TERADATA CORP /DE/

Compensation Discussion and Analysis

Section 3: CORE COMPENSATION PROGRAM

Our executive compensation program is designed to incentivize our executive officers to pursue and execute on our priorities and promote profitable growth. The core elements of our executive officers’ compensation consist of base salary, an annual cash incentive, and a long-term incentive, which the Committee believes such compensation elements are reasonable and appropriate for the Company at this time. For 2024, our annual cash incentive and 60% of our long-term incentive is tied to performance and closely linked to our Public Cloud, Total ARR, and profitable growth strategies and continued value creation for our stockholders.

Executive Compensation Process

After the completion of the fiscal year, the CEO conducts annual performance evaluations for the prior year for each executive officer. After consulting with the Chief People Officer and the Compensation Consultant, the CEO provides the Committee with the performance assessments and recommendations with respect to the amount and form of compensation for such executives for the current fiscal year at the Committee's first meeting of the fiscal year. With regard to our CEO, the independent members of the Board conducts the CEO annual performance evaluation at the first Board meeting of the fiscal year. The Compensation Consultant meets with the independent members of the Board in executive session at this meeting to review compensation recommendations for the CEO for the current fiscal year. Neither the CEO nor the Chief People Officer provide input or recommendations with respect to his or her own compensation.

At its first meetings of each fiscal year (in January and/or February), the Committee reviews and approves compensation for each of our executive officers for the current fiscal year (or the independent members of the Board with regard to our CEO's compensation), which generally includes:

•changes, if any, to base salary;

•for the annual cash incentive awards, setting (i) the target opportunity expressed as a percentage of base salary and (ii) performance measures, weightings, goals and performance adjustment events; and

•for the long-term incentive awards, (i) setting the total long-term incentive opportunity amount for each executive officer, (ii) approving the allocation of the long-term incentive awards for service-based restricted stock unit awards; (iii) approving the allocation to the three-year performance restricted stock unit awards, including the performance measures, weightings, goals and adjustment events, and (iv) at the Committee's first meeting to

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Compensation Discussion and Analysis

occur after the Company's year-end earnings are released, approves the grant of equity awards for each executive officer consistent with the long-term incentive opportunity amount previously approved for that person.

In connection with the Committee's review and approval of executive officer compensation (or the independent members of our Board for CEO compensation), the Committee evaluates information regarding:

•competitive market compensation data prepared by the Compensation Consultant based on the Company's peer group, including for base salary, total cash compensation, and total direct compensation;

•scope, complexity, experience, and tenure of the executive officer’s position, individual contributions and performance, as well as internal pay equity;

•prior and expected financial performance of the Company; and

•the CEO recommendation for the form and amount of compensation for executive officers, other than the CEO.

Throughout the fiscal year, the Committee receives updates on the anticipated performance of the annual cash incentive award and the outstanding long-term incentive awards. In addition, the Committee receives frequent updates on compensation trends from the Compensation Consultant and the compensation methods used by the Company's compensation peer group. At the end of the fiscal year, typically during its last meeting of the fiscal year, the Committee reviews proposed performance measures for the following year's annual incentive plan and long-term incentive plan.

At the Committee's first regular meeting of the fiscal year, management presents a summary of, and the Committee certifies, actual performance as compared to the pre-established performance goals in the annual cash incentive plan and the outstanding long-term incentive plans. The Committee (or the independent members of the Board for CEO compensation) also approves the payouts of the awards under these plans, each subject to the release of the Company's year-end earnings, if such event had not yet occurred.

Additional details of the executive compensation process by the Committee and Board, as applicable, are disclosed, as relevant, in the respective compensation element sections that follow.

We do not have any formal policies for allocating compensation among base salary, annual cash incentive awards, and long-term incentive equity grants. Instead, the Committee exercises judgment to establish a total compensation program for each executive officer that is comprised of a combination of short- and long-term incentive compensation and cash and non-cash compensation, that the Committee believes is appropriate to achieve the goals of our executive compensation program and our profitable growth strategy. In addition, the Company does not generally grant stock options or stock appreciation rights and did not grant any of these instruments during fiscal 2024. The Committee grants other equity-based awards to our executive officers and other key employees on both an annual and as-needed basis, which is typically in connection with promotions. Wedo not time the disclosure of material non-public information for the purpose of affecting the value of executive compensation, and it is the Committee’s practice to generally avoid granting equity awards during periods in which there is undisclosed material non-public information about the Company.

Summary of 2024 Compensation Decisions

Base Salary

We provide a base salary to retain and attract key executive talent and to align our compensation with market practices. Base salaries are reviewed and established by the Committee (or the independent members of the Board for CEO base salary) on a competitive basis each year commensurate with executives with similar experience levels and capabilities in the marketplace. In particular, the Committee or the Board, as relevant, takes into consideration the following factors in setting or reviewing base salaries for our executive officers: current base salary; positioning relative to competitive market compensation data; scope and complexity of the position; experience; tenure; historical and current levels of function, division and individual performance; future potential; recommendations from the CEO for executive officers other than the CEO; and internal pay comparisons.

The base salary level for Mr. McMillan remained unchanged for 2024. Mr. Petley's base salary increased as a result of his promotion to Chief Revenue Officer in April 2024. The other named executive officers received a merit increase of between 3% to 4% for 2024.

Compensation Discussion and Analysis

Annual Cash Incentive Awards

Our named executive officers participated in our 2024 annual cash incentive program under the 2024 Management Plan.

At the end of the fiscal year, during its last meeting of the fiscal year, the Committee reviews proposed performance measures for the following year's annual incentive plan. Then, at the beginning of each fiscal year, during its first meetings of the fiscal year (in January and/or February), the Committee approves a target award expressed as a percentage of base salary for each executive officer (other than the CEO, as that amount is approved by the independent members of the Company's Board) and specific performance measures, weightings, goals and performance adjustment events, if any. For each performance measure, a threshold, target and maximum level of performance is defined, which have corresponding payout percentages. The target level set for each performance measure is aligned with our annual financial plan. Following the end of the fiscal year, at the Committee's first meeting of the fiscal year, management presents a summary of, and the Committee certifies, actual performance as compared to the pre-established goals together with a corresponding payout percentage, which is expressed as a percent of target performance.

When determining the target award for each executive officer, the Committee (or the independent members of the Board for the CEO annual cash incentive) reviews competitive market compensation data for target total cash compensation (sum of base salary and target annual cash incentive) for the position in which such executive officer serves. In addition to considering the market data, the Committee also considers scope, complexity, experience, and tenure of the executive officer’s position, individual contributions and performance, CEO recommendation for executives, other than the CEO, as well as internal pay equity. Actual awards can range from 0% (if threshold levels of performance are not met) to 200% of the target award (if maximum levels of performance are met for all of the performance measures, and subject to an increase for the individual modifier described below) and the resulting competitiveness of total cash compensation will also vary accordingly. As a result, and without considering any potential use of the individual modifier described below, payouts of the annual cash incentive compensation to named executive officers cannot exceed 200% of their target opportunity.

The 2024 target annual incentive opportunity for each of our named executive officers remained unchanged from 2023 levels as those targets where appropriate for the scope of their roles and aligned with the competitive market trends provided by the Compensation Consultantand reviewed by the Committee.

(1)In 2024, Mr. Petley participated in the 2024 Sales Incentive Plan, with a target award opportunity equal to 100% of his base salary. In connection with his promotion to Chief Revenue Officer in April 2024, he ceased to participate in the 2024 Sales Incentive Plan and commenced participation in the 2024 Management Plan, with a target annual incentive opportunity equal to 100% of his base salary. The terms of the 2024 Sales Incentive Plan are described below.

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Compensation Discussion and Analysis

In designing the 2024 Management Plan, our Compensation Consultant performed a comparative review of our annual incentive compensation program. As part of that review, the Compensation Consultant advised the Committee that Teradata’s annual incentive compensation practices were aligned with common market practices within the approved peer group, particularly with regard to the types and number of performance measures used, the payout levels as a percent of the target level of achievement set for each of the threshold and maximum levels of achievement, and the payout percentage for each of the threshold, target and maximum levels of achievement.

Total payouts under the 2024 Management Plan are based primarily on our achievement of three key financial measures: Total ARR Growth, Public Cloud ARR Growth, and Non-GAAP Operating Margin.

(1)Non-GAAP Operating Margin is a non-GAAP financial measure. Please refer to Appendix B of this proxy statement for definitions and reconciliations to the GAAP financial measures.

The Public Cloud ARR Growth metric is designed to focus on our total ARR growth in the cloud during 2024, including by migrations of workloads from existing customers from on-premises to the cloud, expansions of existing workloads in the cloud, and the growth of new customers in the cloud. Of course, Total ARR Growth continues to be an important metric for us as we continue to support a hybrid model for our customers that allows them to use Teradata Vantage across a multi-cloud environment, in hybrid environments, and on-premises. As we have done in the past, the 2024 Management Plan includes both a Public Cloud ARR Growth metric and a Total ARR Growth metric to focus our executives' attention on attaining financial performance for each of these strategically important measures.

The following chart sets forth the Total ARR Growth, Public Cloud ARR Growth, and Non-GAAP Operating Margin targets under the 2024 Management Plan, our performance for such targets, and the achievement payout level by target and in total. The overall financial achievement resulted in an 80% payout, which was less than the 95% payout achieved in 2023, as a result of the challenging financial performance we achieved in 2024. The 2024 targets for Total ARR Growth, Public Cloud ARR Growth, and Non-GAAP Operating Margin were set above 2023 actual results.

Compensation Discussion and Analysis

(1)No payout can be earned for Total ARR Growth or Public Cloud ARR Growth unless the Company achieved the threshold level of Non-GAAP Operating Margin. In addition, in order to fund each of Total ARR Growth and Public Cloud ARR Growth over target at a faster rate up to the maximum payout level, Non-GAAP Operating Margin must meet the target achievement. If the Non-GAAP Operating Margin target is not met, then Total ARR Growth and Public Cloud ARR Growth over target is calculated at a linear rate until the maximum payout is achieved.

(2)Non-GAAP Operating Margin is a non-GAAP financial measure. Please refer to Appendix B of this proxy statement for definitions and reconciliations to the GAAP financial measures.

(3)When establishing the performance objectives under the 2024 Management Plan, the Committee approved specific and typical adjustments, consistent with past practice, to actual performance for each performance measure, such that actual results would be increased or decreased, as applicable, for foreign exchange rate fluctuations, any significant acquisition or divestiture, and/or changes in applicable federal accounting standards. The adjustment for foreign currency for Non-GAAP Operating Margin is reflected in the reconciliation to the GAAP financial measure in Appendix B.

(4)In 2023, the 2023 Non-GAAP Operating Margin actual amount of $332 million was adjusted by $12 million to provide for the typical foreign currency pre-approved adjustment event included as part of the 2023 Management Plan, which resulted in the amount used for purposes of determining the payout under the 2023 Management Plan for Non-GAAP Operating Margin of $344 million. The 2024 target of $337 million for Non-GAAP Operating Margin was set above the 2023 actual results of $332 million for Non-GAAP Operating Margin, without regard to the adjustment made for the foreign currency impact.

Payouts of Annual Cash Incentive Compensation

2024 Management Plan

Each named executive officer was eligible to receive a payout under our 2024 Management Plan. Based on Company performance relative to the financial measures described above, the overall payout achieved was equal to 80% of his or her target annual incentive opportunity.

In addition, our 2024 Management Plan design provides the Committee an individual performance modifier that can adjust the company performance factor positively or negatively up to 25%. The plan design provides this feature to align our pay for performance culture and reward extraordinary contributions that may be made by individuals during the year. In evaluating performance and whether to use this permitted adjustment, the Committee considers contributions that are above and beyond what could have been planned or anticipated when the financial plan was established, in addition to where our named executive officers may have fallen short in their contributions during the year. The Committee did not approve any individual specific adjustments for 2024. As a result, each named executive officer received a payout of 80% of his or her target annual incentive opportunity. Mr. Petley’s award under the 2024 Management Plan was pro-rated based on his promotion date of April 5, 2024 consistent with the Company's policies.

The 2024 Management Plan payment amounts are set forth in the Non-Equity Incentive Plan Compensation column of the Summary Compensation Table of this proxy statement. For more information on the 2024 Management Plan for our named executive officers, please refer to the “Grants of Plan-Based Awards” section of this proxy statement.

2024 Sales Incentive Plan

Prior to his promotion to Chief Revenue Officer on April 5, 2024, Mr. Petley participated in the 2024 Sales Incentive Plan, with a target award opportunity equal to 100% of his base salary. The 2024 Sales Incentive Plan provides monthly payouts based on the extent to which certain annual financial quotas are achieved, including with respect to ARR growth (cloud

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Compensation Discussion and Analysis

and non-cloud), contribution margin (cloud and non-cloud), booking of various services and attainment of certain sales quotas. The 2024 Sales Incentive Plan does not apply to executive officers of the Company, and therefore the Committee did not establish quotas under that plan for Mr. Petley. Based on performance results through April 4, 2024, Mr. Petley was entitled to an aggregate payout of $49,025 (£39,017) under the 2024 Sales Incentive Plan. Effective as of April 5, 2024, Mr. Petley ceased to participate in the 2024 Sales Incentive Plan and commenced participation in the 2024 Management Plan, as described above.

Long-Term Incentives (Equity Awards)

The total direct compensation levels for our named executive officers are heavily weighted to long-term incentive opportunities, which vest over a period of three years. This structure is intended to align executives’ interests with those of our stockholders, enhance our retention incentives, and focus our executives on delivering sustainable performance over the longer-term. The design of this program reflects the core performance metrics and incentive structure the Committee believes is necessary to drive our long-term success. The following chart includes a high-level summary of the elements of the performance-based and serviced-based RSU equity vehicles and performance criteria, as applicable, for our long-term incentive program since 2023.

Long-Term Equity Program Evolution

Compensation Discussion and Analysis

2024 Business Challenges and Compensation Plan Design Changes for 2025

2024 was a challenging year for Teradata, primarily due to elongated deal closing cycles and a shift in customer buying patterns. With the rapid proliferation of AI and information security concerns, many companies are reevaluating their data and analytics platform needs – contributing to rapid shifts from cloud-only strategies to hybrid platforms or remaining on-premises as well as pursuing smaller, incremental transactions than has historically occurred. Teradata is well positioned to deliver the platform that our customers ultimately choose since we are able to offer cloud, hybrid, and on-premises platforms, which we believe is a competitive differentiator for us. These rapidly changing market factors and changes in customer strategies, which were outside the control of management, contributed to our inability to accurately forecast the level of Public Cloud ARR and Total ARR growth, not only for 2024, but going forward. Teradata did experience 18% CC growth in the cloud during 2024; however, this growth was lower than what we had initially anticipated at the beginning of the year. To address these quickly changing market dynamics, the Company took the following actions during 2024:

•on August 5, 2024, the Company announced that it had (i) significantly reduced its 2024 financial guidance, including for Total ARR, Public Cloud ARR, and Free Cash Flow and (ii) realigned its sales function and initiated global restructuring and cost reduction actions to optimize operations, reduce non-revenue generating expenses, and drive efficiencies for long-term growth and profitability (the "Second Quarter Actions"); and

•on November 4, 2024, the Company announced that it had again reduced its 2024 financial guidance for Public Cloud ARR (the "Third Quarter Actions" and together with the Second Quarter Actions, the "2024 Actions").

As a result of the 2024 Actions, the Company's financial results for 2024, and as described in more detail below, the Board determined it was necessary to revise the Company's long-term financial plan and the Committee determined that various changes were needed for our 2023 – 2025 LTIP and 2024 – 2026 LTIP and in the plan design for the 2025 – 2027 LTIP in order to:

•incorporate a Rule of 40 performance measure (a metric used by software companies to assess company health and is defined as total revenue growth plus EBITDA margin) into the 2025 – 2027 LTIP to address stockholder feedback to include a Rule of 40 measure in our compensation plans and reflect the importance of that financial metric for software companies;

•incentivize management to continue to achieve financial growth for the Company and remain aligned with stockholder interests;

•enhance the alignment of our executive compensation program design with our peer group based on market data provided by the Compensation Consultant;

•enhance retention incentives for high-performing executive and senior leadership at this critical time in our business transformation;

•re-align performance goals for Total ARR, Cloud ARR, and Free Cash Flow performance measures in the 2023 – 2025 LTIP and 2024 – 2026 LTIP to address the significant challenges we faced during 2024, enhance our ability to retain our high performing executives and senior leadership that are critical to the future growth of Teradata in a highly competitive talent market, and continue to align the long-term incentive plans with the Company's updated long-term financial plan to ensure executives are incentivized to drive performance; and

•reduce the maximum earning opportunity from 200% to 150% for the 2023 – 2025 LITP and the 2024 – 2026 LTIP in connection with the adjustments made to the performance goals to mitigate the ability of executives to receive a substantial benefit from the adjustments.

The changes to our 2023 – 2025 LTIP and 2024 – 2026 LTIP and the executive compensation plan design for the 2025 – 2027 LTIP are described below. We did not make any changes to the performance goals for the 2024 Management Plan or 2022 – 2024 LTIP as a result of the 2024 Actions.

Adjustment to Performance Goals: 2023 – 2025 LTIP and 2024 – 2026 LTIP

Each year the Board reviews our long-term financial plan which forms the basis for setting goals under our long-term incentive plan as the target levels for the performance measures in our long-term incentive plans are aligned with our long-term financial plan. Due to the 2024 Actions and challenging financial performance during 2024 described above, the Board determined that the Company's long-term financial plan should be revised. In addition, the long-term incentive plans were no longer aligned to the goals of the business, the 2024 annual cash incentive plan was trending below threshold, and each of the 2023 – 2025 LTIP and 2024 – 2026 LTIP were trending near or below threshold. Essentially,

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Compensation Discussion and Analysis

the long-term incentive plans were at risk of no longer performing its important function of incentivizing our executive and senior leaders to drive performance as the levels of performance set in the 2023 – 2025 LTIP and 2024 – 2026 LTIP were no longer realistic goals for the Company. Further, because a significant portion of the compensation provided to our executive and senior leaders is tied to the performance under the long-term incentive plan, as each of the 2023 – 2025 LTIP and 2024 – 2026 LTIP were both projected to achieve performance near or below threshold, they were no longer serving as a retention tool for our top talent in a highly competitive market.

The Committee recognized the seriousness of the Company's long-term incentive compensation situation, particularly given the Company is at a critical stage in its cloud transformation and for being able to capture the opportunity provided by the rapid proliferation of AI. The Committee determined that not taking any additional action was not a prudent option or in the Company's or its stockholder's best interests. As described more below, the Compensation Committee determined it was necessary to re-align the performance goals in the 2023 – 2025 LTIP and 2024 – 2026 LTIP to ensure the long-term incentive plans were able to motivate and retain the Company’s executive and senior leadership team talent at this critical stage in the Company’s cloud transformation, to capture the opportunity provided by the rapid proliferation of AI, and to drive the achievement of the revised financial and operational performance expectations.

The Compensation Committee engaged in discussions, including with the Compensation Consultant, to assess the situation and determine the best course of action. As part of these discussions, the Committee considered additional incentives that could be added in the form of cash and/or equity but determined that these actions would increase the cost and the level of dilution under the long-term incentive plan, which would be counter to stockholder interests. Given the highly competitive market we operate in for leadership talent with enterprise software, cloud, and AI experience, the Committee determined action had to be taken to preserve the pay for performance alignment of the long-term incentive with the long-term financial plan while motivating and retaining the executive and senior leadership team.

The various approaches considered by the Compensation Committee, in consultation with the Compensation Consultant and the Board, were as follows:

•maintaining the 2023 – 2025 LTIP and 2024 – 2026 LTIP without any changes;

•adjusting the performance measures in the 2023 – 2025 LTIP and 2024 – 2026 LTIP to align with the revised long-term financial plan;

•issuing retention grants to specific executive and senior leaders considered critical to the Company's growth and innovation priorities;

•increasing the value of the long-term incentive granted in future years; and

•supplementing with cash compensation.

Ultimately, the Committee determined that in order to align to our pay for performance philosophy and to provide proper incentive to achieve the Company's revised long-term financial plan the best course was to adjust the performance goals in the 2023 – 2025 LTIP and the 2024 – 2026 LTIP so that the target level of such plans aligned with the revised expectations in the Company's revised long-term financial plan. The Committee also determined that adjusting the performance goals was a better option for our stockholders as the other options considered were more costly and dilutive to our stockholders. As a result, the Committee determined that it was a prudent business decision to reset the target performance goals under the 2023 – 2025 LTIP and the 2024 – 2026 LTIP to align with the Company's revised long-term financial plan. In addition, the Committee also determined that it was appropriate to reduce the maximum payout level under both the 2023 – 2025 LTIP and 2024 – 2026 LTIP from 200% to 150% in conjunction with the adjustments to the performance goals to ensure that opportunity for our executive and senior leadership to benefit from the adjusted performance goals was necessarily limited. With the modifications to the target levels in the 2023 – 2025 LTIP and the 2024 – 2026 LTIP, the Compensation Committee believed that with ongoing strong execution, the long-term incentive plans would have a higher probability of achieving the target levels under each of the 2023 – 2025 LTIP and 2024 – 2026 LTIP with strong, consistent execution. The potential payouts with respect to the modified performance goals for the 2023 – 2025 LTIP and 2024 – 2026 LTIP are not guaranteed and remain subject to our future financial performance.

The Committee understood that making any adjustments or taking any other compensation actions would be viewed negatively by proxy advisory firms and potentially by our stockholders. However, given the circumstances facing the Company, the Committee believed that by making these adjustments, as opposed to taking other compensation actions or taking no action all, it was taking the most prudent path to support the Company's continued growth, innovation, and transformation by enhancing the Company's ability to retain its key high-performing executives and senior leaders at a critical time for the Company, while also aligning incentive compensation with the Company's evolving financial

Compensation Discussion and Analysis

performance expectations. The Committee takes its commitment to paying for performance seriously and believed that it ultimately pursued the best option to facilitate and continue the Company's pay-for-performance philosophy.

2025 Compensation Plan Design Changes: 2025 – 2027 LTIP

Historically, the Committee allocated 60% of the long-term incentive opportunity to performance-based RSUs and 40% to service-based RSUs. For our executive compensation program beginning with 2025, the Committee changed the allocation for the 2025 – 2027 LTIP so that the performance-based portion and the service-based portion are equally weighted to align with market data provided to the Committee by the Compensation Consultant, which reflected a more balanced approach among the peer group for providing awards that recognize service to the Company and financial performance, balance our retention and performance objectives, and have a long-term incentive plan that would be viewed positively in the highly competitive technology talent market. All of these factors were considered by the Committee when adopting the long-term incentive plan design for 2025. In addition, the Committee approved the following design for the 2025 – 2027 LTIP as the Committee continues to evolve our long-term incentive plan performance measures to align with stockholder performance expectations for the Company:

•50% of the award payout is based on the extent to which we achieve a 2025 Total ARR target established at the beginning of 2025, with any shares earned vesting in three equal installments;

•25% of the award payout is based on the achievement of certain Rule of 40 performance goals for each of 2025, 2026 and 2027 with the Rule of 40 performance goals for each of 2025, 2026, and 2027 established at the beginning of 2025, with any shares earned vesting after the 3-year performance period ending on December 31, 2027; and

•25% of the award payout is based on the achievement of certain Free Cash Flow performance goals for each of 2025, 2026 and 2027 with the Free Cash Flow performance goals for each of 2025, 2026, and 2027 established at the beginning of 2025, with any shares earned vesting after the 3-year performance period ending on December 31, 2027.

As noted in the "Investor and Stockholder Outreach" and the "2024 Financial Highlights and Key Compensation Decisions" sections, we previewed the changes to the 2025 compensation plan design with stockholders during our 2025 stockholder engagement activities and received support for such changes.

2024 – 2026 Performance-Based and Service-Based RSU Grants

With regard to the executive compensation program that was granted during 2024, our Compensation Consultant performed a benchmark review of our long-term incentive compensation program. As part of that review, the Compensation Consultant advised the Committee that Teradata’s long-term incentive compensation practices were aligned with the peer companies with regard to the types and number of performance measures used, the payout levels as a percent of the target level of achievement set for each of the threshold and maximum levels of achievement, and the payout percentage for each of the threshold, target and maximum levels of achievement, and performance period. In addition, the data provided to the Committee reflected that the equity mix included as part of the Company's long-term incentive plan, with 60% allocated to the performance-based restricted stock units, was a higher percentage than what peer companies provided, however, the Committee maintained the 60% performance-based allocation for the 2024 – 2026 LTIP. In determining the size of the long-term incentive grants, the Committee considered market data, the scope and complexity of the executive’s position, experience, tenure, internal pay comparisons, function, division, CEO recommendations for executive officers, other than the CEO, and individual performance and historical targeted grant levels. In 2024, the Committee made long-term incentive grants that consisted of a grant of 2024 – 2026 LTIP and 3-year service-based RSUs (“Service RSUs”) to our named executive officers. The target opportunity for the aggregate of the 2024 – 2026 LTIP and Service RSUs for each named executive officer was as follows:

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Compensation Discussion and Analysis

(1)In connection with Mr. Petley's promotion in April 2024, the Committee approved an additional target award of $1,033,000 ("Promotion Grant"), which is consistent with his expanded role and additional responsibilities and is included in the amount set forth in the table above. In addition, the total for Mr. Petley reflects the long-term incentive opportunity granted to Mr. Petley during the annual award cycle.

The long-term incentive opportunities for Mses. Bramley and Ashton and Mr. Hutchinson were increased by $500,000, $300,000, and $1,000,000, respectively, to recognize the increasingly complex and enterprise-wide impact of each of their roles, including the importance of their roles for facilitating the Company's transformation. In addition, for Ms. Bramley, the increase recognized the addition of the Company's Strategy team to her area of responsibility, and for Mr. Hutchinson, the increase was also made to better align his long-term incentive opportunity to compensation market trends provided by the Compensation Consultant for a Chief Customer Officer with an enterprise-wide and strategically critical role. The long-term equity incentive for Mr. Petley was increased to recognize his promotion in April 2024 into an executive officer position and to recognize that his position has an enterprise-wide scope that is critical to the Company's achievement of its financial objectives and strategy. The long-term incentive opportunity for Mr. McMillan remained consistent with the 2023 level as the Board viewed this level of compensation as appropriate for the scope of his role and the performance of the Company. Overall, the long-term incentive opportunities for the named executive officers align with the competitive trends as reviewed by the Committee based on the Compensation Consultant's independent analysis as part Committee's overview of competitive trends for talent.

The 2024 – 2026 LTIP will be earned based on the extent to which Teradata achieves three financial goals during the 3-year performance period ending December 31, 2026. The Service RSUs vest in equal annual installments over three years and are designed to provide a meaningful retention incentive for our executives in line with competitive market practices.

Compensation Discussion and Analysis

The 2026 Total ARR and the 2026 Total Public Cloud ARR performance measures are designed to continue to encourage the increase in the cloud portion of Total ARR over the three-year performance period, but also ensure we are focusing on providing the platform that the customer requires, whether on-premises, hybrid, or cloud and, as such, we have an enhanced focus on Total ARR growth over the long-term. Having 2026 Total ARR and 2026 Total Public Cloud ARR in the 2024 – 2026 LTIP, with 2026 Total ARR having a higher weighting than 2026 Total Public Cloud ARR, helps us focus on our mix of revenue and the growth of the public cloud portion of our overall business over the 3-year performance period, but not to the detriment of Total ARR, particularly as the size of our cloud business continues to grow.

The Committee established threshold, target and maximum goals for each performance measure for the 2024 – 2026 LTIP at the beginning of our 2024 fiscal year. As noted above, the Committee approved adjustments to the 2026 Total ARR, 2026 Public Cloud ARR, and Free Cash Flow performance goals that are included in the 2024 – 2026 LTIP. The specific performance goals for the three-year award period are maintained by us as proprietary and confidential. The Committee believes that disclosure of these specific performance goals and business strategy would represent competitive harm to us as such corporate goals and results are not publicly disclosed and are competitively sensitive. The Committee believes the attainment of the re-aligned target performance levels, while uncertain, could be reasonably achieved with strong execution by the Teradata team of our revised long-term financial plan. Threshold goals represent the minimum level of performance necessary for there to be a payout for that performance measure and the Committee believes the re-aligned threshold goals are rigorous, but likely to be achieved. Maximum goals represent the performances at which payouts are 150% of the target award and reinforces stretch achievements. Even if actual results exceed the maximum goals, the payouts are capped at 150% of the target award (which the Committee reduced from 200% in connection with the adjustment of the performance goals in the 2024 – 2026 LTIP) to ensure that the adjustments to the performance goals in the 2024 – 2026 LTIP would did not result in a substantial benefit to the Company's executive officers and to mitigate any incentive to encourage excessive risk taking across Teradata. Maximum goals represent levels of performance at which the Committee determined a payout of 150% of target would be appropriate. The Committee believes that the re-aligned maximum goals established are more aggressive goals. Consistent with the disclosure in this proxy statement, we expect to provide disclosure of the actual goals and performance attained for the 2024 – 2026 LTIP in the proxy statement for our 2027 Annual Meeting.

In addition to approving performance measures, goals and weightings, the Committee also established specific and typical corporate adjustment events that are allowed under the Teradata 2023 Stock Incentive Plan (the “2023 SIP”) and that are consistent with past practice for determining payouts under the 2024 – 2026 LTIP. The adjustment events include foreign exchange rate fluctuations, any significant acquisition or divestiture, and/or changes in applicable federal accounting standards.

Payout of Performance-Based RSUs for the 2022 – 2024 Performance Period (“2022 – 2024 LTIP”)

As part of our 2022 – 2024 LTIP, we granted performance-based RSUs to our named executive officers.

•60% of the award was subject to achievement of specified annual levels of our Total Cloud ARR, the targets of which were set on an annual basis and the payout of which was based on the average cumulative performance relative to the annual targets over the 3-year period. Total Cloud ARR was defined as the annual cloud ARR contract value for all active and contractually binding cloud term-based contracts at the end of a period and does not include ARR related to private cloud.

•40% of the award was based on Free Cash Flow as a percent of the Company’s total reported revenue over the 3-year period. Free Cash Flow was defined as cash provided/used by operating activities, less capital expenditures for property and equipment, and additions to capitalized software over the cumulative 3-year period as reported in the Company’s earnings release at the end of each year, December 31, 2022, December 21, 2023, and December 31, 2024.

As noted above, the 2022– 2024 LTIP was not adjusted for the 2024 Actions.

The performance goals and targets for the 2022 – 2024 LTIP, along with actual results for each year, are as follows:

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Compensation Discussion and Analysis

(1)Free Cash Flow is a non-GAAP financial measure. Please refer to Appendix B of this proxy statement for definitions and reconciliations to the GAAP financial measures.

(2)As previously disclosed in the 2023 Proxy Statement, in early 2023, in order to comply with sanctions, tariffs, and other challenges imposed on business conducted in Russia, Belarus, and China that were outside the control of management, Teradata ceased business operations in those countries (the “Russia and China Action”). Due to the unexpected and extraordinary nature of the Russia and China Action, its impact on Free Cash Flow, and because the impact was outside of management’s control, the Committee determined in early 2023 that it was appropriate to adjust the Free Cash Flow performance measures in the 2022 – 2024 LTIP by the total impact on our business as a result of the Russia and China Action. As a result of these actions, the Free Cash Flow target was reduced by $68 million, with corresponding reductions to the threshold and maximum targets as well and such reduction is reflected in the amounts in the table above.

(3)When establishing the performance objectives under the 2022-2024 LTIP, the Committee approved adjustments to actual performance for each performance measure, such that actual results would be increased or decreased, as applicable, by the product of the impact of foreign exchange rates on revenue from pre-established plan rate levels.

Based on the actual results for the 2022 – 2024 performance period relative to the goals outlined above, the weighted average payout percentage for each of the named executive officers was 72%.