Workday Inc

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Elements of Our Executive Compensation Program

The compensation program for our NEOs for fiscal 2024 consisted of a mix of variable and fixed compensation.

The key elements of our executive compensation program include base salary, cash bonuses (other than for Mr. Bhusri), equity-based awards, and health and welfare programs. Except for target cash bonuses, which typically are expressed as a pre-determined percentage of each participating executive officer’s base salary, we do not use specific formulas or weightings in determining the allocation of the various pay elements. Rather, each executive officer’s compensation has been designed to provide a combination of pay elements that are tied to achievement of our short-term and long-term financial and operational objectives. In particular, we believe our use of RSU awards, which generally vest over four years, promotes a culture of long-term value creation, while cash bonuses payable based upon semi-annual performance drive achievement of near-term objectives.

The initial compensation arrangements with our executive officers, other than Mr. Bhusri, were the result of arm’s-length negotiations between us and each individual executive officer at the time of his or her hire, appointment, or promotion. In fiscal 2024, the Compensation Committee and, with respect to Mr. Bhusri, the independent members of our Board of Directors, conducted its regular annual review of our executive compensation program, including an evaluation of competitive market practices; conducted annual performance reviews for our executive officers; reviewed our executive officers’ base salaries and target annual bonus opportunities and adjusted where appropriate; and made annual equity awards. Following deliberation and consideration of the factors discussed below, our Board and Compensation Committee determined that equity awards should continue to be a significant portion of executive compensation and made increases to cash compensation to some executives based on market positioning.

In developing the compensation package for Mr. Eschenbach at the time of his appointment in December 2022, the independent members of the Compensation Committee and Board gave careful consideration to the compensation structure that was reasonable and necessary to incentivize Mr. Eschenbach to join Workday and assume the role as our Co-Chief Executive Officer, and believed that his compensation should drive achievement of our strategic objectives and be principally tied to sustained, long-term stockholder value creation. The compensation package determined by the Compensation Committee at the time of Mr. Eschenbach’s appointment towards the end of fiscal 2023 was intended to cover the period through the end of fiscal 2024. Therefore, pursuant to the terms of his employment agreement, for fiscal 2024, Mr. Eschenbach’s base salary remained at $1,000,000, his target bonus remained at 150%, and he did not receive any additional equity awards.

Our Compensation Committee, with the assistance of Semler Brossy, also reviewed and determined the executive compensation applicable to Mr. Rowe in connection with his appointment as Chief Financial Officer in June 2023, as discussed below. In developing the compensation package for Mr. Rowe, the Compensation Committee gave careful consideration to the compensation that was reasonable and necessary to incentivize Mr. Rowe to accept the role of our Chief Financial Officer.

The following charts show the fiscal 2024 total direct compensation mix for our fiscal 2024 Co-Chief Executive Officers, Messrs. Bhusri and Eschenbach, and the average fiscal 2024 total direct compensation mix for our other NEOs. Total direct compensation for fiscal 2024 for Mr. Bhusri is the sum of his (i) annual base salary and (ii) annual RSU awards (based on the grant date fair value) and for our other NEOs is the sum of (i) annual base salary, (ii) annual cash bonus target, and (iii) annual RSU awards (based on the grant date fair value). For Mr. Eschenbach, total direct compensation

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for fiscal 2024 is the sum of his (i) annual base salary and (ii) annual cash bonus target, as per the terms of his employment agreement, he did not receive any additional RSU awards in fiscal 2024.

Base Salary

We offer base salaries that are intended to provide a stable level of fixed compensation for our executive officers, including our NEOs, for performance of their day-to-day responsibilities. Base salaries for our executive officers are reviewed annually to determine whether an adjustment is warranted or required, and may be reviewed intra-year as well, such as in connection with a promotion.

Mr. Rowe was appointed our Chief Financial Officer effective June 12, 2023. Mr. Rowe brings significant financial and leadership experience to the role, most recently as Chief Financial Officer of VMware, Inc. In developing the compensation package for Mr. Rowe, the Compensation Committee consulted with Semler Brossy and gave careful consideration to the compensation that was reasonable and necessary to incentivize Mr. Rowe to accept the role of our Chief Financial Officer and recommended that the Board approve an annual base salary of $700,000 for Mr. Rowe.

In connection with our annual compensation cycle during fiscal 2024, the Compensation Committee reviewed the base salaries of our then-current NEOs, other than Mr. Bhusri, whose base salary has been $65,000 since January 2017, and Mr. Eschenbach, whose base salary was set at $1,000,000 at the time of his appointment as Co-Chief Executive Officer at the end of fiscal 2023. After considering a compensation analysis performed by Semler Brossy and the other factors described above, the Compensation Committee determined to make annual base salary increases for two of our NEOs to more closely align to market pay levels. The annual base salaries for each of our NEOs during fiscal 2023 and fiscal 2024 are set forth in the table below:

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(1)

Messrs. Chakraborty and Rowe were not NEOs in fiscal 2023.

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Cash Bonuses

In response to stockholder feedback on increased disclosure regarding the performance metrics we use or may use in our cash bonus program, our Compensation Committee adopted our Omnibus Bonus Plan in early fiscal 2024. Our Omnibus Bonus Plan is designed to motivate and reward eligible employees for their contributions toward the achievement of certain of Workday’s performance goals. Our Compensation Committee established the annual cash bonus plan for fiscal 2024 under, and subject to the terms and conditions of, the Omnibus Bonus Plan.

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During fiscal 2024, our executive officers, other than Mr. Bhusri, participated in our cash bonus plan that was available to all employees not covered under an existing cash incentive plan. Mr. Bhusri has historically not participated in our cash bonus plan because his large ownership stake in Workday adequately incentivizes him to achieve short-term and long-term performance goals. Because of our emphasis on equity-based compensation, annual bonuses are not intended to constitute a material amount of the total compensation for our NEOs. Our fiscal 2024 cash bonus plan was designed to drive revenue growth, encourage accountability, incentivize execution of short-term priorities tied to long-term strategy, and reward our executives and employees upon the achievement of certain objectives.

As depicted below, our cash bonus plan is measured and calculated based on the achievement of pre-set company performance goals and individual performance achievement. For fiscal 2024, company performance was evaluated based on the following goals as set out in our fiscal 2024 cash bonus plan: 80% of the funding of the cash bonus plan was based on a financial performance goal tied to our total fiscal 2024 subscription revenue and 20% of the funding of the cash bonus plan was driven by a non-financial performance goal based on customer satisfaction.

Financial Target: Subscription Revenue

Subscription revenue primarily consist of fees that give our customers access to our cloud applications, which include related customer support, and is a strong indicator of the growth of our business. We selected subscription revenue, adjusted for the impact of foreign currency rate fluctuations and certain acquisitions, as applicable (“adjusted subscription revenue”), as our company financial performance goal to promote revenue growth achievement, which will in turn drive our long-term success and enhance stockholder value, and because subscription revenue is a key metric used by investors in evaluating our financial performance. (See Appendix B for a reconciliation of GAAP subscription revenue to adjusted subscription revenue.) For fiscal 2024, the target for 100% attainment of the company financial performance goal was $6.625 billion in adjusted subscription revenue, with a minimum threshold level of $6.470 billion in adjusted subscription revenue. Full-year funding of the financial portion of the bonus plan for attainment above the minimum threshold but below 100% attainment was based on the level of achievement of adjusted subscription revenue falling within banded achievement levels and, pursuant to the terms of our cash bonus plan, attainment is set at the next subsequent payout level. Full-year funding based on the company financial performance goal was capped at 125% of the target funding.

Non-Financial Target: Customer Satisfaction

Our annual customer satisfaction score was based on the responses received from a survey of the named support contacts at Workday’s HCM and financials customers. Customer service has always been one of our core values and the customer satisfaction score is a strong indicator of Workday’s health and customer retention and expansion. We selected customer satisfaction score as our company non-financial performance goal to drive execution of our strategic initiatives that require a focused and consistent effort by our employees and NEOs throughout the fiscal year to serve our customers and potential customers. For fiscal 2024, the customer satisfaction score target was a 95% satisfaction rating based on a survey conducted by Workday of named support contacts at our HCM and financials customers. If the customer satisfaction score target is not met or exceeded, this portion of the cash bonus plan is not funded.

Individual Performance

Individual performance factors may increase or decrease a participant’s bonus payment. The NEOs’ individual performance objectives assessed by our Compensation Committee for payment under the cash bonus plan may include: (1) performance relative to their individual and organizational goals; (2) contributions to achievement of corporate goals; (3) contributions to achievement of financial goals; and (4) leadership contributions. This assessment approach allows for flexibility and innovation to address competitive dynamics and the evolving economic landscape, which aligns with the key elements of our compensation philosophy.

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Achievement and Payout

First Half Payout

Eligible participants, including executives, who participate in the cash bonus plan were eligible for semi-annual payments in fiscal 2024. If Workday’s financial performance as of the end of the company’s second fiscal quarter indicated that the company expected to meet or exceed the target level of financial performance on an annualized basis, 50% of the financial portion of the bonus plan, which is weighted 80% of the total bonus plan funding, would be funded. The portion of the bonus pool related to the non-financial metric is not eligible to be funded for the first half payment and individual performance for the first half payment can be achieved at 0%, 50%, or 100%.

Following the conclusion of the company’s second fiscal quarter of fiscal 2024, it was determined that based on the company’s forecasted adjusted subscription revenue as of the end of the second fiscal quarter, the company was on track to meet or exceed the target level of financial performance on an annualized basis. The Compensation Committee determined to set each NEO’s individual performance achievement level at 100%, which, together with the 50% funding of the financial portion of the bonus plan, which is weighted 80% of the total bonus plan funding, resulted in a first half payout of 40% of each NEO’s respective annual target bonus for fiscal 2024.

Full Year Payout

Following the conclusion of fiscal 2024, the Compensation Committee reviewed the level of achievement of each company performance goal against the pre-established targets. In fiscal 2024, Workday’s full year adjusted subscription revenue of $6.609 billion fell within the target band of subscription revenue of $6.608M — $6.625M which resulted in the financial portion of the cash bonus plan being funded at target, or 100%. (See Appendix B for a reconciliation of GAAP subscription revenue to adjusted subscription revenue.)

Additionally, we achieved our customer satisfaction goal for fiscal 2024, which resulted in the full funding of that portion of the cash bonus plan. Based on these achievements, the total bonus pool for NEOs and all other eligible employees in fiscal 2024 was funded at 100% of target.

For full year fiscal 2024, the Compensation Committee determined that given the collective performance of the NEOs in driving the strong financial and operational results of the company, the cash bonuses paid to the NEOs were determined based on the achievement levels of the company’s performance goals, which resulted in an overall payout of 100% of each NEO’s respective annual targets for fiscal 2024.

The following table shows the calculation of the individual cash bonuses paid to each NEO based on the formulas set forth above:

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(1)

Inclusive of first half payout of the fiscal 2024 cash bonus plan.

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(2)

Mr. Rowe’s amount is prorated based on his start date.

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(3)

Pursuant to the terms of her transition agreement, Ms. Larson was only eligible to receive a cash bonus with respect to the first half of fiscal 2024 with the individual performance factor deemed to be achieved at 100%.

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Chief Financial Officer Sign-On Bonus

In addition, to incentivize Mr. Rowe to accept the offer to become our Chief Financial Officer, the Board approved a one-time signing bonus of $2,000,000 (payable in two installments and subject to repayment if Mr. Rowe is terminated by Workday for cause or resigns his employment without good reason within a year of his start date).

Equity-Based Awards

The majority of the target total direct compensation of our executive officers, including our NEOs, is provided through equity awards. By having a significant percentage of our executive officers’ target total direct compensation payable in the form of equity that vests over a number of years and, thus, is subject to higher risk and longer vesting than cash compensation, our executive officers are motivated to take actions that focus on our long-term strategic and financial objectives, aligning their interests with those of our stockholders over the long term. We believe that RSUs with multi-year vesting are the most effective compensation vehicle for Workday at this time for a number of reasons, including that RSUs are a common incentive used by many talent competitors and the multi-year vesting schedule decreases risks associated with short-term decision making. Furthermore, the Compensation Committee and the Board believe that it is critical for Workday to promote strategic agility by allowing the business to pivot in response to changing market dynamics without consideration of the impact to short-term rewards, and RSUs with long-term vesting allow us to continue to incentivize and promote the innovative culture that drives our success.

We make annual equity grants to our current executive officers and may make mid-year awards on a case-by-case basis, such as in the event of a promotion. We also make equity grants to newly hired executive officers based on arm’s-length negotiations between us and the executive at the time of his or her hire, and taking into consideration what is reasonable and necessary to incentivize the executive to accept the position and drive alignment with us and our stockholders. The sizes of these annual awards are not determined based on a specific formula, but rather through the exercise of the Compensation Committee’s or Board’s judgment after considering, on an annual basis, the individual performance of each of the executive officers, including financial, operational, customer, strategic, product, and competitive factors; the recommendations of our Chief Executive Officer and Executive Chair (except with respect to their own awards); the appropriate level of compensation for the position given the scope of responsibility; the need to hire or retain an individual in a particular position; the current unvested equity held by such individuals and related vesting schedules; the level of each executive officer’s total target cash compensation (base salary plus target cash bonus opportunity); and the perceived retentive value of the proposed awards.

In addition, the Compensation Committee reviews and considers the equity awards granted to the executives at the companies in our compensation peer group, although it does not benchmark to specific percentiles against those companies. Based on its review, the Compensation Committee and the Board agreed that the fiscal 2024 equity grants described below, together with existing equity awards (if any), appropriately incentivized our executives and satisfied our retention goals for the near-term future, as well as motivated our executives to take actions in support of longer-term stockholder interests.

As noted above, our equity awards generally take the form of time-based RSU awards with a four-year vesting schedule. The number of RSUs awarded to each NEO is determined by dividing the value of RSUs approved by the Compensation Committee or the Board, as applicable, for each NEO by the trailing 20-day simple moving average stock price of Workday’s Class A common stock prior to the date of grant. The Compensation Committee believes that these RSU awards serve as an effective retention tool for our executive officers, because a substantial portion of unvested awards are generally forfeited if an executive officer voluntarily leaves the company before the awards have vested except as provided in the Executive Severance Policy (as defined below).

Bhusri RSU Award

With respect to Mr. Bhusri, the Compensation Committee and the Board considered his equity grant for fiscal 2024 independently relative to competitive peer chief executive officer pay. The Board approached Mr. Bhusri’s fiscal 2024 compensation with the desire to recognize his continued importance to Workday’s operations and technology platform and to encourage his continued service. The Board determined that an RSU grant with a target grant value of $30,000,000 was reflective of both his role and contribution as Co-Chief Executive Officer and his on-going leadership of our product and technology functions as Executive Chair. The value of this equity award reflects his impact on Workday and the competitive market for his role. The Board also considered that the equity awards that were granted to Mr. Bhusri

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in fiscal 2023 and 2022 were on the lower end of peer practices for chief executive officers, and that Mr. Bhusri was not granted any equity awards in fiscal 2021.

Rowe RSU Award

As discussed above, the Compensation Committee gave careful consideration to the compensation structure that was reasonable and necessary to incentivize Mr. Rowe to accept the role of Chief Financial Officer in the context of the considerable value of compensation forfeited by Mr. Rowe upon leaving his prior employer. To this end, the Compensation Committee approved a compensation package for Mr. Rowe which includes the cash compensation elements discussed above, and which allocates a substantial portion of Mr. Rowe’s compensation in the form of equity, to align his interests with our stockholders’ interests. In connection with his appointment, Mr. Rowe was granted two RSU awards with approximate target grant values of $18,000,000 each, with one award vesting over four years and the other vesting over two years. The Compensation Committee approved the award with a two-year vest to incentivize Mr. Rowe to join Workday and considering the near-term vesting of equity awards that were forfeited from Mr. Rowe’s previous employer. Additional details regarding Mr. Rowe’s compensation are also described elsewhere in this “Compensation Discussion and Analysis” section of this Proxy Statement.

The RSU awards granted to our NEOs in fiscal 2024 were as follows:

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(1)

Unless otherwise noted, the RSU awards for our NEOs are subject to vesting based on continued service through the applicable vesting dates, with one-fourth of such awards vesting one year from their vesting start date, after which the awards vest in equal installments over the next 12 quarters.

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(2)

The amounts reported are computed in accordance with ASC Topic 718 based on the closing price of our Class A common stock on the date of grant. These amounts do not reflect the actual economic value that may ultimately be realized by the NEOs.

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(3)

Mr. Eschenbach was not eligible for any stock award grants in fiscal 2024.

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(4)

In connection with Mr. Rowe’s appointment as Chief Financial Officer, he was granted (i) 82,568 RSUs which will vest as to one-fourth of the underlying shares one year from the vesting start date, after which the award vests in equal installments over the next 12 quarters and (ii) 82,568 RSUs which will vest over two years, with one-eighth of the underlying shares vesting three months from the vesting start date, after which the award vests in equal quarterly installments.

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(5)

Pursuant to the terms of her transition agreement, Ms. Larson agreed to forfeit the 51,258 RSUs she was granted in fiscal 2024 on May 24, 2023.

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Eschenbach Fiscal 2023 PVU Awards

Per the terms of Mr. Eschenbach’s new hire compensation package in connection with his appointment as Co-Chief Executive Officer in December 2022, Mr. Eschenbach received certain equity awards in fiscal 2023 and was not eligible for, and did not receive, any stock award grants in fiscal 2024. As disclosed in our 2023 proxy, in developing the compensation package for Mr. Eschenbach, the independent members of the Compensation Committee and the Board gave careful consideration to the compensation structure that was reasonable and necessary to incentivize Mr. Eschenbach to assume the role of our Co-Chief Executive Officer. Further, the independent members of the Compensation Committee and the Board believed that Mr. Eschenbach’s compensation should drive achievement of our strategic objectives and be principally tied to sustained, long-term stockholder value creation. Accordingly, the independent members of the Compensation Committee and the Board determined to allocate a substantial portion of Mr. Eschenbach’s compensation in the form of equity, comprised of time-based RSUs, the majority of which vest over four years, and market-based restricted stock units (“PVUs”) that are subject to achievement of three increasing and meaningful stock price targets during a five-year performance period and service-based vesting requirements. The PVU

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was designed to encourage leadership continuity and to reward sustained, meaningful increases in stockholder value, with vesting only occurring upon achievement of the stock price targets and continued service.

The PVU award is divided into three equal tranches (each, a “Tranche”) each of which requires achievement of a stock price target (each a “Price Hurdle”) during such Tranche’s specific performance period as summarized in the table below, as well as Mr. Eschenbach’s continued service on each time-based vesting date of the PVU award (the “Service Requirement’). Mr. Eschenbach satisfies the Service Requirement of the PVU award as to 1/60 th of each Tranche’s PVU shares on each of the monthly anniversaries of December 5, 2022, the award’s vesting start date, subject to his continued service on such dates (the “Time-Based Schedule”).

In fiscal 2024, the Price Hurdle for Tranche 1 was achieved on the measurement date of June 20, 2023, and the Price Hurdle for Tranche 2 was achieved on the measurement date of January 20, 2024. The portion of the Tranche 1 PVUs and Tranche 2 PVUs that had time-vested as of the applicable measurement date were released at such time, and the remaining portions of the Tranche 1 and Tranche 2 PVUs will continue to vest pursuant to the Time-Based Schedule, subject to Mr. Eschenbach’s continued service on each time-based vesting date. The performance period for Tranche 3 begins on December 28, 2024, and Tranche 3 will not be eligible for achievement until such date, even if the Price Hurdle is achieved on an earlier date. All shares are subject to a one-year holding period once vested and released.

The following table provides information regarding the achievement of the PVUs and outstanding PVUs held by Mr. Eschenbach as of January 31, 2024.

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(1)

Shares that have been released upon the achievement of the Price Hurdle and the time-based vesting requirement for the applicable tranche.

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(2)

Shares that have been earned upon the achievement of the Price Hurdle but remain subject to the time-based vesting requirement for the applicable tranche and so have not yet been released.

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(3)

The Price Hurdle was achieved for Tranche 2 on the measurement date of January 20, 2024. Pursuant to the terms of the PVU award, 23,618 Tranche 2 PVUs were released on February 5, 2024, after the end of our fiscal 2024.

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We believe that the achievement of the Price Hurdles and the increase in our stock price since Mr. Eschenbach assumed the role of Co-Chief Executive Officer demonstrates his strong leadership and precise execution of the company’s strategic initiatives. The following table provides information on the strong performance of our stock price as measured against the baseline price of $155.84, which was the trailing simple moving average of our stock price over the 45 consecutive trading days ending on December 20, 2022, the day that Mr. Eschenbach and Workday signed his Employment Agreement, and the alignment of Mr. Eschenbach’s performance equity incentives with stockholders’ interests.

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Benefits Programs

Our employee benefit programs, which include our 401(k) plan, employee stock purchase plan, and health and welfare programs, such as health savings accounts and flexible spending arrangements, are designed to provide a competitive level of benefits to our employees generally, including our executive officers and their families. We adjust our employee benefit programs as needed based upon regular monitoring of applicable laws and practices and the competitive market. Our executive officers are generally eligible to participate in the same employee benefit plans and programs, and on the same terms and conditions, as all other U.S. full-time employees.

Perquisites and Other Personal Benefits

The personal health, safety, and security of our employees is of the utmost importance to Workday and our stockholders. Accordingly, while we do not view perquisites or other personal benefits as a significant component of our executive compensation program, we provide limited perquisites for business-related purposes, for the health of our executives, and those necessary for the security of Mr. Bhusri.

Health Benefits

We offer our executive officers, including our NEOs, an annual comprehensive physical examination that is fully funded by Workday, as an added benefit to the medical insurance provided to all employees. We recognize the significant role of our executive officers and offer this program to encourage a focus on wellness.

Personal Security

Consistent with prevalent practices among peer companies, and based on an independent third-party security study, the Compensation Committee approved a comprehensive security plan for Mr. Bhusri. Based on the security study, we pay for the annual costs of security at his residences, executive security protection, family protection, and secure transportation arrangements. We require these security measures because of the importance of Mr. Bhusri to Workday, and we believe that their scope and costs are an appropriate business expense for our benefit as they are integrally related to Mr. Bhusri’s ability to perform his employment responsibilities and necessary to his focused job performance. However, because certain components of the program may be considered to be perquisites under SEC disclosure rules, such as security for Mr. Bhusri’s family, security at his residences, and executive security protection outside of work hours, the aggregate incremental costs of such security services are included in the “All Other Compensation” column of the Summary Compensation Table set forth below. The Compensation Committee believes that these costs are appropriate in light of the threat landscape and Mr. Bhusri’s importance to Workday. The Compensation Committee periodically reviews the nature and cost of this program in relation to Mr. Bhusri’s security risk profile and, based on an independent third-party security study conducted in 2024 in connection with Mr. Bhusri’s transition to Executive Chair, the Compensation Committee determined that a continued need for security exists from the nature of Mr. Bhusri’s employment by Workday and the continued provision of such security should be provided to mitigate risks to our business.

Aircraft Policy

In fiscal 2022, the Board approved the purchase of a corporate aircraft as an additional security measure for Mr. Bhusri and to optimize his travel. Pursuant to our aircraft utilization policy, the corporate aircraft is primarily for use by Mr. Bhusri, with certain limited exceptions where other executives may use it for business purposes. Mr. Bhusri primarily uses Workday-provided private aircraft for business purposes. Mr. Bhusri is also permitted to use a private business jet charter when practicable and we provide private charter aircraft services for business purposes for certain other executive travel. Subject to the limitations in our policy, immediate family members of eligible executive officers are permitted to accompany the executive on the private aircraft when the aircraft is already going to a specific destination for a business purpose, provided there is no more than de minimis incremental cost.

Pursuant to the policy, Mr. Bhusri and, on occasion, certain of our executives recognize imputed taxable income as a result of personal use of private aircraft and are not provided a tax reimbursement or gross-up for any portion of this amount, including as a result of members of their immediate family accompanying them on business travel. The non-de minimis incremental costs, if any, of personal travel and travel by guests on any such legs on private aircraft are included in the “All Other Compensation” column in the Summary Compensation Table.

Car Service

For Mr. Eschenbach, we provide a car service that is primarily used for business purposes. Mr. Eschenbach recognizes imputed taxable income as a result of any personal use of the car service and is not provided a tax reimbursement or

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gross-up. The value of the perquisites and benefits provided to Mr. Eschenbach during fiscal 2024 is reported and further described in our Summary Compensation Table below.

In the future, we may provide other perquisites or other personal benefits to our NEOs when we believe it is appropriate and beneficial to the company’s business to assist an individual executive in the performance of his or her duties, to make our executive team more efficient and effective, and for recruitment, motivation, or retention purposes. Future practices with respect to perquisites or other personal benefits for executives will be subject to review and approval by the Compensation Committee.

Post-Employment Compensation

Executive Severance and Change in Control Policy

In November 2023, the Board approved the Workday, Inc. Executive Severance and Change in Control Policy (the “Executive Severance Policy”), which amends and restates the Workday, Inc. Change in Control Policy that was adopted by the Board on April 22, 2021, to align with current market practice by adding severance protection in the event of a termination of an executive by Workday without “cause” outside of a change in control. Under the Executive Severance Policy, an NEO is eligible to receive cash payments and accelerated vesting of certain equity awards in the event of a qualifying termination of the NEO’s employment (i) outside of a change in control of Workday (referred to as a “Non-CIC Qualifying Termination” in the Executive Severance Policy), or (ii) in connection with a change in control of Workday (referred to as a “CIC Qualifying Termination” in the Executive Severance Policy). We do not provide for single trigger acceleration following a change in control and do not provide tax gross-ups for “excess parachute payments.”

The Compensation Committee has determined that the Executive Severance Policy is both competitively reasonable and necessary to recruit and retain key executives. We also believe that entering into these arrangements will help our executive officers maintain continued focus and dedication to their responsibilities to help maximize stockholder value if there is a potential transaction that could involve a change in control of the company. The Executive Severance Policy is also intended to facilitate changes in the leadership team by setting terms for the termination of the employment of an NEO in advance, which allows for a smooth transition of responsibilities when it is deemed to be in the best interest of Workday.

For additional information about the Executive Severance Policy, please see the section below entitled “Potential Payments Upon Termination or Change in Control.”

Post-Employment Terms in Executive Agreements

Eschenbach Agreement

In connection with incentivizing Mr. Eschenbach to join us as our Co-Chief Executive Officer in fiscal 2023, his Employment Agreement provides that he is entitled to certain payments and accelerated vesting if his employment is terminated without cause within two years following his start date, other than in connection with a change in control, after which he will be eligible to receive the Non-CIC Qualifying Termination benefits in the Executive Severance Policy. Likewise, Mr. Eschenbach will participate in the Executive Severance Policy, as modified by his employment agreement, pursuant to which he will receive payments in the event that Mr. Eschenbach’s employment is terminated without cause or he resigns for good reason in connection with a change in control. For further information about the benefits that Mr. Eschenbach may be eligible to receive in connection with certain terminations, please see “Potential Payments Upon Termination or Change in Control — Carl M. Eschenbach.”

Rowe Agreement

In connection with Mr. Rowe’s appointment as our Chief Financial Officer in fiscal 2024, his offer letter provides that he is entitled to certain payments and accelerated vesting if his employment is terminated without cause within two years following his start date, other than in connection with a change in control, after which he will be eligible to receive the Non-CIC Executive Termination benefits in the Executive Severance Policy. Mr. Rowe is also eligible to receive the change in control benefits set forth in the Executive Severance Policy. For further information about the benefits that Mr. Rowe may be eligible to receive in connection with certain terminations, please see “Potential Payments Upon Termination or Change in Control — Zane Rowe.”