The Freshworks board had okayed the award in a pre-IPO decision in September last year, with a third of the nine million share award routed as Restricted Stock Units (RSUs) that began vesting with him beginning November last year. The performance–linked award of six million shares, to be executed through five tranches of 1.2-m shares till January 2029, are tied to the Freshworks scrip scaling and averaging certain hurdles beginning $70 a piece and going up to $200 a piece (nearly 12.5 times last traded price on Nasdaq), according to the document.
The combined RSU award totals $233.4 million in stock value calculated through predictive algorithms centred around the Monte-carlo simulation, said the SEC filing.
In 2020, Freshworks awarded Mathrubootham $11.7 million in RSUs.
The SEC filing read: “On September 12, 2021, in recognition of Mr. Mathrubootham’s instrumental role in achieving our strategic and business goals to date and, more importantly, the significant potential impact of his role on an ongoing basis, our board of directors approved the grant of two restricted stock unit awards,” detailing the 9-million share award to Girish Mathrubootham.
The document also said the number of shares to be vested with Mathrubootham in each tranche would get cut to a third if either his continued service requirement is not fulfilled or the stock price targets are not achieved through the vesting period.
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An email sent seeking commentary on the stock award to Mathrubootham remains unanswered.
Freshworks’ market cap stands at $4.5 billion now, down from $13.5 billion in early November. Its rival Zendesk, which earned $1.34 billion in total revenue in 2021, offers a mix of fixed pay and performance-based cash and equity incentives to chief executives. In 2021, according to a filing by Zendesk, chief executive Mikkel Svane’s 2021 performance-based incentive was 100% of his fixed pay of $500,000. The incentives were both cash and equity. Zendesk also introduced performance-linked RSU grants in February, according to the document. “In February 2022, the Compensation Committee introduced the grant of performance-based restricted stock units (“PSUs”) to our executive officers, including our named executive officers. The Compensation Committee granted these awards to align our named executive officers’ incentives with the long-term interests of our stockholders while addressing retention objectives,” the filing with the SEC said.
The Freshworks board has also decided that Mathrubootham would not be granted additional equity incentives for at least four years.
The company stock closed Friday 10.8% up at $16.08 a piece.
