Fastly, Inc.
For the period ended Jun 12, 2024. Filed Apr 24, 2024.
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What shareholders are asked to vote on at a company's meeting. It is where to find what directors and top executives are paid, and who owns the most shares.
Jun 12, 2024 · Filed Apr 24, 2024
Contents
Executive Compensation Program Design
Our Compensation Committee believes that executive compensation should be linked to our overall financial performance, strategic success, and stockholder returns. Our Compensation Committee evaluates our compensation philosophy and executive compensation program annually to ensure that our program remains competitive relative to our market for executive talent and aligned with our strategic objectives. By delivering compensation in a mix of fixed and variable pay, including long-term vesting equity awards, we seek to align the incentives of our Named Executive Officers with achievement of our long-term business objectives and financial performance that drives sustained stockholder value creation.
To support our long-term objectives and reinforce a strong pay-for-performance culture, a majority of the target total direct compensation for our Named Executive Officers is awarded in the form of equity. Our Named Executive Officers are eligible for RSU awards based on their individual contributions and performance during each fiscal year. Our Compensation Committee believes that this emphasis on equity rather than cash incentives tied to short-term objectives is an effective approach for reinforcing our objective of long-term stockholder value creation.
We also offer our Named Executive Officers standard health and welfare benefits and retirement plan benefits that are generally available to our other employees, including medical, dental, vision, life and disability insurance and, for United States salaried employees, participation in our 401(k) plan. Our Named Executive Officers may also participate in our 2019 Employee Stock Purchase Plan (“ESPP”) on the same basis as our other employees. Certain of our Named Executive Officers were also eligible to participate in our 2023 Bonus Program (the “2023 Bonus Program”) on the same basis as our other employees.
30 | 2024 PROXY STATEMENT
For 2023, the material elements of our executive compensation program were:
| | Compensation Element | | | Relationship to Business Objectives | |
|---|---|---|---|---|---|
| | Base Salary | | | Base salaries are set to be competitive within our industry and are important in attracting and retaining talented executives. Base salaries may be adjusted based on numerous factors, including a change in a Named Executive Officer’s responsibilities, demonstrated performance or relevant competitive market data. During 2023, Mr. Bergman was eligible to reduce his base salary to a lesser amount (in no event lower than the applicable minimum wage) and receive an RSU award based on the amount of such reduction. Mr. Bergman elected to reduce his base salary to the applicable minimum wage. | |
| | Annual Incentive | | | In 2023, our Named Executive Officers (excluding Mr. Shirk) were eligible for annual incentives tied to our level of achievement of annual revenue goals pursuant to our 2023 Bonus Program. Except for Mr. Nightingale, whose award was paid in cash, awards under the 2023 Bonus Program were paid as fully vested RSUs. In addition, Mr. Shirk was eligible to participate in our Commission Plan (as defined below), which tied his annual compensation directly to achievement of certain sales metrics. | |
| | Annual Long-Term Incentive Equity | | | In our annual long-term incentive design, we primarily rely on a combination of PSUs and time-based RSUs. All of our Named Executive Officers, except for Mr. Bergman as our founder, received both PSUs and RSUs in 2023. The PSUs represent 50% of the LTI opportunity for Mr. Nightingale and 30% of the LTI opportunity for Mr. Kisling and Mr. Shirk, and reward executives for meeting certain financial performance requirements set up at the beginning of the year. The focus on revenue growth and profitability are key value creation metrics for our business. The RSUs represent 50% of the LTI opportunity for Mr. Nightingale, and 70% of the LTI opportunity for Mr. Kisling and Mr. Shirk and provide reasonable balance against the PSUs and support in the retention of executives critical to the Company’s ongoing success. Mr. Bergman received a combination of options and RSUs for 2023, which reflects his unique individual status as a founder and recent equity history (for more information, see “Fiscal 2023 Annual Long-Term Incentive Equity – Chief Technology Officer Long Term Incentive Equity” below). | |
| | Benefits | | | We offer competitive health and welfare benefits, as well as participation in the ESPP, 401(k) plan for United States employees, and other employee benefit plans. | |
Adjustments to a Named Executive Officer’s compensation made in connection with the Compensation Committee’s annual review generally occur in the first quarter of the fiscal year. Equity awards for our Named Executive Officers are typically granted during the first quarter of the fiscal year.
The Compensation Committee views these changes as part of an ongoing evolution in our compensation programs that aligns with the growth and maturity of our business. The Compensation Committee will continue to monitor our programs in the context of evolving market practice and our compensation objectives to ensure that we continue to attract and motivate talented executives who can support our growth and long-term stockholder value creation.
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