |
the annual total compensation of our median employee was $139,047;
and |
• |
the ratio of the annual total compensation of our President and CEO
to the annual total compensation of our median employee was 107:1. |
We believe this ratio is a reasonable estimate
calculated in a manner consistent with Item 402(u) of Regulation S-K under the Exchange Act.
We selected July 31, 2023
as the date on which to determine our employee population and the median employee. In determining this population, we included
all worldwide full-time and part-time employees other than our President and CEO. We did not include any contractors in our employee
population. As permitted by SEC rules, to identify our median employee, we elected to use total target cash compensation plus the
grant date fair market value of equity awards, if any, as our consistently applied compensation measure, which we refer to herein
as total target compensation and calculated as (i) base salary and target annual incentive as of July 31, 2023, and (ii) the grant
date fair market value of equity awards issued during the previous twelve months. For employees paid in a currency other than U.S.
dollars, we converted their compensation to U.S. dollars using the exchange rates used by us for various financial and accounting
purposes in effect on July 31, 2023. To identify our median employee, we then calculated the total target direct compensation for
our global employee population and excluded employees at the median who had anomalous compensation characteristics.
The SEC rules for identifying
the median employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt
a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation
practices. Consequently, the pay ratio reported by other companies may not be comparable to the pay ratio reported by us, as other
companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates,
and assumptions in calculating their own pay ratios.
2023 PROXY STATEMENT 57
Pay Versus Performance
In accordance
with Item 402(v) of Regulation S-K, below is a comparison of compensation actually paid (“CAP”) and certain measures
of financial performance. For further information concerning our compensation philosophy and how we align executive compensation
with performance, refer to the “Executive Compensation – Compensation Discussion
and Analysis” section.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 Investment Based On: |
|
|
|
|
Fiscal
Year
(a) |
|
SCT Total
for First
PEO(1)
(b)($) |
|
CAP for
First
PEO(2)
(c)($) |
|
SCT
Total for
Second
PEO(3)
(b)($) |
|
CAP for
Second
PEO(2)
(c)($) |
|
|
Avg. SCT
Total for
Non-PEO
NEOs(7)
(d)($) |
|
Avg.
CAP for
Non-PEO
NEOs(8)
(e)($) |
|
|
Total
Shareholder
Return(4)
(f)($) |
|
Peer Group
Total
Shareholder
Return(4)
(g)($) |
|
Net Income
(Loss)(5)
(in
thousands)
(h)($) |
|
|
Company
Selected
Measure:
Annual
Recurring
Revenue(6)(in
thousands)
(i)($) |
2023 |
|
14,845,940 |
|
38,679,011 |
|
N/A |
|
N/A |
|
|
5,480,229 |
|
10,332,003 |
|
|
136 |
|
164 |
|
(254,560 |
) |
|
1,561,981 |
2022 |
|
12,928,676 |
|
3,241,068 |
|
N/A |
|
N/A |
|
|
4,990,357 |
|
(2,231,182 |
) |
|
68 |
|
129 |
|
(798,946 |
) |
|
1,202,438 |
2021 |
|
37,808,805 |
|
30,852,801 |
|
181,250 |
|
(4,475,791 |
) |
|
4,611,376 |
|
10,050,763 |
|
|
162 |
|
146 |
|
(1,035,589 |
) |
|
878,733 |
(1) |
Total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” (“SCT”)
above. Mr. Ramaswami has served as our Principal Executive Officer (“PEO”) since his hire on December 9, 2020
(“First PEO”). |
(2) |
For each covered year, the values included in column (c)
for the CAP to our PEO and in column (e) for the average CAP to our non-PEO named executive officers reflect the adjustments
set forth below. CAP does not mean these amounts were earned or paid during the year. CAP is an amount derived from the starting
point of total compensation as presented in the SCT under the methodology prescribed under the SEC’s rules, which is
solely based on adjustments to equity award values. Nutanix does not maintain a pension plan and does not pay dividends on
its common stock so no adjustments for these factors were necessary. There are no material differences between the assumptions
used to compute the valuation of the equity awards for calculating the compensation actually paid from the assumptions used
to compute the valuation of the equity awards as of the grant date. |
(3) |
Mr. Dheeraj Pandey previously served as our CEO before
retiring from Nutanix in December 2020. We have included Mr. Pandey in the table above in accordance with Item 402(v) of Regulation
S-K. However, Mr. Pandey has been excluded from the tables and graphs below as we do not believe Mr. Pandey’s further
inclusion is material to any conclusions that may be drawn from this analysis. |
(4) |
Cumulative TSR represents the value of an initial fixed
investment of $100 on July 31, 2020 in the company (column (f)) and the Nasdaq Computer Index (column (g)) for the fiscal
years ended July 31, 2021, 2022, and 2023. The Nasdaq Computer Index is also used in the company’s performance graph
in our Annual Report on Form 10-K. |
(5) |
The dollar amounts reported represent the amount of net
income reflected in our audited financial statements for the applicable year in accordance with accounting principles generally
accepted in the United States. |
(6) |
Annual Recurring Revenue for any given period is defined
as the sum of ACV for all non life-of-device contracts in effect as of the end of a specific period. For the purposes of this
calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent
us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue
for such contract. Annual Contract Value is defined as the total annualized value of a contract, excluding amounts related
to professional services and hardware. The total annualized value for a contract is calculated by dividing the total value
of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years
for contracts that do not have a specified term. |
(7) |
The table below shows the adjustments made to the SCT totals
(column (b) above) for our First PEO, Mr. Rajiv Ramaswami, to determine CAP (column (c) above). |
|
|
PEO |
|
FY 2021
($) |
|
FY 2022
($) |
|
FY 2023
($) |
|
|
Summary Compensation Table - Total Compensation (column (b)
for first PEO) |
|
37,808,805 |
|
12,928,676 |
|
14,845,940 |
- |
|
Grant Date Fair Value of Stock Awards and Option Awards
Granted in Fiscal Year |
|
36,350,054 |
|
11,165,080 |
|
13,153,930 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal
Year |
|
29,394,050 |
|
4,126,603 |
|
19,843,084 |
+ |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
— |
|
(5,948,177) |
|
11,280,867 |
+ |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
— |
|
600,563 |
|
1,487,145 |
+ |
|
Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which
Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
— |
|
2,698,484 |
|
4,375,905 |
- |
|
Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to
Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
— |
|
— |
= |
|
Compensation Actually Paid
(column (e)) |
|
30,852,801 |
|
3,241,068 |
|
38,679,011 |
2023 PROXY STATEMENT 58
(8) |
The table below shows the adjustments made to the average SCT totals
for our non-PEO NEOs (column (d) above) to determine CAP (column (e) above). |
|
|
Average of non-PEO NEOs(1) |
|
FY 2021
($) |
|
FY 2022
($) |
|
FY 2023
($) |
|
|
Summary Compensation Table - Total Compensation (column (d)) |
|
4,611,376 |
|
4,990,357 |
|
5,480,229 |
- |
|
Grant Date Fair Value of Stock Awards and Option Awards Granted
in Fiscal Year |
|
3,430,509 |
|
4,216,833 |
|
4,618,733 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards
Granted in Fiscal Year |
|
4,149,288 |
|
1,109,071 |
|
6,967,492 |
+ |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted
in Prior Fiscal Years |
|
3,009,834 |
|
(2,041,987 |
) |
1,705,032 |
+ |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested
During Fiscal Year |
|
802,254 |
|
201,176 |
|
522,181 |
+ |
|
Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in
Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
908,521 |
|
(439,620 |
) |
780,135 |
- |
|
Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in
Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
1,833,346 |
|
504,333 |
= |
|
Compensation Actually Paid
(column (e)) |
|
10,050,763 |
|
(2,231,182 |
) |
10,332,003 |
(1) |
Average of the total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” above for the
applicable year for the named executive officers, other than our PEO, which are comprised of the following individuals: for
fiscal year 2023, Ms. Sivaraman and Messrs. Sangster and Wall; for fiscal year 2022, Ms. Sivaraman and Messrs. Sangster, Wall,
and Williams; and for fiscal year 2021, Messrs. Sangster, Wall, Williams, and Kaddaras. |
Analysis of information Presented in the Pay
Versus Performance Table
As described in more detail
in the section “Executive Compensation—Compensation Discussion and Analysis,” the company’s executive compensation
program reflects a pay-for-performance philosophy. While the company uses several performance measures to align executive compensation
with performance, it does not seek to align the company’s performance measures with compensation actually paid (as calculated
in accordance with SEC rules).
Relationship Between CAP and TSR
The chart below (i) illustrates
the relationship between the amount of compensation actually paid to our PEO, the average amount of compensation actually paid
to our Non-PEO NEOs, and the company’s cumulative TSR over the three most recently completed fiscal years; and (ii) compares
our cumulative TSR over the three most recently completed fiscal years to that of the Nasdaq Computer Index.
Compensation Actually Paid vs. TSR
2023 PROXY STATEMENT 59
Relationship Between CAP and Net Income
The chart below illustrates
the compensation actually paid to our PEO, the average compensation actually paid to our non-PEO NEOs, and our reported GAAP net
income for each of the three most recently completed fiscal years.
Compensation Actually Paid vs. Net Income
Relationship Between CAP and ARR
The chart below illustrates
the compensation actually paid to our PEO, the average compensation actually paid to our non-PEO NEOs, and our reported ARR for
each of the three most recently completed fiscal years.
Compensation Actually Paid vs. ARR
2023 PROXY STATEMENT 60
We have identified the following performance measures
(in no specific order) as the most important in aligning the compensation of our named executive officers to our financial performance
for fiscal year 2023:
Tabular
List of Most Important Performance Measures
ARR (Annual Recurring Revenue) |
Non-GAAP Operating Expenses (excluding commissions) |
Relative Total Shareholder Return |
Employee Engagement |
2023 PROXY STATEMENT 61
Equity Compensation Plan Information
The following table summarizes
our equity compensation plan information as of July 31, 2023. Information is included for equity compensation plans approved by
our stockholders. We do not have any equity compensation plans not approved by our stockholders.
Plan Category |
|
(a) Number
of Securities
to be Issued
Upon Exercise
of Outstanding
Options,
Warrants and
Rights(1) |
|
(b) Weighted
Average
Exercise Price
of Outstanding
Options,
Warrants and
Rights(2) |
|
(c) Number
of Securities
Remaining
Available
for Future
Issuance Under
Equity
Compensation
Plans
(Excluding
Securities
Reflected in
Column (a))(3) |
|
Equity plans approved by stockholders |
|
25,820,421 |
|
$6.83 |
|
26,645,305 |
|
Equity plans not approved by stockholders |
|
— |
|
— |
|
— |
|
(1) |
Includes 1,046,464 outstanding stock options
and 24,773,957 outstanding RSUs. |
(2) |
The weighted average exercise price is calculated based
solely on outstanding stock options and does not take into account stock underlying restricted stock units, which generally
have no exercise price. |
(3) |
Includes 14,028,460 shares reserved for future equity grants
under our 2016 Equity Incentive Plan and 12,616,845 shares reserved for future stock purchase plan awards under our 2016 Employee
Stock Purchase Plan. Our 2016 Equity Incentive Plan provides that the total number of shares reserved for issuance under our
2016 Equity Incentive Plan will be automatically increased on the first day of each fiscal year beginning in fiscal year 2018,
by an amount equal to the lower of (i) 18,000,000 shares, (ii) 5% of the outstanding shares of all classes of common stock
as of the last day of our immediately preceding fiscal year, or (iii) such other amount as our Board may determine. Accordingly,
on August 1, 2023, the number of shares of Class A common stock available for issuance under our 2016 Equity Incentive Plan
increased by 11,980,343 shares, pursuant to this provision. This increase is not reflected in the table above, which is as
of July 31, 2023. |
2023 PROXY STATEMENT 62
ADDITIONAL PROPOSALS
Proposal 4: Approval of Amendment to Amended and
Restated Certificate of Incorporation to Permit the Exculpation of Officers
|
OUR BOARD RECOMMENDS A VOTE FOR THIS PROPOSAL 4. |
Background
Effective August 1, 2022, the State of Delaware, which
is our company’s state of incorporation, enacted legislation that enables Delaware corporations to limit the liability of certain
of their officers in limited circumstances. In light of this update in the law, we are proposing to amend our Amended and Restated Certificate
of Incorporation to provide for the exculpation of certain of our officers from liability in specific circumstances, as permitted by
Delaware law. The amended Delaware statute permits officer exculpation only for direct claims (and not for, e.g., derivative claims made
by stockholders on behalf of the corporation) and does not apply to breaches of the duty of loyalty, acts or omissions not in good faith
or that involve intentional misconduct or a knowing violation of law, or any transaction in which the officer derived an improper personal
benefit. Our proposed amendment would permit exculpation of certain officers only to the extent permitted under Delaware law. After considering
the benefits and the consequences of these updates and the recommendation of the Nominating and Corporate Governance Committee of our
Board, our Board believes that amending our Amended and Restated Certificate of Incorporation to provide for such exculpation remedies
the inconsistent treatment of officers and directors under Delaware law, to the fullest extent permitted by Delaware law, notwithstanding
that both officers and directors have similar fiduciary duties. Our Board also believes this proposed amendment will strike a balance
between stockholders’ interest in accountability and their interest in our company being able to attract and retain quality officers
to work on its behalf. Further, our Board has considered the extent of exculpation provided under the law and, accordingly, under this
proposed amendment to our Amended and Restated Certificate of Incorporation, has determined that such amendment is reasonable and does
not unduly impact stockholder rights.
Taking into account the scope of claims for which an
officer’s liability would be exculpated, and the benefits our board of directors believes would accrue to our company and our stockholders,
including, but not limited to the enhanced ability to attract and retain talented officers, the Nominating and Corporate Governance Committee
of our Board has recommended that our Board approve the amendment of our Amended and Restated Certificate of Incorporation to permit
officer exculpation in certain circumstances. Based on this recommendation and the review and consideration undertaken by our Board,
our Board has unanimously determined and declared that it is advisable and in the best interests of our company and our stockholders
to amend our Amended and Restated Certificate of Incorporation to provide such exculpation to the extent permitted by Delaware law, and
in accordance with Delaware law, hereby seeks approval of the amendment of our Amended and Restated Certificate of Incorporation as described
herein. However, even if the amendment is approved by our stockholders, our Board may, at any time prior to the effectiveness of the
filing of the Certificate of Amendment with the Delaware Secretary of State, abandon the filing of such amendment without further action
by our stockholders.
The proposed Certificate of Amendment to the Amended
and Restated Certificate of Incorporation reflecting the foregoing amendment is attached as Appendix B to this proxy statement.
Accordingly, we ask our stockholders to vote on the
following resolution:
“RESOLVED, that the Company’s stockholders
approve an amendment to the Company’s certificate of incorporation to amend and restate Section 8.1 of Article VIII in its entirety,
to read as follows:
‘8.1 Limitation of Personal Liability. To the fullest extent permitted by the DGCL as the same exists or as
may hereafter be amended from time to time, a director or officer of the Corporation shall not be personally liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a director or officer. If the DGCL is amended to authorize corporate
action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of
the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.’”
2023 PROXY STATEMENT 63
Recommendation of our Board
This Proposal 4 is a result of the ongoing
review of our corporate governance policies by the Nominating and Corporate Governance Committee. Our Board believes that it is in the
best interests of our company and our stockholders to approve the Certificate of Amendment in order to permit officer exculpation in
certain circumstances. Accordingly, our Board unanimously recommends a vote FOR the
approval of this Proposal 4.
Vote Required
Approval of this Proposal 4 requires FOR
votes from the holders of at least a majority of the voting power of the outstanding shares of
our capital stock entitled to vote on the proposal. Abstentions and broker non-votes will have the same effect as a vote AGAINST
the proposal.
If this Proposal 4 is not approved by the requisite
vote of our stockholders, then the Certificate of Amendment will not be filed with the Secretary of State of the State of Delaware and
our Amended and Restated Certificate of Incorporation will remain as is.
2023 PROXY STATEMENT 64
STOCK OWNERSHIP INFORMATION
Security Ownership of Certain Beneficial Owners and
Management
The following table sets forth, as of the close of
business on October 10, 2023, certain information with respect to the beneficial ownership of our common stock: (i) by each person
known by us to be the beneficial owner of more than five percent of the outstanding shares of Class A common stock; (ii) by each of our
directors; (iii) by each of our named executive officers; and (iv) by all of our current executive officers and directors as a group.
The percentage of shares beneficially
owned shown in the table is based on 243,416,881 shares of Class
A common stock as of the close of business on October 10, 2023. In computing the number of shares of capital stock beneficially owned
by a person and the percentage ownership of such person, we deemed to be outstanding all shares of our capital stock with respect to
which the individual has the right to acquire beneficial ownership within 60 days of October 10, 2023 through the exercise of any stock
option or other right. However, we did not deem such shares of our capital stock outstanding for the purpose of computing the percentage
ownership of any other person.
Beneficial ownership is determined in accordance with
SEC rules and generally includes any shares over which a person exercises sole or shared voting or investment power. Unless otherwise
indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown beneficially
owned by them, subject to applicable community property laws. The information contained in the following table is not necessarily indicative
of beneficial ownership for any other purpose, and the inclusion of any shares in the table does not constitute an admission of beneficial
ownership of those shares. Except as otherwise noted below, the address for persons listed in the table is c/o Nutanix, Inc., 1740 Technology
Drive, Suite 150, San Jose, California 95110. The information provided in the table below is based on our records, information filed
with the SEC and information provided to us, except where otherwise noted.
Name of Beneficial Owner | |
Shares Beneficially Owned | |
% |
5% Stockholders: | |
| |
|
Entities affiliated with Fidelity(1) | |
34,589,461 | |
14.21 |
Entities affiliated with the Vanguard Group(2) | |
25,500,892 | |
10.48 |
Entities affiliated with Generation Investment Management LLP(3) | |
22,080,454 | |
9.07 |
BlackRock, Inc.(4) | |
12,192,834 | |
5.01 |
Named Executive Officers and Directors: | |
| |
|
Rajiv Ramaswami | |
482,597 | |
* |
Rukmini Sivaraman | |
169,398 | |
* |
David Sangster | |
66,870 | |
* |
Tyler Wall | |
63,795 | |
* |
Craig Conway(5) | |
33,363 | |
* |
Max de Groen(6) | |
31,012 | |
* |
Virginia Gambale(7) | |
45,302 | |
* |
Steven J. Gomo(8) | |
128,742 | |
* |
David Humphrey(9) | |
31,012 | |
* |
Gayle Sheppard(10) | |
16,166 | |
* |
Brian Stevens(11) | |
43,247 | |
* |
Mark Templeton(12) | |
15,389 | |
* |
All current directors and executive officers as a group (12 persons)(13) | |
1,126,893 | |
* |
2023 PROXY STATEMENT 65
(1) |
Based on a Schedule 13G/A filed by FMR LLC with the SEC on February 9, 2023,
in which it was reported that FMR LLC had sole voting power over 34,588,737 shares and sole dispositive power over 34,589,461 shares.
The address for FMR LLC is 245 Summer Street, Boston, Massachusetts 02210. |
(2) |
Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 9, 2023, in which
it was reported that The Vanguard Group had shared voting power over 91,327 shares, sole dispositive power over 25,185,307 shares,
and shared dispositive power over 315,585 shares. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
(3) |
Based on a Schedule 13G/A filed by Generation Investment Management LLP and its affiliates with
the SEC on February 13, 2023, in which it was reported that Generation Investment Management LLP had sole voting power over 158,170
shares, shared voting power over 21,507,501 shares, sole dispositive power over 158,170 shares, and shared dispositive power over
21,922,284 shares. The address for Generation Investment Management LLP is 20 Air Street, 7th floor, London, United Kingdom W1B 5AN. |
(4) |
Based on a Schedule 13G filed by BlackRock, Inc. with the SEC on February 9, 2023, in which it was
reported that BlackRock, Inc. had sole voting power over 11,560,276 shares and sole dispositive power over 12,192,834 shares. The
address for BlackRock, Inc. is 55 East 52nd Street, New York, NY 10055. |
(5) |
Consists of (i) 24,681 shares of Class A common stock held of record by Mr. Conway and (ii) 8,682
shares of Class A common stock issuable to Mr. Conway upon vesting of RSUs within 60 days of October 10, 2023. |
(6) |
Consists of (i) 22,330 shares of Class A common stock held of record by Mr. de Groen and (ii) 8,682
shares of Class A common stock issuable to Mr. de Groen upon vesting of RSUs within 60 days of October 10, 2023. |
(7) |
Consists of (i) 31,120 shares of Class A common stock held of record by Ms. Gambale, (ii) 5,500
shares of Class A common stock held of record by Virginia Gambale TTEE Virginia Gambale REV Trust DTD 5/22/2003 for which Ms. Gambale
serves as trustee, and (iii) 8,682 shares of Class A common stock issuable to Ms. Gambale upon vesting of RSUs within 60 days
of October 10, 2023. |
(8) |
Consists of (i) 120,060 shares of Class A common stock held of record by Mr. Gomo and (ii) 8,682
shares of Class A common stock issuable to Mr. Gomo upon vesting of RSUs within 60 days of October 10, 2023. |
(9) |
Consists of (i) 22,330 shares of Class A common stock held of record by Mr. Humphrey and (ii) 8,682
shares of Class A common stock issuable to Mr. Humphrey upon vesting of RSUs within 60 days of October 10, 2023. |
(10) |
Consists of (i) 7,484 of Class A common stock held of record by Ms. Sheppard and (ii) 8,682 shares
of Class A common stock issuable to Ms. Sheppard upon vesting of RSUs within 60 days of October 10, 2023. |
(11) |
Consists of (i) 34,565 of Class A common stock held of record by Mr. Stevens and (ii) 8,682 shares
of Class A common stock issuable to Mr. Stevens upon vesting of RSUs within 60 days of October 10, 2023. |
(12) |
Consists of (i) 12,000 shares of Class A common stock held of record by Mr. Templeton and (ii) 3,389
shares of Class A common stock issuable to Mr. Templeton upon vesting of RSUs within 60 days of October 10, 2023. |
(13) |
Consists of (i) 1,062,730 shares of Class A common stock beneficially owned by our current directors
and executive officers as a group, and (ii) 64,163 shares of Class A common stock issuable upon vesting of RSUs within 60 days
of October 10, 2023. |
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors
and executive officers, and persons who own more than ten percent of a registered class of Nutanix’s equity securities, to file
with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Nutanix.
To our knowledge, based solely on a review of the copies
of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended July 31,
2023, all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were complied
with, except for one Form 4 filed late for Tyler Wall to report the vesting of restricted stock units on March 15, 2023, which was reported
on a Form 4 filed on March 20, 2023.
2023 PROXY STATEMENT 66
OTHER MATTERS
Our Board knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the
associated proxy intend to vote on such matters in accordance with their best judgment.
We filed our Annual Report on Form 10-K
for the fiscal year ended July 31, 2023 with the SEC on September 21, 2023. It is available free of charge at the SEC’s website
at www.sec.gov. Stockholders can also access this proxy statement and our Annual Report at http://ir.nutanix.com,
or a copy of our Annual Report is available without charge upon written request to our Secretary at 1740 Technology Drive, Suite 150,
San Jose, California 95110.
2023 PROXY STATEMENT 67
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Why did I receive a notice regarding the availability
of proxy materials on the Internet?
We have elected to provide access to our proxy materials
over the Internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials containing instructions on how
to access our proxy materials because our Board is soliciting your proxy to vote at the Annual Meeting. All stockholders will have the
ability to access the proxy materials on the website referred to in the Notice or to request a printed set of the proxy materials. Instructions
on how to access the proxy materials over the Internet or to request a printed copy may be found in the Notice.
We mailed the Notice on or about October
[•], 2023 to all stockholders of record entitled to vote
at the Annual Meeting.
How do I attend and participate in the Annual Meeting
online?
We will be hosting the Annual Meeting
via live webcast only. Any stockholder can attend the Annual Meeting, live online at www.virtualshareholdermeeting.com/NTNX2023.
The webcast will start at 9:00 a.m., Pacific Time. Stockholders may vote and submit questions
while attending the meeting online. The webcast will open 15 minutes before the start of the meeting. In order to enter the meeting,
you will need the control number. The control number will be included in the Notice or on your proxy card if you are a stockholder of
record of shares of common stock or included with your voting instructions received from your broker, bank or other agent if you hold
your shares of common stock in a “street name.” Instructions on how to attend and participate online are available at www.virtualshareholdermeeting.com/NTNX2023.
Who can vote at the Annual Meeting?
Only stockholders of record at the close
of business on October 10, 2023, the record date for the Annual Meeting, will be entitled to vote at the Annual Meeting. As of the close
of business on the record date, there were [•] shares of
Class A common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your
Name
If, as of the close of business on the record date,
your shares of Class A common stock were registered directly in your name with our transfer agent, Computershare Trust Company, N.A.,
then you are a stockholder of record. As a stockholder of record, you may vote online during the meeting or vote by proxy. Whether or
not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name
of a Broker or Bank
If, as of the close of business on the record date,
your shares of Class A common stock were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other
similar organization, then you are the beneficial owner of shares held in “street name” and the Notice will be forwarded
to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting
at the Annual Meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares
in your account. You are also invited to attend the virtual Annual Meeting. Since you are not the stockholder of record, you may vote
your shares online during the Annual Meeting only by following the instructions from your broker, bank or other agent.
2023 PROXY STATEMENT 68
What matters am I voting on?
There are four matters scheduled for a vote:
• |
the election of three Class I directors to hold office until the annual meeting
of stockholders to take place after the end of fiscal year ending July 31, 2024; |
• |
the ratification of the selection of Deloitte & Touche LLP as our independent registered public
accounting firm for the fiscal year ending July 31, 2024; |
• |
the approval, on a non-binding advisory basis, of the compensation of our named executive officers;
and |
• |
the approval of an amendment to our Amended and Restated Certificate of Incorporation to permit
the exculpation of officers. |
How do I vote?
The procedures for voting are as follows:
Stockholder of Record: Shares Registered in Your
Name
If you are a stockholder of record, you may vote online
during the Annual Meeting, vote by proxy through the Internet, vote by proxy over the telephone, or vote by proxy using a proxy card
that you may request. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy to ensure your vote is counted.
Even if you have submitted a proxy before the Annual Meeting, you may still attend online and vote during the meeting. In such case,
your previously submitted proxy will be disregarded.
• |
To vote online during the Annual
Meeting, follow the provided instructions to join the meeting at www.virtualshareholdermeeting.com/NTNX2023, starting
at 9:00 a.m., Pacific Time, on December 8, 2023. |
• |
To vote online before the Annual Meeting, go to www.proxyvote.com.
|
• |
To vote by toll-free telephone, call 1-800-690-6903 if you are a stockholder of record or 1-800-454-8683
if you are a “beneficial” stockholder (be sure to have your Notice or proxy card in hand when you call). |
• |
To vote by mail, simply complete, sign and date the proxy card or voting instruction card, and return
it promptly in the envelope provided. |
If we receive your vote by Internet or phone or your
signed proxy card up until 11:59 p.m., Eastern Time, the day before the Annual Meeting, we will vote your shares as you direct.
To vote, you will need the control number. The control
number will be included in the Notice, or on your proxy card if you are a stockholder of record of shares of Class A common stock, or
included with your voting instructions received from your broker, bank or other agent if you hold your shares of Class A common stock
in “street name.”
Beneficial Owner: Shares Registered in the Name
of Broker or Bank
If you are a beneficial owner of shares registered
in the name of your broker, bank or other agent, you should have received a notice containing voting instructions from that organization
rather than from us. Simply follow the voting instructions in such notice to ensure that your vote is counted. To vote online during
the meeting, you must follow the instructions from your broker, bank or other agent.
Internet proxy voting is provided to allow you to
vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. Please
be aware that you must bear any costs associated with your Internet access.
2023 PROXY STATEMENT 69
Can I change my vote?
Yes. Subject to the voting deadlines above, if you
are a stockholder of record, you may revoke your proxy at any time before the close of voting using one of the following methods:
• |
You may submit another properly completed proxy card with a later date. |
• |
You may grant a subsequent proxy by telephone or through the Internet. |
• |
You may send a written notice that you are revoking your proxy to our Secretary at 1740 Technology
Drive, Suite 150, San Jose, California 95110. |
• |
You may attend and vote online during the Annual Meeting. Simply attending the Annual Meeting will
not, by itself, revoke your proxy. |
If your shares are held by your broker or bank as a
nominee or agent, you should follow the instructions provided by such party.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your
Name
If you are a stockholder of record and do not vote
during the Annual Meeting, or through the Internet, by telephone or by completing your proxy card before the Annual Meeting, your shares
will not be voted.
Beneficial Owner: Shares Registered in the Name
of a Broker or Bank
Broker non-votes occur when (i) a broker or other nominee
holds shares for a beneficial owner, (ii) the beneficial owner has not given the respective broker specific voting instructions, (iii)
the matter is non-routine in nature, and (iv) there is at least one routine proposal presented at the applicable meeting of stockholders
(such as Proposal 2 at the Annual Meeting). Under applicable rules, a broker or other nominee has discretionary voting power only with
respect to proposals that are considered “routine,” but not with respect to “non-routine” proposals. Broker non-votes
are considered present for purposes of determining the presence of a quorum so long as the shares represented by a broker or other nominee
who holds shares for a beneficial owner, where the beneficial owner has not given the respective broker or other nominee specific voting
instructions, can be voted for, against or in abstention for at least one proposal presented at the Annual Meeting. Since there is one
routine proposal presented at the Annual Meeting (Proposal 2) on which brokers and other nominees have such discretionary voting power,
broker non-votes will be counted for quorum purposes at the Annual Meeting. Broker non-votes will not be counted for purposes of determining
the number of votes cast or considered entitled to vote, as applicable, on a proposal. Therefore, a broker non-vote will make a quorum
more readily attainable but will not otherwise affect the outcome of the vote on Proposals 1, 2, and 3. In the case of Proposal 4, broker
non-votes are also counted as votes against the proposal.
Abstentions represent a stockholder’s
affirmative choice to decline to vote on a proposal, and occur when shares present at the meeting are marked ABSTAIN.
Abstentions are counted for purposes of determining whether a quorum is present but will not otherwise affect the outcome of the vote
on Proposal 1. In the case of Proposals 2, 3 and 4, abstentions are also counted as votes AGAINST
the proposal.
Proposals 1, 3, and 4 are non-routine matters, so your
broker or nominee may not vote your shares on Proposals 1, 3, and 4 without your instructions. Proposal 2, the ratification of Deloitte
& Touche LLP as our independent registered public accounting firm for the fiscal year ending July 31, 2024, is a routine matter so
your broker or nominee may vote your shares on Proposal 2 even in the absence of your instruction. Please instruct your bank, broker
or other agent to ensure that your vote will be counted.
What if I return a proxy card or otherwise vote
but do not make specific choices?
If you return a signed and dated proxy
card or otherwise vote but do not make specific choices, your shares will be voted FOR the
election of all three nominees as Class I directors, FOR the
ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year
ending July 31, 2024, FOR the approval of the compensation
of our named executive officers, and FOR the amendment
to our Amended and Restated Certificate of Incorporation to permit the exculpation of officers. If any other matter is properly presented
at the Annual Meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using the proxyholder’s
best judgment.
2023 PROXY STATEMENT 70
How many votes do I have?
Each holder of Class A common stock will have the right
to one vote per share of Class A common stock. Stockholders are not permitted to cumulate votes with respect to the election of directors.
How many votes are needed to approve each proposal
and how are the votes counted?
Proposal 1: Directors
are elected by a majority of the votes cast, meaning that the number of shares voted FOR a
director’s election exceeds the number of votes cast AGAINST such
director’s election. You may vote FOR, AGAINST,
or ABSTAIN on each of the nominees for election as director.
Abstentions will not be counted for purposes of determining the number of votes cast with respect to the election of a director, and
thus will have no effect on the outcome of the vote. Broker non-votes will have no effect on the outcome of the vote.
Proposal 2: The
ratification of the selection of our independent registered public accounting firm for the fiscal year ending July 31, 2024, must receive
FOR votes from the holders of a majority in voting power
of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal. You may vote FOR,
AGAINST, or ABSTAIN
with respect to this proposal. Abstentions are considered votes present and entitled to vote
on this proposal, and thus will have the same effect as a vote AGAINST the
proposal. Broker non-votes will have no effect as a vote on the outcome of this proposal.
Proposal 3: The
approval, on an advisory basis, of the compensation of our named executive officers must receive FOR
votes from the holders of a majority of the voting power of the shares present at the Annual
Meeting or represented by proxy thereat and entitled to vote on the proposal. You may vote FOR,
AGAINST, or ABSTAIN
with respect to this proposal. Abstentions are considered votes present and entitled to vote
on this proposal, and thus will have the same effect as votes AGAINST this
proposal. Broker non-votes will have no effect on the outcome of this proposal. Although the advisory vote is non-binding, our Board
values stockholders’ opinions. The Compensation Committee will review the results of the vote and, consistent with our record of
stockholder responsiveness, consider stockholders’ concerns and take into account the outcome of the vote when considering future
decisions concerning our executive compensation program.
Proposal 4: The
approval of the amendment to our Amended and Restated Certificate of Incorporation to permit the exculpation of officers must receive
FOR votes from the holders of at least a majority of the
voting power of the outstanding shares entitled to vote on the proposal. You may vote FOR,
AGAINST, or ABSTAIN
with respect to this proposal. Abstentions and broker non-votes are considered votes present
and entitled to vote on this proposal, and thus will have the same effect as votes AGAINST this
proposal.
Who counts the votes?
We have engaged Broadridge Financial Solutions as our
independent agent to tabulate stockholder votes. If you are a stockholder of record, and you choose to vote over the Internet (either
prior to or during the Annual Meeting) or by telephone, Broadridge Financial Solutions will access and tabulate your vote electronically,
and if you choose to sign and mail your proxy card, your executed proxy card is returned directly to Broadridge Financial Solutions for
tabulation. As noted above, if you hold your shares through a broker, your broker (or its agent for tabulating votes of shares held in
street name, as applicable) returns one proxy card to Broadridge Financial Solutions on behalf of all its clients.
Who is paying for this proxy solicitation?
We will pay for the cost of soliciting proxies to be
voted at the Annual Meeting. We intend to retain Alliance Advisors, LLC for various services related to the solicitation of proxies,
which we anticipate will cost approximately $15,000, plus reimbursement of expenses. In addition to these proxy materials, our directors
and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not
be paid additional compensation for soliciting proxies. We may reimburse brokers, banks and other agents for the cost of forwarding proxy
materials to beneficial owners.
When are stockholder proposals due for next year’s
annual meeting?
Requirements for Stockholder Proposals to be Considered
for Inclusion in our Proxy Materials
Stockholder proposals submitted pursuant
to Rule 14a-8 under the Exchange Act and intended to be presented at the 2024 annual meeting of stockholders must be received by us no
later than June [•], 2024 in order to be considered for
inclusion in our proxy materials for that meeting.
2023 PROXY STATEMENT 71
Requirements for Stockholder Proposals to be Brought
Before an Annual Meeting
Our Amended and Restated Bylaws contain
advance notice provisions that provide that, for stockholder director nominations or other proposals to be considered at an annual meeting
of stockholders, the stockholder must give timely notice thereof in writing to our Secretary at Nutanix, Inc., 1740 Technology Drive,
Suite 150, San Jose, California 95110. To be timely for our 2024 annual meeting of stockholders, a stockholder’s notice must be
delivered to or mailed and received by our Secretary at Nutanix, Inc., 1740 Technology Drive, Suite 150, San Jose, California 95110 not
later than the close of business on September [•], 2024
nor earlier than the close of business on August [•], 2024.
A stockholder’s notice to the Secretary must set forth the information required by our Amended and Restated Bylaws, which bylaws
include the information required by Rule 14a-19 of the Exchange Act.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid
meeting. A quorum will be present if stockholders holding at least a majority of the aggregate voting power of the shares of Class A
common stock issued, outstanding and entitled to vote are present in person at the meeting or represented by proxy.
Your shares will be counted towards the quorum only
if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote during the Annual
Meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, either the chairperson
of the Annual Meeting or the stockholders entitled to vote at the Annual Meeting that are present in person or represented by proxy may
adjourn the meeting to another date.
How can I find out the results of the voting at
the Annual Meeting?
We expect that preliminary voting results will be announced
during or shortly following the Annual Meeting. In addition, final voting results will be published in a current report on Form 8-K that
we expect to file with the SEC within four business days after the Annual Meeting.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may
be registered in more than one name or in different accounts. Please follow the instructions on the Notices to ensure that all your shares
are voted.
What does it mean if multiple members of my household
are stockholders, but we only received one Notice or full set of proxy materials in the mail?
The SEC has adopted rules that permit companies and
intermediaries, such as brokers, to satisfy the delivery requirements for notices and proxy materials with respect to two or more stockholders
sharing the same address by delivering a single Notice or set of proxy materials addressed to those stockholders. In accordance with
a prior notice sent to certain brokers, banks, dealers or other agents, we are sending only one Notice or full set of proxy materials
to those addresses with multiple stockholders unless we received contrary instructions from any stockholder at that address. This practice,
known as “householding,” allows us to satisfy the requirements for delivering Notices or proxy materials with respect to
two or more stockholders sharing the same address by delivering a single copy of these documents. Householding helps to reduce our printing
and postage costs, reduces the amount of mail you receive and helps to preserve the environment. If you currently receive multiple copies
of the Notice or proxy materials at your address and would like to request “householding” of your communications, please
contact your broker. Once you have elected “householding” of your communications, “householding” will continue
until you are notified otherwise or until you revoke your consent.
To receive a separate copy, or, if a stockholder is
receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our proxy materials, such stockholder
may contact us at the following address:
Nutanix, Inc.
Attention: Investor Relations
1740 Technology Drive, Suite 150
San Jose, California 95110
2023 PROXY STATEMENT 72
APPENDIX A – KEY PERFORMANCE MEASURES AND NON-GAAP
FINANCIAL MEASURES
This proxy statement includes the following key performance
and non-GAAP financial measures:
• |
ACV billings – We calculate
ACV billings as the sum of the ACV for all contracts billed during the period. ACV is defined as the total annualized value of a
contract, excluding amounts related to professional services and hardware. We calculate the total annualized value for a contract
by dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an assumed
term of five years for contracts that do not have a specified term. |
• |
Annual recurring revenue (“ARR”) – We
calculate ARR as the sum of ACV for all non-life-of-device contracts in effect as of the end of a specific period. For the purposes
of this calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract
prevent us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue
for such contract. |
• |
Free cash flow – We calculate free cash flow as
net cash provided by operating activities less purchases of property and equipment, which measures our ability to generate cash from
our business operations after our capital expenditures. |
ACV billings is a performance measure that we believe
provides useful information to our management and investors as it allows us to better track the topline growth of our business during
our transition to a subscription-based business model because it takes into account variability in term lengths. ARR is a performance
measure that we believe provides useful information to our management and investors as it allows us to better track the topline growth
of our subscription business because it only includes non-life-of-device contracts and takes into account variability in term lengths.
Free cash flow is a performance measure that we believe provides useful information to our management and investors about the amount
of cash generated by the business after necessary capital expenditures, and we define free cash flow as net cash provided by operating
activities less purchases of property and equipment. We use these key performance and non-GAAP financial measures for financial and operational
decision-making and as a means to evaluate period-to-period comparisons. However, these key performance and non-GAAP financial measures
have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as
reported under GAAP. There is no GAAP measure that is comparable to ACV billings or ARR, so we have not reconciled the ACV billings or
ARR data included in this proxy statement to any GAAP measure. The GAAP measure that is most comparable to free cash flow is net cash
flow provided by operating activities. Set forth below is a reconciliation of free cash flow to net cash flow provided by operating activities.
In addition, other companies, including companies in our industry, may calculate key performance measures and non-GAAP financial measures
and differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our key performance
measures and non-GAAP financial measures as tools for comparison. We urge you not to rely on any single financial measure to evaluate
our business.
| |
Fiscal Year Ended July 31, |
| |
2022
($) |
| |
2023
($) |
|
| |
| (in thousands) | |
Net cash provided by operating activities | |
| 67,543 | | |
| 272,403 | |
Purchases of property and equipment | |
| (49,058 | ) | |
| (65,404 | ) |
FREE CASH FLOW (NON-GAAP) | |
| 18,485 | | |
| 206,999 | |
2023 PROXY STATEMENT A-1
APPENDIX B - PROPOSED CERTIFICATE OF AMENDMENT TO AMENDED
AND RESTATED CERTIFICATE OF INCORPORATION
CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF NUTANIX, INC.
(Pursuant to Section 242 of the General Corporation
Law of the State of Delaware)
Nutanix, Inc., a corporation
organized and existing under the laws of the State of Delaware, DOES HEREBY CERTIFY:
FIRST:
That the name of the corporation is Nutanix, Inc. (the “Corporation”) and
that the Corporation’s original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on
September 22, 2009 (the “Original Certificate”).
SECOND:
That the Corporation amended and restated the Original Certificate by filing an Amended and Restated
Certificate of Incorporation with the Secretary of State of the State of Delaware on December 9, 2022 (the “Certificate of Incorporation”).
THIRD:
That pursuant to Section 242 of the General Corporation Law of the State of Delaware (the “DGCL”),
this Certificate of Amendment to the Amended and Restated Certificate of Incorporation (this “Certificate of Amendment”)
amends the provisions of the Certificate of Incorporation.
FOURTH:
That pursuant to Section 242 of the DGCL, the Board of Directors of the Corporation duly adopted
resolutions setting forth the terms and provisions of this Certificate of Amendment, declaring the terms and provisions of this Certificate
of Amendment to be advisable, and directing the terms and provisions of this Certificate of Amendment to be submitted to and considered
by the stockholders of the Corporation for approval.
RESOLVED,
that the Certificate of Incorporation is hereby amended by amending and restating Section 8.1
of Article VIII thereof in its entirety as follows:
“8.1 Limitation
of Personal Liability. To the fullest extent permitted by the DGCL as the same exists or as may hereafter be amended
from time to time, a director or officer of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director or officer. If the DGCL is amended to authorize
corporate action further eliminating or limiting the personal liability of directors or officers, then the liability of a
director or officer of the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL, as so
amended.”
* * *
2023 PROXY STATEMENT B-1
FIFTH:
The terms and provisions of this Certificate of Amendment have been duly adopted in accordance
with Section 242 of the DGCL.
IN
WITNESS WHEREOF, this Certificate of Amendment has been duly executed by a duly authorized officer of the Corporation on this ___
day of ________, 2023.
NUTANIX, INC.
2023 PROXY STATEMENT B-2
PRELIMINARY PROXY CARD - SUBJECT TO COMPLETION
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v3.23.3
Pay vs Performance Disclosure - USD ($)
|
12 Months Ended |
Jul. 31, 2023 |
Jul. 31, 2022 |
Jul. 31, 2021 |
Pay vs Performance Disclosure [Table] |
|
|
|
Pay vs Performance [Table Text Block] |
Pay Versus Performance
In accordance
with Item 402(v) of Regulation S-K, below is a comparison of compensation actually paid (“CAP”) and certain measures
of financial performance. For further information concerning our compensation philosophy and how we align executive compensation
with performance, refer to the “Executive Compensation – Compensation Discussion
and Analysis” section.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value of Initial Fixed $100 Investment Based On: |
|
|
|
|
Fiscal
Year
(a) |
|
SCT Total
for First
PEO(1)
(b)($) |
|
CAP for
First
PEO(2)
(c)($) |
|
SCT
Total for
Second
PEO(3)
(b)($) |
|
CAP for
Second
PEO(2)
(c)($) |
|
|
Avg. SCT
Total for
Non-PEO
NEOs(7)
(d)($) |
|
Avg.
CAP for
Non-PEO
NEOs(8)
(e)($) |
|
|
Total
Shareholder
Return(4)
(f)($) |
|
Peer Group
Total
Shareholder
Return(4)
(g)($) |
|
Net Income
(Loss)(5)
(in
thousands)
(h)($) |
|
|
Company
Selected
Measure:
Annual
Recurring
Revenue(6)(in
thousands)
(i)($) |
2023 |
|
14,845,940 |
|
38,679,011 |
|
N/A |
|
N/A |
|
|
5,480,229 |
|
10,332,003 |
|
|
136 |
|
164 |
|
(254,560 |
) |
|
1,561,981 |
2022 |
|
12,928,676 |
|
3,241,068 |
|
N/A |
|
N/A |
|
|
4,990,357 |
|
(2,231,182 |
) |
|
68 |
|
129 |
|
(798,946 |
) |
|
1,202,438 |
2021 |
|
37,808,805 |
|
30,852,801 |
|
181,250 |
|
(4,475,791 |
) |
|
4,611,376 |
|
10,050,763 |
|
|
162 |
|
146 |
|
(1,035,589 |
) |
|
878,733 |
(1) |
Total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” (“SCT”)
above. Mr. Ramaswami has served as our Principal Executive Officer (“PEO”) since his hire on December 9, 2020
(“First PEO”). |
(2) |
For each covered year, the values included in column (c)
for the CAP to our PEO and in column (e) for the average CAP to our non-PEO named executive officers reflect the adjustments
set forth below. CAP does not mean these amounts were earned or paid during the year. CAP is an amount derived from the starting
point of total compensation as presented in the SCT under the methodology prescribed under the SEC’s rules, which is
solely based on adjustments to equity award values. Nutanix does not maintain a pension plan and does not pay dividends on
its common stock so no adjustments for these factors were necessary. There are no material differences between the assumptions
used to compute the valuation of the equity awards for calculating the compensation actually paid from the assumptions used
to compute the valuation of the equity awards as of the grant date. |
(3) |
Mr. Dheeraj Pandey previously served as our CEO before
retiring from Nutanix in December 2020. We have included Mr. Pandey in the table above in accordance with Item 402(v) of Regulation
S-K. However, Mr. Pandey has been excluded from the tables and graphs below as we do not believe Mr. Pandey’s further
inclusion is material to any conclusions that may be drawn from this analysis. |
(4) |
Cumulative TSR represents the value of an initial fixed
investment of $100 on July 31, 2020 in the company (column (f)) and the Nasdaq Computer Index (column (g)) for the fiscal
years ended July 31, 2021, 2022, and 2023. The Nasdaq Computer Index is also used in the company’s performance graph
in our Annual Report on Form 10-K. |
(5) |
The dollar amounts reported represent the amount of net
income reflected in our audited financial statements for the applicable year in accordance with accounting principles generally
accepted in the United States. |
(6) |
Annual Recurring Revenue for any given period is defined
as the sum of ACV for all non life-of-device contracts in effect as of the end of a specific period. For the purposes of this
calculation, we assume that the contract term begins on the date a contract is booked, unless the terms of such contract prevent
us from fulfilling our obligations until a later period, and irrespective of the periods in which we would recognize revenue
for such contract. Annual Contract Value is defined as the total annualized value of a contract, excluding amounts related
to professional services and hardware. The total annualized value for a contract is calculated by dividing the total value
of the contract by the number of years in the term of such contract, using, where applicable, an assumed term of five years
for contracts that do not have a specified term. |
(7) |
The table below shows the adjustments made to the SCT totals
(column (b) above) for our First PEO, Mr. Rajiv Ramaswami, to determine CAP (column (c) above). |
|
|
PEO |
|
FY 2021
($) |
|
FY 2022
($) |
|
FY 2023
($) |
|
|
Summary Compensation Table - Total Compensation (column (b)
for first PEO) |
|
37,808,805 |
|
12,928,676 |
|
14,845,940 |
- |
|
Grant Date Fair Value of Stock Awards and Option Awards
Granted in Fiscal Year |
|
36,350,054 |
|
11,165,080 |
|
13,153,930 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal
Year |
|
29,394,050 |
|
4,126,603 |
|
19,843,084 |
+ |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
— |
|
(5,948,177) |
|
11,280,867 |
+ |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
— |
|
600,563 |
|
1,487,145 |
+ |
|
Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which
Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
— |
|
2,698,484 |
|
4,375,905 |
- |
|
Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to
Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
— |
|
— |
= |
|
Compensation Actually Paid
(column (e)) |
|
30,852,801 |
|
3,241,068 |
|
38,679,011 |
(8) |
The table below shows the adjustments made to the average SCT totals
for our non-PEO NEOs (column (d) above) to determine CAP (column (e) above). |
|
|
Average of non-PEO NEOs(1) |
|
FY 2021
($) |
|
FY 2022
($) |
|
FY 2023
($) |
|
|
Summary Compensation Table - Total Compensation (column (d)) |
|
4,611,376 |
|
4,990,357 |
|
5,480,229 |
- |
|
Grant Date Fair Value of Stock Awards and Option Awards Granted
in Fiscal Year |
|
3,430,509 |
|
4,216,833 |
|
4,618,733 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards
Granted in Fiscal Year |
|
4,149,288 |
|
1,109,071 |
|
6,967,492 |
+ |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted
in Prior Fiscal Years |
|
3,009,834 |
|
(2,041,987 |
) |
1,705,032 |
+ |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested
During Fiscal Year |
|
802,254 |
|
201,176 |
|
522,181 |
+ |
|
Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in
Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
908,521 |
|
(439,620 |
) |
780,135 |
- |
|
Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in
Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
1,833,346 |
|
504,333 |
= |
|
Compensation Actually Paid
(column (e)) |
|
10,050,763 |
|
(2,231,182 |
) |
10,332,003 |
(1) |
Average of the total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” above for the
applicable year for the named executive officers, other than our PEO, which are comprised of the following individuals: for
fiscal year 2023, Ms. Sivaraman and Messrs. Sangster and Wall; for fiscal year 2022, Ms. Sivaraman and Messrs. Sangster, Wall,
and Williams; and for fiscal year 2021, Messrs. Sangster, Wall, Williams, and Kaddaras. |
|
|
|
Company Selected Measure Name |
Annual Recurring Revenue
|
|
|
Named Executive Officers, Footnote [Text Block] |
(1) |
Total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” (“SCT”)
above. Mr. Ramaswami has served as our Principal Executive Officer (“PEO”) since his hire on December 9, 2020
(“First PEO”). |
(1) |
Average of the total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” above for the
applicable year for the named executive officers, other than our PEO, which are comprised of the following individuals: for
fiscal year 2023, Ms. Sivaraman and Messrs. Sangster and Wall; for fiscal year 2022, Ms. Sivaraman and Messrs. Sangster, Wall,
and Williams; and for fiscal year 2021, Messrs. Sangster, Wall, Williams, and Kaddaras. |
|
|
|
Adjustment To PEO Compensation, Footnote [Text Block] |
|
|
PEO |
|
FY 2021
($) |
|
FY 2022
($) |
|
FY 2023
($) |
|
|
Summary Compensation Table - Total Compensation (column (b)
for first PEO) |
|
37,808,805 |
|
12,928,676 |
|
14,845,940 |
- |
|
Grant Date Fair Value of Stock Awards and Option Awards
Granted in Fiscal Year |
|
36,350,054 |
|
11,165,080 |
|
13,153,930 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal
Year |
|
29,394,050 |
|
4,126,603 |
|
19,843,084 |
+ |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
— |
|
(5,948,177) |
|
11,280,867 |
+ |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
— |
|
600,563 |
|
1,487,145 |
+ |
|
Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which
Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
— |
|
2,698,484 |
|
4,375,905 |
- |
|
Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to
Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
— |
|
— |
= |
|
Compensation Actually Paid
(column (e)) |
|
30,852,801 |
|
3,241,068 |
|
38,679,011 |
|
|
|
Non-PEO NEO Average Total Compensation Amount |
$ 5,480,229
|
$ 4,990,357
|
$ 4,611,376
|
Non-PEO NEO Average Compensation Actually Paid Amount |
$ 10,332,003
|
(2,231,182)
|
10,050,763
|
Adjustment to Non-PEO NEO Compensation Footnote [Text Block] |
|
|
Average of non-PEO NEOs(1) |
|
FY 2021
($) |
|
FY 2022
($) |
|
FY 2023
($) |
|
|
Summary Compensation Table - Total Compensation (column (d)) |
|
4,611,376 |
|
4,990,357 |
|
5,480,229 |
- |
|
Grant Date Fair Value of Stock Awards and Option Awards Granted
in Fiscal Year |
|
3,430,509 |
|
4,216,833 |
|
4,618,733 |
+ |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards
Granted in Fiscal Year |
|
4,149,288 |
|
1,109,071 |
|
6,967,492 |
+ |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted
in Prior Fiscal Years |
|
3,009,834 |
|
(2,041,987 |
) |
1,705,032 |
+ |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested
During Fiscal Year |
|
802,254 |
|
201,176 |
|
522,181 |
+ |
|
Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in
Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
908,521 |
|
(439,620 |
) |
780,135 |
- |
|
Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in
Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
— |
|
1,833,346 |
|
504,333 |
= |
|
Compensation Actually Paid
(column (e)) |
|
10,050,763 |
|
(2,231,182 |
) |
10,332,003 |
(1) |
Average of the total compensation as set forth in the “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2023 Summary Compensation Table” above for the
applicable year for the named executive officers, other than our PEO, which are comprised of the following individuals: for
fiscal year 2023, Ms. Sivaraman and Messrs. Sangster and Wall; for fiscal year 2022, Ms. Sivaraman and Messrs. Sangster, Wall,
and Williams; and for fiscal year 2021, Messrs. Sangster, Wall, Williams, and Kaddaras. |
|
|
|
Compensation Actually Paid vs. Total Shareholder Return [Text Block] |
Compensation Actually Paid vs. TSR
|
|
|
Compensation Actually Paid vs. Net Income [Text Block] |
Compensation Actually Paid vs. Net Income
|
|
|
Compensation Actually Paid vs. Company Selected Measure [Text Block] |
Compensation Actually Paid vs. ARR
|
|
|
Tabular List [Table Text Block] |
Tabular
List of Most Important Performance Measures
ARR (Annual Recurring Revenue) |
Non-GAAP Operating Expenses (excluding commissions) |
Relative Total Shareholder Return |
Employee Engagement |
|
|
|
Total Shareholder Return Amount |
$ 136
|
68
|
162
|
Peer Group Total Shareholder Return Amount |
164
|
129
|
146
|
Net Income (Loss) Attributable to Parent |
$ (254,560,000)
|
$ (798,946,000)
|
$ (1,035,589,000)
|
Company Selected Measure Amount |
1,561,981,000
|
1,202,438,000
|
878,733,000
|
Measure [Axis]: 1 |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Measure Name |
ARR (Annual Recurring Revenue)
|
|
|
Measure [Axis]: 2 |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Measure Name |
Non-GAAP Operating Expenses (excluding commissions)
|
|
|
Measure [Axis]: 3 |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Measure Name |
Relative Total Shareholder Return
|
|
|
Measure [Axis]: 4 |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Measure Name |
Employee Engagement
|
|
|
Non-PEO NEO [Member] | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
$ 4,618,733
|
$ 4,216,833
|
$ 3,430,509
|
Non-PEO NEO [Member] | Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
6,967,492
|
1,109,071
|
4,149,288
|
Non-PEO NEO [Member] | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
1,705,032
|
(2,041,987)
|
3,009,834
|
Non-PEO NEO [Member] | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
522,181
|
201,176
|
802,254
|
Non-PEO NEO [Member] | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
780,135
|
(439,620)
|
908,521
|
Non-PEO NEO [Member] | Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
504,333
|
1,833,346
|
|
Mr. Rajiv Ramaswami |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Total Compensation Amount |
14,845,940
|
12,928,676
|
37,808,805
|
PEO Actually Paid Compensation Amount |
38,679,011
|
3,241,068
|
30,852,801
|
Mr. Rajiv Ramaswami | PEO [Member] | Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
13,153,930
|
11,165,080
|
36,350,054
|
Mr. Rajiv Ramaswami | PEO [Member] | Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
19,843,084
|
4,126,603
|
29,394,050
|
Mr. Rajiv Ramaswami | PEO [Member] | Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
11,280,867
|
(5,948,177)
|
|
Mr. Rajiv Ramaswami | PEO [Member] | Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
1,487,145
|
600,563
|
|
Mr. Rajiv Ramaswami | PEO [Member] | Change in Fair Value as of Vesting Date of Stock Awards and Option Awards Granted in Prior Fiscal Years For Which Applicable Vesting Conditions Were Satisfied During Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
4,375,905
|
2,698,484
|
|
Mr. Rajiv Ramaswami | PEO [Member] | Fair Value as of Prior Fiscal Year-End of Stock Awards and Option Awards Granted in Prior Fiscal Years That Failed to Meet Applicable Vesting Conditions During Fiscal Year |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
Adjustment to Compensation Amount |
|
|
|
Second PEO |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Total Compensation Amount |
|
|
181,250
|
PEO Actually Paid Compensation Amount |
|
|
$ (4,475,791)
|
Mr. Rajiv Ramaswami | PEO [Member] |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Name |
Mr. Ramaswami
|
Mr. Ramaswami
|
Mr. Ramaswami
|
Ms Sivaraman | Non-PEO NEO [Member] |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Name |
Ms. Sivaraman
|
Ms. Sivaraman
|
|
Mr. Sangster | Non-PEO NEO [Member] |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Name |
Sangster
|
Sangster
|
Sangster
|
Mr. Wall | Non-PEO NEO [Member] |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Name |
Wall
|
Wall
|
|
Mr. Williams | Non-PEO NEO [Member] |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Name |
|
Williams
|
Williams
|
Mr. Kaddaras | Non-PEO NEO [Member] |
|
|
|
Pay vs Performance Disclosure [Table] |
|
|
|
PEO Name |
|
|
Kaddaras
|
X |
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Nutanix (NASDAQ:NTNX)
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Nutanix (NASDAQ:NTNX)
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