ServiceNow Inc
For the period ended May 22, 2025. Filed Apr 4, 2025.
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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.
May 22, 2025 · Filed Apr 4, 2025
Contents
Proxy Statement Summary
2024 Business Highlights
2024 was another strong year of sustained growth for ServiceNow, as we continued to deliver strong performance and value for our shareholders.
Strong Growth and Profitability
| 23% | 98% | $11B | 29.5% | 31.5% | $3.5B |
| Subscription Revenues Growth Y/Y | Industry Renewal Rate 6 Years in a Row(1) | Total Revenues | Non-GAAP Operating Margin(2) | Free Cash Flow Margin(2) | Free Cash Flow (“FCF”)(2) |
|---|---|---|---|---|---|
| Subscription Revenues · Non-GAAP Operating Income Growth Y/Y | |||||
| Total Revenues Growth Y/Y · FCF Growth Y/Y | |||||
Numbers rounded for presentation purposes. ServiceNow metrics as of December 31, 2024, except as noted otherwise.
(1)We adjust our renewal rate for acquisitions, consolidations and other customer events that cause the merging of two or more accounts occurring at the time of renewal. For additional information, please see the discussion under the sections titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Key Business Metrics” in our Annual Report on Form 10-K for the year ended December 31, 2024.
(2)See Appendix C for a reconciliation of GAAP to non-GAAP metrics and other information.
(3)Represents the weighted average metric of our 2024 Peer Group members that are publicly-traded as of December 31, 2024 with a comparable growth metric for the last reported four fiscal quarters. See “Compensation Discussion & Analysis—Section 3 - Compensation Policies and Practices—Peer Companies” for our 2024 Peer Group.
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Delivering Continued Superior Shareholder Value
Five-Year Total Shareholder Return
As shown below, our total shareholder return over the past five years significantly outperformed our 2024 Peer Group and the S&P 500. See “Compensation Discussion and Analysis—Section 3 - Compensation Policies and Practices—Peer Companies” for a list of our 2024 Peer Group.
Source: S&P Capital IQ, based on latest closing price as of December 31, 2024. 2024 Peer Group only includes publicly-traded companies as of such date.
Building the Defining Enterprise Software Company of
the 21st Century
Strategic Milestones
Earned Fortune 500 recognition for second year in a row, with 2024 revenue exceeding $10 billion•Served approximately 8,400 global customers, including over 85% of the Fortune 500(1)•Exceeded $10.6 billion in subscription revenue in 2024 and provided a target of achieving above $15 billion in subscription revenue by 2026(2)•Continued significant customer growth as the number of customers generating over $1 million in ACV rose to 2,109 and the number of customers contributing $20 million or more in ACV rose 35% year over year•Supported four customers as they crossed $100 million in total ACV•Finished 2024 operating at a Rule of 54+(3)•Launched powerful new agentic AI innovations on ServiceNow’s AI platform for business transformation, to put AI to work across every corner of an enterprise
(1)Global customer count is as of the end of FY2024.
(2)2026 outlook provided during Financial Analyst Day on May 16, 2023.
(3)Enterprise software companies are often measured on a “Rule of 40,” defined as the result of free cash flow margin plus subscription revenue growth rate. ServiceNow’s free cash flow margin plus subscription revenue growth rate exceeded 54 for the year ended December 31, 2024. See Appendix C for a reconciliation of GAAP to non-GAAP metrics and other information.
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ServiceNow’s Board of Director Nominees
Our Board nominees bring the expertise and leadership necessary to guide our business strategy and create shareholder value. With the exception of our Chairman and CEO, Mr. McDermott, and our founder, Mr. Luddy, the Board is composed entirely of independent directors. In addition, the Board benefits from its members’ wide range of backgrounds, experiences and perspectives.
Skills and Experience
| Leadership & Governance | |||||||
|---|---|---|---|---|---|---|---|
| Senior Leadership Experience | 9 | Global Operations Leadership Experience | 8 | Public Company Board Experience | 7 | ||
| Risk Management | Financial | Non-Corporate | |||||
| Risk Management Experience | 7 | Financial Experience | 4 | Non-Profit, Education and Government | 7 | ||
| Strategic | |||||||
| Significant Technical or Business Experience in Software Industry | 8 | Experience at High-Growth Organization with $10+ Billion Annual Revenue | 6 | Multi-Product/Services or Multi-Segment Company Experience | 8 | ||
| Knowledge of Emerging Technologies | 9 | Experience with Large Scale Transformations in Key Functions | 7 | Experience with M&A, Debt and Equity Financings and Other Strategic Transactions | 4 | ||
See “Nomination Process and Nominees” for more detail.
Board Profile*
| Independence | Tenure (Median) | Age (Median) | |||
|---|---|---|---|---|---|
| 7 Independent | 2 <5 years | 2 <50 years | |||
| 2 Not independent | 4 5-10 years | 1 50-60 years | |||
| 3 >10 years | 6 61-70 years | ||||
- All figures are based on a total of nine directors.
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Director Nominees
The Board has nominated nine directors for re-election, seven of whom are independent under NYSE standards. The following table sets forth the names, ages and certain other information for each of our director nominees.
| Committee Membership | |||
|---|---|---|---|
| Name and Occupation · Age · DirectorSince · Independent · AuditCommittee · LeadershipDevelopmentandCompensationCommittee · NominatingandGovernanceCommittee · Number ofOther PublicBoards | |||
| William R. McDermottChairman and Chief Executive Officer of ServiceNow, Inc. | 63 | 2019 | 1 |
| Susan L. BostromFormer Executive Vice President, Chief Marketing Officer and Head of Worldwide Government Affairs of Cisco Systems, Inc.Lead Independent Director | 64 | 2014 | 2 |
| Teresa BriggsFormer Vice Chair & West Region Managing Partner of Deloitte LLP; Retired Certified Public Accountant | 64 | 2019 | 3 |
| Jonathan C. ChadwickFormer Executive Vice President, Chief Financial Officer and Chief Operating Officer of VMware, Inc. | 59 | 2016 | 3 |
| Paul E. ChamberlainBusiness Advisor & Investor; Former Managing Director and Co-Head of Global Technology Banking of Morgan Stanley | 61 | 2016 | 1 |
| Lawrence J. Jackson, Jr.Founder and Chief Executive Officer of gamma; Former Global Creative Director, Apple Music of Apple Inc. | 44 | 2020 | 0 |
| Frederic B. LuddyFounder and Former President, Chief Executive Officer and Chief Product Officer of ServiceNow, Inc. | 70 | 2004 | 0 |
| Joseph “Larry” QuinlanFormer Global Chief Information Officer of Deloitte LLP | 62 | 2021 | 2 |
| Anita M. SandsFormer Group Managing Director, Head of Change Leadership of UBS Financial Services | 48 | 2014 | 1 |
| Member | Chair |
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Executive Compensation
Our executive compensation program is designed to align with our pay-for-performance philosophy, drive achievement of our strategic and financial goals and continue to incentivize value creation for our shareholders. Maintaining a compensation program that motivates and retains a talented and experienced leadership team is critical to ServiceNow’s long-term success.
2024 Pay Mix
For 2024, the annual pay mix for our CEO and other named executive officers (“NEOs”) consisted of base salary, annual cash incentive and long-term performance-based and time-based equity awards, with a significant amount of compensation at risk and tied to rigorous financial and operational performance targets. The following shows the percentage of this mix based on total target annual compensation:
Numbers rounded for presentation purposes.
2024 Compensation Changes
In 2024, we continued our plan to implement responsive changes to our executive compensation program outlined in our 2024 proxy statement. Those changes are summarized below.
| Eliminated overlapping metrics in the annual cash incentive plan and performance-based restricted stock units (“PRSUs”) | Net new annual contract value (“NNACV”) metric in 2024 annual cash incentive plan only; previously in both annual cash incentive plan and PRSUs | Say-on-PayApproval | |
|---|---|---|---|
| Approximately 88% of votes cast at our 2024 Annual Meeting supported our executive compensation program. We believe the significant increase in support since our 2023 Annual Meeting reflects our commitment to addressing shareholder feedback and the meaningful changes we made to our compensation program. | |||
| Lengthened performance period for PRSUs | Lengthened performance period for PRSUs from one year to three years following the 2024 transition period | ||
| Extended vesting period for PRSUs | Updated PRSU vesting period to three-year cliff vesting from three-year ratable vesting following the 2024 transition period | ||
See“Compensation Discussion and Analysis” for more detail on 2024 Compensation Changes.
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2024 Pay and Performance Alignment
Even with record-breaking performance in 2024, our annual cash incentive for the year paid out just under target, reflecting our rigorous pay for performance approach.
For 2024, annual cash incentives were earned at 99.3% of target, based on achievement of rigorous 2024 NNACV and operating margin targets, as well as an evaluation of non-financial performance goals.
Our 2024 PRSU awards are in progress, with no equity earned under these awards until after the first performance period ends December 31, 2025.
See“Compensation Discussion and Analysis—Section 2 - Executive Compensation Program” for more detail.
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