Workday Inc

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In setting Mr. Enslin’s new hire RSU award value, the Compensation Committee determined that the amount reflects a reasonable multiple of an annual refresh grant that was aligned with competitive data for similarly situated executives. Mr. Enslin is not eligible for additional equity awards until fiscal 2027.

Mr. Robinson continues to serve Workday as an Executive Advisor, assisting with the transition of his duties, closing deals in the pipeline, and mentoring sales leaders. Mr. Robinson will serve as Executive Advisor through April 30, 2025, and then transition to a consulting role with us. See “Post-Employment Compensation” below for a discussion of the compensation provided to Mr. Robinson in his role as an Executive Advisor and as a consultant to Workday. Consistent with our standard equity award terms for all employees, Mr. Robinson’s awards continue to vest during his continued service. Although no changes were made to the terms or vesting conditions of Mr. Robinson’s outstanding equity awards in connection with this transition to Executive Advisor or this consulting role, his transition triggered an accounting modification under Topic 718, which resulted in an incremental expense with respect to his outstanding equity awards that is required to be included in the 2025 Summary Compensation Table and other disclosures. These amounts are non-cash charges reportable for the accounting modification and are not additional amounts received by Mr. Robinson.

Elements of Our Executive Compensation Program

The compensation program for our NEOs for fiscal 2025 consisted of a mix of variable and fixed compensation.

The key elements of our executive compensation program for fiscal 2025 include base salary, cash bonuses, 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 2025, the Compensation Committee and, with respect to Messrs. Eschenbach and 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 increased the cash compensation of some executives based on market positioning.

The following charts show the fiscal 2025 total direct compensation mix for our Chief Executive Officer, Mr. Eschenbach, and the average fiscal 2025 total direct compensation mix for our other NEOs, including our Executive Chair, Mr. Bhusri. Total direct compensation for fiscal 2025 for Mr. Eschenbach and 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). Mr. Bhusri does not receive an annual cash bonus.

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Base Salary

We offer base salaries that are intended to provide a competitive 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.

In connection with our annual compensation cycle during fiscal 2025, 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. After considering a compensation analysis performed by Semler Brossy and the other factors described above, as well as the fact that cash compensation for long-tenured executives was conservative relative to peer levels, the Committee approved adjustments as shown below with the intention of better aligning compensation for such long-tenured executives with peer levels and driving greater consistency and internal alignment across the team. The annual base salaries for each of our NEOs during fiscal 2024 and fiscal 2025 are set forth in the following table:

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(1)

Mr. Enslin was not an NEO in fiscal 2024.

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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 2025 under, and subject to the terms and conditions of, the Omnibus Bonus Plan.

During fiscal 2025, our executive officers, other than Mr. Bhusri, participated in our cash bonus plan that was available to all executive officers. 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 2025 cash bonus plan was designed to drive revenue growth, focus on customer satisfaction, and incentivize execution of short-term priorities tied to long-term strategy.

As depicted below, our cash bonus plan is measured and calculated based on the achievement of pre-established company performance goals. For fiscal 2025, company performance was evaluated based on the following goals as set

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out in our fiscal 2025 cash bonus plan: 80% of the funding of the cash bonus plan was based on a financial performance target based on adjusted subscription revenue and 20% of the funding of the cash bonus plan was driven by a non-financial performance target based on our customer satisfaction score.

Company Performance Metrics and Targets

As in prior years, the Compensation Committee selected adjusted subscription revenue and our annual customer satisfaction score as the company performance metrics to determine the funding of our cash bonus plan. In fiscal 2025, the Compensation Committee expanded the customer satisfaction score to include survey responses from named support contacts at Workday’s acquired products to better align the metric with Workday’s customer base and current strategy. The table below details the company performance metrics and targets set by the Compensation Committee for purposes of determining the funding of our cash bonus plan.

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(1)

See Appendix A for a reconciliation of GAAP subscription revenue to adjusted subscription revenue.

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The achievement calculation for each company performance metric under the cash bonus plan is described in more detail below:

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(1)

Subject to linear interpolation for performance between the threshold and target levels and between the target and maximum levels, as applicable. If the threshold level of adjusted subscription revenue is not achieved, neither the adjusted subscription revenue nor the customer satisfaction portion of the cash bonus plan will be funded.

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(2)

The maximum payout with respect to customer satisfaction is 100%.

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Individual Performance

The cash bonus plan provides the ability to adjust each NEO’s individual payout based on individual performance. The Compensation Committee has historically only applied this modifier in exceptional circumstances (last applied in fiscal 2022) and did not apply it for any of the NEOs in fiscal 2025.

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 2025. For the first half payout, the company performance metric is capped at a maximum of 40% of the total full year funding and is only calculated using the financial metric of forecasted adjusted subscription revenue as of the end of the company’s second fiscal quarter. The portion of the bonus pool related to the non-financial metric is not eligible to be funded for the first half payment.

Following the conclusion of the company’s second fiscal quarter of fiscal 2025, it was determined that based on the company’s forecasted adjusted subscription revenue as of the end of the second fiscal quarter, the company performance metric would be funded at 33% of full year target bonus for the first half payout.

Full Year Payout

Following the conclusion of fiscal 2025, the Compensation Committee reviewed the level of achievement of each company performance goal against the pre-established targets. The achievement level and corresponding funding of the fiscal 2025 cash bonus plan is set forth below:

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(1)

See Appendix A for a reconciliation of GAAP subscription revenue to adjusted subscription revenue.

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For full year fiscal 2025, 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 81.7% of each NEO’s respective annual targets for fiscal 2025. While the cash bonus plan provides the ability to adjust each NEO’s individual payout based on individual performance, the Compensation Committee did not exercise this discretion.

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(1)

Inclusive of first half payout of the fiscal 2025 cash bonus plan. The annual cash bonus paid is based on each NEO’s base salary applicable during fiscal 2025 and is prorated to account for base salary changes during the fiscal year.

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(2)

Mr. Chakraborty’s annual cash bonus paid and target bonus amounts are adjusted to reflect a leave of absence.

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(3)

Mr. Enslin was not eligible to participate in the fiscal 2025 cash bonus plan.

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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

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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 were the most effective compensation vehicle for Workday in fiscal 2025 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. As noted above in “Evolving our Executive Compensation Program for Fiscal 2026,” in response to stockholder feedback, we are incorporating PSUs, performance-based equity incentives, into our fiscal 2026 executive compensation program.

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. 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 factors noted in “Role of the Compensation Committee” above. Based on its review, the Compensation Committee and the Board agreed that the fiscal 2025 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. 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 the competitive practices for similarly situated executives in our peer group, and what is reasonable and necessary to incentivize the executive to accept the position and drive alignment with us and our stockholders.

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).

The RSU awards granted to our NEOs in fiscal 2025 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)

In connection with Mr. Enslin’s appointment as President, Chief Commercial Officer, he was granted 141,773 RSUs.

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(4)

This amount includes the grant date fair value of a fiscal 2025 RSU award granted to Mr. Robinson ($13,273,310), as well as the incremental fair value required to be reported under Topic 718 in connection with the Robinson Transition in fiscal 2025. Although no changes were made to the terms of Mr. Robinson’s fiscal 2025, 2024, 2023, or 2022 equity awards, his continued service in a new role triggered an accounting modification under Topic 718, which resulted in an incremental expense of $15,495,236 with respect to such equity awards. No changes were made to the terms or vesting conditions of Mr. Robinson’s original award agreements. Consistent with our standard equity award terms for all employees, Mr. Robinson’s awards continue to vest during his continued service. These amounts are non-cash charges reportable for the accounting modification and are not additional amounts received by Mr. Robinson.

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Eschenbach 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, a substantial portion of Mr. Eschenbach’s compensation was allocated in the form

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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 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”). 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, 2025.

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(1)

Shares that have been released upon the achievement of the Price Hurdle and satisfaction of 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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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, we provide limited perquisites for business-related purposes, for the health of our executives, and those necessary for the security of Messrs. Eschenbach and 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, during fiscal 2025, we paid 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 his high profile as not only the Executive Chair but also as a Co-Founder of a global public company, and

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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

The independent third-party security study recommended that Mr. Bhusri use private aircraft for all business and personal travel. To facilitate that, in 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. Mr. Bhusri uses Workday-provided private aircraft for both business and personal purposes and the Board believes such use enhances his security, efficiency, privacy, confidentiality, and productivity to allow for time that he can devote to our business as our Executive Chair. Additionally, Messrs. Bhusri and Eschenbach are 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 certain 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, Mr. Eschenbach, 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

Based on a preliminary third-party security study, 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 gross-up. The value of the perquisites and benefits provided to Mr. Eschenbach during fiscal 2025 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

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). In November 2024, the Board amended and restated the Workday, Inc. Executive Severance and Change in Control Policy (the “Executive Severance Policy”). The purpose of the amendment was to provide that equity awards granted to a participant coincident with, or as an inducement to, such participant’s hiring and/or commencement of employment or other service with Workday shall be eligible for acceleration pursuant to the Executive Severance Policy in the event of a termination of employment by Workday without cause outside of a change in control period (as such terms are defined

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in the Executive Severance Policy). Awards, other than these “new hire” awards, granted within the 12-month period preceding a Non-CIC Qualifying Termination remain ineligible for acceleration under the Executive Severance Policy.

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. We do not provide for single trigger acceleration following a change in control and do not provide tax gross-ups for “excess parachute payments.”

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 through December 20, 2024, other than in connection with a change in control, after which he is 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.”

Robinson Agreement

Following Mr. Robinson’s transition out of his role as Co-President, he continues to provide service to Workday as an Executive Advisor through April 2025, after which he will transition into a consulting role. Pursuant to the terms of his separation agreement, while serving as an Executive Advisor, Mr. Robinson’s base salary remains at $625,000 annually and he remained eligible for a fiscal 2025 cash bonus payment. Mr. Robinson is not eligible to receive a cash bonus pursuant to the terms of our fiscal 2026 cash bonus plan and did not receive an annual refresh equity grant for fiscal 2026. As Executive Advisor, his previously granted equity awards continue to vest in accordance with their terms. As a consultant, Mr. Robinson is expected to provide sales and strategy advisory services to Workday. Pursuant to the terms of his separation agreement, the terms of his RSU award agreements, and our 2022 Plan and 2012 Equity Incentive Plan, Mr. Robinson will continue to vest into his outstanding RSUs so long as he continues to provide services to Workday. Mr. Robinson’s consulting period is expected to end on October 31, 2025, unless earlier terminated. Following termination of his services to Workday, Mr. Robinson will cease vesting in his equity awards, and any then-unvested equity awards will terminate and be forfeited in accordance with their terms.

The material terms of post-employment payments to our NEOs are set forth under “Employment Arrangements and Indemnification Agreements” and “Potential Payments Upon Termination or Change in Control” below.