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Pay vs Performance Disclosure - USD ($)

12 Months Ended

Dec. 31, 2024

Dec. 31, 2023

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2020

Pay vs Performance Disclosure

Pay vs Performance Disclosure, Table

Pay Versus Performance

As required by Section 953(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid and certain financial performance of the Company. The following table sets forth information regarding compensation for our principal executive officer (“PEO”) and average compensation related to our other named executive officers (“NEOs”), both as reported in the Summary Compensation Table and with certain adjustments to reflect the “compensation actually paid” to such individuals, as defined under the SEC rules, for each of 2024, 2023, 2022 and 2021. The table also provides information on our cumulative total shareholder return (“TSR”), the cumulative TSR of our peer group, our Net Income and Revenue over such years in accordance with the SEC rules. Although we selected Revenue as our “most important financial performance measure” used to link “compensation actually paid” to our PEO and other NEOs to our performance for 2024, we consider ARR to be the most important performance measure for purposes of linking executive compensation to our performance. As discussed in more detail in the Compensation Discussion and Analysis section of this Proxy Statement, our Compensation Committee believes that utilizing the ARR metric aligns with the primary driver of revenue growth and orientation of the Company and our sales compensation around ARR. It is also the key performance measure that we use in determining the payout under our annual Bonus Plan as well as in our 2024 PSU design. However, ARR is not considered a “financial performance measure” within the meaning of the SEC’s pay versus performance rules, so we selected Revenue for purposes of the table below. For further information regarding our performance-based approach to executive compensation and how the Company aligns executive compensation with the Company’s performance, see “Compensation Discussion and Analysis.”


					Value of Initial Fixed $100 Investment Based On:
Year	Summary Compensation Table Total for PEO⁽⁴⁾	Compensation Actually Paid to PEO⁽⁴⁾	Average Summary Compensation Total for Non-PEO NEOs⁽⁵⁾	Average Compensation Actually Paid to Non- PEO NEOs⁽⁵⁾	Company Total Share Return⁽⁶⁾	Peer Group Total Share Return⁽⁶⁾	Net Income (in thousands)⁽⁷⁾	Revenue (in thousands)⁽⁸⁾
2024⁽¹⁾	$14,854,209	$7,986,685	$5,663,316	$2,868,566	$71.81	$284.38	$25,526	$844,007
2023⁽¹⁾	$3,140,768	$6,142,857	$3,778,921	$7,771,595	$101.93	$212.86	$(152,815)	$777,707
2022⁽²⁾	$8,446,001	$(10,330,753)	$5,867,923	$(1,399,218)	$60.66	$129.82	$(124,717)	$685,083
2021⁽³⁾	$10,853,303	$18,283,167	$6,107,485	$9,373,883	$210.09	$199.80	$(146,334)	$535,404
2020⁽³⁾	$8,736,832	$16,594,512	$3,076,447	$6,536,814	$160.94	$157.33	$(98,849)	$411,486

(1)	For 2024 and 2023, the PEO was our CEO, Corey Thomas, and the other NEOs were Tim Adams, Andrew Burton and Christina Luconi.

(2)

For 2022, the PEO was our CEO, Corey Thomas, and the other NEOs were Tim Adams, Andrew Burton, Jeff Kalowski and Christina Luconi. Mr. Kalowski retired from his role as Chief Financial Officer effective as of January 3, 2022, and he continued to consult with the Company in an advisory capacity from January 3, 2022, through March 31, 2022, for which he received $87,692. The Average Summary Compensation Total for Non-PEO NEOs excluding Jeff Kalowski was $7,794,667, and the Average Compensation Actually Paid to Non-PEO NEOs excluding Jeff Kalowski was $(1,894,856).

(3)	For 2021 and 2020, the PEO was our CEO, Corey Thomas, and the other NEOs were Andrew Burton, Jeff Kalowski, Christina Luconi and Lee Weiner.

(4)	Amounts in these columns represent the amounts in the “Total” column for the PEO and the average amounts from the “Total” column for the other NEOs set forth in the Summary Compensation Table (“SCT”) on page 43. See the footnotes to the SCT for further detail regarding the amounts in these columns.

(5)

The amounts reported in these columns represent the amounts of “compensation actually paid” for the PEO and average compensation “actually paid” for our non-PEO NEOs. The dollar amounts do not reflect the actual amounts of compensation earned by or paid to such individuals during the applicable year. The amounts are computed in accordance with Item 402(v) of Regulation S-K by deducting and adding the following amounts from the “Total” column of the SCT (pursuant to SEC rules, fair value at each measurement date is computed in a manner consistent with the fair value methodology used to account for share-based payments in our financial statements under GAAP).


Adjustments	PEO	Non-PEO NEOs
SCT Total Compensation	$14,854,209	$5,663,316
Less: Amounts reported under the Stock Awards column of the SCT for the applicable year	(14,325,220)	(5,166,649)
Add: Fair value of awards granted during the applicable year that remain unvested as of the applicable year end, determined as of the applicable year end	8,357,420	1,340,075
Add: Change in fair value of awards granted in prior years that remain unvested as of the applicable year end, determined based on change in fair value from prior year end to applicable year	(908,129)	1,145,817
Add: Fair value of awards granted and vested in the applicable year, determined as of the vesting date	737,672	263,953
Add: Change in fair value of awards granted in prior years that vested during the applicable year, determined based on change in fair value from prior year end to the vesting date	(729,267)	(377,946)
Total compensation actually paid	$7,986,685	$2,868,566

(6)

TSR is cumulative for the measurement periods beginning on December 31, 2019 and ending on December 31 of each of 2024, 2023, 2022 and 2021, respectively, calculated in accordance with Item 201(e) of Regulation S-K. The peer group for purposes of this table is the Nasdaq Computer Index, which is one of the peer groups used for purposes of the Stock Performance Graph set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “Peer Group”).

(7)	Reflects “Net Income” for each applicable year as set forth in our Consolidated Statements of Operations included in our Annual Report on Form 10-K for each of the applicable years.

(8)	Reflects “Revenue” for each applicable year as set forth in our Consolidated Statements of Operations included in our Annual Report on Form 10-K for each of the applicable years.

Company Selected Measure Name

Revenue

Named Executive Officers, Footnote

(1)	For 2024 and 2023, the PEO was our CEO, Corey Thomas, and the other NEOs were Tim Adams, Andrew Burton and Christina Luconi.

(2)

(3)	For 2021 and 2020, the PEO was our CEO, Corey Thomas, and the other NEOs were Andrew Burton, Jeff Kalowski, Christina Luconi and Lee Weiner.

Peer Group Issuers, Footnote

(6)

PEO Total Compensation Amount

$ 14,854,209

$ 3,140,768

$ 8,446,001

$ 10,853,303

$ 8,736,832

PEO Actually Paid Compensation Amount

$ 7,986,685

6,142,857

(10,330,753)

18,283,167

16,594,512

Adjustment To PEO Compensation, Footnote

(5)


Adjustments	PEO	Non-PEO NEOs
SCT Total Compensation	$14,854,209	$5,663,316
Less: Amounts reported under the Stock Awards column of the SCT for the applicable year	(14,325,220)	(5,166,649)
Add: Fair value of awards granted during the applicable year that remain unvested as of the applicable year end, determined as of the applicable year end	8,357,420	1,340,075
Add: Change in fair value of awards granted in prior years that remain unvested as of the applicable year end, determined based on change in fair value from prior year end to applicable year	(908,129)	1,145,817
Add: Fair value of awards granted and vested in the applicable year, determined as of the vesting date	737,672	263,953
Add: Change in fair value of awards granted in prior years that vested during the applicable year, determined based on change in fair value from prior year end to the vesting date	(729,267)	(377,946)
Total compensation actually paid	$7,986,685	$2,868,566

Non-PEO NEO Average Total Compensation Amount

$ 5,663,316

3,778,921

5,867,923

6,107,485

3,076,447

Non-PEO NEO Average Compensation Actually Paid Amount

$ 2,868,566

7,771,595

(1,399,218)

9,373,883

6,536,814

Adjustment to Non-PEO NEO Compensation Footnote

(5)


Adjustments	PEO	Non-PEO NEOs
SCT Total Compensation	$14,854,209	$5,663,316
Less: Amounts reported under the Stock Awards column of the SCT for the applicable year	(14,325,220)	(5,166,649)
Add: Fair value of awards granted during the applicable year that remain unvested as of the applicable year end, determined as of the applicable year end	8,357,420	1,340,075
Add: Change in fair value of awards granted in prior years that remain unvested as of the applicable year end, determined based on change in fair value from prior year end to applicable year	(908,129)	1,145,817
Add: Fair value of awards granted and vested in the applicable year, determined as of the vesting date	737,672	263,953
Add: Change in fair value of awards granted in prior years that vested during the applicable year, determined based on change in fair value from prior year end to the vesting date	(729,267)	(377,946)
Total compensation actually paid	$7,986,685	$2,868,566

Compensation Actually Paid vs. Total Shareholder Return

Compensation Actually Paid versus Company TSR

For the five years presented above, the “compensation actually paid” for both our PEO and Non-PEO NEOs as a group (excluding our PEO) has been aligned with the Company’s TSR. The correlation between compensation actually paid with the Company’s TSR over the period presented is because a significant portion of the “compensation actually paid” to the PEO and the Non-PEO NEOs is comprised of equity awards, the value of which is subject to change due to volatility of our stock price.

As reflected in the tables above, changes in the market price of our common stock from one measurement date to another can have a significant impact on the calculation of “compensation actually paid” to our NEOs, as determined pursuant to the SEC rule. As noted above, in the case of equity-based awards, “compensation actually paid” is calculated based on the fair value of such awards as of particular measurement dates and does not reflect compensation actually earned, realized or received by our NEOs. In particular, the price of our common stock was at a relative high point as of December 31, 2021 ($117.69) and at a relative low point as of December 30, 2022 ($33.98) resulting in a decline of almost $10 million in the fair value of stock options and RSUs held by our PEO that were outstanding and unvested on both dates, thereby resulting in a significant amount of negative “compensation actually paid” for 2022. For 2024, our stock price remained relatively constant, which is reflected in the amounts set forth in the above table.

Compensation Actually Paid vs. Net Income

Compensation Actually Paid versus Net Income

As shown in the Pay versus Performance table above, the Company’s Net Income has varied over the five-year measurement period and the changes are not proportionally correlated with the “compensation actually paid” to our PEO or Non-PEO NEOs. As such, we do not believe there is any meaningful relationship between our Net Income and compensation actually paid to our PEO or Non-PEO NEOs during the periods presented.

Compensation Actually Paid vs. Company Selected Measure

Compensation Actually Paid versus Revenue

As noted above, while ARR is the key performance measure that we use in determining the payout under our annual Bonus Plan we utilized Revenue for purposes of the table. For the periods presented, there is an inverse correlation between Revenue and “compensation actually paid” to our PEO or Non-PEO NEOs, largely due to the change in the value of the equity awards due to stock volatility described above and our levels of achievement against our performance goals.

Total Shareholder Return Vs Peer Group

Compensation Actually Paid versus Peer Group TSR; Company TSR versus Peer Group TSR

While there is no direct link between “compensation actually paid” to our PEO and Non-PEO NEOs and the TSR of our Peer Group, the two were generally aligned in respect of five years presented above due to the alignment between “compensation actually paid” and the Company’s TSR over the period. The Company’s TSR has generally moved in a manner consistent with the TSR of our Peer Group. However, Company TSR in 2021 exceeded that of the Nasdaq Computer Index and reflected our growth and Company performance during that period. Generally, our TSR and the TSR of our Peer Group has fluctuated over the period presented due to various factors, including but not limited to, economic instability caused by the COVID-19 pandemic and macroeconomic pressures.

Tabular List, Table

Financial Performance Measures

As described in detail above under “Compensation Discussion and Analysis,” the Company’s executive compensation program consists of several compensation elements reflecting the Company’s compensation philosophy.

Listed below are the financial and non-financial performance measures which in our assessment represent the most important performance measures we use to link compensation actually paid to our NEOs, for 2024, to company performance. See Appendix A for a reconciliation of the non-GAAP measures discussed herein to the most directly comparable GAAP measure.


Performance Measure			Description
ARR ($)			Annualized recurring revenue is a financial measure that we define as the annual value of all recurring revenue related to contracts in place at the end of the period.
Revenue			Revenue (determined on a consolidated basis) is a GAAP measure reported in our audited financial statements.
Non-GAAP Operating Income			Non-GAAP income from operations is a non-GAAP financial measure, which represents the GAAP income from operations, excluding stock-based compensation expense, amortization of acquired intangible assets and certain other items, such as acquisition-related expenses, litigation-related expenses, impairment of long-lived assets and non-ordinary course restructuring expense related to our restructuring plan announced in 2023.
Free Cash Flow			Free cash flow is a non-GAAP measure defined as cash provided by operating activities less purchases of property and equipment and capitalization of internal-use software costs.
Adjusted EBITDA			Adjusted EBITDA is net income before (1) interest income, (2) interest expense, (3) other (income) expense, net, (4) provision for (benefit from) income taxes, (5) depreciation expense, (6) amortization of intangible assets, (7) stock-based compensation expense, (8) acquisition-related expenses, (9) litigation-related expenses, (10) impairment of long-lived assets and (11) restructuring expense.

Total Shareholder Return Amount

$ 71.81

101.93

60.66

210.09

160.94

Peer Group Total Shareholder Return Amount

284.38

212.86

129.82

199.8

157.33

Net Income (Loss)

$ 25,526,000

$ (152,815,000)

$ (124,717,000)

$ (146,334,000)

$ (98,849,000)

Company Selected Measure Amount

844,007,000

777,707,000

685,083,000

535,404,000

411,486,000

PEO Name

Corey Thomas

Measure:: 1

Pay vs Performance Disclosure

Name

ARR

Measure:: 2

Pay vs Performance Disclosure

Name

Revenue

Measure:: 3

Pay vs Performance Disclosure

Name

Non-GAAP Operating Income

Non-GAAP Measure Description

Non-GAAP income from operations is a non-GAAP financial measure, which represents the GAAP income from operations, excluding stock-based compensation expense, amortization of acquired intangible assets and certain other items, such as acquisition-related expenses, litigation-related expenses, impairment of long-lived assets and non-ordinary course restructuring expense related to our restructuring plan announced in 2023.

Measure:: 4

Pay vs Performance Disclosure

Name

Free Cash Flow

Non-GAAP Measure Description

Free cash flow is a non-GAAP measure defined as cash provided by operating activities less purchases of property and equipment and capitalization of internal-use software costs.

Measure:: 5

Pay vs Performance Disclosure

Name

Adjusted EBITDA

Jeff Kalowski [Member]

Pay vs Performance Disclosure

Salary and Wage, Officer, Excluding Cost of Good and Service Sold

$ 87,692

Tim Adams, Andrew Burton and Christina Luconi [Member]

Pay vs Performance Disclosure

Non-PEO NEO Average Total Compensation Amount

7,794,667