SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:
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Preliminary Proxy Statement
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
Definitive Proxy Statement
Definitive Additional Materials
Soliciting Material Pursuant to § 240.14a-12
Tenable Holdings, Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box)
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No fee required.
Fee paid previously with preliminary materials.
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
WHEN
WHERE
Wednesday, May 22, 2024
Via Webcast
RECORD DATE
March 28, 2024
1:00 pm Eastern Time
https://www.proxydocs.com/
TENB
Only stockholders of record at the
close of business on that date may
vote at the Annual Meeting or any
adjournment thereof.
ITEMS OF BUSINESS
Electing the Board of Directors’ nominees, Arthur W. Coviello, Jr.,
George Alexander Tosheff and Margaret Keane, to the Board of
Directors to hold office until the 2027 Annual Meeting of Stockholders.
BOARD VOTING
RECOMMENDATION
PAGE
REFERENCE
FOR each director nominee
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Ratifying the selection by the Audit Committee of the Board of
Directors of Ernst & Young LLP as the independent registered public
accounting firm of the Company for the year ending December 31,
2024.
Approving, on a non-binding advisory basis, the compensation of the
Company's Named Executive Officers as disclosed in this proxy
statement.
FOR
FOR
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Conducting any other business properly brought before the Annual Meeting, including any adjournments or
postponements of the meeting.
Each of these items of business is more fully described in the proxy statement accompanying this notice.
Important Notice Regarding the Availability of Proxy Materials for the Virtual Stockholders' Meeting to Be Held on
Wednesday, May 22, 2024 at 1:00 p.m. Eastern Time.
The proxy statement and annual report to shareholders
are available at https://www.proxydocs.com/TENB.
By Order of the Board of Directors,
Michelle VonderHaar
Chief Legal Officer and Corporate Secretary
Columbia, MD
April 11, 2024
You are cordially invited to attend the virtual annual meeting. Whether or not you expect to attend the meeting,
please vote over the telephone or the Internet as instructed in these materials as promptly as possible in order to
ensure your representation at the meeting. Even if you have voted by proxy, you may still vote online if you attend the
virtual annual meeting. Please note, however, that if your shares are held of record by a broker, bank or other
nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.
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CONTENTS
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
PROPOSAL 1 ELECTION OF DIRECTORS
Information Regarding the Board of Directors and Corporate Governance
Independence of the Board of Directors
Role of the Board in Risk Oversight
Meetings of the Board of Directors
Information Regarding Committees of the Board of Directors
Audit Committee
Compensation Committee
Nominating and Corporate Governance Committee
Cybersecurity Risk Management Committee
Stockholder Communications with the Board of Directors
Code of Ethics
Hedging Policy
PROPOSAL 2 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Fees and Services
Pre-Approval Policies and Procedures
PROPOSAL 3 ADVISORY VOTE TO APPROVE THE NAMED EXECUTIVE OFFICER
COMPENSATION
Corporate Social Responsibility
Executive Officers
Security Ownership of Certain Beneficial Owners and Management
Executive Compensation
Executive Summary
Executive Compensation Philosophy and Objectives
Compensation Elements
Compensation-Setting Process
Employment Arrangements
Post-Employment Compensation
Other Compensation Policies
Tax and Accounting Considerations
Summary Compensation Table
Grants of Plan-Based Awards
Outstanding Equity Awards
Options Exercised and Stock Vested
Employment Agreements with Our Named Executive Officers
Potential Payments Upon Termination or Change in Control
CEO Pay Ratio
Pay versus Performance
Director Compensation
Securities Authorized for Issuance Under Equity Compensation Plans
Transactions With Related Persons and Indemnification
Related-Person Transactions Policy and Procedures
Certain Related Person Transactions
Indemnification
Householding of Proxy Materials
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Other Matters
Appendix: Reconciliation of Non-GAAP Measures
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Cautionary Note Regarding Forward-Looking Statements
This proxy statement contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements regarding performance, events, developments or achievements that we
expect or anticipate will occur in the future, including statements expressing our general views about
future operating results and our corporate social responsibility and diversity and inclusion progress,
plans and goals, are forward-looking statements. The inclusion of environmental, diversity and social-
related statements is not an indication that these are material to investors or required to be disclosed
in our filings with the SEC. In addition, such statements may be based on standards for measuring
progress that are still developing, processes that continue to evolve and assumptions that are subject
to change in the future.
Forward-looking statements are subject to certain risks and uncertainties that could cause our actual
results to differ materially from historical experience and our present expectations or projections.
These risks and uncertainties include, but are not limited to, those described in Item 1A, Risk Factors,
in our Annual Report on Form 10-K for the year ended December 31, 2023 and those set forth in our
future filings with the SEC. We disclaim and do not undertake any obligation to update, revise, or
withdraw any forward-looking statements, whether as a result of new information, future events, or
otherwise, except as required by applicable law or regulation.
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To Our Stockholders,
We manage our company on the simple, powerful principle that what we do matters to the world.
In a year where artificial intelligence took center stage and geopolitical tensions dominated the
headlines and disrupted supply chains, our mission to help organizations understand and reduce
cyber risk has never been more critical. The communities where we live, the government agencies on
which we rely and the enterprises that power the global economy all depend on cybersecurity. And
they are increasingly turning to Tenable to understand where they are exposed and how to reduce
risk. This is a pivotal time and Tenable is at the center of it.
Our stakeholders –cust omers, partners, employees and investors –drive o ur every decision.
Complex times call for radical simplicity and in 2023 we seized an opportunity to help more
organizations consolidate multiple use cases and products on a single, unified platform. Today,
Tenable One, our Exposure Management platform, is helping over a thousand customers protect their
most vulnerable and crucial assets. We’re adding critical asset coverage to the platform, integrating
cloud and operational technology ("OT") security, bringing even more context and actionable insights.
We’re innovating in cloud security, cutting through the complexity so security teams can quickly
identify elusive problems and remediate them fast. We are helping our customers make better, faster
and more informed business decisions based on cyber risk.
Our commitment to our customers and partners
Tenable helps organizations understand and reduce risk and we believe we do it better than
anyone. Given our focus on operationalizing preventative security, our solutions constitute a strategic
advantage in a world where regulators are increasingly requiring disclosures on board oversight and
management’s role in assessing and managing material risks from cybersecurity threats. That’s why
approximately 44,000 customers rely on us to stay ahead of bad actors. Together with our global
network of partners, we are uniquely positioned to help customers see and understand their
continuously expanding attack surface, from the cloud to the network and everywhere in between. For
example, Tenable Cloud Security, our cloud-native application protection platform (CNAPP)
technology, delivers unparalleled insights into identities and access and is integrated into Tenable
One. Tenable One is also the first and only exposure management platform that provides holistic
visibility into assets across IT and OT environments, a key differentiator as CISOs are increasingly
accountable for securing both.
Our commitment to our employees
Tenable’s employees fuel our ambition and cement our reputation as atr usted cybersecurity
innovator. We have worked diligently to build the company into a career destination – the kind of
place where passionate high achievers can do their best work, feel supported and know that they are
truly making a difference. We’re giving our people the tools and investments they need – tuition
reimbursement, mentorship programs, advanced certification options and more – so they can level up
their skills and focus on solving some of the thorniest cybersecurity challenges. We continue to invest
in superb total rewards packages, with equity grants, generous time off, an employee stock purchase
plan, volunteer days and more. In 2024, we introduced a full-service mental health benefit for
employees and their families, with free therapy, coaching and work-life services. We believe that
every investment in our people comes back to us many times over. We will continue to innovate in
this space, developing and supporting our people so they can focus on delivering results that exceed
expectations.
Our commitment to our stockholders
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Over the years, we have built trusted and candid relationships with our stockholders. We
continuously reach-out, engage and solicit feedback from our investors on amyriad of topics because
understanding what is top of mind from our investors and how we are perceived by the financial
community is important to us. In 2023, we met with amajority of our top 25 active investors, as well
as over 100 firms in total, an achievement that puts us well above average for midcap companies in
investor engagement. In those conversations, we heard from anumber of investors that they value
Tenable for our balanced-growth approach and competitive position. In 2023, we delivered:
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Calculated current billings of $873.3 million, a 12% increase year-over-year*
Non-GAAP operating margin of 15%, a 500 basis point improvement year-over-year*
Unlevered free cash flow of $175.4 million, a 37% increase year-over-year*
We believe our results in 2023 reflect our ability to balance growth with profitability. We will
continue to invest to take and win share which will position us well for long-term success. And, as we
scale the business, we will continue to work closely with these critical stakeholders.
Our commitment to corporate social responsibility
We care deeply about the places where we live and work. That responsibility begins with
environmental stewardship. Our energy consumption and usage within data centers is an important
component of the day-to-day operations of our business which is why Tenable outsources its data
center needs primarily to Amazon Web Services ("AWS"). AWS, in addition to carefully choosing data
center locations to mitigate environmental risk, has a long-term commitment to use 100% renewable
energy. We continue to track our scope 1 and scope 2 emissions and have begun a process to
identify and track scope 3 emissions. As ever, our employees are our most critical catalysts for
change. Our Green Initiatives group shares best practices for an environmentally conscious lifestyle,
builds global support for initiatives within Tenable and leads campaigns, such as trash clean-ups,
sustainable lifestyle pledges and tree-planting initiatives.
We hold ourselves accountable for increasing representation in our workforce of historically
underrepresented communities, cultivating a more inclusive culture and engaging more impactfully in
the global communities that surround us. We believe that the greater diversity of our employees,
partners and customers leads to a greater diversity of ideas and creativity as well as better
performance.
In conclusion, we are pleased with our performance in 2023. We continued to execute on our
roadmap, expanding our market leadership in exposure management and scaling our business by
capturing large market opportunities in cloud security. We look forward to continuing to build on this
great foundation.
Sincerely,
Amit Yoran
Chairman & CEO
*Refer to the Appendix for reconciliations of these non-GAAP measures to comparable GAAP measures.
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Business Overview - 2023 Highlights
We are a leading provider of exposure management solutions. Exposure management is an
effective discipline for measuring, comparing and reducing cybersecurity risk in today's complex
environments, spanning cloud resources, IT, OT and IoT assets, and more.
In order to be effective, an exposure management platform must extend beyond traditional
vulnerability management, which concentrates on the discovery and remediation of publicly disclosed
Common Vulnerabilities and Exposures. The platform must include information about configuration
issues, vulnerabilities and attack paths across a spectrum of assets and technologies — including
cloud configurations and deployments; identity solutions, such as Active Directory; and web
applications.
Our 2023 business and financial highlights were as follows:
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Launched new AI-fueled identity security into our Exposure Management Platform.
Unveiled new OT security functionality to provide broader protection for operational
technology, critical infrastructure and industrial control systems and to make it easier to
secure and maintain governance of the entire attack surface.
Acquired Ermetic, Ltd. ("Ermetic"), an integrated cloud-native application protection platform
(CNAPP) company with industry leading cloud infrastructure entitlement management
(CIEM), to deliver market-leading contextual risk visibility, prioritization and remediation
across infrastructure and identities, for total consideration of $243.8 million.
Received numerous awards and distinctions including recognition as a "Leader" in both the
GigaOm Radar for Operational Technology (OT) Security and “The Forrester Wave™:
Vulnerability Risk Management," and named Best Security Company and Best Risk/Policy
Management Solution of the Year (for Tenable One) in the 2023 SC Awards.
Recognized globally as a premier employer of choice.
Announced that our Board of Directors approved the repurchase of up to an aggregate of
$100 million of our common stock.
Revenue was $798.7 million, a 17% increase year-over-year.
Calculated current billings was $873.3 million, a 12% increase year-over-year.
• GAAP loss from operations was $52.2 million, compared to $67.8 million in 2022.
•
Non-GAAP income from operations was $121.0 million, compared to $67.7 million in 2022.
• GAAP net loss was $78.3 million, compared to $92.2 million in 2022.
• GAAP net loss per share was $0.68, compared to $0.83 in 2022.
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Non-GAAP net income was $97.2 million, compared to $44.3 million in 2022.
Non-GAAP diluted earnings per share was $0.80, compared to $0.38 in 2022.
Cash and cash equivalents and short-term investments were $474.0 million at December 31,
2023, compared to $567.4 million at December 31, 2022.
Net cash provided by operating activities was $149.9 million, compared to $131.2 million in
2022.
Unlevered free cash flow was $175.4 million, compared to $128.1 million in 2022.
Repurchased 0.4 million shares of our common stock for $14.9 million.
Refer to the Appendix for reconciliations of non-GAAP measures to comparable GAAP measures.
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TENABLE HOLDINGS, INC.
6100 Merriweather Drive, 12th Floor
Columbia, Maryland 21044
PROXY STATEMENT
FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS
May 22, 2024
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Why did I receive a notice regarding the availability of proxy materials on the Internet?
Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we have
elected to provide access to our proxy materials over the Internet. Accordingly, we have sent you a
Notice of Internet Availability of Proxy Materials (the “Notice”) because the Board of Directors (the
"Board of Directors" or the "Board") of Tenable Holdings, Inc. (sometimes referred to as the
“Company” or “Tenable”) is soliciting your proxy to vote at the 2024 Annual Meeting of Stockholders,
including at any adjournments or postponements of the meeting. All stockholders will have the ability
to access the proxy materials on the website referred to in the Notice or request to receive a printed
set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to
request a printed copy may be found in the Notice.
We intend to mail the Notice on or about April 11, 2024 to all stockholders of record entitled to
vote at the Annual Meeting.
Will I receive any other proxy materials by mail?
We may, at our discretion, elect to send you aproxy c ard. We may also send you a second
Notice on or after April 24, 2024.
How do Iattend the Annual Meeting?
The Annual Meeting will be a virtual stockholder meeting through which you can listen to the
meeting and vote online. The Annual Meeting can be accessed by visiting https://
www.proxydocs.com/TENB and entering your control number which is included in the proxy materials
mailed to you. Upon completing your registration, you will receive further instructions via email,
including a unique link that will allow you access to the Annual Meeting. We recommend that you log
in a few minutes before the Annual Meeting to ensure that you are logged in when the meeting starts.
Online check-in will begin at approximately 12:45 p.m. Eastern Time. Information on how to vote
online during the Annual Meeting is discussed below.
Stockholders attending the virtual meeting will be afforded the same rights and opportunities to
participate as they would at an in-person meeting, however any questions will need to be submitted in
advance of the meeting. In accordance with the rules of conduct, we ask that you limit your
submission to one brief question or comment prior to the meeting that is relevant to the Annual
Meeting or our business and that such remarks are respectful of your fellow stockholders and meeting
participants.
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Who can vote at the Annual Meeting?
Only stockholders of record at the close of business on March 28, 2024 (the "Record Date") will
be entitled to vote at the Annual Meeting. On the Record Date, there were 118,743,082 shares of the
Company's common stock outstanding and entitled to vote.
Stockholder of Record: Shares Registered in Your Name
If on March 28, 2024 your shares were registered directly in your name with Tenable’s transfer
agent, Equiniti Trust Company, LLC (formerly American Stock Transfer & Trust Company, LLC), then
you are a stockholder of record with respect to those shares and the Notice was sent directly to you
by the Company. As ast ockholder of record, you may vote online during the meeting or vote by proxy.
Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy using a proxy
card that you may request or that we may elect to deliver at a later time or vote by proxy over the
telephone or Internet as instructed below to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If on March 28, 2024 your shares were held, not in your name, but rather in an account at a
brokerage firm, bank or other similar organization, then you are the beneficial owner of shares held in
“street name” and the Notice is being forwarded to you by that organization. The organization holding
your account is considered to be the stockholder of record for purposes of voting at the Annual
Meeting. As a beneficial owner, you have the right to direct that organization on how to vote the
shares in your account. You will receive instructions from the organization that you must follow in
order to submit your voting instructions and have your shares voted at the Annual Meeting. You are
also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you
may not vote your shares online during the Annual Meeting unless you request and obtain a valid
proxy from the organization.
What am I voting on?
There are three matters scheduled for avote:
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Election of three directors (Proposal 1);
Ratification of selection by the Audit Committee of the Board of Directors of Ernst & Young
LLP as independent registered public accounting firm of the Company for the year ending
December 31, 2024 (Proposal 2); and
Advisory approval, on a non-binding basis, of the compensation of our Named Executive
Officers as disclosed in this proxy statement (Proposal 3).
What if another matter is properly brought before the meeting?
The Board of Directors knows of no other matters that will be presented for consideration at the
Annual Meeting. If any other matters are properly brought before the meeting, it is the intention of the
persons named in the accompanying proxy to vote on those matters in accordance with their best
judgment.
How do Ivo te?
You may either vote “For” all the nominees to the Board of Directors or you may “Withhold” your
vote for any nominee you specify. For Proposals 2and 3, you may vote “For” or “Against” or "Abstain"
from voting.
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Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote online during the Annual Meeting, vote by proxy
using a proxy card that you may request or that we may elect to deliver at a later time, vote by proxy
over the telephone or vote by proxy through the Internet. Whether or not you plan to attend the
meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the
meeting and vote online during the meeting even if you have already voted by proxy.
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To vote online during the meeting, access the Annual Meeting by visiting
www.proxypush.com/TENB and entering your control number which is included in the proxy
materials mailed to you. Please have your Notice in hand when you access the website and
follow the instructions.
To vote using the proxy card, simply complete, sign and date the proxy card that may be
delivered and return it promptly in the envelope provided. If you return your signed proxy card
to us before the Annual Meeting, we will vote your shares as you direct.
To vote over the telephone, dial toll-free 866-230-6244 using a touch-tone phone and follow
the recorded instructions. You will be asked to provide the control number from the Notice. To
ensure your vote is counted, your telephone vote must be received either prior to the start of
the meeting or, if you are attending the meeting, before the polls close during the meeting.
To vote through the Internet, go to www.proxypush.com/TENB to complete an electronic
proxy card. You will be asked to provide the control number from the Notice. To ensure your
vote is counted, your Internet vote must be received either prior to the start of the meeting or,
if you are attending the meeting, before the polls close during the meeting.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent,
you should have received a Notice containing voting instructions from that organization rather than
from Tenable. Simply follow the voting instructions in the Notice to ensure that your vote is counted.
To vote online during the Annual Meeting, you must obtain a valid proxy from your broker, bank or
other agent. Follow the instructions from your broker, bank or other agent included with these proxy
materials, or contact that organization to request a proxy form.
Internet proxy voting will be provided to allow you to vote your shares online, with procedures
designed toensu re the authenticity and correctness of your proxy vote instructions. However,
please be aware that you must bear any costs associated with your Internet access, such as
usage charges from Internet access providers and telephone companies.
How many votes do I have?
On each matter to be voted upon, you have one vote for each share of common stock you own as
of March 28, 2024.
If I am astoc kholder of record and Ido not vote, or if I return a proxy card or otherwise vote
without giving specific voting instructions, what happens?
If you are a stockholder of record and do not vote by completing your proxy card, by telephone,
through the Internet or online during the Annual Meeting, your shares will not be voted.
If you return a signed and dated proxy card or otherwise vote without marking voting selections,
your shares will be voted, as applicable, “For” the election of all nominees for director, “For” the
ratification of Ernst & Young LLP as independent auditors for the year ending December 31, 2024,
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and "For" the approval of, on anon-binding advisory b asis, the compensation of our Named
Executive Officers. If any other matter is properly presented at the meeting, your proxy holder (one of
the individuals named on your proxy card) will vote your shares using his or her best judgment.
If I am abe neficial owner of shares held in street name and Ido not prov ide my broker or bank
with voting instructions, what happens?
If you are a beneficial owner of shares held in street name and you do not instruct your broker,
bank or other agent how to vote your shares, your broker, bank or other agent may still be able to
vote your shares in its discretion. In this regard, brokers, banks and other securities intermediaries
may use their discretion to vote your “uninstructed” shares with respect to matters considered to be
“routine” under applicable rules, but not with respect to “non-routine” matters. Proposals 1and 3 are
considered to be “non-routine” under applicable rules, meaning that your broker may not vote your
shares on those proposals in the absence of your voting instructions. However, Proposal 2 is
considered to be “routine” under applicable rules, meaning that if you do not return voting instructions
to your broker by its deadline, your shares may be voted by your broker in its discretion on Proposal
2.
If you are a beneficial owner of shares held in street name, in order to ensure your shares
are voted in the way you would prefer, you must provide voting instructions to your broker,
bank or other agent by the deadline provided in the materials you receive from your broker,
bank or other agent.
Who is paying for this proxy solicitation?
We will pay for the entire cost of soliciting proxies. In addition to these proxy materials, our
directors and employees may also solicit proxies in person, by telephone or by other means of
communication. Directors and employees will not be paid any additional compensation for soliciting
proxies. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding
proxy materials to beneficial owners.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in
different accounts. Please follow the voting instructions on the Notice to ensure that all of your shares
are voted.
Can Ichan ge my vote after submitting my proxy?
Stockholder of Record: Shares Registered in Your Name
Yes. You can revoke your proxy at any time before the final vote at the Annual Meeting. If you are
the record holder of your shares, you may revoke your proxy in any one of the following ways:
•
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You may submit another properly completed proxy card with a later date.
You may grant a subsequent proxy by telephone or through the Internet.
You may send a timely written notice that you are revoking your proxy to Tenable Holdings,
Inc., Attention: Corporate Secretary at 6100 Merriweather Drive, 12th Floor, Columbia,
Maryland 21044.
You may attend the Annual Meeting and vote online. Simply attending the Annual Meeting will
not, by itself, revoke your proxy.
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Your most current proxy card or telephone or Internet proxy is the one that is counted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If your shares are held by your broker, bank or other agent, you should follow the instructions
provided by your broker, bank or other agent.
When are stockholder proposals and director nominations due for next year’s Annual
Meeting?
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in
writing by December 12, 2024, to 6100 Merriweather Drive, 12th Floor, Columbia, Maryland 21044. If
you wish to nominate an individual for election at, or bring business other than through a stockholder
proposal before, the 2025 Annual Meeting of Stockholders, you must deliver your notice to our
Corporate Secretary at the address above between January 22, 2025 and February 21, 2025. Your
notice to the Corporate Secretary must set forth information specified in our bylaws, including your
name and address and the class and number of shares of our stock that you beneficially own. In
addition to satisfying the foregoing requirements under Tenable's bylaws, to comply with the universal
proxy rules, stockholders who intend to solicit proxies in support of director nominees other than
Tenable's nominees must provide notice that sets forth the information required by Rule 14a-19(b)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act").
If you propose to bring business before an annual meeting of stockholders other than a director
nomination, your notice must also include, as to each matter proposed, the following: (1) abrief
description of the business desired to be brought before such annual meeting, (2) the text of the
proposal or business (including the text of any resolutions proposed for consideration and in the event
that such business includes a proposal to amend the bylaws, the language of the proposed
amendment), (3) the reasons for conducting that business at the annual meeting, and (4) any material
interest you have in that business. If you propose to nominate an individual for election as adirect or,
your notice must also include, as to each person you propose to nominate for election as a director,
the following: (1) the name, age, business address and residence address of the person, (2) the
principal occupation or employment of the person, (3) the class and number of shares of our stock
that are owned of record and beneficially owned by the person, (4) the date or dates on which the
shares were acquired and the investment intent of the acquisition; (5) aques tionnaire with respect to
the background, qualifications, stock ownership and independence of the person and a written
representation or agreement that the person is not and will not become a party to any voting
commitment, and (6) any other information concerning the person as would be required to be
disclosed in a proxy statement soliciting proxies for the election of that person as adirect or in an
election contest (even if an election contest is not involved and whether or not proxies are being or
will be solicited), or that is otherwise required to be disclosed or provided to the Company pursuant to
Section 14 of the Exchange Act, and the rules and regulations promulgated under the Exchange Act,
including the person's written consent to being named in a proxy statement, associated proxy card
and other filings as a nominee and to serving as adirect or if elected. We may require any proposed
nominee to furnish other information as we may reasonably require to determine the eligibility of the
proposed nominee to serve as an independent director or that could be material to a reasonable
stockholder's understanding of the independence, or lack of independence, of the proposed nominee.
For more information, and more detailed requirements about advance notice of stockholder
proposals and director nominations, please refer to our Second Amended and Restated Bylaws, filed
as Exhibit 3.1 to our Current Report on Form 8-K (File No. 001-38600), filed with the SEC on
November 15, 2023.
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How are votes counted?
Votes will be counted by the inspector of election appointed for the meeting, who will separately
count, for Proposal 1, the proposal to elect directors, votes “For,” “Withhold” and broker non-votes
(described below); for Proposal 2, the proposal to ratify our independent auditors, votes “For,”
“Against” and “Abstain”; and, for Proposal 3, the proposal to approve, on a non-binding advisory
basis, the compensation of our Named Executive Officers, ”For," "Against" and “Abstain” and
broker non-votes. If you “Abstain” it will be counted towards the vote total for Proposals 2and 3. For
Proposal 2 and 3, it will have the same effect as “Against” votes. Broker non-votes on Proposals 1
and 3 will have no effect and will not be counted toward the vote total for those proposals. We do not
expect broker non-votes on Proposal 2.
What are “broker non-votes”?
A "broker non-vote" occurs when your broker submits aproxy f or the meeting with respect to
"routine" matters but does not vote on "non-routine" matters because you did not provide voting
instructions on such "non-routine" matters. These un-voted shares with respect to the "non-routine
matters" are counted as “broker non-votes.” Proposals 1and 3 are considered to be “non-routine”
under applicable rules and we therefore expect broker non-votes on these proposals. However, as
Proposal 2 is considered “routine” under applicable rules, we do not expect broker non-votes on this
proposal.
As a reminder, if you are a beneficial owner of shares held in street name, in order to
ensure your shares are voted in the way you would prefer, you must provide voting
instructions to your broker, bank or other agent by the deadline provided in the materials you
receive from your broker, bank or other agent.
How many votes are needed to approve each proposal?
For Proposal 1, the election of directors, the three nominees receiving the most “For” votes from
the holders of shares present online at the meeting or represented by proxy and entitled to vote on
the election of directors will be elected. Only votes “For” will affect the outcome. Broker non-votes will
have noef fect.
To be approved, Proposal 2, ratification of the selection of Ernst & Young LLP as the Company’s
independent registered public accounting firm for 2024, must receive “For” votes from the holders of a
majority of shares present online at the meeting or represented by proxy and entitled to vote on the
matter. If you “Abstain” from voting, it will have the same effect as an “Against” vote. Since brokers
have the authority to vote on your behalf with respect to Proposal 2, we do not expect broker non-
votes on this proposal.
For Proposal 3, advisory approval of the compensation of our Named Executive Officers will be
considered to be approved if it receives "For" votes from the holders of a majority of the shares
present online at the meeting or represented by proxy and entitled to vote thereon to be approved. If
you “Abstain” from voting, it will have the same effect as an “Against” vote on this proposal. Broker
non-votes will have no effect.
What is the quorum requirement?
A quorum of stockholders is necessary to hold avalid meeting. A quorum will be present if
stockholders holding at least a majority of the voting power of the outstanding shares entitled to vote
are present online at the meeting or represented by proxy. On the Record Date, there were
14
118,743,082 shares outstanding and entitled to vote. Thus, the holders of 59,371,542 shares must be
present online at the meeting or represented by proxy at the meeting to have a quorum.
Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no
quorum, the chairperson of the meeting or the holders of a majority of shares present online at the
meeting or represented by proxy may adjourn the meeting to another date.
Will a list of record stockholders as of the Record Date be available?
Upon request, a list of our record stockholders as of the close of business on the Record Date will
be made available to stockholders. In addition, for the ten days ending the day prior to the Annual
Meeting, the list will be available upon request for examination by any stockholder of record for a
legally valid purpose. To access the list of record stockholders beginning May 12, 2024 and until the
Annual Meeting, stockholders should email David Bartholomew, Deputy General Counsel, at
dbartholomew@tenable.com.
How do Iask a question at the Annual Meeting?
Only stockholders of record as of March 28, 2024 may submit questions or comments in advance
of the virtual stockholders meeting, not during. If you would like to submit a question or comment, you
may do so prior to 5:00 p.m. Eastern Time on May 20, 2024 by following the instructions in your
registration documents on https://www.proxydocs.com/TENB.
To help ensure that we have aproduc tive and efficient meeting, and in fairness to all stockholders
in attendance, you will also find posted our rules of conduct for the Annual Meeting when you log in
prior to the start of the Annual Meeting. Our management may group pre-submitted questions by topic
with a representative question read aloud and answered. In addition, questions may be ruled out of
order if they are, among other things, irrelevant to our business, related to pending or threatened
litigation, disorderly, repetitious of statements already made, or in furtherance of the speaker's own
personal, political or business interests. Questions will be addressed in the "Question and Answer"
portion of the Annual Meeting.
What do I do if I have technical difficulties in connection with the Annual Meeting?
If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time,
please call the technical support number that will be posted on the Annual Meeting login page.
Technical support will be available beginning at approximately 12:00 p.m. Eastern Time on May 22,
2024.
How can I find out the results of the voting at the Annual Meeting?
Preliminary voting results will be announced at the Annual Meeting. In addition, final voting results
will be published in a current report on Form 8-K that we expect to file within four business days after
the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four
business days after the meeting, we intend to file a Form 8-K to publish preliminary results and, within
four business days after the final results are known to us, file an additional Form 8-K to publish the
final results.
15
PROPOSAL 1
ELECTION OF DIRECTORS
Tenable’s Board of Directors is divided into three classes and each class has a three-year term.
Vacancies on the Board may be filled only by persons elected by a majority of the remaining directors. A
director elected by the Board to fill a vacancy in aclass, including vacancies created by an increase in the
number of directors, shall serve for the remainder of the full term of that class and until the director’s
successor is duly elected and qualified.
The Board of Directors currently consists of nine members. There are three directors in the class whose
term of office expires in 2024. Mr. Coviello was previously elected by Tenable's stockholders. Ms. Keane and
Mr. Tosheff were recommended to the Board by amember of senior management, nominated by the
Nominating and Corporate Governance Committee, and elected by the Board. If elected at the Annual
Meeting, each of these nominees would serve until the 2027 Annual Meeting of Stockholders and until their
successor has been duly elected and qualified, or, if sooner, until the director’s death, resignation or removal.
It is the Company’s policy to invite and encourage directors and nominees for director to attend each annual
meeting of stockholders. In 2023, all of our then-serving directors attended the Annual Meeting.
Directors are elected by a plurality of the votes of the holders of shares present online at the meeting or
represented by proxy and entitled to vote on the election of directors. Accordingly, the three nominees
receiving the highest number of affirmative votes will be elected. Shares represented by executed proxies
will be voted, if authority to do so is not withheld, for the election of the three nominees named below. If any
nominee becomes unavailable for election as a result of an unexpected occurrence, shares that would have
been voted for that nominee will instead be voted for the election of a substitute nominee proposed by the
Board. Each person nominated for election has agreed to serve if elected. The Company’s management has
no reason to believe that any nominee will be unable to serve.
The following table reflects certain diversity information regarding our directors based on self-
identification by each director.
Board Diversity Matrix (as of March 28, 2024)
Total Number of Directors
Part I: Gender Identity
Directors
Part II: Demographic Background
African American or Black
White
Did Not Disclose Demographic Background
Female
Male
3
0
3
9
1
6
1
4
Our Board Diversity Matrix as of March 30, 2023 can be found in our proxy statement for the 2023
Annual Meeting filed with the SEC on April 12, 2023.
16
The following table lists the skills and experience that our Nominating and Corporate Governance
Committee and Board consider important for our directors to have given our current business and future
market opportunities, and the directors who we believe possess them:
Coviello Higgins Howe
Huffard Keane Seawell Tosheff
Vicks
Yoran
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
Cybersecurity
Experience
Enterprise SaaS
Experience
CEO/COO
Management
Experience
Operations
Experience
Business
Development
Experience
Moving Innovation
Through to
Commercialization
Relationships with
the DoD and/or other
Relevant Agencies
Capital Markets
Experience
Financial Reporting,
Accounting and
Internal Controls
Experience
Board/Corporate
Governance
Experience
Human Resources/
Executive
Compensation
Legal and/or Risk
Management
Experience
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
✔
17
CLASS III NOMINEES FOR ELECTION FOR A THREE-YEAR TERM EXPIRING AT THE 2027 ANNUAL
MEETING
The following is abrief b iography of each nominee for director and a discussion of the specific
experience, qualifications, attributes or skills of each nominee that led the Nominating and Corporate
Governance Committee of the Board of Directors to recommend that person as anominee for director, as of
the date of this proxy statement.
The Nominating and Corporate Governance Committee seeks to assemble a board of directors that, as
a whole, possesses the appropriate balance of professional and industry knowledge, financial expertise and
high-level management experience necessary to oversee and direct the Company’s business. To that end,
the Committee has identified and evaluated nominees in the broader context of the Board’s overall
composition, with the goal of recruiting members who complement and strengthen the skills of other
members and who also exhibit integrity, collegiality, sound business judgment and other qualities that the
Committee views as critical to the effective functioning of the Board. To provide a mix of experience and
perspective on the Board, the Committee also takes into account gender, age, and ethnic diversity. The brief
biographies below include information, as of the date of this proxy statement, regarding the specific and
particular experience, qualifications, attributes or skills of each director or nominee that led the Committee to
believe that that nominee should continue to serve on the Board.
18
Arthur W. Coviello, Jr., age 70
Arthur W. Coviello, Jr. has served as a member of our Board of Directors since
February 2018 and as our Lead Independent Director since February 2022. Mr.
Coviello has served as Managing Partner of Syn Ventures, a venture capital
fund, since June 2021. Mr. Coviello has served on the Board of Directors of
Synchrony Financial ("Synchrony") since November 2015. Mr. Coviello was
previously a venture partner at Rally Ventures, LLC, a position he held from May
2015 to July 2022, and previously was on the boards of directors of FireEye/
Mandiant, Inc. from December 2020 to October 2022, and Epiphany Technology
Acquisition Corp. from November 2020 to January 2023. Mr. Coviello received a
B.B.A. with a concentration in Accounting from the University of Massachusetts.
Our Board of Directors believes that Mr. Coviello is qualified to serve as a
director based on his extensive security industry and management experience
and his experience as adirect or of public technology companies.
George Alexander Tosheff, age 57
George Alexander Tosheff has served as a member of our Board of Directors
since September 2022. Mr. Tosheff has served as Senior Vice President, Chief
Security Officer of VMware, Inc. (recently acquired by Broadcom) since
February 2022 following his promotion from Vice President, Chief Security
Officer, a position he held since 2014. Mr. Tosheff served as amember of our
Customer Advisory Board from 2017 until September 2022. Mr. Tosheff received
a B.S. in Physics from California State University. Our Board of Directors
believes that Mr. Tosheff is qualified to serve as a director based on his
extensive cybersecurity expertise and management experience.
Margaret Keane, age 64
Margaret Keane has served as a member of our Board of Directors since June
2023. Ms. Keane is the former Executive Chair of the Board of Directors of
Synchrony, a position she held from April 2021 to April 2023. Ms. Keane was a
member of Synchrony's Board of Directors from 2013 to April 2023. Ms. Keane
served as Synchrony’s Chief Executive Officer from February 2014 to March
2021 and President from February 2014 to May 2019. She previously served as
the Chief Executive Officer and President of the North American retail finance
business of the General Electric Company from April 2011 to February 2014.
Ms. Keane serves on the Board of Directors for the Allstate Corporation, an
insurance company, a position she has held since April 2018. Ms. Keane earned
a bachelor’s degree in government and politics and an M.B.A. from St. John’s
University. Our Board of Directors believes that Ms. Keane is qualified to serve
as a director based on her extensive management experience.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH NAMED NOMINEE.
19
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2025 ANNUAL MEETING
Amit Yoran, age 53
Amit Yoran has served as our Chief Executive Officer and Chairman since
December 2016 and was appointed as our President, in addition to Chief
Executive Officer and Chairman, in May 2018. Mr. Yoran has served on the
Board of Directors of BlackLine Systems, Inc., an enterprise software company,
since January 2023. Prior to joining Tenable, Mr. Yoran served as President of
RSA Solutions, Inc. from October 2014 to December 2016. Mr. Yoran received a
B.S. in Computer Science from the United States Military Academy at West
Point and an M.S. in Computer Science from George Washington University.
Our Board of Directors believes that Mr. Yoran is qualified to serve as a director
based on his role as our Chief Executive Officer and his extensive management
experience in the technology and security industries.
Niloofar Razi Howe, age 55
Niloofar Razi Howe has served as a member of our Board of Directors since
May 2021. Ms. Howe has served as a Senior Operating Partner at Energy
Impact Partners, a venture capital fund since 2019. Ms. Howe has served on
the Board of Directors of Composecure, Inc. since December 2021. Ms. Howe
also currently serves on the board of directors of a number of private technology
companies. Ms. Howe received a B.A. in English Literature from Columbia
College and holds a Juris Doctor degree from Harvard Law School. Our Board
of Directors believes that Ms. Howe is qualified as adirect or based on her
extensive cybersecurity and management experience and her experience as a
director of technology companies.
Linda Zecher Higgins, age 70
Linda Zecher Higgins has served as a member of our Board of Directors since
August 2019. Ms. Higgins is the Chief Executive Officer and Managing Director
of the Barkley Group, a consulting firm focused on effective digital
transformation, and has held such positions since January 2017. Ms. Higgins
has served as a member of the board of directors of Hasbro, Inc. since October
2014. Ms. Higgins served as a member of the board of directors of C5
Acquisition Corp from January 2022 to September 2023 and also served as the
Corporate Vice President, Worldwide Public Sector of Microsoft Corporation
from 2003 to 2011. In July 2023, Ms. Higgins was hired as the Chief Executive
Officer of IronNet, Inc., a cybersecurity company, to assist in its restructuring
efforts. In October 2023, IronNet, Inc., filed avoluntary C hapter 11 restructuring
plan with the U.S. Bankruptcy Court for the District of Delaware, which was
completed in February 2024. Ms. Higgins received a B.S. in Earth Science from
The Ohio State University. Our Board of Directors believes that Ms. Higgins is
qualified to serve as a director based on her extensive management experience
with technology companies and her experience as adirect or of public
companies.
20
DIRECTORS CONTINUING IN OFFICE UNTIL THE 2026 ANNUAL MEETING
John C. Huffard, Jr., age 56
John C. Huffard, Jr. has served as a member of our Board of Directors since
2002. Mr. Huffard served as our Chief Operating Officer from May 2018 through
December 2019. Prior to that, he served as our President and Chief Operating
Officer from November 2008 to May 2018, and he co-founded our company in
2002. Mr. Huffard has also served as a member of the board of directors of
Norfolk Southern Corporation since February 2020. Mr. Huffard received a
B.S.B.A. from Washington and Lee University and an M.B.A. from Babson
College. Our Board of Directors believes that Mr. Huffard is qualified to serve as
a director based on his in-depth knowledge of our company and our products
due to his role as our co-founder and subsequent role as our Chief Operating
Officer.
A. Brooke Seawell, age 76
A. Brooke Seawell has served as a member of our Board of Directors since
October 2017. Mr. Seawell is aVe nture Partner at New Enterprise Associates
Inc., a position he has held since January 2005. Mr. Seawell has served on the
board of directors of NVIDIA Corporation, an accelerated computing company,
since December 1997. He previously served on the board of directors of Eargo,
Inc., a medical device company, from September 2020 to December 2022, and
Tableau Software, Inc., a business intelligence software company, from
November 2011 to August 2019. Mr. Seawell received both a B.A. in Economics
and an M.B.A. in Finance from Stanford University. Our Board of Directors
believes that Mr. Seawell is qualified to serve as a director based on his
extensive experience in technology finance and operations, including having
served as the chief financial officer of two public companies and his experience
as a director of public technology companies.
Raymond Vicks, Jr., age 64
Raymond Vicks, Jr. has served as a member of our Board of Directors since
January 2022. Mr. Vicks has served on the Board of Directors of Bowman
Consulting Group Ltd since May 2022. Mr. Vicks previously served as Managing
Partner at the BMV Group, a position he held from August 2015 until his
retirement in 2019. Concurrent with that role, Mr. Vicks also served as the Chief
Financial Officer of the HSC Health Care System from 2015 to 2018. Prior to
that, Mr. Vicks served in roles of increasing responsibility at
PricewaterhouseCoopers LLP from 1995 to 2014, where at the time of his
departure, he was a Partner. Mr. Vicks is a Certified Public Accountant and
received a B.S. in accounting from Virginia Tech. Our Board of Directors
believes that Mr. Vicks is qualified to serve as a director based on his based on
his extensive public accounting and management experience.
21
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
Independence of the Board of Directors
As required under the Nasdaq Stock Market (“Nasdaq”) listing standards, a majority of the
members of a listed company’s Board of Directors must qualify as “independent,” as affirmatively
determined by the Board of Directors. The Board consults with the Company’s counsel to ensure that
the Board’s determinations are consistent with relevant securities and other laws and regulations
regarding the definition of “independent,” including those set forth in pertinent listing standards of
Nasdaq, as in effect from time to time.
Our Board determines the independence of each director based on their business and personal
activities that might affect us and our management. Each director completes a detailed questionnaire
on an annual basis that provides information about relationships that might affect their independence.
The Board, with support from our counsel, then evaluates all known relevant facts and circumstances
concerning any identified relationship and assesses whether any such relationship would interfere
with the independent judgment of the director in carrying out their responsibilities. Consistent with
these considerations, after review of all relevant identified transactions or relationships between each
director, or any of his or her family members, and the Company, its senior management and its
independent registered public accounting firm, the Board has affirmatively determined that the
following eight of our current directors are independent directors within the meaning of the applicable
Nasdaq listing standards: Arthur W. Coviello, Jr., John C. Huffard, Jr., Margaret Keane, Niloofar Razi
Howe, A. Brooke Seawell, George Alexander Tosheff, Raymond Vicks, Jr., and Linda Zecher Higgins.
In making this determination, the Board found that none of these directors or nominees for director
had a material or other disqualifying relationship with the Company.
Board Leadership Structure
Our Board of Directors is currently chaired by Mr. Yoran, our Chief Executive Officer. The Board
believes that combining the positions of Chief Executive Officer and Board Chair helps to ensure that
the Board and management act with a common purpose and provides a single, clear chain of
command to execute Tenable’s strategic initiatives and business plans. In addition, the Board
believes that a combined Chief Executive Officer/Board Chair is better positioned to act as abridge
between management and the Board, facilitating the regular flow of information. The Board also
believes that it is advantageous to have aBo ard Chair with significant history with and extensive
knowledge of Tenable (as is the case with Mr. Yoran).
The Board has also appointed Mr. Coviello as lead independent director in order to help reinforce
the independence of the Board as a whole. Mr. Coviello will remain lead independent director until
February of 2025, assuming his re-election as of the 2024 Annual Meeting. The position of lead
independent director has been structured to serve as an effective balance to Mr. Yoran’s leadership
as our combined Chief Executive Officer and Board Chair. Mr. Coviello has served as a director since
2018 and currently serves as the Chair of the Nominating and Corporate Governance Committee. Mr.
Coviello has extensive security industry and management experience, and experience as adirect or of
public technology companies. The Board believes Mr. Coviello's experience, breadth of knowledge
and contributions to the Board position him well to provide strong leadership and oversight of ongoing
Board matters and to contribute valuable insight with respect to Tenable's business. The Board
believes that Mr. Coviello is highly qualified to assist the Board in overseeing the identification,
assessment and management of the Company's exposure to various risks as a result of his extensive
management and security experience. The Board believes that Mr. Coviello will be able to provide
leadership and help guide the Board's independent oversight of the Company's risk exposures
through his role as lead independent director. The lead independent director is empowered to, among
22
other duties and responsibilities, work with the Chief Executive Officer and Board Chair to develop
and approve an appropriate Board meeting schedule and Board meeting agendas; provide the Chief
Executive Officer and Board Chair feedback on the quality, quantity, and timeliness of the information
provided to the Board; develop the agenda and moderate executive sessions of the independent
members of the Board; preside over Board meetings when the Chief Executive Officer and Board
Chair is not present or when Board or Chief Executive Officer performance or compensation is
discussed; act as principal liaison between the independent members of the Board and Chief
Executive Officer and Board Chair; convene meetings of the independent directors as appropriate;
and perform such other duties as may be established or delegated by the Board. As a result, the
Company believes that the lead independent director can help ensure the effective independent
functioning of the Board in its oversight responsibilities.
Role of the Board in Risk Oversight
One of the Board’s key functions is informed oversight of Tenable’s risk management process.
The Board does not have a standing risk management committee, but rather administers this
oversight function directly through the Board as awhole, as well as through various Board standing
committees that address risks inherent in their respective areas of oversight. In particular, our Board
is responsible for monitoring and assessing strategic risk exposure, including a determination of the
nature and level of risk appropriate for the Company.
Our Audit Committee has the responsibility to consider and discuss our major financial risk
exposures and the steps our management has taken to monitor and control these exposures,
including risks pertaining to financial accounting, investments and cash management, and disclosure
controls and procedures. The Audit Committee also monitors compliance with legal and regulatory
requirements and oversees the performance of our internal audit function and the performance and
independence of external auditors.
Our Nominating and Corporate Governance Committee monitors the effectiveness of our
corporate governance guidelines, including as it relates to regulatory changes and other
developments. The Nominating and Corporate Governance Committee also oversees our corporate
social responsibility program, stockholder engagement, and board and committee composition and
refreshment.
Our Compensation Committee assesses and monitors whether any of our compensation policies
and programs has the potential to encourage excessive risk-taking, and risks associated with human
capital management, including recruiting, retention, diversity and inclusion.
Our Cybersecurity Risk Management Committee assists the Board in fulfilling its oversight
responsibility with respect to the management of risks related to our information technology use and
protection, cybersecurity, and product security.
Typically, the entire Board meets with members of management responsible for risk management
at least annually, and the applicable Board committees meet at least annually with the employees
responsible for risk management in the committees’ respective areas of oversight. Both the Board as
a whole and the various standing committees receive periodic reports from members of management
responsible for risk management, as well as incidental reports as matters may arise. It is the
responsibility of the committee chairs to report findings regarding material risk exposures to the Board
as quickly as possible.
23
Meetings of the Board of Directors
The Board of Directors met four times during 2023. All directors attended at least 75% of the
aggregate number of meetings of the Board and of each of the committees on which they served,
held during the portion of the last year for which they were directors or committee members,
respectively.
Information Regarding Committees of the Board of Directors
The Board has four committees: an Audit Committee, a Compensation Committee, a
Cybersecurity Risk Management Committee, and a Nominating and Corporate Governance
Committee. The following table provides the current membership of each of the Board committees,
and identifies the chairperson of each committee and the number of committee meetings held in
2023:
Name
Arthur W. Coviello, Jr.
Margaret Keane(1)
Linda Zecher Higgins
Niloofar Razi Howe(2)
John C. Huffard, Jr.(3)
A. Brooke Seawell
George Alexander Tosheff
Raymond Vicks, Jr.
Total meetings in 2023
_____________
*
Committee Chairperson
Audit
Compensation
Cybersecurity
Risk
Management
Nominating and
Corporate
Governance
X*
X
X*
X
5
X
X*
X
4
X
X
4
X
X*
X
X
8
Ms. Keane joined the Board, Compensation Committee and Cybersecurity Risk Management
(1)
Committee in June 2023.
(2)
2023.
(3)
Ms. Howe was elected to the Nominating and Corporate Governance Committee in June
Mr. Huffard was elected to the Audit Committee in August 2023.
Below is adescripti on of each committee of the Board of Directors. Each of the committees has
the authority to engage legal counsel or other experts or consultants, as it deems appropriate to carry
out its responsibilities. The Board of Directors has determined that each member of each committee
meets the applicable Nasdaq rules and regulations regarding “independence” and each member is
free of any relationship that would impair his or her individual exercise of independent judgment with
regard toth e Company.
Audit Committee
The Audit Committee of the Board of Directors was established by the Board in accordance with
Section 3(a)(58)(A) of the Exchange Act to oversee the Company’s corporate accounting and
financial reporting processes and audits of its financial statements. For this purpose, the Audit
Committee performs several functions. The principal duties and responsibilities of our audit committee
include, among other things:
•
selecting a qualified firm to serve as the independent registered public accounting firm to
audit our financial statements;
24
•
•
•
•
•
•
•
•
approving (or, as permitted, pre-approving) all audit and all permissible non-audit services to
be performed by the independent registered public accounting firm;
helping to ensure the independence and performance of the independent registered public
accounting firm;
obtaining and reviewing areport b y the independent registered public accounting firm at least
annually, that describes its internal quality-control procedures, any material issues with such
procedures, and any steps taken to deal with such issues when required by applicable law;
discussing the scope and results of the audit with the independent registered public
accounting firm, and reviewing, with management and the independent registered public
accounting firm, our interim and year-end operating results, including a review of our
disclosures under "Management's Discussion and Analysis of Financial Condition and
Results of Operations";
reviewing our policies on risk assessment and risk management;
overseeing the organization and performance of the Company's internal audit function;
developing procedures for employees to submit concerns anonymously about questionable
accounting or audit matters;
reviewing related party transactions; and
• meeting in executive session with management and the Company's independent registered
public accountants.
The Audit Committee is currently composed of four directors: Messrs. Seawell, Huffard, Tosheff,
and Vicks. The Audit Committee met eight times during 2023. The Board has adopted a written Audit
Committee charter that is available to stockholders on our website at www.investors.tenable.com.
The Board of Directors reviews the Nasdaq listing standards definition of independence for Audit
Committee members on an annual basis and has determined that all of the current members of the
Audit Committee are independent (as independence is currently defined in Rule 5605(c)(2)(A)(i) and
(ii) of the Nasdaq listing rules and under Rule 10A-3 under the Exchange Act).
The Board of Directors has also determined that Messrs. Seawell and Vicks each qualifies as an
“audit committee financial expert,” as defined in applicable SEC rules. The Board made a qualitative
assessment of Messrs. Seawell's and Vicks' level of knowledge and experience based on a number
of factors, including their formal education, Mr. Seawell's experience as achief f inancial officer of
public reporting companies and Mr. Vicks' public accounting experience.
Report of the Audit Committee of the Board of Directors*
The Audit Committee has reviewed and discussed the audited financial statements for the year
ended December 31, 2023 with management of the Company. The Audit Committee has discussed
with the independent registered public accounting firm the matters required to be discussed by the
applicable requirements of the Public Company Accounting Oversight Board (“PCAOB”) and SEC.
The Audit Committee has also received the written disclosures and the letter from the independent
registered public accounting firm required by applicable requirements of the PCAOB regarding the
independent registered public accounting firm's communications with the audit committee concerning
independence, and has discussed with the independent registered public accounting firm the
accounting firm’s independence. Based on the foregoing, the Audit Committee recommended to the
Board of Directors that the audited financial statements be included in the Company’s Annual Report
on Form 10-K for the year ended December 31, 2023.
25
A. Brooke Seawell, Chair
John C. Huffard, Jr.
George Alexander Tosheff
Raymond Vicks, Jr.
*The material in this report is not "soliciting material," is not deemed "filed" with the Commission
and is not to be incorporated by reference in any filing of the Company under the Securities Act or the
Exchange Act, whether made before or after the date hereof and irrespective of any general
incorporation language in any such filing.
Compensation Committee
The Compensation Committee of the Board of Directors acts on behalf of the Board to review,
modify and oversee the Company’s compensation strategy, policies, plans and programs, including:
•
•
•
•
establishment of corporate and individual performance objectives relevant to the
compensation of our executive officers, directors and other senior management and
evaluation of performance in light of these stated objectives;
review and approve the compensation and other terms of employment or service, including
severance and change-in-control arrangements, of our Chief Executive Officer, the other
executive officers and other senior management;
review and recommend to the Board for approval the type and amount of compensation to be
paid or awarded to our directors; and
administration of our equity compensation plans, bonus plans, benefit plans and other similar
plans and programs.
The Compensation Committee is currently composed of three directors: Mses. Higgins, Howe,
and Keane. All members of the Company’s Compensation Committee are independent (as
independence is currently defined inRule 5605(d)(2) of the Nasdaq listing rules). The Compensation
Committee met five times during 2023. The Board has adopted a written Compensation Committee
charter that is available to stockholders on our website at www.investors.tenable.com.
Compensation Committee Processes and Procedures
Typically, the Compensation Committee meets quarterly and with greater frequency when
necessary. The agenda for each meeting is usually developed by the Chair of the Compensation
Committee, in consultation with the Chief Executive Officer, Chief People and Culture Officer and
Compensia, Inc. ("Compensia"), the compensation consultant engaged by the Compensation
Committee. The Compensation Committee meets regularly in executive session. In addition to our
Chief Executive Officer, our Chief People Officer and our Deputy General Counsel also regularly
attend meetings at the invitation of the Compensation Committee and take part in discussions about
executive compensation. From time to time, various members of management and other employees
as well as outside advisors or consultants may be invited by the Compensation Committee to make
presentations, to provide financial or other background information or advice or to otherwise
participate in Compensation Committee meetings. The Chief Executive Officer may not participate in,
or be present during, any deliberations or determinations of the Compensation Committee regarding
his compensation or individual performance objectives. The charter of the Compensation Committee
grants the Compensation Committee full access to all books, records, facilities and personnel of the
Company. In addition, under its charter, the Compensation Committee has the authority to obtain, at
the expense of the Company, advice and assistance from compensation consultants and internal and
external legal, accounting or other advisors and other external resources that the Compensation
Committee considers necessary or appropriate in the performance of its duties. The Compensation
26
Committee has direct responsibility for the oversight of the work of any consultants or advisers
engaged for the purpose of advising the Committee. In particular, the Compensation Committee has
the sole authority to retain, in its sole discretion, compensation consultants to assist in its evaluation
of executive and director compensation, including the authority to approve the consultant’s
reasonable fees and other retention terms. Under the charter, the Compensation Committee may
select, or receive advice from, a compensation consultant, legal counsel or other adviser to the
compensation committee, other than in-house legal counsel and certain other types of advisers, only
after taking into consideration six factors, prescribed by the SEC and Nasdaq, that bear upon the
adviser’s independence; however, there is no requirement that any adviser be independent.
During the past calendar year, after taking into consideration the six factors prescribed by the
SEC and Nasdaq described above, the Compensation Committee retained Compensia as its
compensation consultant. Our Compensation Committee identified Compensia based on
Compensia's general reputation in the industry. The Compensation Committee requested that
Compensia:
•
•
evaluate the efficacy of the Company’s existing compensation strategy and practices in
supporting and reinforcing the Company’s long-term strategic goals; and
assist in refining the Company’s compensation strategy and in developing and implementing
an executive compensation program to execute that strategy.
As part of its engagement, Compensia was requested by the Compensation Committee to review
and update the group of companies that we use for comparative purposes and to perform an analysis
of competitive performance and compensation levels for that group. The specific determinations of
the Compensation Committee with respect to executive compensation for the year ended December
31, 2023, as well as the role of the compensation consultant in assisting with those determinations,
are described in greater detail in the “Compensation Discussion and Analysis” section of this proxy
statement.
Under its charter, the Compensation Committee may form, and delegate authority to,
subcommittees as appropriate. In 2023, the Compensation Committee delegated authority to Mr.
Yoran, in his capacity as our Chief Executive Officer and Chairman, to grant, without any further
action required by the Compensation Committee, stock awards to certain employees who are not his
direct reports or officers of the Company, up to and including employees at the senior vice president
level. The purpose of this delegation of authority is to enhance the flexibility of equity award
administration within the Company and to facilitate the timely grant of stock awards to employees,
particularly new employees and promoted employees, within specified limits approved by the
Compensation Committee. The number of shares underlying awards approved by Mr. Yoran for on-
hire, annual, promotion, and retention-and-merit-based awards, are subject to certain limitations and
guidelines approved by the Compensation Committee from time to time. As part of its oversight
function, the Compensation Committee reviews on aquar terly basis the list of grants made by Mr.
Yoran. The Compensation Committee reviews the delegated authority periodically and amends it as
necessary. During 2023, Mr. Yoran exercised his authority to grant a total of 3,017,494 restricted stock
units ("RSUs") to qualifying employees. No other equity awards were granted pursuant to Mr. Yoran’s
authority during 2023.
The Compensation Committee typically makes adjustments to annual compensation, approves
changes to the key financial metric targets and formulas used to determine annual bonus payments,
approves additional equity awards and establishes new performance objectives at one or more
meetings held during the first quarter of the year. However, the Compensation Committee also
considers matters related to individual compensation, such as compensation for new executive hires,
as well as high-level strategic issues, such as the efficacy of the Company’s compensation strategy,
potential modifications to that strategy and new trends, plans or approaches to compensation, at
27
various meetings throughout the year. Generally, the Compensation Committee’s process comprises
two related elements: the determination of compensation levels and the establishment of performance
objectives for the current year. For executives other than the Chief Executive Officer, the
Compensation Committee solicits and considers evaluations and recommendations submitted to the
Committee by the Chief Executive Officer. In the case of the Chief Executive Officer, the evaluation of
his performance is conducted by the Compensation Committee, which determines any adjustments to
his compensation as well as awards to be granted. For all executives and directors as part of its
deliberations, the Compensation Committee may review and consider, as appropriate, materials such
as financial reports and projections, operational data, tax and accounting information, tally sheets that
set forth the total compensation that may become payable to executives in various hypothetical
scenarios, executive and director stock ownership information, company stock performance data,
analyses of historical executive compensation levels and current company-wide compensation levels
and recommendations of the Compensation Committee’s compensation consultant, including
analyses of executive and director compensation paid at other companies identified by the consultant.
Compensation Committee Interlocks and Insider Participation
None of the current members of our Compensation Committee has ever been an executive officer
or employee of ours. None of our executive officers currently serves, or has served during the last
completed year, on the compensation committee or board of directors of any other entity that has one
or more executive officers serving as a member of our Board of Directors or Compensation
Committee.
Report of the Compensation Committee of the Board of Directors*
The Compensation Committee has reviewed and discussed with management the Compensation
Discussion and Analysis (“CD&A”) contained in this proxy statement. Based on this review and
discussion, the Compensation Committee has recommended to the Board of Directors that the CD&A
be included in this proxy statement and incorporated into the Company’s Annual Report on Form 10-K
for the year ended December 31, 2023.
Linda Zecher Higgins, Chair
Niloofar Razi Howe
Margaret Keane
*The material in this report is not “soliciting material,” is furnished to, but not deemed “filed” with,
the Commission and is not deemed to be incorporated by reference in any filing of the Company
under the Securities Act or the Exchange Act, other than the Company’s Annual Report on Form
10-K, where it shall be deemed to be “furnished,” whether made before or after the date hereof and
irrespective of any general incorporation language in any such filing.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee of the Board of Directors is responsible
for identifying, reviewing and evaluating candidates to serve as directors of the Company (consistent
with criteria approved by the Board), reviewing and evaluating incumbent directors, recommending to
the Board for selection candidates for election to the Board of Directors, making recommendations to
the Board regarding the membership of the committees of the Board, assessing the performance of
management and the Board, developing a set of corporate governance principles for the Company
and overseeing the Company's corporate environmental, social and governance programs and
policies.
28
The Nominating and Corporate Governance Committee is currently composed of three directors:
Mr. Coviello and Mses. Higgins and Howe. All members of the Nominating and Corporate
Governance Committee are independent (as independence is currently defined in Rule 5605(a)(2) of
the Nasdaq listing rules). The Nominating and Corporate Governance Committee met four times
during 2023. The Board has adopted a written Nominating and Corporate Governance Committee
charter that is available to stockholders on our website at www.investors.tenable.com.
The Nominating and Corporate Governance Committee believes that candidates for director
should have certain minimum qualifications, including the ability to read and understand basic
financial statements and having the highest personal integrity and ethics. The Nominating and
Corporate Governance Committee also intends to consider such factors as possessing relevant
expertise upon which to be able toof fer advice and guidance to management, having sufficient time
to devote to the affairs of the Company, demonstrated excellence in his or her field, having the ability
to exercise sound business judgment and having the commitment to rigorously represent the long-
term interests of the Company’s stockholders. However, the Nominating and Corporate Governance
Committee retains the right to modify these qualifications from time to time. Board diversity and
inclusion is critical to Tenable’s success. Candidates for director nominees are reviewed in the context
of the current composition of the Board, the operating requirements of the Company and the long-
term interests of stockholders. In conducting this assessment, the Nominating and Corporate
Governance Committee typically considers diversity (including gender, racial and ethnic diversity),
age, skills and such other factors as it deems appropriate, given the current needs of the Board and
the Company, to maintain a balance of knowledge, experience and capability.
The Nominating and Corporate Governance Committee appreciates the value of thoughtful Board
refreshment, and regularly identifies and considers qualities, skills and other director attributes that
would enhance the composition of the Board. In the case of incumbent directors whose terms of office
are set to expire, the Nominating and Corporate Governance Committee will review these directors’
overall service to the Company during their terms, including the number of meetings attended, level of
participation, quality of performance and any other relationships and transactions that might impair
the directors’ independence. The Committee also takes into account the results of the Board’s self-
evaluation, conducted by outside counsel annually on a group and individual basis. In the case of
new director candidates, the Nominating and Corporate Governance Committee also determines
whether the nominee is independent for Nasdaq purposes, which determination is based upon
applicable Nasdaq listing standards, applicable SEC rules and regulations and the advice of counsel,
if necessary. The Nominating and Corporate Governance Committee then uses its network of
contacts to compile a list of potential candidates, but also engages professional search firms from
time to time to assist in identifying potential candidates. The Nominating and Corporate Governance
Committee conducts any appropriate and necessary inquiries into the backgrounds and qualifications
of possible candidates after considering the function and needs of the Board. The Nominating and
Corporate Governance Committee meets to discuss and consider the candidates’ qualifications and
then selects anominee for recommendation to the Board by majority vote.
The Nominating and Corporate Governance Committee will consider director candidates
recommended by stockholders. The Nominating and Corporate Governance Committee does not
intend to alter the manner in which it evaluates candidates, including the minimum criteria set forth
above, based on whether or not the candidate was recommended by a stockholder. Stockholders
who wish to recommend individuals for consideration by the Nominating and Corporate Governance
Committee to become nominees for election to the Board may do so by delivering a written
recommendation to the Nominating and Corporate Governance Committee at the following address:
Tenable Holdings, Inc., Attention: Corporate Secretary, 6100 Merriweather Drive, 12th Floor,
Columbia, Maryland 21044, at least 90 days, but not more than 120 days prior to the anniversary date
of the preceding year's annual meeting of stockholders. Submissions must include the name and
29
address of the stockholder on whose behalf the submission is made, the number of shares of Tenable
stock owned beneficially by such stockholder on the date of the submission, the full name of the
proposed nominee, a description of the proposed nominee’s business experience for at least the
previous five years, complete biographical information and a description of the proposed nominee's
qualifications as a director. Any submission must be accompanied by the written consent of the
proposed nominee to be named as a nominee and to serve as adirect or if elected.
Cybersecurity Risk Management Committee
The Cybersecurity Risk Management Committee of the Board of Directors assists the Board in
fulfilling its oversight responsibility with respect to the management of risks related to the Company's
information technology use and protection, cybersecurity, and product security. The Cybersecurity
Risk Management Committee is responsible for oversight of the Company's:
•
•
quality and effectiveness of the policies and procedures governing information technology
and network systems, including relating to data governance, incident response procedures
and disaster recovery capabilities, and product security;
technology senior management teams' priorities for its information technology and
engineering security functions;
• management of compliance risks and audits related to its information technology and network
systems;
•
•
•
internal access controls and audits relating to cyber and information security;
disclosures in SEC filings related to its information technology and network systems; and
cyber insurance policies and coverage.
The Cybersecurity Risk Management Committee is currently composed of three directors: Mr.
Huffard, Ms. Keane and Mr. Tosheff. All members of the Cybersecurity Risk Management Committee
are independent (as independence is currently defined in Rule 5605(a)(2) of the Nasdaq listing rules).
The Cybersecurity Risk Management Committee met four times during 2023. The Board has adopted
a written Cybersecurity Risk Management Committee charter that is available to stockholders on our
website at www.investors.tenable.com.
The Cybersecurity Risk Management Committee meets quarterly and with greater frequency if
necessary. The Cybersecurity Risk Management Committee meets regularly in executive session. In
addition to our Chief Executive Officer, our Chief Security Officer and our Chief Legal Counsel
regularly attend meetings at the invitation of the Cybersecurity Risk Management Committee. The
Cybersecurity Risk Management Committee also has direct access to our Chief Security Officer and
evaluates his performance. From time to time, various members of management and other
employees as well as outside advisors may be invited by the Cybersecurity Risk Management
Committee to brief the committee members on the current threat landscape and cybersecurity efforts.
Under its charter, the Cybersecurity Risk Management Committee is granted authority to retain
independent advisors and investigate matters brought to its attention.
Stockholder Communications with the Board of Directors
All stockholders and other interested parties are welcome to communicate with our non-
management directors through an established process for stockholder communication. For
communication directed to our non-management directors, please contact our Corporate Secretary or
Legal Department in writing at the address listed below.
30
Tenable Holdings, Inc.
6100 Merriweather Drive, 12th Floor
Columbia, MD 21044
Attn: Corporate Secretary or Legal Department
Our Corporate Secretary or Legal Department will review all incoming stockholder
communications and determine whether the communication should be presented to the Board or the
appropriate director or committee. The purpose of this screening is to allow the Board to avoid having
to consider irrelevant or inappropriate communications, such as mass mailings, product complaints or
inquiries, job inquiries, business solicitations and patently offensive or otherwise inappropriate
material. The screening procedures have been approved by a majority of our independent directors.
All communications directed to the Audit Committee in accordance with the Company’s whistleblower
policy that relate to questionable accounting or auditing matters involving the Company will be
promptly and directly forwarded to the Audit Committee.
Code of Ethics
We have adopted the Tenable Code of Business Conduct and Ethics that applies to all officers,
directors, employees and independent contractors. The Code of Business Conduct and Ethics is
available on our website at www.investors.tenable.com. If we make any substantive amendments to
the Code of Business Conduct and Ethics or grant any waiver from a provision of the Code to any
executive officer or director, we will promptly disclose the nature of the amendment or waiver on our
website.
Hedging Policy
Our Insider Trading Policy prohibits our employees, including our executive officers, and the non-
employee members of our Board of Directors from engaging in short sales, transactions in put or call
options, hedging transactions, using margin accounts, pledges, or other inherently speculative
transactions involving our equity securities.
31
PROPOSAL 2
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of the Board of Directors has selected Ernst & Young LLP as the
Company’s independent registered public accounting firm for the year ending December 31, 2024
and has further directed that management submit the selection of its independent registered public
accounting firm for ratification by the stockholders at the Annual Meeting. Ernst & Young LLP has
audited the Company’s financial statements since 2014. Representatives of Ernst & Young LLP are
expected to be present online at the Annual Meeting. They will have an opportunity to make a
statement if they so desire and will be available to respond to appropriate questions.
Neither the Company’s Bylaws nor other governing documents or laws require stockholder
ratification of the selection of Ernst & Young LLP as the Company’s independent registered public
accounting firm. However, the Audit Committee of the Board is submitting the selection of Ernst &
Young LLP to the stockholders for ratification as a matter of good corporate practice. If the
stockholders fail to ratify the selection, the Audit Committee of the Board will reconsider whether or
not to retain that firm. Even if the selection is ratified, the Audit Committee of the Board in its
discretion may direct the appointment of a different independent registered public accounting firm at
any time during the year if they determine that such a change would be in the best interests of the
Company and its stockholders.
The affirmative vote of the holders of a majority of the shares present online at the meeting or
represented by proxy and entitled to vote on the matter at the Annual Meeting will be required to ratify
the selection of Ernst & Young LLP.
Fees and Services
The following table represents aggregate fees billed to the Company by Ernst & Young LLP, the
Company’s principal accountant.
(in thousands)
Audit Fees(1)
Audit-Related Fees(2)
Tax fees(3)
All Other Fees(4)
Total Fees
Year Ended December 31,
2023
2022
$
$
1,754 $
338
6
73
2,171 $
1,707
271
—
—
1,978
Audit fees consisted of fees billed for professional services provided in connection with the
_____________
(1)
audits of our annual consolidated financial statements and our internal control over financial reporting,
the review of our quarterly condensed consolidated financial statements, and related procedures and
audit services that are normally provided by the independent registered public accounting firm in
connection with regulatory filings. In 2022 and 2023, audit fees included fees related to business
combinations.
Audit-related fees consisted of professional services provided in connection with attestation
(2)
reports for service organizations. In 2023 audit-related fees also included fees associated with due
diligence procedures performed in connection with the acquisition of Ermetic.
(3)
Tax fees included fees for permissible tax advisory services.
32
(4)
as fees related to arisk assessment exercise performed in 2023.
All other fees included fees for access to online accounting and tax research software as well
All fees and services described above were pre-approved by the Audit Committee.
Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy and procedures for the pre-approval of audit and non-
audit services rendered by the Company’s independent registered public accounting firm, Ernst &
Young LLP. The policy generally pre-approves specified services in the defined categories of audit
services, audit-related services and tax services up to specified amounts. Pre-approval may also be
given as part of the Audit Committee’s approval of the scope of the engagement of the independent
registered public accounting firm or on an individual, explicit, case-by-case basis before the
independent registered public accounting firm is engaged to provide each service. The Chair of the
Audit Committee has been delegated authority to pre-approve certain audit and non-audit services,
but the decision must be reported toth e full Audit Committee at its next scheduled meeting.
The Audit Committee has determined that the non-audit services rendered by Ernst & Young LLP
are compatible with maintaining the principal accountant’s independence.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 2.
33
PROPOSAL 3
ADVISORY VOTE TO APPROVE THE NAMED EXECUTIVE OFFICER COMPENSATION
The Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the
Exchange Act enable our stockholders to approve, on an advisory non-binding basis, the
compensation of our Named Executive Officers as disclosed in this proxy statement. This proposal,
commonly known as a"Say-on-Pa y" proposal, gives our stockholders the opportunity to express their
views on our Named Executive Officers' compensation as awhole. The vote is not intended to
address any specific item of compensation or any specific Named Executive Officer, but rather the
overall compensation of all our Named Executive Officers and the philosophy, policies and practices
described in this proxy statement. At the 2020 Annual Meeting of Stockholders, the stockholders
indicated their preference that the Company solicit a Say-on-Pay vote every year. The Board has
adopted a policy that is consistent with that preference. In accordance with that policy, this year, we
are asking stockholders to approve, on an advisory basis, the compensation of our Named Executive
Officers as disclosed in this proxy statement in accordance with SEC rules.
The Say-on-Pay vote is advisory, and therefore is not binding on us, the Compensation
Committee or the Board. The Say-on-Pay vote will, however, provide information to us regarding
investor sentiment about our executive compensation philosophy, policies and practices, which the
Compensation Committee will be able to consider when determining executive compensation for the
remainder of the current year and beyond. The Board and our Compensation Committee value the
opinions of our stockholders and to the extent there is any significant vote against the Named
Executive Officer compensation as disclosed in this proxy statement, we will endeavor to
communicate with stockholders to better understand the concerns that influenced the vote, consider
our stockholders’ concerns and the Compensation Committee will evaluate whether any actions are
necessary to address those concerns.
The compensation of our Named Executive Officers subject to the vote is disclosed in the
Compensation Discussion and Analysis section, the compensation tables and the related narrative
disclosure contained in this proxy statement. As discussed in those disclosures, we believe that our
compensation policies and decisions are aligned with our stockholders’ interests to support long-term
value creation and enable us to attract and retain talented executives.
Accordingly, the Board is asking the stockholders to indicate their support for the compensation of
our Named Executive Officers as described in this proxy statement by casting a non-binding advisory
vote “FOR” the following resolution:
“RESOLVED, that the compensation paid to the Company’s Named Executive Officers, as
disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and
Analysis, compensation tables and narrative discussion is hereby APPROVED.”
Advisory approval of this proposal requires the vote of the holders of a majority of the shares
present online or represented by proxy and entitled to vote on the matter at the annual meeting.
Unless the Board decides to modify its policy regarding the frequency of soliciting Say-on-Pay votes,
the next scheduled Say-on-Pay vote will be at the 2025 Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF PROPOSAL 3.
34
CORPORATE SOCIAL RESPONSIBILITY
We believe good governance at all levels is necessary to drive corporate responsibility, which in
turn promotes the long-term interests of our stockholders and strengthens Board and management
accountability. We focus our efforts in the following key areas:
• Governance;
•
•
Environmental stewardship; and
Social responsibility in: cybersecurity and data privacy, diversity, equity and inclusion,
employee engagement, and community involvement.
Governance
Our Board sets high standards for the Company's employees, officers, and directors. Implicit in
this philosophy is the importance of sound corporate governance. It is the duty of the Board to serve
as a prudent fiduciary for stockholders and to oversee the management of the Company's business.
The Board adheres to our corporate governance guidelines, which are designed to give directors and
management a flexible framework for effectively pursuing the Company's objectives for the benefit of
its stockholders.
In the risk management process, risk oversight is one of the Board’s key functions. The Board
does not have a standing risk management committee but rather administers this oversight function
directly through the Board as a whole, as well as through various Board standing committees that
address risks inherent in their respective areas of oversight. In particular, our Board is responsible for
monitoring and assessing strategic risk exposure, including a determination of the nature and level of
risk appropriate for the Company. The Nominating and Corporate Governance Committee is
responsible for environmental, social, and governance oversight and is briefed at least twice a year
on relevant matters. For additional details on the Committee's oversight responsibilities see
"Nominating and Corporate Governance Committee" above.
In addition to our governance best practices, we consider environmental and social issues in our
operations. We believe that socially responsible operating practices go hand in hand with generating
value for our stockholders, providing cybersecurity solutions for our clients, being good neighbors
within our communities, and being a good employer to our employees. In our view, our corporate
governance is more effective when we consider environmental and social issues as part of our
oversight of corporate strategy, key risks, and our operations more generally.
We are committed to the promotion of ethical business practices and the implementation of
measures to reduce the risk of corruption. We believe strongly in human rights, including, but not
limited to, supporting our diverse and inclusive workforce and promoting equality of opportunity and
treatment in hiring, training, promotions and working conditions. As such, our Human Rights Policy
and Supplier Code of Conduct articulate our commitments and values regarding such matters as
ethical business practices, labor practices (including child labor and human trafficking), data privacy,
diversity and non-discrimination, and whistleblower protections, and our related expectations
regarding supplier, vendor, and contractor practices.
35
Environmental Stewardship
Our Board and management team recognize that we have a role to play in environmental
stewardship. Given that the Company is a software company, our energy consumption and usage
within our data centers is an important component of the day-to-day operations of our business. We
outsource our data center needs to Amazon Web Services (“AWS”). In addition to carefully choosing
data center locations to mitigate environmental risks, AWS has a long-term commitment to using 100
percent renewable energy.
Aside from data center needs, greenhouse gas emissions and water and energy usage are not
material factors in the day-to-day operations of our business. However, we believe that we can still
play a part through environmentally sound practices. Consequently, we have invested in software to
manage our environmental impact factors, enabling us track and calculate our scope 1 and scope 2
footprint and have begun a process to identify and track scope 3 emissions.
Our corporate headquarters is a LEED Certified Gold for Core Construction. In addition, we have
taken the following actions to enable environmental stewardship:
•
•
•
•
implemented recycling in our offices;
offered biodegradable to-go boxes to reduce food waste;
implemented a strict policy for disposing of hardware; and
transitioned to a travel portal that provides detail on our carbon footprint.
Tenable and our employees have donated time and money to important environmental causes
such as healthy waterways and other clean-up efforts, recycling, carbon footprint mitigation and
protection of threatened wildlife. At Tenable, we believe our employees are our most critical catalysts
for change. Our Green Initiatives group continues to gain traction as away f or employees to share
best practices for an environmentally conscious lifestyle, building global support within the Company,
and lead campaigns such as trash clean-ups, sustainable lifestyle pledges, and tree-planting
initiatives. Partnering within our Tenable CARES program - detailed later in this section -th e Green
Initiatives group curates easy-to-implement actions and measures our collective impact.
Our regional Green Initiatives leaders build engagement and momentum by hosting regular
community check-ins and information sessions and building camaraderie among members. Through
their shared passion for environmentalism, participants inspire one another to take action for a
greener and cleaner tomorrow. Our 2024 theme, “Water!” is centered around the importance of water
quality and conservation. The Green Initiatives group will spearhead trash clean ups and other
activities that are focused on water conservation campaigns.
Cybersecurity and Data Privacy
We take great pride in assisting our customers with enhancing their security posture through the
use of our services and products. We understand that customers must trust and have confidence in
an organization to use its service offerings for managing their exposure data. As such, we take the
overall security of our products and their supporting infrastructure very seriously.
We align our information security and risk management program to the National Institute of
Standards and Technology Cybersecurity Framework and have implemented an information security
36
management system to protect the confidentiality, integrity, and availability of assets against threats
and vulnerabilities. We achieved ISO/IEC 27001:2013 certification, recognizing our proven
commitment to the highest level of information security management.
As a leader in cybersecurity, and with our focus on sound governance, we believe adding
oversight at the board level is important, which is why we elevated the Cybersecurity Risk
Management Committee from asubcommittee o f the Audit Committee to a separate fully functioning
committee of the Board in November of 2022. The Cybersecurity Risk Management Committee
assists the Board in fulfilling its oversight responsibility for managing risks related to the Company’s
information technology use and protection, cybersecurity, and product security. For additional details
on the Committee's oversight responsibilities see "Cybersecurity Risk Management Committee"
above.
Data privacy protection and cybersecurity require diligence and a community effort. We enable
the community through our employees, customers, and products by bringing security awareness to
everything we do. As an enterprise security company, we consistently look for ways to improve our
security posture to maintain data privacy and protect sensitive information for our employees and
customers.
Thousands of customers, including financial services organizations, healthcare providers,
retailers, educational institutions, and government agencies, trust Tenable with their exposure data,
digital identities and exposure insights in our cloud platform. Security is core to our corporate ethos
and we allocate significant investment to protect the confidentiality, integrity, and availability of all
customer data. One of our top priorities is preventing any non-customers or bad actors from
accessing, disclosing, or violating the privacy and protection of data stored in the Tenable cloud
platform. Using acombinat ion of preventative and detective controls, environment segregation,
automation, granular data access controls, modern identity and access management practices, and
data localization, our products are built to protect data and help meet privacy obligations. We
continuously assess and implement additional measures to help improve our security program and
address the ever-changing threat landscape.
Diversity and Inclusion
We believe an inclusive culture drives employee engagement, sparks innovation and delivers
exceptional business results. Tenable’s people strategy aspires to create a positive and rewarding
experience for new, prospective and current employees across all aspects of employee connection —
recruiting, onboarding, career growth, wellness and compensation. Our total rewards package —
which includes abundant development options — recognizes employees for their contributions, gives
them the opportunity for continued growth and provides resources to support well-being both inside
and outside the workplace.
At Tenable, we strive to be a career destination in which employees from all backgrounds are
welcomed and empowered, treated with fairness and respect, presented with opportunities to make a
difference and provided with resources to enable them to grow.
We feel it is imperative to be transparent regarding our progress concerning Diversity and
Inclusion ("D&I"). We undertake numerous efforts to increase representation in our workforce of
historically excluded communities, cultivating a more inclusive culture and engaging in intentional and
more impactful ways in the global communities that surround us. Our Diversity Council is made up of
leaders from across our organization and is responsible for developing, enabling and promoting our
37
strategic D&I plans. They champion and prioritize all D&I initiatives, cultivate and strengthen a culture
of inclusion and hold themselves and other leaders accountable for our D&I goals.
Our D&I strategy at Tenable is aligned to three major objectives:
• Workforce: increase the representation of women globally and people of color in the U.S.;
• Workplace: cultivate an inclusive workplace where all employees feel they belong and are
given the support they need to thrive; and
•
Community: increase our commitment to supporting the next generation of science
technology, engineering and mathematics (STEM) talent in diverse communities.
To support our initiatives, we build partnerships within our communities to support organizations
and events that strive for greater representation of women and underrepresented minorities in
cybersecurity; conduct inclusion, bias mitigation, and intercultural competency training; and offer
targeted development opportunities to assist with career advancement. Our efforts have included the
following:
•
•
•
•
•
•
•
implementing initiatives to drive diversity at the senior level which have enabled us to
increase the percentage of new hires and internal promotions;
using diversity-focused recruiting programs to help increase representation of women and
people of color in cybersecurity. All of our open external positions are made available on
diversity-focused job boards;
using talent scout programs for mid-level diverse talent to network with senior leaders as well
as directed recruitment marketing efforts to drive diverse candidates;
establishing Employee Resource Groups to connect and support employees who identify with
diverse communities and identities;
working with external partners to host professional development events, including Pronoun
Workshop for LGBTQ+ allies;
launching workshops for teams to discuss inclusion-related topics, such as cultural
competency; and
enhancing our mentorship program, focusing on opportunities for women, Black, and
Hispanic employees to establish greater professional connections and grow within our
organization.
Employee Engagement
Our ability to fulfill core values depends on how well we listen to our employees. We constantly
ask employees what they need to do their best work and we act on their input. We have several
different methods of soliciting employee feedback to ensure we hear from all parts of the business.
We also create regular opportunities for two-way communication with our executives to help our
people better understand how decisions are made. Our methods include the following:
•
•
•
conducting an annual employee engagement survey combined with periodic division -or
region-specific check-ins;
soliciting employee feedback at various stages of their employment cycle, from onboarding to
offboarding;
holding frequent executive "coffee chat" sessions during which employees can engage with
our senior leaders to exchange information, provide feedback and brainstorm ideas in small-
group settings;
38
•
•
•
•
staging monthly company-wide All Hands meetings led by our CEO, with an open question-
and-answer period;
empowering departmental, regional or team leaders to host their own town halls for their
direct reports;
encouraging people managers to hold regular check-in meetings with their direct reports
where they can focus on real-time feedback, recognition, coaching, and professional
development; and
ensuring executive sponsorship of each Employee Resource Group, providing each cohort
with adirect path to communicate with senior leadership.
We believe professional development is a continuous and iterative process and encourage
employees to think of refining and redefining their development goals and plans as a path or direction,
rather than pursuing aspecific job p osition or promotion. We promote and support employee
development and organizational effectiveness by providing numerous high-quality learning and
development options. Employees and their managers work together to create development plans for
increasing business acumen and building on the skills and knowledge each employee needs to excel
in their position and grow professionally. Our professional development offerings include mentor and
mentee matching and informal networking opportunities, tuition reimbursement and professional
development funds, access to industry-leading tools for learning and building skills, a management
development program, career development and learning events, and an internship program.
We expect our employees to respect and adhere to the highest standards of business conduct,
including as set forth in our Code of Business Conduct and Ethics. All employees are expected to
complete certain compliance training requirements annually. Topics include information security, data
privacy, harassment prevention, anti-bribery and insider trading.
Community Involvement
We invest in social good in alignment with our company values. Tenable demonstrates that we
care by striving to make a positive difference in everything that we do — in our work, with our
customers and colleagues and in our communities. We are proud to contribute to charities, initiatives
and programs that strengthen our industry and impact our employees and communities.
Our people strive to create a better tomorrow by giving back to their communities globally through
our internal giving and volunteerism program, Tenable CARES. Tenable CARES is designed to make
it easier for our employees to support the charitable organizations that are important to them. The
program offers employees one day of paid leave per year to participate in volunteer activities. In
addition, we match employee donations up to $300 USD per person per year to their preferred
organizations and give each employee an opportunity to nominate a cause that is important to them
to be selected as Tenable's global cause of the year. In 2023, Tenable's global cause of the year was
the International Federation of the Red Cross. Previous causes have included St. Jude Children's
Research Hospital, the Multiple Sclerosis Foundation and the Make-A-Wish Foundation. Through
Tenable CARES, we aim to unite our employees around our missions and use our programs and tools
to help spread the word about their charitable passions and work.
Just as volunteering in our communities is an important aspect of our corporate culture, we
encourage our employees to express their voices in local, state, and national public policy.
Employees are given a total of one day off per year to exercise their right to vote. We are also
focused onadvocat ing for policies that impact Tenable and the cybersecurity industry as awhole. We
39
regularly engage with U.S. federal, state, and local government entities to provide expertise and
thought leadership to policymakers as they shape policies and regulations that directly impact our
customers and cybersecurity as a whole. But our efforts are not limited to the U.S. government. We
engage governments, policymakers and partners around the world to advocate on important issues
affecting our business, our customers, our partners, and the communities in which we operate.
We also lend our expertise to promote cybersecurity resilience and help inform the development
of cybersecurity standards. We participate in numerous public private partnerships such as the
President's National Security Telecommunications Advisory Committee, the IT Sector Coordinating
Council and the National Institute for Standards and Technology's National Cybersecurity Center of
Excellence -to provide cybersecurity and technology insight to policymakers and government
officials.
These engagements have led to opportunities to provide official testimony at congressional
hearings on topics ranging from securing critical infrastructure to creating the Office of the National
Cybersecurity Director. Tenable participates in a range of conferences, events, and summits that
collectively advance our public policy goals. In addition, we conduct lobbying activities aimed at
supporting policies that enhance cybersecurity and digital resilience. These activities are reported
publicly in accordance with the Lobbying Disclosure Act and all subsequent amendments to the law.
Complementary to our policy advocacy, we are engaged in cyber threat intelligence information
sharing and operational collaboration with multiple organizations, including the Cybersecurity and
Infrastructure Security Agency's Joint Cyber Defense Collaborative. We are members of numerous
associations, such as the Alliance for Digital Innovation, the Cybersecurity Coalition, the Computing
Technology Industry Association, the Information Technology Industry Council, the International
Society of Automation, the Operational Technology Cybersecurity Coalition, DigiAmericas Alliance,
the National Association of Chief Information Officers, and the National Governors Association.
In addition, our Political Action Committee ("PAC"), which allows eligible employees to pool their
voluntary, personal contributions to help support and elect pro-technology and pro-cybersecurity
lawmakers to Congress. Tenable's PAC does not advance aparti san or social agenda, but instead
ensures public policies promote sound cybersecurity policies and growth for our business, our
employees and our customers. You can find all disbursements for the Tenable PAC by visiting the
Federal Election Commission website.
EXECUTIVE OFFICERS
Our executive officers, and their respective ages as of April 11, 2024, are as follows:
Name
Executive Officers
Amit Yoran
Stephen A. Vintz
Mark Thurmond
Age
Position(s)
53 Chief Executive Officer and Chairman
55 Chief Financial Officer
54 Chief Operating Officer
The biography of Mr. Yoran is set forth in “Proposal 1: Election of Directors” above.
40
Stephen A. Vintz
Stephen A. Vintz has served as our Chief Financial Officer since October 2014.
Mr. Vintz previously served as Executive Vice President and Chief Financial
Officer of Vocus, Inc. Mr. Vintz received aB.B.A. in Accounting from Loyola
University Maryland and is a Certified Public Accountant.
Mark Thurmond
Mark Thurmond has served as the Company’s Chief Operating Officer since
February 2020. Prior to joining the Company, Mr. Thurmond served as the Chief
Operating Officer of Turbonomic Inc. from September 2017 to February 2020
and as the Executive Vice President, Worldwide Sales and Services of QlikTech
International AB from August 2015 to August 2017. Mr. Thurmond holds a B.S.
in Psychology from Hofstra University.
41
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership of the Company’s
common stock as of March 28, 2024 by: (i) each director and nominee for director; (ii) each of the
executive officers named in the Summary Compensation Table; (iii) all executive officers and directors
of the Company as a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its common stock.
Beneficial Owner
Beneficial Ownership(1)
Number of Shares Percent of Total
5% or greater stockholders:
FMR, LLC(2)
The Vanguard Group(3)
BlackRock, Inc.(4)
Named executive officers and directors:
Amit Yoran(5)
Stephen A. Vintz(6)
Mark Thurmond(7)
Arthur W. Coviello, Jr.(8)
John C. Huffard, Jr.(9)
Linda Zecher Higgins(10)
Niloofar Razi Howe(11)
A. Brooke Seawell(12)
Raymond Vicks, Jr.(13)
George Alexander Tosheff(14)
Margaret Keane
12,626,513
12,510,817
10,524,434
3,538,283
806,085
42,646
35,124
491,998
5,203
19,170
269,245
11,332
14,100
—
10.6%
10.5%
8.9%
2.9%
*
*
*
*
*
*
*
*
*
*
All current executive officers and directors as agroup (11
persons)(15)
_____________
* Represents beneficial ownership of less than 1%.
5,233,186
4.3%
This table is based upon information supplied by officers, directors and principal stockholders
(1)
and Schedules 13D and 13G filed with the SEC. Unless otherwise indicated in the footnotes to this
table and subject to community property laws where applicable, the Company believes that each of
the stockholders named in this table has sole voting and investment power with respect to the shares
indicated as beneficially owned. Applicable percentages are based on 118,743,082 shares
outstanding on March 28, 2024, adjusted as required by rules promulgated by the SEC.
(2)
As reported in aSc hedule 13G/A filed with the Securities and Exchange Commission on
February 8, 2024, which states that FMR LLC has sole dispositive power with respect to all of the
shares and sole voting power with respect to 12,622,068 of the shares. Members of the Johnson
family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series
B voting common shares of FMR LLC, representing 49% of the voting power of FMR LLC. The
Johnson family group and all other Series B shareholders have entered into a shareholders' voting
agreement under which all Series B voting common shares will be voted in accordance with the
majority vote of Series B voting common shares. Accordingly, through their ownership of voting
42
common shares and the execution of the shareholders' voting agreement, members of the Johnson
family may be deemed, under the Investment Company Act of 1940, to form a controlling group with
respect to FMR LLC. The principal business address of FMR LLC is 245 Summer Street, Boston,
Massachusetts 02210.
As reported in aSc hedule 13G/A filed with the Securities and Exchange Commission on
(3)
February 13, 2024, which states that The Vanguard Group, Inc. has sole dispositive power with
respect to 12,177,020 of the shares, shared dispositive power with respect to 333,797 of the shares
and shared voting power with respect to 210,551 of the shares. The Vanguard Group, Inc. is the
parent holding company of Vanguard Asset Management, Limited, Vanguard Fiduciary Trust
Company, Vanguard Global Advisors, LLC, Vanguard Group (Ireland) Limited, Vanguard Investments
Australia Ltd, Vanguard Investments Canada Inc., Vanguard Investments Hong Kong Limited and
Vanguard Investments UK, Limited, which act as investment advisers to registered investment
companies and separate accounts that own the reported shares. The principal business address of
The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, Pennsylvania 19355.
As reported in aSc hedule 13G filed with the Securities and Exchange Commission on
(4)
January 25, 2024, which states that BlackRock, Inc. has sole dispositive power with respect to all of
the shares and sole voting power with respect to 10,333,404 of the shares. BlackRock, Inc. is the
parent holding company of BlackRock Life Limited, BlackRock Advisors, LLC, BlackRock
(Netherlands) B.V., BlackRock Institutional Trust Company, National Association, BlackRock Asset
Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Asset Management
Schweiz AG, BlackRock Investment Management, LLC, BlackRock Investment Management (UK)
Limited, BlackRock Asset Management Canada Limited, BlackRock Investment Management
(Australia) Limited, BlackRock Fund Advisors and BlackRock Fund Managers Ltd, which act as
investment advisers to registered investment companies and separate accounts that own the reported
shares. The principal business address of BlackRock, Inc. is 55 East 52nd Street, New York, New
York 10055.
Consists of (a) 338,226 shares of common stock held by Mr. Yoran directly, (b) 245,947
(5)
shares of common stock held by the Amit Yoran 2020 Family Trust, (c) 335,435 shares of common
stock held by the Amit Yoran Grantor Retained Annuity Trust A, (d) 169,765 shares of common stock
held by the Amit Yoran Grantor Retained Annuity Trust B, (e) 2,413,712 shares of common stock
issuable upon the exercise of outstanding options exercisable within 60 days of March 28, 2024, and
(f) 35,198 shares of common stock issuable upon the vesting and settlement of outstanding RSUs
and PSUs within 60 days of March 28, 2024.
Consists of (a) 257,924 shares of common stock, (b) 528,434 shares of common stock
(6)
issuable upon the exercise of outstanding options exercisable within 60 days of March 28, 2024, and
(c) 19,727 shares of common stock issuable upon the vesting and settlement of outstanding RSUs
and PSUs within 60 days of March 28, 2024.
Consists of (a) 27,993 shares of common stock and (b) 14,653 shares of common stock
(7)
issuable upon the vesting and settlement of outstanding RSUs and PSUs within 60 days of March 28,
2024.
(8)
issuable upon the vesting and settlement of outstanding RSUs within 60 days of March 28, 2024.
Consists of (a) 29,923 shares of common stock and (b) 5,201 shares of common stock
Consists of (a) 11,179 shares of common stock held by Mr. Huffard directly, (b) 31,847 shares
(9)
of common stock held by Mr. Huffard’s spouse in the Mary Kathryn Braden Huffard Revocable Trust
U/T/A dated March 2, 2012, (c) 390,183 shares of common stock held by Mary Kathryn Braden
43
Huffard and Jonathan M. Forster, as Trustees of The Three Suns 2019 Non-Exempt Irrevocable Trust
U/T/A dated November 15, 2019, (d) 53,588 shares of common stock held by Mr. Huffard and Mary
Kathryn Braden Huffard, as Trustees of The John Cloyd Huffard Jr Revocable Trust U/T/A dated
March 2, 2012, and (e) 5,201 shares of common stock issuable upon the vesting and settlement of
outstanding RSUs within 60 days of March 28, 2024.
(10)
upon the vesting and settlement of outstanding RSUs within 60 days of March 28, 2024.
Consists of (a) 2shares of common stock and (b) 5,201 shares of common stock issuable
(11)
issuable upon the vesting and settlement of outstanding RSUs within 60 days of March 28, 2024.
Consists of (a) 10,660 shares of common stock and (b) 8,510 shares of common stock
Consists of (a) 34,044 shares of common stock, (b) 230,000 shares of common stock
(12)
issuable upon the exercise of outstanding options exercisable within 60 days of March 28, 2024, and
(c) 5,201 shares of common stock issuable upon the vesting and settlement of outstanding RSUs
within 60days o f March 28, 2024.
Consists of (a) 4,631 shares of common stock, (b) 1,500 shares of common stock held in a
(13)
custodial account established pursuant to the Uniform Transfer to Minors Act for which Mr. Vicks
serves as custodian, and (c) 5,201 shares of common stock issuable upon the vesting and settlement
of outstanding RSUs within 60 days of March 28, 2024.
(14)
issuable upon the vesting and settlement of outstanding RSUs within 60 days of March 28, 2024.
Consists of (a) 8,899 shares of common stock and (b) 5,201 shares of common stock
Consists of (a) 1,951,746 shares of common stock, (b) 3,172,146 shares of common stock
(15)
issuable upon the exercise of outstanding options exercisable within 60 days of March 28, 2024, and
(c) 109,294 shares of common stock issuable upon the vesting and settlement of outstanding RSUs
and PSUs within 60 days of March 28, 2024.
44
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis reviews the material elements of our 2023 executive
compensation, philosophy, policies and practices, and discusses compensation earned by our named
executive officers. Our named executive officers for the year ended December 31, 2023, are our
principal executive officer, our chief financial officer and our chief operating officer, as reflected below
(our “Named Executive Officers”). We have no other executive officers who were serving as of
December 31, 2023 or who served during 2023.
Position
Chief Executive Officer and Chairman of the Board of Directors
Chief Financial Officer
Chief Operating Officer
Name
Amit Yoran
Stephen A. Vintz
Mark Thurmond
Executive Summary
Who We Are
We are a leading provider of exposure management solutions. Exposure management is an
effective discipline for measuring, comparing and reducing cybersecurity risk in today's complex IT
environments.
2023 Financial Highlights
•
•
Revenue was $798.7 million, a 17% increase year-over-year.
Calculated current billings was $873.3 million, a 12% increase year-over-year.
• GAAP loss from operations was $52.2 million, compared to $67.8 million in 2022.
•
Non-GAAP income from operations was $121.0 million, compared to $67.7 million in 2022.
• GAAP net loss was $78.3 million, compared to $92.2 million in 2022.
• GAAP net loss per share was $0.68, compared to $0.83 in 2022.
•
•
•
•
•
•
Non-GAAP net income was $97.2 million, compared to $44.3 million in 2022.
Non-GAAP diluted earnings per share was $0.80, compared to $0.38 in 2022.
Cash and cash equivalents and short-term investments were $474.0 million at December 31,
2023, compared to $567.4 million at December 31, 2022.
Net cash provided by operating activities was $149.9 million, compared to $131.2 million in
2022.
Unlevered free cash flow was $175.4 million, compared to $128.1 million in 2022.
Repurchased 0.4 million shares of our common stock for $14.9 million.
Refer to the Appendix for reconciliations of non-GAAP measures to comparable GAAP measures.
Executive Compensation Highlights
We seek to ensure that executive pay is tied to performance and long-term stockholder value
creation. Based on our success in executing our strategic plan in a challenging environment, including
progress by the executive leadership team on our diversity and inclusion and employee engagement
and development initiatives, the Compensation Committee took the following key actions with respect
to the compensation of our Named Executive Officers in 2023 and in early 2024:
45
•
•
• No Base Salary Increases -In light of the challenging macro environment, our Compensation
Committee determined to keep the base salaries of our Named Executive Officers at the
same levels as those set in 2022. In February 2024, the Compensation Committee approved
increases to the base salaries of our Named Executive Officers to better position the salaries
with the median levels for such positions at our peers.
Cash Bonuses - Our cash bonus structure mirrored that of prior years and incorporated
revenue, unlevered free cash flow and bookings goals. Our target cash bonuses are
expressed as apercenta ge of base salary paid out based on quarterly and annual attainment,
and remained comparable with 2022. Given our performance in these areas, cash bonuses
were paid out in accordance with their plan formula below target at 97.1%.
Long-Term Incentive Compensation -We continue to provide a large percentage of our
Named Executive Officers’ target compensation opportunity through our long-term incentive
compensation program. In 2023, our long-term incentive plan continued to include the grant
of restricted stock units (“RSUs”) subject to service-based vesting and performance restricted
stock units ("PSUs") subject to achievement of certain financial performance goals and
followed by additional service-based vesting. The aggregate grant date fair value of Messrs.
Yoran, Vintz, and Thurmond’s 2023 grants decreased relative to 2022 between 7 and 8%,
which was $0.7 million, $0.4 million, and $0.3 million, respectively.
In order to comply with SEC requirements, we adopted a new compensation recoupment
policy to replace our existing policy, under which certain incentive compensation paid to or
earned by our Named Executive Officers may be recovered in the event of financial
restatements.
In 2022, we began incorporating PSUs in our long-term incentive plan as aporti on of our
long-term incentive grants in order to further tie pay to performance. For 2023, PSUs made
up 25% of the total grant date fair value of the long-term incentive grants for our Named
Executive Officers. In February 2024, the Compensation Committee increased the proportion
of PSUs in the 2024 long-term incentive grant mix from 25% to 35%. In future years and over
time, the Compensation Committee intends to continue to gradually shift the mix of equity
awards granted to Named Executive Officers to include a higher proportion of performance-
based incentives.
•
•
46
2023 Target Total Direct Compensation Overview
For 2023, 95% of our CEO’s total reported compensation and an average of 91% of our other
Named Executive Officers’ total reported compensation was at-risk through quarterly and annual
bonuses earned and equity incentives awarded, as reported in the Summary Compensation Table.
CEO Pay Mix
Other Executives Pay Mix (1)
Base Salary 5%
Actual Bonus 5%
Base Salary 9%
Actual Bonus 7%
Equity Awards
90%
Equity Awards
84%
Listening toOur S tockholders
At our annual meeting of stockholders in 2023, we conducted our third advisory vote on executive
compensation, or a say-on-pay vote. Approximately 90.5% of the votes cast on the say-on-pay
proposal supported the proposal. Our Compensation Committee reviewed the final vote results for the
proposal and given the level of support, concluded that our compensation program provided a
competitive performance package that incentivizes our Named Executive Officers and encourages
their retention over the long term. Accordingly, other than as described below, the Compensation
Committee determined not to make any significant changes to our executive compensation policies or
decisions as a result of the vote. Our Compensation Committee will continue to monitor and
continually evaluate our compensation program going forward in light of our stockholders’ views and
our transforming business needs. In addition to our annual advisory vote on executive compensation,
we are committed to ongoing engagement with our stockholders on executive compensation and
corporate governance issues.
Executive Compensation Policies and Practices
We endeavor to maintain appropriate pay-for-performance alignment and sound governance
standards as we review and manage executive compensation policies and practices. The
Compensation Committee evaluates our executive compensation program on a regular basis to
ensure that it is consistent with our short-term and long-term goals given the dynamic nature of our
business and the market in which we compete for executive talent. The following summarizes our key
convictions with respect to executive compensation and related policies and practices:
47
What We Do
What We Do Not Do
P Maintain an independent
Compensation Committee.
P Retain an independent compensation
advisor.
O No guaranteed bonuses.
O No tax “gross ups” on payments on
future post-employment
compensation arrangements.
P Annual executive compensation
O No hedging or pledging of our equity
strategy review.
securities.
P Multi-year vesting requirements for
O No mid-year adjustments or
modifications of our cash or equity
incentives in 2023.
O No retirement and perquisite benefits
to our executives that are not offered
to employees generally.
equity awards.
P “Double-trigger” change-in-control
arrangements.
P Succession planning by full Board.
P Annual Say-on-Pay voting.
P Stock incentive plans and executive
employment agreements that provide
for forfeiture of equity awards and
severance if an executive is
terminated for cause, including due to
misconduct that results in reputational
harm to the Company.
Executive Compensation Philosophy and Objectives
Our executive compensation program is guided by our overarching philosophy of paying for
demonstrable performance. To achieve these objectives, we believe that our executive compensation
program should include short-term and long-term elements, including cash and equity compensation,
and should reward consistent performance that meets or exceeds expectations. We evaluate both
performance and compensation to make sure that the compensation provided to our executives
remains competitive relative to compensation paid by companies of similar size operating in our
industry, taking into account our relative performance, our strategic objectives, and the performance
of the individual executive.
Consistent with this philosophy, we have designed our executive compensation program to
achieve the following primary objectives:
•
•
•
Provide market competitive compensation and benefit levels that will attract, motivate,
reward, and retain a highly talented team of executives within the context of responsible cost
management;
Establish adirect link between our financial and operational results and strategic objectives
and the compensation of our executives;
Align the interests and objectives of our executives with those of our stockholders by linking
our executives’ long-term incentive compensation opportunities to stockholder value creation
and their cash incentives to our annual performance; and
• Offer total compensation opportunities to our executives that, while competitive, are internally
consistent.
Executive Compensation Design; Pay for Performance
The annual compensation arrangements for our Named Executive Officers consist of both fixed
and "at risk" compensation elements which have been designed to align pay and performance.
48
Our fixed base salaries are designed to retain our executives by providing dependable and
competitive annual income. In addition, we emphasize variable compensation through our short-term
incentive cash bonus plan based on our Named Executive Officers attainment of pre-established
short-term financial targets as determined from time to time by the Company and reviewed by our
Board of Directors in connection with our annual operating plan, and "at-risk" compensation through
our long-term equity incentive plan, which consists of service-vesting RSUs and PSUs.
Historically, we believed that service-based RSU awards were an appropriate long-term incentive
compensation vehicle in so far as they exposed our Named Executive Officers to fluctuations in our
stock price, thereby aligning the interests of our Named Executive Officers and stockholders and
incentivizing them to build sustainable long-term value for the benefit of our stockholders while
satisfying our retention objectives. In 2022, we incorporated PSUs in our long-term incentive plan as a
portion of our long-term incentive grants in order to further tie pay to performance. For 2023, PSUs
made up 25% of the total grant date fair value of the long-term incentive grants for our Named
Executive Officers. In February 2024, the Compensation Committee increased the proportion of PSUs
in the 2024 long-term incentive grant mix from 25% to 35%. In future years and over time, the
Compensation Committee intends to continue to gradually shift the mix of equity awards granted to
Named Executive Officers to include a higher proportion of performance-based incentives.
These at-risk pay elements ensure that a substantial portion of our Named Executive Officers’
target total direct compensation is contingent (rather than fixed) in nature, with the amounts ultimately
payable commensurate with our actual performance.
49
Compensation Elements
In 2023, the principal elements of our executive compensation program, and the objective and
key features of each element, were as follows:
Element
Type and Form of
Element
Objective
Base Salary
Fixed/Cash
Designed to attract and
retain highly talented
executives by providing
financial stability and security
for performing job
responsibilities through a
fixed amount that is market
competitive and rewards
performance
Short-Term
Incentive
Variable/Cash
Bonus
Designed to motivate and
reward executives with
financial incentives for
achieving or exceeding
rigorous quarterly and
annual financial objectives
related to our key business
imperatives
Key Features
• Established initially through
arm’s-length negotiation at the
time of hire and then reviewed
annually at beginning of year.
• Factors considered include:
executive's position,
qualifications, experience, pre-
hire salary level, the base
salaries of our other executives,
company and individual
performance, retention
objectives, a competitive market
analysis, and recommendations
of the CEO (for Named
Executive Officers other than
the CEO)
• Target bonus amounts
generally are reviewed annually
at the beginning of year and
determined based on various
factors, including company and
individual performance, a
competitive market analysis,
and recommendations of the
CEO (for Named Executive
Officers other than the CEO)
• Bonus payments earned are
determined after each quarter
and the full-year
• Bonus payments are generally
dependent upon achievement of
pre-established corporate
financial objectives selected by
our Compensation Committee
from our annual operating plan
reviewed by our Board of
Directors
50
Long-Term
Incentive
At risk/RSUs and
Variable/PSUs
Designed to motivate and
reward executives for
successful long-term
performance, align interests
of executives and
stockholders by motivating
them to create sustainable
long-term stockholder value,
and encourage continued
employment of executives
over the long-term
Other
Compensation
Retirement and
health and welfare
benefits offered to
all employees on
the same terms
Employee benefits that
promote employee savings
and health and welfare,
which assists in attracting
and retaining our executives
and employees
• Annual award opportunities
are generally reviewed and
determined annually at
beginning of the year or as
appropriate during year for new
hires, promotions, or other
special circumstances
• Individual awards are
determined based on various
factors, including company and
individual performance,
retention value of outstanding
equity holdings, competitive
market analysis, and
recommendations of the CEO
(for Named Executive Officers
other than the CEO)
• Historically granted RSU
awards or stock options with
four-year vesting requirements,
although the Compensation
Committee has discretion to
grant other equity vehicles and
use different vesting
requirements or performance
conditions
• In 2023, continued to grant
PSUs as part of the long-term
incentive program in order to
more closely tie together Named
Executive Officer compensation
and Company performance
Indirect compensation element
consisting of programs such as
medical, vision, dental, life and
disability insurance, as well as
the 401(k) Plan with a company
matching contribution and an
ESPP, and other plans and
programs made available to all
eligible employees
Base Salary
In February 2023, the Compensation Committee reviewed the base salaries of our Named
Executive Officers, taking into consideration acompet itive market analysis prepared by its
compensation consultant and the recommendations of our CEO (except with respect to the CEO's
own compensation), as well as the other factors described in “Compensation-Setting Process" below.
Following this review, in light of the challenging macro environment, the Compensation Committee
determined to keep the base salaries of our Named Executive Officers at the same levels as those
set in 2022.
51
The base salaries of our Named Executive Officers were as follows:
Named Executive Officer
Mr. Yoran
Mr. Vintz
Mr. Thurmond
$
2022 Base Salary
2023 Base Salary
487,000 $
414,000
414,000
487,000
414,000
414,000
Percentage Adjustment
— %
— %
— %
The base salaries paid to our Named Executive Officers during 2023 are set forth in the Summary
Compensation Table below.
In February 2024, the Compensation Committee approved increases to the base salaries of our
Named Executive Officers to better position the salaries with the median levels for such positions at
our peers.
Cash Bonuses
Cash bonuses are based upon a specific percentage of each participant’s annual base salary and
are paid, subject to goal attainment, in five equally weighted installments, following each quarter and
a fifth payment following year-end.
We believe that paying bonuses throughout the year is the most effective way to motivate
achievement of our short-term financial goals because quarterly and annual payments align with the
time periods for which we provide external guidance to the investment community.
2023 Cash Bonus Structure
In February 2023, the Compensation Committee reviewed the target short-term cash incentive
bonus opportunities of our Named Executive Officers in place for 2023, taking into consideration a
competitive market analysis prepared by its compensation consultant and the recommendations of
our CEO (except with respect to the CEO's own bonus opportunity), as well as the other factors
described in “Compensation-Setting" below. Following this review, the Compensation Committee
determined that the target short-term cash incentive bonus opportunities would remain unchanged as
a percentage of their base salaries for our Named Executive Officers.
Accordingly, the target short-term cash incentive bonus opportunities of our Named Executive
Officers for 2023 were as follows:
Named Executive Officer
Mr. Yoran
Mr. Vintz
Mr. Thurmond
2023 Target Cash Bonus Opportunity
487,000
$
362,250
362,250
Target Percentage of Base Salary
100.0 %
87.5 %
87.5 %
Consistent with the prior year, for 2023, our Board of Directors established anticipated target
goals for each performance metric used in our annual operating plan, with actual bonus payments at
each periodic payment interval calculated by multiplying 20% of a participant’s target cash bonus
opportunity by the weighted average percentage attainment level of the applicable goals for each
applicable quarter or full year. No payments are made if attainment is below 75% and the maximum
payment is capped at 200% of the target amount. Accordingly, for 2023, the target performance goals
52
for our Named Executive Officers were as follows, each of which exceeds prior year actual
performance:
Performance Metric
Revenue + Unlevered Free
Cash Flow (2)
Bookings
$
Target Performance Level
(in thousands)(1)
Weighting
995,744
(3)
66.67 %
33.33 %
_____________
(1)
The target performance level for each performance metric was adjusted to include the
expected impact of Ermetic from October 2, 2023 (date of acquisition) through the end of the year as
approved by our Board of Directors.
(2)
of non-GAAP measures to comparable GAAP measures.
Unlevered Free Cash Flow is a non-GAAP measure. Refer to the Appendix for reconciliations
We have chosen not to disclose the target performance level for our bookings performance
(3)
measure as such information is proprietary in nature, the disclosure of which could result in
competitive harm to the Company. For 2023, the Board of Directors considered the target
performance achievement levels for the bookings performance measure to be challenging, but
achievable with significant effort requiring circumstances to align as projected. The bookings target
goal reflected a 22.6% increase over our actual bookings results from 2022.
For this purpose, each of the above metrics are defined as follows:
•
•
•
Revenue - to be calculated in accordance with GAAP and as set forth in our quarterly and
annual financial statements.
Unlevered Free Cash Flow – to be calculated as free cash flow, defined as GAAP net cash
flows from operating activities reduced by purchases of property and equipment, plus cash
paid for interest and other financing costs, excluding payments for acquisition-related
expenses.
Bookings - to be calculated as sales of new and renewal subscription licenses, perpetual
licenses and related first-year maintenance, and services and training, which are closed in a
period. Bookings is based on annual contract value (ACV), whereby we include only the first-
year contract value as booked in cases where a multi-year deal is prepaid or billed upfront.
Our Board of Directors believed that, for purposes of the short-term cash incentive bonus plan,
these were the most appropriate corporate performance measures to use because, in its view, they
would provide meaningful indicators of our successful execution of our annual operating plan and our
ability to enhance long-term value creation. In particular, we believe our bookings levels are an
effective measure of annual contract value, which management uses to measure the growth of our
business.
2023 Cash Bonus Attainment
Our actual performance against the aggregate target level for the various corporate performance
measures for each quarter and for the full year, as applicable, as well as the amounts received by
each Named Executive Officer, were reviewed by the Compensation Committee in February 2024.
53
The following table provides information regarding the full year cash bonus payout level achieved
by the Named Executive Officers during 2023:
Performance Metric
Revenue + Unlevered Free
Cash Flow
$
Bookings
Actual Performance Level
(in thousands)(1)
Percentage of Target
983,445
(2)
98.8 %
93.3 %
_____________
(1)
from October 2, 2023 (date of acquisition) through the end of the year.
The actual performance level for each performance metric includes the impact of Ermetic
We have chosen not to disclose the performance level for our bookings performance
(2)
measure as such information is proprietary in nature, the disclosure of which could result in
competitive harm to the Company. For 2023, the Board of Directors considered the target
performance achievement levels for the booking performance measure to be challenging but
achievable with significant effort requiring circumstances to align as projected. The bookings
performance attainment reflected a 14.4% increase over our actual bookings results from 2022.
54
The following table provides information regarding the actual quarterly and full year cash bonuses
earned by the Named Executive Officers during 2023:
Named Executive
Officer
Mr. Yoran
Mr. Vintz
Performance
Period
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Total 2023
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Total 2023
Mr. Thurmond
First Quarter
Second Quarter
Third Quarter
Fourth Quarter
Full Year
Target Quarterly/
Annual Bonus
Aggregate
Weighted Average
Achievement/
Payment
Percentage
Actual Quarterly/
Annual Bonus
$
$
$
$
$
97,400
97,400
97,400
97,400
97,400
487,000
72,450
72,450
72,450
72,450
72,450
362,250
72,450
72,450
72,450
72,450
72,450
102.1 % $
96.7 %
96.4 %
94.9 %
95.4 %
99,445
94,186
93,894
92,433
92,920
97.1 % $
472,878
102.1 % $
96.7 %
96.4 %
94.9 %
95.4 %
73,971
70,059
69,842
68,755
69,117
97.1 % $
351,744
102.1 % $
96.7 %
96.4 %
94.9 %
95.4 %
73,971
70,059
69,842
68,755
69,117
Total 2023
$
362,250
97.1 % $
351,744
The cash bonus payments made to our Named Executive Officers for 2023 are set forth in the
Summary Compensation Table below.
Long-Term Incentive Compensation
We have historically granted equity compensation to our Named Executive Officers primarily in
the form of RSU awards or stock options. The Compensation Committee introduced PSUs for our
Named Executive Officers beginning in 2022. For 2023, as part of its annual compensation review the
Compensation Committee determined to continue granting amix o f equity awards consisting of 75%
RSUs and 25% PSUs (based on target grant date values). Each RSU and PSU granted represents a
contingent right to receive one share of our common stock for each unit that ultimately vests. Based
upon a review of competitive market practice and the incentive power of these awards, in February
2023, the Compensation Committee granted RSU and PSU awards to our Named Executive Officers
in amounts that it considered to be consistent with our compensation philosophy and its desired
market competitiveness as follows:
55
Named
Executive
Officer
Mr. Yoran
Mr. Vintz
Mr. Thurmond
Restricted
Stock Unit
Award
(shares)
143,963
81,521
59,406
Restricted
Stock Unit
Award
(grant date
fair value)
$ 6,224,960
3,524,968
2,568,715
Performance
Stock Unit
Award
(target
shares)
47,987
27,173
19,802
Performance
Stock Unit
Award
(target grant
date fair
value)
Total Grant
Date Fair
Value
Total Year-
over-Year
Change
$ 2,074,958 $ 8,299,918
4,699,929
3,424,954
1,174,961
856,239
(7.8)%
(7.8)%
(7.4)%
2023 RSU Awards
RSU awards serve as an incentive that is aligned with the long-term interests of our stockholders
because their value increases (or decreases) with any change in the value of the underlying shares.
Further, RSUs serve our retention objectives because they are subject to a multi-year vesting
requirement based on continued service. The RSU awards granted to our Named Executive Officers
vest over a four-year period, with 25% of the total number of units subject to the award vesting on the
first anniversary of February 22, 2023, the vesting commencement date, and 1/16th of the total
number of units subject to the award vesting in quarterly installments over the following three years,
contingent upon the Named Executive Officer’s continued employment by us through each applicable
vesting date.
2023 PSU Awards
For 2023, the Compensation Committee continued to grant PSUs, representing 25% of the equity
award mix (based on target grant date values), to strengthen the Company's pay for performance
philosophy and in light of stockholder and institutional investor feedback. Because PSUs are only
earned upon achievement of key performance goals that drive our business and our stockholder
value, the Compensation Committee believes that these awards increase the alignment between the
interests of our executive officers and stockholders. In February 2024, the Compensation Committee
increased the proportion of PSUs in the long-term incentive grant mix from 25% to 35% for 2024. In
future years and over time, the Compensation Committee intends to continue to gradually shift the
mix of equity awards granted to Named Executive Officers to include a higher proportion of
performance-based incentives.
The PSU awards were subject to the achievement of (i) pre-established target levels for global
bookings (weighted 33.33%) and revenue + unlevered free cash flow (weighted 66.67%) during the
one-year performance period beginning on January 1, 2023, and (ii) a service-based vesting
requirement, with 25% of the total number of PSUs deemed to be earned based on performance by
the Compensation Committee vesting on the first anniversary of February 22, 2023, and the
remainder vesting quarterly over the following three years, subject to the Named Executive Officer's
continuous service through each applicable vesting date. The vesting of the PSUs may accelerate
upon certain change in control events.
For purposes of the PSU awards, global bookings, revenue and unlevered free cash flow have
the same definitions set forth above under “Cash Bonuses.” The Compensation Committee selected
these performance measures based on its belief that they were the best indicators of our successful
execution of our annual operating plan and our ability to enhance long-term value creation.
The number of units (and, correspondingly, the number of shares) that could be earned under the
PSU awards ranged from 0% to 200% of the target number of PSUs granted, subject to the service-
56
based vesting requirement described above. The levels of performance required to earn the target
number of PSUs was approved by the Compensation Committee at the time of grant as follows:
Global Bookings and Revenue +
Unlevered Free Cash Flow
Achievement Percentage
Payout Percentage(1)
Maximum
Target
Threshold
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