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 |
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Filed by a Party other than the Registrant |
| Check the appropriate
box: |
|
Preliminary Proxy Statement |
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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): |
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No fee required |
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Fee paid previously with preliminary materials |
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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,
Fiscal year 2024 was a year of significant financial
milestones and achievements. We achieved GAAP operating profitability for the full fiscal year, almost tripled our free cash flow
from the previous fiscal year, and became a rule-of-40+(1) company again. All while growing annual recurring revenue
at 20+% and extending our technology vision of becoming the leading platform for running all apps and managing data, anywhere.
Challenging the Status Quo
As we celebrate our 15-year anniversary, we take
pride in the fact that we’ve been challengers every step of the way. In our first decade, we pioneered Hyperconverged Infrastructure
(HCI) to help customers simplify and modernize their data centers away from legacy three-tier architectures. Along the way, we
had to build an appliance to prove HCI’s viability, de-risk customers with an enterprise-grade hypervisor, and transform
ourselves into a subscription-based software vendor that runs on any hardware platform - challenging the conventional wisdom of
its time on each of those dimensions.
In just the first half of our second decade of
existence, we’ve enabled our customers to run their workloads not just on-premises but also on major public cloud providers,
giving them the flexibility to get the best of both worlds in a hybrid multicloud world. We’ve also created new routes to
market for this platform by making it available through major server vendors as well as public cloud marketplaces.
While we are proud of those accomplishments, we have higher aspirations
as a company.
Leading Platform for All Apps and Data
With the disruption in the infrastructure market due to recent acquisitions,
many companies are actively reevaluating their IT strategy.
Many have invested heavily in three-tier architectures
both from a hardware as well as a talent standpoint. Some of these organizations are looking at in-place replacements as an intermediate
step before moving to more modern architectures like HCI or hybrid multicloud. For them, we recently announced that we are extending
our platform to work with traditional three-tier setups with compute-only nodes connected to external IP-based storage. This will
enable them to reuse their existing hardware while providing a staged migration to our modern hybrid multicloud platform. We expect
to be in the market with our first server and external storage partners next calendar year.
 2024 Proxy Statement |
01 |
Customers looking to use public clouds in a cost-effective
manner are increasingly adopting our hybrid multicloud technology through Nutanix Cloud Clusters (NC2). This technology enables
our customers to operate seamlessly across cloud and on-prem environments, with a single team managing both, while also allowing
existing apps to be run across these environments. Customers are using NC2 for disaster recovery, elastic capacity-on-demand, geographic
expansion, and “lift and shift” cloud migration.
For customers building modern apps, Kubernetes
has become one of the best ways to speed up innovation as it helps developers build and ship apps faster. With the recent general
availability of Nutanix Kubernetes Platform (NKP), we provide customers the platform to manage their Kubernetes clusters across
any environment. And our vision is to deliver a consistent suite of storage and platform services such as databases on any cloud.
By bringing these elements together, we plan to deliver a complete modern apps platform that enables customers to build their apps
once and run them anywhere.
Artificial intelligence (AI) is probably the
most modern of modern apps. With the recent innovations in generative AI, companies are looking to deploy models and build their
own generative AI solutions for a wide array of use cases, including co-piloting, fraud detection, and customer support. We expect
that generative AI apps will run both in the public cloud and on-prem. Many mission-critical generative AI apps will need to run
on-prem or at the edge for co-location of data, privacy, and security reasons. To address this need and to simplify deploying generative
AI for our customers, we launched GPT-in-a-Box about a year ago and are seeing good early traction.
With these innovations, Nutanix is well positioned
to serve all customers, from those with legacy three-tier architectures to those that are building modern apps, to become the leading
platform for running all applications and managing data, anywhere.
Well-Positioned for Growth
Our expanding product offerings, world-class
net promoter score, and the recent industry disruption have helped us build a strong pipeline for our business and sign up an increasing
number of new customers in fiscal year 2024. As we’ve said all along, this is a multi-year opportunity – a marathon
rather than a sprint.
Over the last couple of years, we’ve deliberately
shifted our focus to the larger enterprises where most of our total addressable market sits. To enable that move, we’ve significantly
top-graded our sales teams and invested in our broader go-to-market engine to grow awareness of our offerings. We have hired more
sales reps to capture the opportunity and product specialists to enable our sellers to better position our complete portfolio.
As a result, we are seeing higher engagement and interest from some of the largest Forbes Global 2000 companies. While sales cycles
with these large customers tend to be longer and have a greater variability in timing, outcome and deal structure, we are securing
large deals at a scale our company has previously not booked.
In addition, we are now beginning to see increased
leverage from our partners. In fiscal year 2024, our channel began identifying, prosecuting, and transacting business increasingly
autonomously for an identified whitespace set of smaller prospective customers. Our platform partners, Cisco, Lenovo, and now Dell
among others, are selling our solutions along with theirs, enabling an entirely new route to market through their sellers and getting
us into companies that we previously never served. We are excited by what this can grow into and are investing into making this
route more successful.
For our existing customers, renewals continue
to be transacting at a healthy level both from a timing and outcome standpoint. We are pleased by this continued execution of our
renewals team and expect to get even better on renewals in the coming years given our world class product and support offerings
that are focused on customer outcomes.
| 2024 Proxy Statement |
02 |
Looking Ahead
We are entering fiscal year 2025 with a strong
platform targeting hybrid multicloud environments, modern apps, and generative AI. Coupled with a reinvigorated go-to-market engine
and leverage from our partners, Nutanix is well positioned for growth and value creation for stockholders.
Thank you for your continued trust and faith in us.
Rajiv Ramaswami
President and Chief Executive Officer
| (1) |
Rule-of-40+ is defined as the sum of revenue growth rate and
free cash flow margin being greater than or equal to 40%. |
| 2024 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 expectations regarding: extending
our platform to work with traditional three-tier setups, including the availability and timing thereof; our plan to deliver a
complete modern apps platform that enables customers to build their apps once and run them anywhere; generative AI trends; our
goal of becoming the leading platform for running all applications and managing data, anywhere; our growth and market opportunity;
our focus on larger enterprises; increased leverage from our partners; our renewals performance; and our fiscal year 2025 outlook.
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, 2024 filed with the Securities and Exchange Commission on September 19, 2024. 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.
| 2024 Proxy Statement |
04 |
Notice of 2024 Annual Meeting of Stockholders
To Be Held Virtually on Friday, December
13, 2024
at 9:00 a.m., Pacific Time
| 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 |
| Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on December 13, 2024:
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 2024 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/NTNX2024
on Friday, December 13, 2024, at 9:00 a.m., Pacific Time.
We are holding the Annual Meeting for the following purposes:
| Proposals |
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Board vote
recommendation |
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For further
details |
| 1. |
Election of Three Class I and Three Class II Directors |
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FOR |
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Page 20 |
| 2. |
Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public
Accounting Firm for Fiscal Year 2025 |
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FOR |
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Page 29 |
| 3. |
Advisory Vote to Approve the Compensation of our Named Executive Officers |
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FOR |
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Page 34 |
| 4. |
Advisory Vote to Approve the Frequency of Future Stockholder Advisory Votes on the Compensation
of our Named Executive Officers |
|
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ONE YEAR |
|
Page 72 |
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 of 2024 Annual Meeting of Stockholders.
The record date for the Annual Meeting is October
8, 2024. 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 22, 2024, we mailed to our
stockholders a Notice of Internet Availability of Proxy Materials (the “Notice”) containing instructions on how to
access our proxy statement and annual report. The 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.
| 2024 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 22, 2024
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.
| 2024 Proxy Statement |
06 |
Proxy Statement
For the 2024 Annual Meeting of Stockholders
To Be Held on Friday, December 13, 2024 at 9:00
a.m., Pacific Time
Our Board of Directors is soliciting your proxy
to vote at the 2024 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/NTNX2024 on Friday, December 13, 2024 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, 2024,
to our stockholders primarily via the Internet. On or about October 22, 2024, 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 8, 2024, the record date for the Annual Meeting, will be entitled to vote at the Annual
Meeting. On the record date, there were 267,836,148 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, 2024, which was filed with the Securities and Exchange Commission (the “SEC”) on September
19, 2024, 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.
| 2024 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
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| Time and Date |
|
Virtual Meeting Site |
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Record Date |
9:00 a.m. Pacific Time
Friday, December 13, 2024 |
|
www.virtualshareholdermeeting.com/NTNX2024 |
|
October 8, 2024 |
Proposal 1: Election
of Three Class I and Three Class II Directors (See Page 20)
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Our
Board Recommends a VOTE FOR Max de Groen, Steven J. Gomo, and Mark Templeton as Class I Directors and Craig Conway,
Virginia Gambale, and Brian Stevens as Class II Directors |
| |
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Nominees
Our Class I directors currently consist of
Max de Groen, Steven J. Gomo, and Mark Templeton, and our Class II directors currently consist of Craig Conway, Virginia Gambale,
and Brian Stevens. 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. Conway, Ms. Gambale, and Mr. Stevens have each
been nominated to continue to serve as Class II directors, and each of them has agreed to stand for re-election at the Annual Meeting.
The following provides summary information about each Class I and Class II director nominee.
| Name |
|
Age |
|
Audit
Committee |
|
Compensation
Committee |
|
Nominating
and
Corporate
Governance
Committee |
|
Security
and Privacy
Committee |
|
Independent |
|
Director Since |
| Max
de Groen |
|
39 |
|
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|
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|
2020 |
| Steven J. Gomo |
|
72 |
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|
2015 |
| Mark
Templeton |
|
72 |
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2023 |
| Craig
Conway |
|
70 |
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2017 |
| Virginia
Gambale |
|
65 |
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|
2020 |
| Brian
Stevens |
|
61 |
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|
2019 |
|
Chair |
|
Member |
| 2024 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 4.7 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 started being phased out beginning with our 2023 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 a majority vote and our Board will accept the 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 |
|
• |
Executive officers and 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 and Class II director nominee to a one-year term. Accordingly,
our Board unanimously recommends stockholders vote FOR the election of each Class I and Class II director nominee
at the Annual Meeting.
The election of each Class I and Class II
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.
| 2024 Proxy Statement |
10 |
Proposal 2: Ratification of Selection
of Independent Registered Public Accounting Firm (See Page 29)
| |
|
|
|
|
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, 2025, 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, 2023 and 2024.
| |
Fiscal Year Ended July 31, |
| |
2023
($) |
|
2024
($) |
| Audit fees(1) |
5,008,855 |
|
4,067,700 |
| Audit-related fees(2) |
— |
|
— |
| Tax fees(3) |
731,810 |
|
759,821 |
| TOTAL FEES |
5,740,665 |
|
4,827,521 |
| (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, 2025. 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.
| 2024 Proxy Statement |
11 |
Proposal 3: Advisory Vote to Approve
the Compensation of Our Named Executive Officers (See Page 34)
| |
|
|
|
|
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 (“NEOs”).
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: Advisory Vote on the Frequency
of Future Stockholder Advisory Votes to Approve the Compensation of Our Named Executive Officers (See Page 72)
| |
|
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|
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Our
Board Recommends a VOTE FOR ONE YEAR on this Proposal 4. |
| |
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Our stockholders have the right to indicate
their preference at least once every six years regarding how frequently we should solicit an advisory vote on the compensation
of our NEOs as disclosed in our proxy statement. Accordingly, we are asking our stockholders to indicate whether they would prefer
an advisory say-on-pay vote every one, two or three years. Alternatively, stockholders may abstain from casting votes.
After careful consideration, our Board has
determined that continuing to hold an advisory say-on-pay vote annually is the most appropriate frequency for us, and therefore
our Board unanimously recommends a vote for ONE YEAR.
The alternative among one year, two years
or three years that receives the highest number of votes from the holders of the shares present at the Annual Meeting or represented
by proxy thereat and entitled to vote on the proposal will be deemed to be the frequency preferred by our stockholders. Abstentions
and broker non-votes will have no effect on this proposal.
| 2024 Proxy Statement |
12 |
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. Information contained on or accessible through our website is not incorporated by reference herein
and is not a part of this proxy statement.
Board of Directors and Its Committees
Current Composition of the Board of Directors and its Committees
|
Chair |
|
Member |
| 2024 Proxy Statement |
13 |
| |
Independent Directors |
|
Gender and Ethnic Diversity |
|
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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 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.
| 2024 Proxy Statement |
14 |
Board Diversity Matrix
| Board Diversity Matrix
(As of October 22, 2024)(1) |
| Total
Number of Directors |
|
|
|
|
9 |
|
|
|
|
|
| |
Female |
|
Male |
|
|
|
Non-Binary |
|
Did Not
Disclose
Gender |
|
| Part
I: Gender Identity |
|
|
|
|
|
|
|
|
|
|
| Directors |
2 |
|
7 |
|
|
|
— |
|
— |
|
| Part
II: Demographic Background |
|
|
|
|
|
|
|
|
|
|
| African
American or Black |
— |
|
— |
|
|
|
— |
|
— |
|
| Alaskan
Native or Native American |
— |
|
— |
|
|
|
— |
|
— |
|
| Asian |
— |
|
1 |
|
|
|
— |
|
— |
|
| Hispanic
or Latinx |
— |
|
— |
|
|
|
— |
|
— |
|
| Native
Hawaiian or Pacific Islander |
— |
|
— |
|
|
|
— |
|
— |
|
| White |
2 |
|
6 |
|
|
|
— |
|
— |
|
| Two
or More Races or Ethnicities |
— |
|
— |
|
|
|
— |
|
— |
|
| LGBTQ+ |
|
|
|
|
— |
|
|
|
|
|
| Did
Not Disclose Demographic Background |
|
|
|
|
— |
|
|
|
|
|
| (1) |
To see our Board Diversity Matrix as of October 23, 2023, please see the
proxy statement filed with the SEC on October 23, 2023. |
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 Chief Executive Officer and Chair of the Board. Mr. Ramaswami has served as our President and Chief
Executive Officer since December 2020, and Ms. Gambale, an independent director, has served as our Chair of the Board since June
2021. Separating the positions of Chief Executive Officer and Chair of the Board allows our Chief Executive Officer 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
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.
| 2024 Proxy Statement |
15 |
Committees of our Board
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.
Chair:
Steven J. Gomo
Members:
•
Max
de Groen
•
Virginia
Gambale
•
Gayle
Sheppard
|
|
Audit
Committee |
| |
The Audit Committee is composed
of Mr. de Groen, Ms. Gambale, Mr. Gomo, and Ms. Sheppard, each of whom is a non-employee director. Mr. Gomo serves as 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 each member of the
Audit Committee 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, and our enterprise risk management framework, including policies,
and processes around the identification, management, monitoring and mitigation of enterprise-wide risks;
•
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 composed of Mr. Conway, Mr. de Groen, Mr. Stevens, and Mr. Templeton, each of whom is a non-employee director. Mr. de Groen
serves as the chair of the Compensation Committee. 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;
•
reviewing
and monitoring matters related to human capital management, including talent acquisition and retention and diversity; and
•
reviewing
succession planning for the CEO and other members of our executive leadership.
|
| 2024 Proxy Statement |
16 |
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 2024 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.
Chair:
Virginia Gambale
Members:
•
Craig
Conway
•
Steven
J. Gomo
•
David
Humphrey
|
|
Nominating
and Corporate Governance Committee |
| |
The Nominating and Corporate
Governance Committee is composed of Mr. Conway, Ms. Gambale, Mr. Gomo, and Mr. Humphrey, each of whom is a non-employee director.
Ms. Gambale serves as 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 our 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 composed of Mr. Humphrey, Ms. Sheppard, Mr. Stevens, and
Mr. Templeton, each of whom is a non-employee director. Mr. Stevens serves as 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 artificial intelligence, 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 2024, our Board met 11 times, the Audit Committee met 11 times, the Compensation Committee met 7 times, the Nominating
and Corporate Governance Committee met 5 times, and the Security and Privacy Committee met 2 times. During fiscal year 2024, 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. All of our nine then-incumbent directors attended
our 2023 annual meeting of stockholders.
| 2024 Proxy Statement |
17 |
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 (i) 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 pertaining to financial, accounting and tax matters,
and (ii) enterprise risk management framework, including policies and processes around the identification, management, monitoring
and mitigation of enterprise-wide risks. One member of the Audit Committee is required to also be a member of the Security and
Privacy Committee. 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, security, 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 fourth annual Environmental, Social, and Governance Report
in 2024. We encourage you to read our Environmental, Social, and Governance Report at https://www.nutanix.com/esg-report. 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 our Board
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.
| 2024 Proxy Statement |
18 |
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 (the “2026 Notes”). Under the
terms of the investment agreement, Bain previously received the right to appoint two nominees to our Board, and we appointed David
Humphrey and Max de Groen as the two Bain nominees to our Board in September 2020. Under the terms of the investment agreement,
if, at any time, Bain beneficially owns less than 50% of the Class A common stock underlying the 2026 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 Class A common stock underlying the 2026 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, under the
terms of the investment agreement, 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 Class A 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 Class A common stock underlying the 2026 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 Class A 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 Class A common stock underlying the 2026 Notes (on an as-converted
basis, and assuming full physical settlement). In June 2024, Bain delivered a notice of conversion to convert $817.6 million in
aggregate principal amount of the 2026 Notes, representing all of the then outstanding principal amount of the 2026 Notes. During
the fiscal quarter ended July 31, 2024, we settled the conversion by paying $817.6 million in cash and delivering approximately
16.9 million shares of Class A common stock, which represents 6.3% of our outstanding Class A common stock as of the record date
for the Annual Meeting. As a result of Bain’s conversion of the 2026 Notes, Bain ceased to beneficially own at least 9.09%
of our outstanding Class A common stock and, as a result, has a right to nominate only one director to our Board.
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.
| 2024 Proxy Statement |
19 |
Proposal 1: Election of Directors
| |
|
|
|
|
Our
Board Recommends a VOTE FOR Max de Groen, Steven J. Gomo, and Mark Templeton as Class I Directors and Craig Conway,
Virginia Gambale, and Brian Stevens as Class II Directors. |
| |
|
|
Our Board currently consists of nine members divided into three classes:
| • |
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, unless re-elected. |
| • |
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. |
We are in the second year of a three-year process of declassifying
our Board. At the Annual Meeting, six Class I and Class II directors will stand for re-election to serve for one-year terms instead
of the three-year terms that directors served prior to the start of the declassification of our Board. Until the declassification
of our Board is completed, 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. From and after our
2025 annual meeting of stockholders, the division of our directors into classes will terminate in accordance with our Amended and
Restated Certificate of Incorporation and all of our directors will stand for election annually.
Mr. de Groen, Mr. Gomo, and Mr. Templeton have each been nominated
to continue to serve as a Class I director for a one-year term, and Mr. Conway, Ms. Gambale, and Mr. Stevens have each been nominated
to continue to serve as a Class II director for a one-year term. Each of these Class I nominees and Class II nominees 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 would
continue to serve as Class I directors until the annual meeting of stockholders to be held after the end of fiscal year 2025 and
until his successor has been duly elected, or if sooner, until his death, resignation or removal. If elected at the Annual Meeting,
Mr. Conway, Ms. Gambale, and Mr. Stevens would continue to serve as Class II directors until the annual meeting of stockholders
to be held after the end of fiscal year 2025 and until his or her successor has been duly elected, or if sooner, until his or her
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. Our Amended and Restated
Bylaws provide for majority voting in uncontested director elections and our corporate governance guidelines 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.
| 2024 Proxy Statement |
20 |
Class I Nominees for Re-Election at the Annual Meeting
 |
Max
de Groen |
|
Age: 39
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, a private investment firm, in 2011
and is currently a managing director in the Technology Vertical at Bain Capital. Prior to joining Bain Capital, Mr. de Groen was
a consultant at The Boston Consulting Group, a management consulting firm, 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. |
 |
Steven
J. Gomo |
|
Age: 72
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 solar energy products company, 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. |
| 2024 Proxy Statement |
21 |
 |
Mark
Templeton |
|
Age: 72
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. (2020-2024) |
|
Professional background
Mr. Templeton previously served at Citrix Systems, Inc., a virtualization,
mobility management, networking and SaaS solutions company, 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. He was also Chief
Executive Officer of DigitalOcean, Inc., a cloud computing company, from June 2018 to August 2019. Mr. Templeton has served as
a member of the board of directors of 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, Keysight Technologies, Inc., an electronics test and measurement equipment
company, from December 2015 to July 2018, and Health Catalyst, Inc., a healthcare data and analytics technology and services company,
from July 2020 to March 2024. 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 Nominees for Re-Election at the Annual Meeting
 |
Craig
Conway |
|
Age: 70
Director since: 2017
Independent
Board Committees:
• Compensation
• Nominating and Corporate Governance |
Other public boards during the past five years:
• Paylocity Holding Corporation (since 2024)
• 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, a
global software and services company. Mr. Conway has served as a member of the board of directors of Salesforce, Inc., a cloud-based
customer relationship management company, since October 2005 and Paylocity Holding Corporation, a cloud-based HCM and payroll software
solutions company, since March 2024. 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., an insurance technology company, 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. |
| 2024 Proxy Statement |
22 |
 |
Virginia
Gambale |
|
Age: 65
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 (2015-2023)
• 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 financial
technology company, since May 2023; Virtu Financial, Inc., a financial services company, since January 2020; and Jamf Holding Corp.,
an Apple device management and security company, 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, Avellino Lab USA, Inc., and
FD Technologies plc.
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: 61
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, owned by Alphabet, Inc., a multinational technology company, 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 OpenStack 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. |
| 2024 Proxy Statement |
23 |
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: 47
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 partner in the Technology, Media and Telecommunications
Vertical and Co-Head of Bain Capital’s North America Private Equity businesses. Prior to joining Bain Capital, Mr. Humphrey
was an investment banker in the mergers and acquisitions group at Lehman Brothers, a global financial firm, 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: 58
Director since: 2020
President and Chief Executive Officer
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,Inc., a virtualization and cloud infrastructure solutions company, 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, a semiconductor,
enterprise software and security solutions company, 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, a
global networking hardware and software technology company, 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 and Computer Science from the Indian
Institute of Technology, Madras; M.S. and Ph.D. in Electrical Engineering and Computer Science 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. |
| 2024 Proxy Statement |
24 |
 |
Gayle
Sheppard |
|
Age: 70
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, a division of Microsoft Corporation, a multinational technology company, 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, a multinational technology company, 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 AI platforms, solutions in business and consumer markets, and digitization of business in a wide variety of industries.
Ms. Sheppard has served as a member of the board of directors of Astroscale Holdings Inc., an orbital debris removal company, since
July 2023. Ms. Sheppard also 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, gained from her leadership in driving
global market expansion and advancing enterprise data and AI services. |
| 2024 Proxy Statement |
25 |
Director Compensation
Non-Employee Director Compensation Policy
Members of our Board who are not employees
or officers of our company, also referred herein as our 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
restricted stock unit (“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 |
| 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 |
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, $1.5 million).
| 2024 Proxy Statement |
26 |
Fiscal Year 2024 Director Compensation Table
The following table provides information
for all compensation awarded to, earned by or paid to each person who served as a non-employee director for all, or a portion of
the fiscal year ended July 31, 2024, or a portion thereof. Mr. Ramaswami, our President and CEO, did not receive compensation
for his service as a director. The compensation received by Mr. Ramaswami as an employee is shown in “Executive
Compensation – Executive Compensation Tables – Fiscal Year 2024 Summary Compensation Table.”
| Name | |
Fees
Earned
or Paid in
Cash
($) | |
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 | |
67,685 | |
280,170 | |
— | |
— | |
— | |
— | |
347,855 |
| Max de Groen | |
82,726 | |
280,170 | |
— | |
— | |
— | |
— | |
362,896 |
| Virginia Gambale | |
185,507 | |
280,170 | |
— | |
— | |
— | |
— | |
465,677 |
| Steven J.
Gomo | |
87,740 | |
280,170 | |
— | |
— | |
— | |
— | |
367,910 |
| David Humphrey | |
65,178 | |
280,170 | |
— | |
— | |
— | |
— | |
345,348 |
| Gayle Sheppard | |
69,295 | |
280,170 | |
— | |
— | |
— | |
— | |
349,465 |
| Brian Stevens | |
75,205 | |
280,170 | |
— | |
— | |
— | |
— | |
355,375 |
| Mark Templeton | |
49,705 | |
280,170 | |
— | |
— | |
— | |
— | |
329,875 |
| (1) |
The amounts reported in this column represent the aggregate grant date fair value
of the RSUs granted, as computed in accordance with Financial Accounting Standards Board, Accounting Standards Codification
Topic 718, Compensation - Stock Compensation (“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, 2024 filed with the SEC on September 19, 2024. These amounts do not necessarily reflect the actual
economic value that may ultimately be realized by the director. |
Outstanding Director Equity Awards at Fiscal Year 2024 Year-End
Table
Our non-employee directors held the following
outstanding option and RSU awards as of July 31, 2024. 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 2024 Year-End Table.”
| Name | |
# of Outstanding Options
(in shares) | |
# of Outstanding RSUs
(in shares) |
| Craig
Conway | |
— | |
6,088 |
| Max de Groen | |
— | |
6,088 |
| Virginia Gambale | |
— | |
6,088 |
| Steven J.
Gomo | |
— | |
6,088 |
| David Humphrey | |
— | |
6,088 |
| Gayle Sheppard | |
— | |
6,088 |
| Brian Stevens | |
— | |
6,088 |
| Mark Templeton | |
— | |
6,088 |
| 2024 Proxy Statement |
27 |
Director Stock Ownership Guidelines
Under our stock ownership guidelines for
non-employee directors, each non-employee director is expected to acquire and hold a minimum stock ownership position with an aggregate
value equal to at least five times the value of his or her then-current annual cash retainer for service on our Board (not including
any additional cash retainers for serving as Chair of the Board, lead independent director or a member or chair of any Board committee).
Each current non-employee director is expected to achieve the applicable level of ownership by the fourth annual meeting of stockholders
following the date on which he or she joined our Board. Any new non-employee director will be expected to achieve the applicable
level of ownership by the fifth anniversary of the date on which he or she joins 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,” and the matters discussed
in the section “Corporate Governance—Nominations Process and Director Qualifications—Bain
Board Nomination Rights,” there has not been since August 1, 2023, 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. |
| 2024 Proxy Statement |
28 |
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, 2025, 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, 2022, 2023 and 2024. 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, 2023 and 2024.
| | |
Fiscal Year Ended July 31, |
| | |
2023
($) | |
2024
($) |
| Audit
fees(1) | |
5,008,855 | |
4,067,700 |
| Audit-related
fees(2) | |
— | |
— |
| Tax
fees(3) | |
731,810 | |
759,821 |
| TOTAL FEES | |
5,740,665 | |
4,827,521 |
| (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. |
| 2024 Proxy Statement |
29 |
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, 2023 and 2024 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, 2024 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, 2024.
The Audit Committee
Steven J. Gomo (Chair)
Max de Groen
Virginia Gambale
Gayle Sheppard
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.
| 2024 Proxy Statement |
30 |
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 |
58 |
President and Chief Executive Officer |
| Rukmini Sivaraman |
43 |
Chief Financial Officer |
| David
Sangster |
60 |
Chief Operating Officer |
| Brian
Martin |
62 |
Chief Legal Officer |
On August 30, 2024, Mr. Sangster notified
the Company of his decision to retire as Chief Operating Officer, effective October 31, 2024.
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.
Brian Martin
has served as our Chief Legal Officer since June 2024. Prior to joining us, he served as Executive Vice President and
General Counsel at Lyten, Inc., a supermaterial applications company, from July 2021 to May 2024. Prior to that, he served as Senior
Vice President, General Counsel, and Secretary at Juniper Networks, Inc., a networking company, from October 2015 to July 2021.
He also served as General Counsel of KLA Corporation (formerly known as KLA-Tencor Corporation), an equipment and services company
for the electronics industry, from 2007 to September 2015 and spent ten years in senior legal positions at Sun Microsystems, Inc.,
a network computing infrastructure solutions company. Mr. Martin holds a B.S. in Economics from the University of Rochester and
a J.D. from the State University of New York at Buffalo Law School.
| 2024 Proxy Statement |
31 |
Executive Compensation
Letter From the Chair of the Compensation
Committee
Dear Fellow Stockholders:
As Chair of the Compensation Committee (the “Committee”), I lead
the Committee in its oversight of the design of pay programs that attract, retain, and drive our leadership team to maintain and grow
our position as a global leader in cloud software. I want to share some insights into the circumstances that drove the Committee’s
decision to grant a supplemental long-term performance-based equity award to Rajiv Ramaswami, our President and CEO, during fiscal year
2024.
Against the backdrop of the highly competitive market for CEO talent, the Committee
became aware that Rajiv had been approached regarding a potential competitive opportunity outside Nutanix. In these extraordinary circumstances,
the Committee determined that a long-term performance-based equity award would address the immediate retention concerns and provide a
strong performance incentive for Rajiv to continue driving long-term value for stockholders. In consultation with our independent compensation
consultant, external counsel and the Chair of the Board, the Committee evaluated all available options to retain Rajiv and provide him
long-term performance motivation as CEO. The Committee’s decision in making this award was grounded in the following:
Rajiv is a proven, strategic leader. He has been the key architect of our company’s
transformation. Under Rajiv’s leadership, Nutanix has:
| • |
achieved profitable growth while nearly doubling its stock price from his start
date through fiscal year 2024; |
| • |
evolved into a hybrid multicloud leader and transitioned to a subscription-based business model; |
| • |
cultivated key strategic partnerships with leading technology companies; and |
| • |
launched Nutanix Cloud Clusters on Microsoft Azure, GPT-in-a-Box, and new cloud-native offerings. |
Rajiv is instrumental to Nutanix’s next stage of growth, including capitalizing on recent
industry disruption and progressing toward the goal of becoming the leading platform for running applications and managing data, anywhere.
Rajiv has already continued to drive achievements since the award was granted, with Nutanix having:
| • |
delivered record revenue of over $2.1 billion in FY 2024 (a 15% CAGR since FY 2020); |
| • |
delivered record free cash flow of $598 million in FY 2024, almost 3x higher than FY 2023; |
| • |
achieved its first full year of positive GAAP operating profit in FY 2024; |
| • |
achieved a Rule of 40 score of 43 in FY 2024; |
| • |
forged a new partnership with NVIDIA and an expanded partnership with Dell; |
| • |
launched a new AI partner program; and |
| • |
launched Nutanix Kubernetes Platform. |
The award is 100% performance-based, with each of the measures (stock price,
ARR, and free cash flow) tied to our strategic objectives and requiring rigorous performance for the respective portions of the award
to be earned.
| • |
The payout opportunity is balanced to focus Rajiv on strategic execution and
sustained value creation by incentivizing both operational goals (50% annual recurring revenue (“ARR”) and free cash flow
(“FCF”)) as well as absolute returns to stockholders (50% stock price hurdles) during a performance period that ends on July 31,
2027. |
| • |
The performance required to achieve any payout associated with each operational
goal is the high end of the fiscal year 2027 year-end targets provided at our September 2023 Investor Day. The stock price hurdles represent
annualized growth ranging from 13% to 21% over the performance period and an approximate doubling of our market capitalization over the
same period to achieve a maximum payout, and payout cannot exceed target unless our total shareholder return for the approximate 3.5 year
performance period ending July 31, 2027 is at least at the median of the total shareholder return of the Nasdaq Compositive Index. |
| • |
Vesting is subject to Rajiv’s continued service as our CEO through September
15, 2027. |
| 2024 Proxy Statement |
32 |
The Committee’s objective was to balance the incentive to Rajiv against
the long-term-value we want to create for stockholders.
| • |
Supplemental awards are not a regular part of our executive compensation program,
and absent extraordinary circumstances, the Committee will not use them going forward. |
| • |
The $30 million target award value represents the minimum value that the Committee
believed was necessary to secure Rajiv’s continued service. |
| • |
The award demonstrates the Committee’s confidence in Rajiv and his ability
to execute against long-range financial goals and drive stockholder value. |
We also transitioned the leadership of our legal operations during 2024. In
February 2024, our former Chief Legal Officer, Tyler Wall, notified us of his decision to retire. To provide adequate time to identify
a well-qualified successor and ensure an orderly transition of the day-to-day duties of Chief Legal Officer, the Committee approved a
transition agreement to extend Tyler’s employment through June 2024. In exchange for his transition service, he received a payment
of $1.35 million in addition to post-departure COBRA payments for 12 months. The payment amount considered that, upon retirement, Tyler
forfeited his unvested equity awards and was ineligible to receive an annual cash incentive award for fiscal year 2024.
We have held several engagements with stockholders in recent months covering
a range of topics. I am encouraged by the level of support we continue to see for the Nutanix leadership team and the foundation of our
executive compensation program. We always appreciate stockholder feedback and look forward to continuing our meaningful dialogue with
you.
On behalf of the Committee, I respectfully request your support for this year’s
say-on-pay proposal (Proposal 3).
Max de Groen
Compensation Committee Chair
| 2024 Proxy Statement |
33 |
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 and non-binding basis, the compensation of our named executive officers (“NEOs”).
This vote, commonly known as a “say-on-pay” vote, gives our stockholders the opportunity to express their views on our NEOs’
compensation as a whole. This vote is not intended to address any specific item of compensation or any specific NEO, but rather the overall
compensation of all our NEOs 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 NEO 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 SEC, 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 NEO 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 2024 is set forth in detail in the “Fiscal Year 2024 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 NEOs. In addition, we explain how and why the Compensation Committee arrived at the specific compensation policies
and decisions for our NEOs. The following are our NEOs for fiscal year 2024:
| • | Rajiv Ramaswami, our President and CEO; |
| • | Rukmini Sivaraman, our Chief Financial Officer; |
| • | David M. Sangster, our Chief Operating Officer; |
| • | Brian Martin, our Chief Legal Officer; and |
| • | Tyler Wall, our former Chief Legal Officer. |
Mr. Martin succeeded Mr. Wall as our Chief Legal
Officer in June 2024. In August 2024, Mr. Sangster notified us of his decision to retire as our Chief Operating Officer effective October
31, 2024.
| 2024 Proxy Statement |
34 |
Fiscal Year 2024 Financial
and Performance Highlights
| $1.91 billion |
|
$597.7 million |
|
43 |
| Annual Recurring Revenue(1) |
|
Free Cash Flow(2) |
|
“Rule of 40” Score |
| |
|
|
|
|
 22% increase compared
to the end of FY 2023 |
|
$390.7 million increase
compared to FY 2023 |
|
Revenue growth of 15% plus free cash
flow margin of 28% |
| |
|
|
|
|
| (1) | See Appendix A for details on how we define ARR, why we monitor this
performance measure, and limitations on its use. There is no measure under accounting principles generally accepted in the
United States (“GAAP”) that is comparable to ARR, so we have not reconciled the ARR 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. |
Our overall revenue for fiscal year 2024 was $2.15
billion, exceeding the $2 billion level for the first time and representing 15% year-over-year growth. Our ARR, which we view as the best
measure of our recurring subscription business, increased to $1.91 billion as of the end of fiscal year 2024, representing 22% year-over-year
growth. Our free cash flow grew to $598 million, an increase of 189% compared to the prior year and resulting in a free cash flow margin
of 28%. Our Rule of 40 score, which we define as revenue growth rate plus free cash flow margin, was 43. We also delivered our first full
year of GAAP operating income of $8 million in fiscal year 2024, an important financial milestone.
Beyond these financial accomplishments, in fiscal
year 2024 we also made notable progress on partnerships, signing new or enhanced agreements with Cisco, NVIDIA and Dell, and delivered
important innovations on Nutanix Cloud Platform towards our goal of becoming the leading platform for running applications and managing
data, anywhere.
Fiscal Year 2024 Compensation
Highlights
The Compensation Committee, in conjunction with
the full Board, has continually strived to make compensation decisions that would be in the best interest of our company, our stockholders,
and our employees. Some fiscal year 2024 highlights include:
| • | Annual Incentive Results – Our NEOs earned 70% of their respective target annual incentive
opportunities. Despite 22% year-over-year ARR growth, we did not meet the threshold level of performance based on the aggressive internal
ARR goals we established at the beginning of the fiscal year. We effectively managed our operating expenses despite not reaching our internal
ARR threshold goal. |
| • | Performance-Based Long-Term Incentive Results – The results of our performance-based long-term
incentive awards reflect the strength in our stock price and the returns we have delivered to stockholders. As of fiscal year-end, our
total shareholder return (“TSR”) for each of our outstanding performance cycles was tracking above the 75th percentile
of companies in the Nasdaq Composite Index. Our fiscal year 2022 awards paid out at maximum based on our relative performance from August
1, 2021 through July 31, 2024. |
| • | CEO Supplemental Long-Term Performance-Based Equity Award – In January 2024, the Compensation
Committee determined that a supplemental long-term performance-based equity award was necessary to retain Mr. Ramaswami, who is a highly
sought-after, recognized industry leader. This award, which is described in more detail later in this section, aligns compensation opportunities
with the interests of our stockholders. We believe the award will enable continued execution of our long-term strategic plan and delivery
of long-term value for our stockholders. |
| 2024 Proxy Statement |
35 |
Stockholder Engagement and Say-on-Pay Results
At the Annual Meeting, we will conduct a non-binding,
advisory vote on the compensation of our NEOs, also known as a “say-on-pay vote,” as described in Proposal 3 of this proxy
statement. In addition, Proposal 4 proposes a continuation of our practice of holding a say-on-pay vote every year to seek stockholder
approval, on a non-binding, advisory basis, of the compensation of our NEOs every year.
Say-on-Pay Vote Results at 2023 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.
Our stockholders showed strong support of our executive compensation program at our 2023 annual meeting of stockholders. The Compensation
Committee will continue to consider the results of the annual say-on-pay vote and stockholder feedback as data points in making executive
compensation decisions.
Following our 2023 annual meeting of stockholders,
we reached out to stockholders as illustrated in the graphic below.
We reached out to
stockholders
representing:
> 57%
of our outstanding stock
|
|
We
engaged with
stockholders
representing:
> 27%
of our outstanding stock
|
|
We held engagement
meetings with:
8
of our Top 20
stockholders
|
|
Our Board Chair
and Compensation
Committee Chair
participated in:
75%
of our engagements
with Top 20 stockholders
|
Our engagement centered on the supplemental long-term
performance-based equity award granted to Mr. Ramaswami in January 2024, the design of our executive compensation program, and our
governance practices. Many of these engagements included director participation and several engagements included both the Chair of the
Board and the Chair of the Compensation Committee. Given the extraordinary circumstances surrounding the supplemental long-term performance-based
equity award, our stockholders valued the opportunity to better understand the award context, committee process and decision-making, and
the performance aligned structure of the award.
In light of the supplemental long-term performance-based
equity award to Mr. Ramaswami, the Chair of the Compensation Committee participated in six of our engagements to best explain the context
and structure of the award and the Compensation Committee’s decision-making process.
Several of the key topics covered in our discussions
with stockholders - including our perspectives - are highlighted below.
| 2024 Proxy Statement |
36 |
| Discussion
Topic |
|
Nutanix Perspective |
| CEO
performance |
|
•
We are pleased that stockholders are supportive of our company’s
progress, long-term strategy, and believe Mr. Ramaswami is the right long-term leader for Nutanix. We remain focused on enhancing
the value proposition of Nutanix Cloud Platform and driving sustainable, profitable growth.
•
See “Letter from the Chair
of the Compensation Committee” above for additional detail.
|
| Rationale
for supplemental long-term performance-based equity award and stockholder policies |
|
•
The Compensation Committee appreciates many stockholders’
skepticism of supplemental, off-cycle equity awards and engaged extensively to provide stockholders with an understanding of the
extraordinary circumstances that necessitated the award. Further, the Committee discussed with stockholders its efforts to develop
an award structure that addressed these unique circumstances while furthering alignment of Mr. Ramaswami’s pay opportunities
with long-term value creation for stockholders.
•
Mr. Ramaswami’s performance has been a key driver of
our business evolution as well as our operational and financial success. Against the backdrop of his success and the highly competitive
market for CEO talent, the Compensation Committee became aware that Mr. Ramaswami had been approached regarding a potential competitive
opportunity outside Nutanix.
•
In these extraordinary circumstances, the Compensation Committee
determined, after a series of meetings in consultation with its external advisors, that a supplemental long-term performance-based
equity award was necessary to address the immediate retention concerns and provide a strong incentive for Mr. Ramaswami to continue
to drive significant long-term value for stockholders.
•
The award is 100% performance-based and aligns with, but does
not replace, our overall pay-for-performance driven compensation plan.
•
The award reflects the minimum value that the Compensation
Committee believed was necessary to secure Mr. Ramaswami’s continued service.
|
| Use
of relative and absolute performance targets |
|
•
The Compensation Committee believes that both absolute and
relative performance objectives can serve a purpose in aligning executives with the stockholder experience.
•
The supplemental long-term performance-based equity award
balances stockholders’ interests and long-term, sustained performance with our company’s retention objectives. The stock
price performance-based restricted stock units (“PRSUs”) include challenging absolute stock price hurdles and a relative
component that limits the payout if our company’s performance ranks at less than the 50th percentile of companies in the Nasdaq
Composite Index.
•
The operational PRSUs align Mr. Ramaswami’s opportunity
with the metrics most indicative of the successful execution of our business strategy.
•
Refer to the “Fiscal Year
2024 CEO Supplemental Long-Term Performance-Based Equity Award” section below for more detail on performance metrics,
targets and weighting.
|
| The
use of “one-time” or supplemental equity awards |
|
•
The supplemental long-term performance-based equity award
to Mr. Ramaswami is not a reflection of a gap in compensation program design; rather, it is a reflection of the highly competitive
market for CEO talent and our desire to retain Mr. Ramaswami’s leadership over the long term.
•
We have not historically used supplemental equity awards and
will not use them going forward absent extraordinary circumstances.
|
| Disclosure
of operational performance goals |
|
•
We appreciate that some stockholders expressed a preference
for disclosure of operational goals in both the annual incentive plan and the supplemental award. While the specific targets are
not disclosed for competitive reasons, the performance levels required to achieve a payout for each metric are anchored to the high-end
of our long-range targets provided at our September 2023 Investor Day. Accordingly, meaningful outperformance relative to those plans
is required.
•
We will continue to engage with stockholders on this topic
and solicit feedback to inform future disclosure.
|
| 2024 Proxy Statement |
37 |
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 2024:
| 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 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 |
|
Emphasize 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 stock ownership guidelines for our executive officers and non-employee directors |
|
|
No excessive risk taking promoted by our incentive plan designs |
|
Maintain a compensation recovery policy that complies with SEC rules and Nasdaq listing requirements |
|
|
|
|
Include caps on performance-based annual incentive and long-term equity incentive payouts for NEOs |
|
|
|
|
Hold an annual advisory say-on-pay vote on NEO compensation |
|
|
|
| 2024 Proxy Statement |
38 |
Executive Compensation Philosophy and Objectives
Our goal is to become the leading platform for running
applications and managing data, anywhere, and our compensation philosophy is aligned with that goal. Our executive compensation program
is designed to attract, motivate, and retain highly qualified executive officers who drive our success and to align their interests with
the long-term interests of our stockholders. This section provides an overview of our executive compensation philosophy, the overall objectives
of our executive compensation program and its primary features.
Our executive compensation program is designed to
achieve this goal through four key objectives:
| Objective |
|
Influence on Compensation Programs |
| Attracting
and Retaining Talent in a Highly 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.
•
We have responded to intense competition for talent
in our industry by implementing competitive 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 stockholder value.
|
| 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 executives to execute against
our short-term and long-term goals. |
| Alignment
of Compensation with 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.
•
In fiscal year 2024, we implemented stock ownership
guidelines that cover each of our NEOs to further align the interests of our executives with 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 growth strategy includes landing new end customers,
expanding sales to existing end customers, driving renewals and retention in existing end customers, building on our hybrid multicloud
vision, deepening engagement with our partners, and driving profitable growth.
•
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.
|
| 2024 Proxy Statement |
39 |
Components of our Executive Compensation Program
Below are the primary components of our executive
compensation program, how each is determined, and the reasons why each is used:
| Component |
|
Type |
|
Duration |
|
Factors Used to Determine |
|
Rationale |
| Base
Salary |
|
Cash |
|
Ongoing |
|
• Peer group data (no specific benchmark percentile
or formula)
• Role Scope
• Experience
• Performance
• Internal Equity
|
|
• Provides a market competitive rate of pay aligned to role responsibilities |
| Annual
Incentive |
|
Cash |
|
1 Year |
|
• Target opportunities aligned to role, experience,
performance, and peer group
• Payouts aligned to business and individual performance
|
|
• Promotes the achievement of annual individual and business objectives tied
to achieving our long-term priorities |
Long-Term
Incentive |
|
Equity |
|
3+ Years |
|
• Target awards aligned to market and influenced by
contributions to business results and potential impact on future results
• Value realized driven by share price and our performance
relative to Nasdaq Composite companies
|
|
• Promotes the achievement of our long-term strategic
goals that drive our share price and create stockholder value
• Retention
|
We provide our executive officers with 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.
Our named executive officers are also provided severance and change of control-related protections generally limited to senior-level executives.
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 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.
The specific decisions approved for our NEOs during
fiscal year 2024, including short-term and long-term incentive design and performance, are discussed in detail below.
| 2024 Proxy Statement |
40 |
Fiscal Year 2024 Compensation Mix
The mix of target total direct compensation for
Mr. Ramaswami (excluding his supplemental long-term performance-based equity award) and our other NEOs for fiscal year 2024 was as follows:
| |
Fiscal Year 2024 Pay Mix – CEO |
|
|
|
Fiscal Year 2024 Pay Mix – Other NEOs(1) |
|
| |
|
|
|
|
|
|
| |
 |
|
|
|
 |
|
| |
|
|
|
|
|
|
| (1) | Data excludes Mr. Wall, who retired in June 2024, and includes full-year target compensation for Mr. Martin
(annual incentive at target plus the value of his new hire equity award), who joined Nutanix as our Chief Legal Officer in June 2024. |
Fiscal Year 2024 Base Salaries
In August 2023, as part of its review of our executive
compensation program, the Compensation Committee set annual base salaries for our NEOs for fiscal year 2024, effective as of August 1,
2023. 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 $450,000 to $475,000 to reflect her performance in her role; this increase
aligned with the relevant market data for comparable positions among peer group companies.
| Named
Executive Officer |
|
Fiscal
Year 2024
Base Salary(1)
($) |
|
Change
From
Fiscal Year 2023 |
| Rajiv Ramaswami |
|
800,000 |
|
0% |
| Rukmini Sivaraman |
|
475,000 |
|
5.6% |
| David Sangster |
|
475,000 |
|
0% |
| Brian Martin(2) |
|
475,000 |
|
N/A |
| Tyler Wall(3) |
|
475,000 |
|
0% |
| (1) | As of July 31, 2024. |
| (2) | Mr. Martin joined Nutanix in June 2024 and earned a total of $54,808 in salary during fiscal year 2024. |
| | (3) | Mr. Wall retired from Nutanix in June 2024. |
| 2024 Proxy Statement |
41 |
Fiscal Year 2024 Target Annual
Incentive Opportunities
The target annual incentive opportunities for our
NEOs during fiscal year 2024 were as follows:
| Named
Executive Officer |
|
FY2024 Annual
Incentive Target
($) |
|
Annual Incentive Target
(as % of Base Salary) |
|
Change From
Fiscal Year 2023 |
| Rajiv Ramaswami |
|
800,000 |
|
100% |
|
0% |
| Rukmini Sivaraman |
|
356,250 |
|
75% |
|
5.6% |
| David Sangster |
|
356,250 |
|
75% |
|
0% |
| Brian Martin(1) |
|
41,106 |
|
75% |
|
N/A |
| Tyler Wall(2) |
|
356,250 |
|
75% |
|
0% |
| (1) | Mr. Martin’s incentive target was established upon his hire and prorated based on his June 2024
start date. |
| (2) | Mr. Wall retired from Nutanix in June 2024. |
Fiscal Year 2024 Executive
Incentive Compensation Plan
Based on a review of market practices and in consultation
with both management and its independent consultant, the Compensation Committee did not make any changes to our fiscal year 2024 Executive
Incentive Compensation Plan metrics and weightings:
In the first fiscal quarter of 2024, the Compensation Committee approved corporate
objectives for the fiscal year 2024 Executive Incentive Compensation Plan that were aligned with our annual operating plan. The fiscal
year 2024 Executive Incentive Compensation Plan provided for potential performance-based incentive payouts to our NEOs based on three
performance components. The levels of achievement aligned to a target-level payout were determined to be challenging and required substantial
skill and effort on the part of senior management and were weighted based on their relative importance. In addition, each NEO’s
potential payout was subject to upward or downward adjustment based on a holistic assessment of individual performance.
The Compensation Committee approved the use of the
performance metrics below for the fiscal year 2024 Executive Incentive Compensation Plan:
| Performance Metric |
|
Definition |
|
Importance of the
Performance Metric |
| Annual Recurring Revenue |
|
For any given period, the sum of Annual Contract Value (“ACV”) for all subscription 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. Excludes all life-of-device contracts. |
|
An indicator of the top-line growth of our subscription business that 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), costs related to the 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. |
| 2024 Proxy Statement |
42 |
At the time that the Compensation Committee approved
these performance metrics, it believed that they would represent objective measures that are strong indicators of the success of our growth
and business strategy for fiscal year 2024.
Actual incentive award amounts under the fiscal
year 2024 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 NEO and were paid in a lump sum during the first quarter of fiscal year
2025.
The following table describes the relative weighting
of each performance metric and the payout percentages used to calculate payouts under the fiscal year 2024 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 97.5% of Target |
|
0% |
| |
Between 97.5% and 100% of Target |
|
Between 0% and 100% |
| |
100% of Target |
|
100% |
| |
Between 100% and 102.5% of Target |
|
Between 100% and 200% |
| |
102.5% or More of Target |
|
200% |
| Non-GAAP operating expenses excluding commissions |
|
 |
|
104% or More of Target |
|
0% |
| |
Between 100% and 104% of Target |
|
Between 0% 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 74% |
|
0% |
| |
Between 74% and 78% |
|
Between 0% and 100% |
| |
78% |
|
100% |
| |
Between 78% and 82% |
|
Between 100% and 200% |
| |
82% or More |
|
200% |
| 2024 Proxy Statement |
43 |
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.
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. If the achievement levels rank between these percentile
thresholds, the payout is determined using linear interpolation.
Fiscal Year 2024 Executive
Incentive Compensation Plan Payouts
The achievement of each performance metric under
the fiscal year 2024 Executive Incentive Compensation Plan was as follows:
| Performance
Metric |
|
Achievement |
|
Payout% |
|
Weighting |
|
Weighted
Total |
| ARR |
|
Less than
97.5% of Target |
|
0.0% |
|
60% |
|
0% |
| Non-GAAP operating expenses
excluding commissions(1) |
|
Less than
96% of Target |
|
200.0% |
|
30% |
|
60.0% |
| Employee engagement |
|
At Target (78%) |
|
100.0% |
|
10% |
|
10.0% |
| |
|
TOTAL WEIGHTED ACHIEVEMENT PERCENTAGE: |
|
70.0% |
| (1) | For Non-GAAP operating expenses excluding commissions, achievement below target (lower expenses) translates
to a payout above target. |
After considering each executive’s individual
performance, the Compensation Committee determined that no adjustment to any NEO’s calculated payout was necessary. The aggregate
payouts received by each NEO under the fiscal year 2024 Executive Incentive Compensation Plan were:
| NEO |
|
FY2024
Incentive Target
($) |
|
FY2024
Incentive Payout
($) |
| Rajiv
Ramaswami |
|
800,000 |
|
560,000 |
| Rukmini
Sivaraman |
|
356,250 |
|
249,375 |
| David
Sangster |
|
356,250 |
|
249,375 |
| Brian
Martin(1) |
|
41,106 |
|
28,774 |
| Tyler Wall(2) |
|
356,250 |
|
N/A |
| (1) | Mr. Martin’s incentive target was prorated based on his June 2024 start date. |
| (2) | Mr. Wall retired from Nutanix in June 2024 and did not receive an annual incentive payout for fiscal year
2024. |
Long-Term Equity-Based Compensation
Our corporate culture encourages our NEOs to focus
on our 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 NEOs 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 NEO’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.
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 NEOs, taking into account a number of factors as described
in the section titled “Executive Compensation – Compensation Discussion and Analysis –
Compensation-Setting Process.”
| 2024 Proxy Statement |
44 |
Fiscal Year 2024 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 annual award value.
Annual PRSU awards are based on our TSR relative to the TSR 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 TSR 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. The remaining 50% of each executive officer’s target award value was delivered in time-based
RSU awards.
The Compensation Committee considers many factors
in determining the value of the annual equity awards made to our NEOs, 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. In establishing fiscal
2024 awards for our CEO and CFO in particular, the Compensation Committee took into consideration the strength of their respective performance
and leadership, as well as the importance of continuing to provide market-competitive equity opportunities that reflected the significant
year-over-year changes in market data. The equity awards granted in fiscal year 2024 under our 2016 Equity Incentive Plan were as follows:
| Named
Executive Officer |
|
Total Annual
Target Award
Value(1)
($) |
|
Time-Based
RSU Awards
(#) |
|
PRSU Awards
(# at target) |
|
Supplemental
PRSU Target
Award Value(2)
($) |
|
Supplemental
PRSU Awards
(# at target) |
| Rajiv Ramaswami |
|
15,000,000 |
|
254,151 |
|
254,151 |
|
30,000,000 |
|
565,481 |
| Rukmini Sivaraman |
|
4,500,000 |
|
76,245 |
|
76,245 |
|
– |
|
– |
| David Sangster |
|
3,000,000 |
|
50,830 |
|
50,830 |
|
– |
|
– |
| Brian Martin(3) |
|
5,000,000 |
|
45,199 |
|
–(3) |
|
– |
|
– |
| Tyler Wall(4) |
|
2,500,000 |
|
42,358 |
|
42,358 |
|
– |
|
– |
| (1) | The
target award values are the values approved by the Compensation Committee and may not be
the same as the grant date fair values calculated in accordance with ASC Topic 718 as reported
in the “Fiscal Year 2024 Summary Compensation Table”
appearing on page 49 of this proxy statement. |
| (2) | For
a detailed discussion of Mr. Ramaswami’s supplemental long-term performance-based equity
award, please see the section entitled “Fiscal Year 2024
CEO Supplemental Long-Term Performance-Based Equity Award.” |
| (3) | The
value reflected for Mr. Martin aligns with his employment offer. The RSU portion of Mr. Martin’s
awards was granted on July 10, 2024, in accordance with our standard practices. The PRSU
portion was granted on September 10, 2024, and will be included in the Summary Compensation
Table of our proxy statement for the fiscal year ending July 31, 2025. |
| (4) | Mr. Wall’s unvested outstanding equity awards were forfeited upon his retirement in June 2024. |
Each RSU represents a contingent right to receive
one share of our Class A common stock upon vesting.
| 2024 Proxy Statement |
45 |
The elements of the annual equity awards granted to these NEOs for
fiscal year 2024 are as follows:
| 2024 Proxy Statement |
46 |
Fiscal Year 2024 CEO Supplemental Long-Term Performance-Based
Equity Award
As discussed in the Letter from the Compensation
Committee Chair above, the Compensation Committee approved a one-time supplemental long-term performance-based equity award for
our President and CEO, Rajiv Ramaswami, in January 2024. Prior to the award, the Compensation Committee became aware that Mr. Ramaswami
had been approached regarding a potential competitive opportunity outside Nutanix. As Mr. Ramaswami has been the key architect
of our company’s transformation and is instrumental to our next stage of growth, the Compensation Committee sought to secure
Mr. Ramaswami’s employment through the next stage of our growth while also aligning potential payout opportunities with the
value we create for stockholders through the end of fiscal year 2027.
The Chair of the Board and the Chair of the Compensation
Committee led the process to consider a supplemental award. To ensure a diligent, thorough process, they directly engaged the Compensation
Committee’s independent compensation consultant, Compensia, and outside counsel to weigh the value of Mr. Ramaswami’s
continued leadership against the non-standard practice of making a one-time supplemental award. Following their review, they determined
that a supplemental award was necessary in these extraordinary circumstances and sought to design an incentive that would address
our Board’s retention concerns and align long-term pay with company performance while remaining consistent with Nutanix’s
executive compensation philosophy. The Compensation Committee approved a supplemental award with a target value of $30 million
that is delivered 100% in PRSUs, includes challenging performance objectives, and only vests if Mr. Ramaswami remains our CEO through
fiscal year 2027. Absent extraordinary circumstances, the Compensation Committee will not use supplemental awards in the future.
The structure of the supplemental long-term performance-based equity
award is detailed below:
| Performance Metric |
|
Metric Type |
|
Weighting
(% of Total) |
|
Detail |
FY27
ARR (25%)
FY27 Free Cash Flow (25%) |
|
Operational |
|
 |
|
• ARR
is a key determinant of our top-line growth.
• Free
cash flow is a key measure of our organizational health and drives
our investment strategy.
• Threshold
performance required to achieve the minimum payout for either performance
metric is aligned to the high-end of the long-range (FY27 year-end)
targets provided at our September 2023 Investor Day (ARR of $3.1-$3.3B
and FCF of $700-$900M). |
| Stock
Price Hurdles (50%) |
|
Stock
Price |
|
 |
|
• Our
stock price is a direct reflection of the value we create for, and
the returns we deliver to, our stockholders.
• Stock
price hurdles of $70, $80, and $90 (no linear interpolation) must
be achieved and sustained for 90 consecutive calendar days to drive
a payout at the end of the performance period. Target and
maximum hurdles represent implied CAGRs of 13% to
20% through the end of fiscal year 2027.
• Payout
on the stock price component of the award is capped at target if
our stock price is below the median of Nasdaq Composite companies
over the performance period. |
The Compensation Committee believes this award:
| • |
helps secure Mr. Ramaswami’s strategic vision and leadership through the next phase of our growth; |
| • |
motivates the appropriate behaviors that will drive growth, promote operational excellence, and link decision making to long-term strategy. In particular, the Compensation Committee believes that ARR is a critical measure of successful execution of our next phase growth objective over all time horizons, and for that reason believed it was important to maintain consistency with the growth metric used under our fiscal year 2024 Executive Incentive Compensation Plan; |
| • |
provides a strong mix of stretch operational and share price performance goals that focus Mr. Ramaswami on strategic execution while directly aligning his incentives with stockholder interests; and |
| • |
represents the minimum value required to retain Mr. Ramaswami. |
| 2024 Proxy Statement |
47 |
Supplemental awards are not a regular part of
our executive compensation program, and absent extraordinary circumstances, the Compensation Committee will not use them going
forward.
Given the long-term forward-looking nature of
our ARR and free cash flow targets, prospective disclosure of these targets could cause irreparable harm by providing competitors
with insights into our multi-year strategic road map and business initiatives. As noted above, the Compensation Committee intentionally
set the threshold goals for each operational metric in alignment with the high-end of our long-range targets to ensure the award
incorporated challenging goals that would not provide any payout without meaningful outperformance relative to our long-term plans.
PRSU Performance Results
Per the terms detailed above, the table below
details the final performance period measurement for PRSU awards granted to our executive officers in fiscal years 2022 and interim
measurements for 2023 and 2024.
| |
|
FY22-FY24 PRSU Performance Results(1) |
| |
|
FY22(2) |
FY22-23(2) |
FY22-24(2) |
| Nutanix
TSR |
|
-59.02% |
-20.83% |
46.55% |
| Percentile
Rank |
|
31.32% |
64.77% |
89.61% |
| Payout
(% of Total Target Units) |
|
20.88% |
33.33% |
145.79% |
| |
TOTAL PAYOUT (% OF TARGET) TO DATE |
200.00% |
| |
|
FY23-FY25 PRSU Performance Results(1) |
| |
|
FY23(2) |
FY23-24(2) |
FY23-25(2) |
| Nutanix
TSR |
|
93.19% |
257.61% |
|
| Percentile
Rank |
|
95.58% |
98.31% |
TBD |
| Payout
(% of Total Target Units) |
|
33.33% |
33.33% |
|
| |
TOTAL PAYOUT (% OF TARGET) TO DATE |
66.67% |
| |
|
FY24-FY26 PRSU Performance Results(1) |
| |
|
FY24(2) |
FY24-25(2) |
FY24-26(2) |
| Nutanix
TSR |
|
85.10% |
|
|
| Percentile
Rank |
|
94.54% |
TBD |
TBD |
| 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, Tranche 2 of the PRSU award 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 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. |
Chief Legal Officer Transition
Mr. Wall served as our Chief Legal Officer until
his retirement in June 2024. As a result of his retirement, Mr. Wall was not eligible for an annual incentive payment under the
terms of our fiscal year 2024 Executive Incentive Compensation Plan, which requires that participants be actively employed on the
date incentive payments are made. Upon his retirement, all of Mr. Wall’s unvested long-term incentive awards were also forfeited
per the terms and conditions of the 2016 Equity Incentive Plan and the individual award agreements. To ensure a smooth transition
following the February 2024 announcement, management and the Compensation Committee requested that Mr. Wall continue to provide
services through June 2024 while a successor was identified and responsibilities for
| 2024 Proxy Statement |
48 |
our company’s legal operations could be
adequately transitioned. The Compensation Committee subsequently approved a transition agreement for Mr. Wall that considered the
value of his foregone annual incentive, his equity award forfeitures upon retirement, and the importance of maintaining continuity
within our legal operations during the period of transition. Accordingly, the Compensation Committee determined to provide Mr.
Wall a transition payment of $1.35 million plus COBRA payments for 12 months, to be paid following his retirement. Other than his
salary and the vesting of previously granted equity awards prior to his retirement, these payments represent the only compensation
paid to Mr. Wall for his services during the year. Mr. Martin was appointed Chief Legal Officer in June 2024.
Severance and Change of Control-Related Benefits
Our NEOs 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 and Severance Policy are evaluated periodically by our 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.”
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 CEO and other NEOs, 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.
| 2024 Proxy Statement |
49 |
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.
Information contained on or accessible through our website is not incorporated by reference herein and is not a part of this proxy
statement.
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 other 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, based on their assessment and other pertinent information, makes decisions as to total compensation
for each executive officer, as well as each individual compensation component.
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 2024, 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 2024:
| • |
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 Class A 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.
| 2024 Proxy Statement |
50 |
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 2024, 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 compensation
market data from companies that we believe are comparable to our company in order to provide insight on competitive pay practices
and levels for executive talent. With Compensia’s assistance, the Compensation Committee developed a peer group for use when
making its fiscal year 2024 compensation decisions, which consisted of publicly traded information technology companies with revenues
and market capitalizations 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 2024 base salary, annual incentive, and equity award decisions for our executive
officers, including our NEOs.
In June 2024, the Compensation Committee reviewed
the compensation peer group to be used for compensation decision-making for fiscal year 2025. With Compensia’s assistance,
the Compensation Committee approved certain changes to the existing peer group based on relative size and, in certain cases, acquisition-related
activity. New Relic, Splunk, and VMware were removed following their acquisitions and SolarWinds was removed based on its relative
size. The Compensation Committee approved the addition of Dynatrace, NetApp, and Okta to the peer group for fiscal year 2025. Both
the fiscal year 2024 and fiscal year 2025 compensation peer groups are detailed below.
| 2024 Proxy Statement |
51 |
The following graphic illustrates our size relative
to the 2025 peer group based on annual revenue (trailing four quarters as reported) and market capitalization as of July 31, 2024.
Employment Arrangements
We have employment agreements with our currently
employed NEOs. Each of these arrangements provides for “at-will” employment and sets forth the initial terms and conditions
of employment of the NEO, 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 our 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 NEOs, see the section titled “Executive Compensation –
Employment Arrangements” below.
| 2024 Proxy Statement |
52 |
Other Compensation Policies and Practices
Employee Benefits
We provide employee benefits to all eligible
employees in the United States, including our currently employed NEOs, 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 Ownership Guidelines
Our Board believes that our executive officers
should acquire and hold a significant equity interest in Nutanix. During fiscal year 2024, our company adopted stock ownership
guidelines for our executive leadership team members, including our NEOs. The stock ownership guidelines are intended to further
align the interests of our executive leadership team members and our stockholders. Only shares owned directly or beneficially owned
by the executive leadership team member or their immediate family members count towards the requirements. Executive leadership
team members are expected to achieve the minimum ownership requirement within five years from the date of approval or their appointment
(if later). As of July 31, 2024, each NEO exceeded their required ownership level, with the exception of Mr. Martin who joined
our company in June 2024.
The following table lists the specific ownership
requirements for our NEOs.
| |
Minimum Stock Ownership Requirement |
| Position |
(as % of Base Salary) |
| CEO |
500% |
| Other
Named Executive Officers |
100% |
Stock Trading Practices; Hedging and Pledging
Policy
We maintain the Nutanix, Inc. Insider Trading
Policy, which governs transactions involving our securities, including the purchase, sale and/or other dispositions of our securities,
by our directors, officers, employees and other covered persons. Our Insider Trading Policy and the related Rule 10b5-1 trading
plan guidelines adopted by Nutanix are reasonably designed to promote compliance with insider trading laws, rules and regulations,
and the listing requirements of the Nasdaq Global Select Market. A copy of our Insider Trading Policy is filed as Exhibit 19.1
to our Annual Report on Form 10-K for our fiscal year ended July 31, 2024 filed with the SEC on September 19, 2024. Our Insider
Trading Policy, among other things, prohibits our directors, executive officers, 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 NEOs, 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 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.
| 2024 Proxy Statement |
53 |
Policies and Practices Related to the
Timing of Option Awards
We do not currently grant new awards of stock
options, stock appreciation rights, or similar option-like instruments. Accordingly, we have no specific policy or practice on
the timing of awards of such options in relation to the disclosure of material nonpublic information by our company. In the event
that we determine to grant new awards of such options in the future, our Board will evaluate the appropriate steps to take in relation
to the foregoing.
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 NEOs 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
NEOs 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 NEOs 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 and 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 NEO 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 NEOs 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.
| 2024 Proxy Statement |
54 |
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
| 2024 Proxy Statement |
55 |
Executive Compensation Tables
Fiscal Year 2024 Summary Compensation Table
The following table presents all of the compensation
awarded to, or earned by, our NEOs during the fiscal year ended July 31, 2024.
Name and Principal
Position | |
Fiscal
Year | |
Salary
($) | |
Bonus
($) | |
Option
Awards
($) | |
Stock
Awards
($)(1) | |
Non-Equity
Incentive Plan
Compensation
($)(2) | |
All
Other
Compensation(3)
($) | |
Total
($) |
| Rajiv Ramaswami | |
2024 | |
800,008 | |
— | |
— | |
49,781,703 | |
560,000 | |
2,000 | |
51,143,711 |
| President and CEO | |
2023 | |
800,010 | |
— | |
— | |
13,153,930 | |
892,000 | |
— | |
14,845,940 |
| | |
2022 | |
783,596 | |
— | |
— | |
11,165,080 | |
980,000 | |
— | |
12,928,676 |
| Rukmini Sivaraman | |
2024 | |
474,431 | |
— | |
— | |
5,939,485 | |
249,375 | |
2,000 | |
6,665,291 |
| Chief Financial Officer | |
2023 | |
449,431 | |
— | |
— | |
4,778,000 | |
376,313 | |
— | |
5,603,744 |
| | |
2022 | |
366,329 | |
— | |
— | |
5,255,793 | |
291,267 | |
— | |
5,913,389 |
| David M. Sangster | |
2024 | |
475,008 | |
— | |
— | |
3,959,657 | |
249,375 | |
2,000 | |
4,686,040 |
| 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 |
| Brian Martin(4) | |
2024 | |
54,808 | |
— | |
— | |
2,676,685 | |
28,774 | |
— | |
2,760,267 |
| Chief Legal Officer | |
| |
| |
| |
| |
| |
| |
| |
|
| Tyler Wall(5) | |
2024 | |
447,604 | |
— | |
— | |
3,299,688 | |
— | |
1,382,975 | |
5,130,267 |
| Former Chief Legal Officer | |
2023 | |
475,010 | |
— | |
— | |
4,300,200 | |
397,219 | |
— | |
5,172,429 |
| | |
2022 | |
465,263 | |
— | |
— | |
2,679,554 | |
436,406 | |
— | |
3,581,223 |
| (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 NEOs. The grant date fair value for time-based RSUs and PRSUs tied to operational/financial
goals 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 tied to market conditions
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) |
The amounts in this column include company contributions on behalf of the NEO to defined contribution
retirement plans. |
| (4) |
Mr. Martin was appointed Chief Legal Officer in June 2024. |
| (5) |
In February 2024, Mr. Wall notified our company of his decision to retire. In order to provide adequate
time to identify a successor and ensure an orderly transition of his responsibilities, our company reached an agreement with Mr.
Wall to continue his employment through June 2024 in exchange for a retention payment post-separation of $1.35 million and COBRA
benefit payments for 12 months, the sum of which is included as All Other Compensation. As a result of his retirement, Mr. Wall forfeited
the value of his stock awards indicated in the table and annual incentive (Non-Equity Incentive Plan Compensation). |
| 2024 Proxy Statement |
56 |
Grants of Plan-Based Awards
The following table presents, for each of our NEOs,
information concerning plan-based awards granted during the fiscal year ended July 31, 2024. This information supplements the information
about these awards set forth in the “Fiscal Year 2024 Summary Compensation Table” above.
| | |
|
| |
| |
Estimated Future Payouts
Under Non-Equity Incentive
Plan Awards(1) | |
Estimated Future Payouts
Under Equity Incentive Plan
Awards | |
All Other
Stock
Awards: | |
Grant
Date Fair
Value of |
| Name | |
Award Type |
| |
Grant
Date | |
Threshold
($) | |
Target
($) | |
Maximum
($) | |
Threshold
(#) | |
Target
(#) | |
Maximum
(#) | |
Number
of Shares
of Stock
or Units
(#) | |
Stock
and
Option
Awards(8)
($) |
| Rajiv Ramaswami | |
Cash incentive |
| |
— | |
— | |
800,000 | |
1,600,000 | |
— | |
— | |
— | |
— | |
— |
| | |
Time-based RSUs |
(2) | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
254,151 | |
7,830,392 |
| | |
PRSUs |
(3) | |
8/29/2023 | |
— | |
— | |
— | |
127,076 | |
254,151 | |
508,302 | |
— | |
11,967,971 |
| | |
PRSUs - SP |
(4) | |
1/7/2024 | |
— | |
— | |
— | |
— | |
238,398 | |
476,796 | |
— | |
14,983,314 |
| | |
PRSUs - FCF |
(5) | |
1/7/2024 | |
— | |
— | |
— | |
— | |
163,542 | |
327,084 | |
— | |
7,500,036 |
| | |
PRSUs - ARR |
(6) | |
1/7/2024 | |
— | |
— | |
— | |
— | |
163,541 | |
327,082 | |
— | |
7,499,990 |
| Rukmini Sivaraman | |
Cash incentive |
| |
— | |
— | |
356,250 | |
712,500 | |
— | |
— | |
— | |
— | |
— |
| | |
Time-based RSUs |
(2) | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
76,245 | |
2,349,108 |
| | |
PRSUs |
(3) | |
8/29/2023 | |
— | |
— | |
— | |
38,123 | |
76,245 | |
152,490 | |
— | |
3,590,377 |
| David M. Sangster | |
Cash incentive |
| |
— | |
— | |
356,250 | |
712,500 | |
— | |
— | |
— | |
— | |
— |
| | |
Time-based RSUs |
(2) | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
50,830 | |
1,566,072 |
| | |
PRSUs |
(3) | |
8/29/2023 | |
— | |
— | |
— | |
25,415 | |
50,830 | |
101,660 | |
— | |
2,393,585 |
| Brian Martin | |
Cash incentive |
| |
— | |
— | |
41,106 | |
82,212 | |
— | |
— | |
— | |
— | |
— |
| | |
Time-based RSUs |
(7) | |
7/10/2024 | |
— | |
— | |
— | |
— | |
— | |
— | |
45,199 | |
2,676,685 |
| Tyler Wall(9) | |
Cash incentive |
| |
— | |
— | |
356,250 | |
712,500 | |
— | |
— | |
— | |
— | |
— |
| | |
Time-based RSUs |
(2) | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
42,358 | |
1,305,050 |
| | |
PRSUs |
(3) | |
8/29/2023 | |
— | |
— | |
— | |
21,179 | |
42,358 | |
84,716 | |
— | |
1,994,638 |
| (1) |
The amounts reported in this column represent cash incentive compensation opportunities
under the fiscal year 2024 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 NEO’s target (for a maximum
payment of 200% of each NEO’s target). |
| (2) |
The RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested
on December 15, 2023, subject to continued service to us through each vesting date. |
| (3) |
The PRSUs are eligible to vest in up to three installments based on the TSR of our company relative
to the TSR of companies in the Nasdaq Composite Index over three performance periods: (i) August 1, 2023 to July 31, 2024, (ii) August
1, 2023 to July 31, 2025, and (iii) August 1, 2023 to July 31, 2026. PRSUs that become eligible to vest based on performance
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) 50% if our TSR ranks at the 25th percentile of the indexed companies,
(iii) 100% if our TSR ranks at the 50th percentile of the indexed companies, and (iv) 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 $144.40. |
| (4) |
The PRSUs are eligible to vest at the target level of stock price performance and become eligible
to vest in a range from 0% to 200% of the target number based on actual performance achieved relative to the following stock price
hurdles at any time during the period that began on the grant date and ends on July 31, 2027 (the “Performance Period”):
(i) 100% of the PRSUs for a stock price hurdle of $70, (ii) 150% of the PRSUs for a stock price hurdle of $80, and (iii) 200% of
the PRSUs for a stock price hurdle of $90. A stock price hurdle is only achieved if the average closing price of our company’s
common stock is equal to or greater than the hurdle price for 90 consecutive calendar days. None of the PRSUs become eligible to
vest for achievement of a stock price hurdle of less than $70. In addition, a maximum of 100% of the target number of PRSUs will
be eligible to vest if our company’s TSR ranks at less than the 50th percentile relative to the TSR of companies in the Nasdaq
Composite Index during the Performance Period. Achievement of the stock price hurdles may occur at any time during the Performance
Period, but vesting will remain subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. |
| 2024 Proxy Statement |
57 |
| (5) |
The PRSUs become eligible to vest upon achievement of specified Free Cash Flow hurdles,
with achievement of 100% of the PRSUs at the target level of FCF performance and additional achievement levels of 150% and 200% of
the target number of PRSUs at higher levels of FCF performance. None of the PRSUs are eligible to vest if performance is below the
target level of FCF performance. The target level FCF was set relative to our company’s internal long-term plans and requires
strong performance over the Performance Period to be achieved. FCF will be measured over the last four completed fiscal quarters
ending on the last day of the Performance Period on July 31, 2027. Linear interpolation will not apply in the case of achievement
between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains subject to Mr. Ramaswami’s continued employment
as CEO through September 15, 2027. |
| (6) |
The PRSUs become eligible to vest upon achievement of specified ARR hurdles, with achievement of
100% of the PRSUs at the target level of ARR performance and additional achievement levels of 150% and 200% of the target number
of PRSUs at higher levels of ARR performance. None of the PRSUs are eligible to vest if performance is below the target level of
ARR performance. The target level ARR was set relative to our company’s internal long-term plans and requires strong performance
over the Performance Period to be achieved. ARR will be measured as of the last day of the Performance Period on July 31, 2027. Linear
interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains
subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. |
| (7) |
The RSUs vest 25% on September 15, 2025 and the remainder in 12 equal quarterly installments, with
the first quarterly installment vesting on December 15, 2025, subject to continued service to us through each vesting date. |
| (8) |
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 NEOs. The grant date fair value for time-based RSUs and PRSUs tied to operational/financial goals 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 tied to market conditions 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. |
| (9) |
All of Mr. Wall’s unvested awards were forfeited upon his retirement in June 2024. |
| 2024 Proxy Statement |
58 |
Outstanding Equity Awards At Fiscal Year 2024 Year-End Table
The following table presents, for each of our NEOs,
information concerning each outstanding equity award held by such NEO as of July 31, 2024. This information supplements the information
about these awards set forth in the “Fiscal Year 2024 Summary Compensation Table” above.
| | |
| |
Option Awards | |
Stock Awards |
| |
Equity |
| Name | |
Grant
Date | |
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | |
Option
Exercise
Price
($) | |
Option
Expiration
Date | |
Shares
or Units
of Stock
That
Have Not
Vested
(#) | |
Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested(1)
($) | |
Equity
Incentive
Plan
Awards:
Unearned
Shares,
Units or
Other
Rights
That Have
Not Yet
Vested
(#) |
| |
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares,
Units or
Other
Rights That
Have
Not
Vested(1)
($) |
| Rajiv Ramaswami | |
RSUs | |
| |
| |
| |
| |
| |
| |
|
| |
|
| | |
12/9/2020 | |
— | |
— | |
— | |
— | |
47,326 | (2) |
2,390,436 | |
— |
| |
— |
| | |
10/11/2021 | |
— | |
— | |
— | |
— | |
43,140 | (4) |
2,179,001 | |
— |
| |
— |
| | |
8/25/2022 | |
— | |
— | |
— | |
— | |
154,858 | (6) |
7,821,878 | |
— |
| |
— |
| | |
8/29/2023 | |
— | |
— | |
— | |
— | |
206,498 | (7) |
10,430,214 | |
— |
| |
— |
| | |
PRSUs | |
| |
| |
| |
| |
| |
| |
|
| |
|
| | |
12/9/2020 | |
— | |
— | |
— | |
— | |
— | |
— | |
116,893 |
(3) | |
5,904,265 |
| | |
10/11/2021 | |
— | |
— | |
— | |
— | |
— | |
— | |
201,251 |
(5) | |
10,165,188 |
| | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
370,190 |
(5) | |
18,698,297 |
| | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
508,302 |
(5) | |
25,674,334 |
| | |
1/7/2024 | |
— | |
— | |
— | |
— | |
— | |
— | |
238,398 |
(8) | |
12,041,483 |
| | |
1/7/2024 | |
— | |
— | |
— | |
— | |
— | |
— | |
163,542 |
(9) | |
8,260,506 |
| | |
1/7/2024 | |
— | |
— | |
— | |
— | |
— | |
— | |
163,541 |
(10) | |
8,260,456 |
| Rukmini Sivaraman | |
RSUs | |
| |
| |
| |
| |
| |
| |
|
| |
|
| | |
10/2/2020 | |
— | |
— | |
— | |
— | |
7,662 | (11) |
387,008 | |
— |
| |
— |
| | |
10/11/2021 | |
— | |
— | |
— | |
— | |
12,942 | (4) |
653,700 | |
— |
| |
— |
| | |
5/1/2022 | |
— | |
— | |
— | |
— | |
38,081 | (12) |
1,923,471 | |
— |
| |
— |
| | |
8/25/2022 | |
— | |
— | |
— | |
— | |
56,250 | (6) |
2,841,188 | |
— |
| |
— |
| | |
8/29/2023 | |
— | |
— | |
— | |
— | |
61,950 | (7) |
3,129,095 | |
— |
| |
— |
| | |
PRSUs | |
| |
| |
| |
| |
| |
| |
|
| |
|
| | |
10/11/2021 | |
— | |
— | |
— | |
— | |
— | |
— | |
60,375 |
(5) | |
3,049,541 |
| | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— | |
— | |
134,467 |
(5) | |
6,791,928 |
| | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— | |
— | |
152,490 |
(5) | |
7,702,270 |
| David Sangster | |
RSUs | |
| |
| |
| |
| |
| |
| |
|
| |
|
| | |
10/2/2020 | |
— | |
— | |
— | |
— | |
11,788 | (11) |
595,412 | |
— |
| |
— |
| | |
10/11/2021 | |
— | |
— | |
— | |
— | |
15,099 | (4) |
762,650 | |
— |
| |
— |
| | |
8/25/2022 | |
— | |
— | |
— | |
— | |
56,250 | (6) |
2,841,188 | |
— |
| |
— |
| | |
8/29/2023 | |
— | |
— | |
— | |
— | |
41,300 | (7) |
2,086,063 | |
— |
| |
— |
| 2024 Proxy Statement |
59 |
| | |
| |
Option Awards | |
Stock Awards |
| |
Equity |
| Name | |
Grant
Date | |
Number of
Securities
Underlying
Unexercised
Options
Exercisable
(#) | |
Number of
Securities
Underlying
Unexercised
Options
Unexercisable
(#) | |
Option
Exercise
Price
($) | |
Option
Expiration
Date | |
Shares
or Units
of Stock
That
Have Not
Vested
(#) |
|
Market
Value of
Shares
or Units
of Stock
That
Have Not
Vested(1)
($) | |
Equity
Incentive
Plan
Awards:
Unearned
Shares,
Units or
Other
Rights
That Have
Not Yet
Vested
(#) |
| |
Incentive
Plan
Awards:
Market
Value of
Unearned
Shares,
Units or
Other
Rights That
Have
Not
Vested(1)
($) |
| | |
PRSUs | |
| |
| |
| |
| |
|
|
| |
|
| |
|
| | |
10/11/2021 | |
— | |
— | |
— | |
— | |
— |
|
— | |
70,437 |
(5) | |
3,557,773 |
| | |
8/25/2022 | |
— | |
— | |
— | |
— | |
— |
|
— | |
134,467 |
(5) | |
6,791,928 |
| | |
8/29/2023 | |
— | |
— | |
— | |
— | |
— |
|
— | |
101,660 |
(5) | |
5,134,847 |
| Brian
Martin | |
RSUs | |
| |
| |
| |
| |
|
|
| |
|
| |
|
| | |
7/10/2024 | |
— | |
— | |
— | |
— | |
45,199 |
(13) |
2,283,001 | |
— |
| |
— |
| Tyler
Wall(14) | |
— | |
— | |
— | |
— | |
— | |
— |
|
— | |
— |
| |
— |
| (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, 2024, which was $50.51. |
| (2) |
25% of the RSUs vested on December 15, 2022, with the remainder in 12 equal quarterly installments,
with the first quarterly installment having vested on March 15, 2023, subject to continued service to us through each vesting date. |
| (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 TSR of our company relative
to the TSR of companies in the Nasdaq Composite Index over one-, two-, and three-year performance periods beginning in the fiscal
year granted. PRSUs that become eligible to vest based on performance vest on September 15 following the period, subject to continued
service through the vesting date. The total number of PRSUs that are eligible to vest range from 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) 50% if our TSR ranks at the 25th
percentile of the indexed companies, (iii) 100% if our TSR ranks at the 50th percentile of the indexed companies, and (iv) 200% if
our TSR ranks at or above 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 for the awards granted October 11, 2021; $89.70 for the awards granted August 5, 2022; and $144.40 for the
awards granted August 29, 2023. As of July 31, 2024, our TSR ranked above the 75th percentile of the companies in the Nasdaq Composite
Index for each respective performance period, therefore the values reported reflect maximum achievement, including the impact of
the applicable value cap on the awards granted in fiscal year 2023. |
| (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 RSUs vest in 16 equal quarterly installments, with the first quarterly installment having vested
on December 15, 2023, subject to continued service to us through each vesting date. |
| (8) |
The PRSUs are eligible to vest at the target level of stock price performance and become eligible
to vest in a range from 0% to 200% of the target number based on actual performance achieved relative to the following stock price
hurdles at any time during the Performance Period: (i) 100% of the PRSUs for a stock price hurdle of $70, (ii) 150% of the PRSUs
for a stock price hurdle of $80, and (iii) 200% of the PRSUs for a stock price hurdle of $90. A stock price hurdle is only achieved
if the average closing price of our company’s common stock is equal to or greater than the hurdle price for 90 consecutive
calendar days. None of the PRSUs become eligible to vest for achievement of a stock price hurdle of less than $70. In addition, a
maximum of 100% of the target number of PRSUs will be eligible to vest if our company’s TSR ranks at less than the 50th percentile
relative to the TSR of companies in the Nasdaq Composite Index during the Performance Period. Achievement of the stock price hurdles
may occur at any time during the Performance Period, but vesting will remain subject to Mr. Ramaswami’s continued employment
as CEO through September 15, 2027. The values reported reflect achievement at 100% of target. |
| (9) |
The PRSUs become eligible to vest upon achievement of specified FCF hurdles, with achievement of
100% of the PRSUs at the target level of FCF performance and additional achievement levels of 150% and 200% of the target number
of PRSUs at higher levels of FCF performance. None of the PRSUs are eligible to vest if performance is below the target level of
FCF performance. The target level FCF was set relative to our company’s internal long-term plans and requires strong performance
over the Performance Period to be achieved. FCF will be measured over |
| 2024 Proxy Statement |
60 |
| |
the last four completed fiscal quarters ending on the last day of the Performance Period
on July 31, 2027. Linear interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage
levels. PRSU vesting remains subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. The values
reported reflect achievement at 100% of target. |
| (10) |
The PRSUs become eligible to vest upon achievement of specified ARR hurdles, with achievement of
100% of the PRSUs at the target level of ARR performance and additional achievement levels of 150% and 200% of the target number
of PRSUs at higher levels of ARR performance. None of the PRSUs are eligible to vest if performance is below the target level of
ARR performance. The target level ARR was set relative to our company’s internal long-term plans and requires strong performance
over the Performance Period to be achieved. ARR will be measured as of the last day of the Performance Period on July 31, 2027. Linear
interpolation will not apply in the case of achievement between the 100%, 150% and 200% payout percentage levels. PRSU vesting remains
subject to Mr. Ramaswami’s continued employment as CEO through September 15, 2027. The values reported reflect achievement
at 100% of target. |
| (11) |
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. |
| (12) |
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. |
| (13) |
The RSUs vest 25% on September 15, 2025 and the remainder in 12 equal quarterly installments, with
the first quarterly installment vesting on December 15, 2025, subject to continued service to us through each vesting date. |
| (14) |
Mr. Wall had no outstanding equity awards as of July 31, 2024. |
2024 Option Exercises and Stock Vested Value
The following table presents, for each of our NEOs,
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 2024.
| | |
Option
Awards | |
Stock Awards |
| Name | |
Number
of Shares
Acquired on
Exercise
(#) | |
Value
Realized on
Exercise
($) | |
Number
of Shares
Acquired on
Vesting
(#) | |
Value
Realized on
Vesting(1)
($) |
|
| Rajiv Ramaswami | |
— | |
— | |
617,207 | |
28,938,271 |
|
| Rukmini Sivaraman | |
— | |
— | |
150,222 | |
6,807,606 |
|
| David M. Sangster | |
— | |
— | |
158,821 | |
7,009,272 |
|
| Brian Martin | |
— | |
— | |
— | |
— |
|
| Tyler Wall | |
— | |
— | |
110,387 | |
4,870,715 |
|
| (1) |
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). |
| 2024 Proxy Statement |
61 |
Employment Arrangements
Employment Arrangements with Named Executive
Officers
We have entered into employment agreements with
each of our currently employed NEOs. 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 NEO, 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 Chief Executive Officer, 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 and 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 and 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.
| 2024 Proxy Statement |
62 |
In connection with his hire, Mr. Sangster was
granted a stock option under our 2010 Stock 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.
Mr. Sangster is a participant in our Executive
Severance Policy and our Change of Control and Severance Policy, both of which are described below.
On August 30, 2024, Mr. Sangster notified us
of his decision to retire as Chief Operating Officer, effective October 31, 2024. As part of Mr. Sangster’s transition,
we and Mr. Sangster entered into a senior advisor agreement under which he has agreed to provide advisory services to us following
his retirement date until December 31, 2024 for $10,000 per month.
Brian Martin
We entered into an employment letter with Brian
Martin, our Chief Legal Officer, on April 29, 2024. The employment letter has an indefinite term and Mr. Martin’s employment
is at-will. Mr. Martin’s 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.
Per the terms of his offer letter, Mr. Martin
was granted 45,199 RSUs under the 2016 Equity Incentive Plan. 25% of the RSUs will vest on December 15, 2025, with 1/16th
of the RSUs vesting quarterly thereafter, subject to continued service to us through each vesting date. For additional details
regarding Mr. Martin’s outstanding equity awards, see “Executive Compensation –
Executive Compensation Tables” above. The offer letter also provided for a grant of PRSUs to be granted in the first
quarter of fiscal year 2025, consistent with the terms and conditions of PRSUs granted to other executives, and subject to the
approval of the Compensation Committee.
Mr. Martin is a participant in our Executive
Severance Policy and our Change of Control and Severance Policy, both of which are described below.
Severance and Change in 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
(as defined below, and 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
NEOs, 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 NEOs. |
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
| 2024 Proxy Statement |
63 |
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 and 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 and Severance Policy.
Each of our NEOs is a participant in our Change of Control and Severance Policy. Generally, if a participant’s employment
is terminated within three months prior to or 12 months following the consummation of a change in 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 and 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 NEOs, |
| |
|
| (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 in 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 in control, whichever is
greater, multiplied by 100% for each of our NEOs, |
| |
|
| (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 NEOs, and |
| |
|
| (5) |
payment or reimbursement of the cost of continued health benefits for a period of up to 12
months for each of our NEOs. |
In order to receive severance benefits under
our Change of Control and Severance Policy, a participant must timely execute and not revoke a release of claims in favor of us.
In addition, our Change of Control and Severance Policy provides that, if any payment or benefits to a participant, including the
payments and benefits under our Change of Control and Severance 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.
For purposes of each of our Change of Control
and 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 and 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:
| 2024 Proxy Statement |
64 |
| • |
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 and Severance Policy. |
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 in Control
The following table sets forth the estimated
payments that would be received by each of our NEOs who remained employed with us as of July 31, 2024 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, 2024 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 in control of our
company had occurred on July 31, 2024. The table below reflects amounts that would have been payable to the NEO assuming that,
if applicable, the hypothetical termination occurred on July 31, 2024, and, if applicable, a change in control of our company also
occurred on that date.
| Name |
|
Salary
Severance(1)
($) |
|
Annual
Incentive
Severance(2)
($) |
|
Value
of
Accelerated
Vesting(3)
($) |
|
Other
($) |
|
Continuation
of Medical
Benefits(4)
($) |
|
Total
($) |
| Rajiv Ramaswami |
|
|
|
|
|
|
|
|
|
|
|
|
| Involuntary or Constructive Termination(5) |
|
800,000 |
|
— |
|
— |
|
|
|
32,323 |
|
832,323 |
| Termination in connection with a Change in Control(6) |
|
800,000 |
|
800,000 |
|
113,187,404 |
|
|
|
32,323 |
|
114,819,727 |
| Rukmini Sivaraman |
|
|
|
|
|
|
|
|
|
|
|
|
| Involuntary or Constructive Termination(5) |
|
475,000 |
|
— |
|
— |
|
|
|
33,631 |
|
508,631 |
| Termination in connection with a Change in Control(6) |
|
475,000 |
|
356,250 |
|
26,972,694 |
|
|
|
33,631 |
|
27,837,575 |
| David M. Sangster |
|
|
|
|
|
|
|
|
|
|
|
|
| Involuntary or Constructive Termination(5) |
|
475,000 |
|
— |
|
— |
|
|
|
33,631 |
|
508,631 |
| Termination in connection with a Change in Control(6) |
|
475,000 |
|
356,250 |
|
22,264,353 |
|
|
|
33,631 |
|
23,129,234 |
| Brian Martin |
|
|
|
— |
|
— |
|
|
|
|
|
|
| Involuntary or Constructive Termination(5) |
|
475,000 |
|
— |
|
— |
|
|
|
33,631 |
|
508,631 |
| Termination in connection with a Change in Control(6) |
|
475,000 |
|
356,250 |
|
2,283,001 |
|
|
|
33,631 |
|
3,147,882 |
| Tyler Wall |
|
|
|
|
|
|
|
|
|
|
|
|
| Retirement Transition Agreement(7) |
|
— |
|
— |
|
— |
|
1,350,000 |
|
30,975 |
|
1,380,975 |
| (1) |
The amounts reported in this column reflect a lump-sum payment equal to 100% of the NEO’s
annual base salary as of July 31, 2024 under our Executive Severance Policy and a lump-sum payment equal to 100% of the NEO’s
annual base salary as of July 31, 2024 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 NEO’s
annual incentive target for fiscal year 2024 under our Change of Control and Severance Policy. |
| 2024 Proxy Statement |
65 |
| (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 $50.51 as reported on The Nasdaq Global Select Market on July 31, 2024. For unearned
outstanding annual PRSUs as of July 31, 2024, our TSR ranked above the 75th percentile of the companies in the Nasdaq Composite
Index for each respective performance period, therefore the values reported reflect maximum achievement, including the impact
of the applicable value cap on the awards granted in fiscal year 2023. For Mr. Ramaswami’s supplemental long-term performance-based
equity award, the value reported assumes achievement at 100% of target. |
| (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. |
| (5) |
Termination by Nutanix (other than for cause, death, or disability) or termination by officer
on account of Constructive Termination |
| (6) |
Termination by Nutanix (other than for cause, death, or disability) or termination by officer
for good reason in connection with a change in control. |
| (7) |
In February 2024 Mr. Wall notified our company of his decision to retire. In order to provide
adequate time to identify a successor and ensure an orderly transition of his responsibilities, our company reached an agreement
with Mr. Wall to continue his employment through June 2024 in exchange for a retention payment post-separation of $1.35 million
and COBRA benefit payments for 12 months. As a result of his retirement, Mr. Wall forfeited his unvested stock awards and
annual incentive (Non-Equity Incentive Plan Compensation). |
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 2024:
| • |
the annual total compensation of our President and CEO was $51,141,711; |
| • |
the annual total compensation of our median employee was $140,339; and |
| • |
the ratio of the annual total compensation of our President and CEO to the annual total compensation
of our median employee was 364:1. |
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, 2024 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, 2024, 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, 2024. 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.
| 2024 Proxy Statement |
66 |
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(2,7)
(c)($) | |
SCT
Total for
Second
PEO(1,3)
(b)($) | |
CAP
for
Second
PEO(2,3)
(c)($) | | |
Avg. SCT
Total
for
Non-PEO
NEOs(1)
(d)($) | |
Avg.
CAP for
Non-PEO
NEOs(7)
(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)($) |
| 2024 | |
51,143,711 | |
97,948,820 | |
N/A | |
| N/A | | |
4,810,466 | |
8,792,715 | |
228 | |
221 | |
| (124,775 | ) | |
| 1,907,982 |
| 2023 | |
14,845,940 | |
38,679,011 | |
N/A | |
| N/A | | |
5,475,467 | |
11,092,941 | |
136 | |
164 | |
| (254,560 | ) | |
| 1,561,981 |
| 2022 | |
12,928,676 | |
3,241,068 | |
N/A | |
| N/A | | |
4,990,357 | |
(2,699,520) | |
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 2024 Summary Compensation Table” (“SCT”) above.
Mr. Ramaswami has served as our Principal Executive Officer (“PEO”) since his hire on December 9, 2020 (“First
PEO”). The individuals comprising the PEO and Non-PEO NEOs for each year are listed in the table below. |
| |
|
|
PEO |
|
Non-PEO NEOs |
| |
Name |
|
2021 |
|
2022 |
|
2023 |
|
2024 |
|
2021 |
|
2022 |
|
2023 |
|
2024 |
| |
Rajiv Ramaswami |
|
ü |
|
ü |
|
ü |
|
ü |
|
|
|
|
|
|
|
|
| |
Dheeraj Pandey |
|
ü |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Rukmini Sivaraman |
|
|
|
|
|
|
|
|
|
|
|
ü |
|
ü |
|
ü |
| |
David Sangster |
|
|
|
|
|
|
|
|
|
ü |
|
ü |
|
ü |
|
ü |
| |
Tyler Wall |
|
|
|
|
|
|
|
|
|
ü |
|
ü |
|
ü |
|
ü |
| |
Brian Martin |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ü |
| |
Duston Williams |
|
|
|
|
|
|
|
|
|
ü |
|
ü |
|
|
|
|
| |
Christopher Kaddaras Jr. |
|
|
|
|
|
|
|
|
|
ü |
|
|
|
|
|
|
| (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 NEOs 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 CAP from the assumptions used to compute the valuation of the equity awards as of the grant date. |
| (3) |
Mr. Pandey previously served as our CEO before retiring from Nutanix in December 2020 (“Second PEO”). 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 $100 on July 31, 2020 in the company (column (f))
and the Nasdaq Computer Index (column (g)) for the fiscal years ended July 31, 2021, 2022, 2023 and 2024. The Nasdaq Computer
Index is also used in our performance graph in our Annual Report on Form 10-K for our fiscal year ended July 31, 2024 filed
with the SEC on September 19, 2024. |
| (5) |
The dollar amounts reported represent the amount of net income (loss) reflected in our audited financial statements for
the applicable year in accordance with accounting principles generally accepted in the United States. |
| (6) |
ARR for any given period is defined as the sum of ACV for all non life-of-device contracts in effect as of the end of
a specific period. For the purposes of this calculation, we assume that the contract term begins on the date a contract is
booked, unless the terms of such contract prevent us from fulfilling our obligations until a later period, and irrespective
of the periods in which we would recognize revenue for such contract. ACV is defined as the total annualized value of a contract,
excluding amounts related to professional services and hardware. The total annualized value for a contract is calculated by
dividing the total value of the contract by the number of years in the term of such contract, using, where applicable, an
assumed term of five years for contracts that do not have a specified term. |
| (7) |
The table below shows the adjustments made to the SCT totals (columns (b) and (d) above) for our First PEO and average
for non-PEO NEOs to determine CAP for fiscal year 2024 (columns (c) and (e) above). |
| 2024 Proxy Statement |
67 |
| |
|
|
|
PEO
($) |
|
Average for
Non-PEO
NEOs
($) |
| |
|
Summary Compensation Table - Total Compensation (columns (b) and (d)) |
|
51,143,711 |
|
4,810,466 |
| - |
|
Grant Date Fair Value of Stock Awards and Option Awards Granted in Fiscal Year |
|
49,781,703 |
|
3,968,879 |
| + |
|
Fair Value at Fiscal Year-End of Outstanding and Unvested Stock Awards and Option Awards Granted in Fiscal Year |
|
63,997,025 |
|
4,415,419 |
| + |
|
Change in Fair Value of Outstanding and Unvested Stock Awards and Option Awards Granted in Prior Fiscal Years |
|
23,206,675 |
|
3,731,194 |
| + |
|
Fair Value at Vesting of Stock Awards and Option Awards Granted in Fiscal Year That Vested During Fiscal Year |
|
2,596,611 |
|
432,748 |
| + |
|
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 |
|
6,786,500 |
|
723,399 |
| - |
|
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 |
|
— |
|
1,351,633 |
| = |
|
Compensation Actually Paid (columns (c) and (e)) |
|
97,948,820 |
|
8,792,715 |
Analysis of Information Presented in the Pay Versus Performance Table
As described in more detail in the section “Executive Compensation—Compensation
Discussion and Analysis,” our company’s executive compensation program reflects a pay-for-performance philosophy.
While our company uses several performance measures to align executive compensation with performance, we do not seek to align
our company’s performance measures with CAP (as calculated in accordance with SEC rules).
Relationship Between CAP and TSR
The chart below (i) illustrates the relationship between the amount of CAP to our PEO, the average amount
of CAP to our non-PEO NEOs, and the company’s cumulative TSR over the four most recently completed fiscal years; and (ii)
compares our cumulative TSR over the four most recently completed fiscal years to that of the Nasdaq Computer Index.
Compensation Actually Paid vs. TSR
| 2024 Proxy Statement |
68 |
Relationship Between CAP and Net Income
The chart below illustrates the CAP to our PEO, the average CAP to our non-PEO NEOs, and our reported
GAAP net income for each of the four most recently completed fiscal years.
Compensation Actually Paid vs. Net Income
Relationship Between CAP and ARR
The chart below illustrates the CAP to our PEO, the average CAP to our non-PEO NEOs, and our reported
ARR for each of the four most recently completed fiscal years.
Compensation Actually Paid vs. ARR
| 2024 Proxy Statement |
69 |
We have identified the following performance measures (in no specific order) as the most important in
aligning the compensation of our NEOs to our financial performance for fiscal year 2024:
Tabular List of Most Important Performance Measures
| ARR |
| Non-GAAP Operating Expenses (excluding commissions) |
| Relative Total Shareholder Return |
| Employee Engagement |
| 2024 Proxy Statement |
70 |
Equity Compensation Plan Information
The following table summarizes our equity compensation plan information as of July 31, 2024. 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 |
|
22,433,179 |
|
$11.26 |
|
30,711,134 |
|
| Equity plans not approved by stockholders |
|
— |
|
— |
|
— |
|
| (1) |
Includes 258,300 outstanding stock options and 22,174,879 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 19,963,904 shares reserved for future equity grants under our 2016 Equity Incentive Plan and 10,747,230 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, 2024, the number of shares of Class
A common stock available for issuance under our 2016 Equity Incentive Plan increased by 13,259,036 shares, pursuant to this
provision. This increase is not reflected in the table above, which is as of July 31, 2024. |
| 2024 Proxy Statement |
71 |
Additional Proposals
Proposal 4: Advisory Vote on the
Frequency of Future Stockholder Advisory Votes to Approve the Compensation of Our Named Executive Officers
| |
|
|
|
|
Our
Board Recommends a VOTE FOR ONE YEAR on this Proposal 4. |
| |
|
|
Background
Section 14A of the Exchange Act also enables our stockholders to indicate their preference at least once
every six years regarding how frequently we should solicit an advisory vote on the compensation of our NEOs as disclosed in our
proxy statement. Accordingly, we are asking our stockholders to indicate whether they would prefer an advisory say-on-pay vote
every one, two or three years. Alternatively, stockholders may abstain from casting a vote.
After careful consideration, our Board has determined that a non-binding advisory vote on the compensation
of our NEOs annually is the most appropriate frequency for us, and therefore our Board recommends that you vote for a ONE YEAR
interval. In formulating its recommendation, our Board considered that given the nature of our compensation programs, an annual
vote is appropriate because it would enable our stockholders to provide us with their input on our compensation philosophy, policies
and practices on a timely basis, and is consistent with our belief in the importance of engaging our stockholders and obtaining
their input on our corporate governance matters and our executive compensation philosophy, policies and practices.
Vote Required
The alternative among one year, two years or three years that receives the highest number of votes from
the holders of the shares present at the Annual Meeting or represented by proxy thereat and entitled to vote on the proposal will
be deemed to be the frequency preferred by our stockholders. Abstentions and broker non-votes will have no effect on this proposal.
Stockholders are not voting to approve or disapprove the recommendation of our Board, but are instead
asked to indicate their preference, on an advisory basis, as to whether the advisory vote on the approval of the compensation
of our NEOs should be held every one year, two years or three years.
Our Board and the Compensation Committee value the opinions of our stockholders in this matter and, to
the extent there is any significant vote in favor of one time period over another, will take into account the outcome of this
vote when making future decisions regarding how often to hold future advisory say-on-pay votes. However, because this is an advisory
vote and therefore not binding on our Board or our company, our Board may decide that it is in the best interests of our stockholders
that we hold an advisory vote on the compensation of our NEOs more or less frequently than the option preferred by our stockholders.
The results of the vote will not be construed to create or imply any change or addition to the fiduciary duties of our Board.
| 2024 Proxy Statement |
72 |
Stock Ownership Information
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth, as of the close of business on October 8, 2024, 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 NEOs;
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 267,836,148 shares of Class
A common stock as of the close of business on October 8, 2024. 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 8, 2024 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) |
|
36,476,326 |
|
13.6 |
| Entities affiliated with the Vanguard Group(2) |
|
24,740,679 |
|
9.2 |
| BCPE Nucleon (DE) SPV, LP(3) |
|
16,854,032 |
|
6.3 |
| Named Executive Officers
and Directors: |
|
|
|
|
| Rajiv Ramaswami |
|
639,014 |
|
* |
| Rukmini Sivaraman |
|
192,169 |
|
* |
| David Sangster |
|
123,868 |
|
* |
| Brian Martin |
|
— |
|
* |
| Tyler Wall |
|
23,371 |
|
* |
| Craig Conway(4) |
|
33,363 |
|
* |
| Max de Groen(5) |
|
16,885,044 |
|
6.3 |
| Virginia Gambale(6) |
|
45,302 |
|
* |
| Steven J. Gomo(7) |
|
70,162 |
|
* |
| David Humphrey(8) |
|
16,885,044 |
|
6.3 |
| Gayle Sheppard(9) |
|
16,166 |
|
* |
| Brian Stevens(10) |
|
43,247 |
|
* |
| Mark Templeton(11) |
|
15,389 |
|
* |
| All current directors and executive officers as a group (12 persons)(12) |
|
18,094,736 |
|
6.8 |
| * |
Denotes less than 1% |
| (1) |
Based on a Schedule 13G/A filed by FMR LLC with the SEC on February 9, 2024, in which it was reported that FMR LLC had
sole voting power over 36,475,488 shares and sole dispositive power over 36,476,326 shares. The address for FMR LLC is 245
Summer Street, Boston, Massachusetts 02210. |
| 2024 Proxy Statement |
73 |
| (2) |
Based on a Schedule 13G/A filed by The Vanguard Group with the SEC on February 13, 2024, in which it
was reported that The Vanguard Group had shared voting power over 90,806 shares, sole dispositive power over 24,390,134 shares,
and shared dispositive power over 350,545 shares. The address for The Vanguard Group is 100 Vanguard Blvd., Malvern, PA 19355. |
| (3) |
Based on a Schedule 13D filed by BCPE Nucleon (DE) SPV, LP with the SEC on July 26, 2024, in which it was reported that
BCPE Nucleon (DE) SPV, LP had shared voting power over 16,854,032 shares and shared dispositive power over 16,854,032 shares.
The address for BCPE Nucleon (DE) SPV, LP is 200 Clarendon Street, Boston, Massachusetts 02116. |
| (4) |
Consists of 33,363 shares of Class A common stock held of record by Mr. Conway. |
| (5) |
Consists of (i) 16,854,032 shares of Class A common stock held directly by BCPE Nucleon (DE) SPV, LP and (ii) 31,012 shares
of Class A common stock held of record by Mr. de Groen. Mr. de Groen is a Partner of Bain Capital Investors, LLC, the ultimate
general partner of BCPE Nucleon (DE) SPV, LP. Voting and investment decisions with respect to securities held by BCPE Nucleon
(DE) SPV, LP are made by the partners of Bain Capital Investors, LLC. As a result, Mr. de Groen may be deemed to share voting
and dispositive power with respect to the securities held by BCPE Nucleon (DE) SPV, LP. Mr. de Groen disclaims beneficial
ownership of the securities held by BCPE Nucleon (DE) SPV, LP, except to the extent of his pecuniary interest therein. |
| (6) |
Consists of shares 45,302 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. |
| (7) |
Consists of (i) 3,962 shares of Class A common stock held of record by The Steven and Chris Gomo Trust for which Mr. Gomo
serves as trustee, and (ii) 66,200 shares of Class A common stock held of record by The Chris Gomo Legacy Trust, for which
Mr. Gomo serves as trustee. |
| (8) |
Consists of (i) 16,854,032 shares of Class A common stock held directly by BCPE Nucleon (DE) SPV, LP and (ii) 31,012 shares
of Class A common stock held of record by Mr. Humphrey. Mr. Humphrey is a Partner of Bain Capital Investors, LLC, the ultimate
general partner of BCPE Nucleon (DE) SPV, LP. Voting and investment decisions with respect to securities held by BCPE Nucleon
(DE) SPV, LP are made by the partners of Bain Capital Investors, LLC. As a result, Mr. Humphrey may be deemed to share voting
and dispositive power with respect to the securities held by BCPE Nucleon (DE) SPV, LP. Mr. Humphrey disclaims beneficial
ownership of the securities held by BCPE Nucleon (DE) SPV, LP, except to the extent of his pecuniary interest therein. |
| (9) |
Consists of 16,166 shares of Class A common stock held of record by Ms. Sheppard. |
| (10) |
Consists of 43,247 of Class A common stock held of record by Mr. Stevens. |
| (11) |
Consists of 15,389 shares of Class A common stock held of record by Mr. Templeton. |
| (12) |
Consists of 18,094,736 shares of Class A common stock beneficially owned by our current directors and executive officers
as a group. |
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, 2024, all Section 16(a) filing requirements
applicable to our officers, directors and greater than 10% beneficial owners were complied with, except that three gifts to a
donor advised fund that occurred in October 2021 were reported late on a Form 4 filed for Steven J. Gomo on March 5, 2024.
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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, 2024 with the SEC on September
19, 2024. 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.
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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 22, 2024 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/NTNX2024. 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/NTNX2024.
Who can vote at the Annual Meeting?
Only stockholders of record at the close of business on October 8, 2024, 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 267,836,148
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.
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What matters am I voting on?
There are four matters scheduled for a vote:
| • |
the election of three Class I and three Class II directors to hold office until the annual meeting
of stockholders to take place after the end of fiscal year ending July 31, 2025; |
| • |
the ratification of the selection of Deloitte & Touche LLP as our independent registered public accounting firm for
the fiscal year ending July 31, 2025; |
| • |
the approval, on a non-binding advisory basis, of the compensation of our NEOs; and |
| • |
the approval, on a non-binding advisory basis, of the frequency of future stockholder advisory votes on the compensation
of our NEOs. |
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 which 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/NTNX2024,
starting at 9:00 a.m., Pacific Time, on December 13, 2024. |
| • |
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.
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. |
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| • |
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 any of the
proposals.
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 Proposals 1 and 4. In the case of Proposals 2
and 3, 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, 2025, 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 and all three nominees as Class II 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, 2025, FOR the approval of the compensation of our NEOs, and for future stockholder
advisory votes on the compensation of our NEOs to be held every ONE YEAR. 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.
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.
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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, 2025, 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 NEOs 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: For the approval, on an advisory basis, of the
frequency of future stockholder advisory votes on the compensation of our NEOs, the frequency receiving the highest number of
votes from holders of shares present at the Annual Meeting or represented by proxy and entitled to vote on the proposal will be
considered the frequency preferred by the stockholders. You may vote for the frequency of future advisory votes on executive compensation
to be ONE YEAR, TWO YEARS, or THREE YEARS, or you may ABSTAIN with respect to this proposal. Abstentions
and broker non-votes will have no effect on the outcome of the vote. Because this vote is advisory only, it will not be binding
on us or on our Board. However, our Board values our stockholders’ opinions. The Compensation Committee will review the
results of the vote and take into account the outcome of the vote when considering future decisions on the frequency of future
stockholder advisory votes on the compensation of our NEOs.
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
$15,500, 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 2025 annual meeting of stockholders must be received by us no later than June 24, 2025 in order to be considered for inclusion
in our proxy materials for that meeting.
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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 2025 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 7, 2025 nor earlier than the close of business on August 8, 2025. 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
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Appendix A – Key Performance Measures and Non-GAAP Financial Measures
This proxy statement includes the following key performance and non-GAAP financial measures:
| • |
Annual recurring revenue (“ARR”) – We
calculate ARR as the sum of ACV for all subscription contracts in effect as of the end of the 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. ARR excludes all life-of-device contracts. 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 life-of-device contracts that do not have a specified term. |
| • |
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. |
ARR is a performance measure that we believe provides useful information to our management and investors
as it allows us to better track the top-line growth of our subscription business because it takes into account variability in
term lengths. Free cash flow is a performance measure that we believe provides useful information to management and investors
about the amount of cash generated by the business after capital expenditures. 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 ARR, so we
have not reconciled the 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 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, |
| | |
2023
($) |
| |
2024
($) |
|
| | |
| (in thousands) | |
| Net cash provided by operating activities | |
| 272,403 | | |
| 672,931 | |
| Purchases of property and equipment | |
| (65,404 | ) | |
| (75,252 | ) |
| FREE CASH FLOW (NON-GAAP) | |
| 206,999 | | |
| 597,679 | |
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