Software-as-a-Service firm Freshworks’ board of directors cancelled the performance award of six million stock units allotted to founder and CEO Girish Mathurbootham in 2022, showed a US SEC filing.
The Nasdaq-listed company cited changes in performance targets due to tough macroeconomic conditions for cancelation of the CEO’s performance award.
“As a result of macroeconomic conditions that are entirely outside the control of the company’s leadership team, the stock price hurdles were too far ahead of the current stock price for the CEO PRSU (Performance-based Restrictive Stock Units) award to have the retention value expected at the time the award was granted,” the filing showed on February 16.
However, Mathrubootham will be entitled to a new annual long-term equity incentive award with a fair value of $19 million.
“In determining to cancel Mr Mathrubootham’s CEO PRSU award and grant him an annual long-term equity incentive award in 2024, the Board and the Committee considered the fact that the long-term equity incentive program is an investment the Company has asked of its stockholders,” the filing said.
Freshworks’ total stock-based compensation expense for 2023 was at $212 million.
In 2021, the company had launched its initial public offering (IPO). Its board had granted a multi-year performance-based restricted stock unit award to Mathrubootham for 6 million stock units. The CEO performance award had a total fair value of $131 million.
For fourth quarter, Freshworks posted strong revenue on a surge in demand for its AI-powered customer support and IT services products.
The San Mateo, California-based company posted Q4 revenue at $160.1 million.
Freshworks, which counts Nucor, S&P Global and Bridgestone as its clients, offers an IT service management product called Freshservice, which assists businesses with employee onboarding and management.
Freshworks, which competes with larger rivals such as Salesforce and Zendesk, expects 2024 revenue between $703.5 million and $711.5 million.
(With inputs from agencies)
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Published: 18 Feb 2024, 03:14 PM IST
#Freshworks #board #cancels #CEO #Girish #Matruboothams #performance #award #stock #units
