Adam Karon
AKAMAI TECHNOLOGIESAbout Adam Karon
Adam Karon, age 53, is Chief Operating Officer and General Manager of Akamai’s Cloud Technology Group (since March 2021). He joined Akamai in 2005 and previously led the Media & Carrier Division and Global Services & Support; prior employers include Leftbrain, Inc. and Transportation Components, Inc. (education not disclosed) . Under his tenure as COO/GM of Cloud, Akamai reported 2024 revenue of $3.99B (+5% YoY), with Security surpassing $2B (+16% YoY), Compute at >$630M (+25% YoY), and operating cash flow of $1.52B (38% of revenue) . Shareholder return under the 2022–2024 relative TSR cycle ranked at the 26th percentile (payout at 28% of target; absolute TSR −10.7%), while 2024 PRSUs paid 80.5% of target and 2024 annual bonus funded at 72.57% of target (vs. 156.03% in 2023) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Akamai Technologies | COO & GM, Cloud Technology Group | Mar 2021–present | Leads cloud transformation and Connected Cloud strategy; expansion of compute revenue and edge footprint . |
| Akamai Technologies | EVP & GM, Media and Carrier Division | Mar 2017–Feb 2021 | Scaled media delivery; prepared transition toward multi-pillar model (delivery, security, compute) . |
| Akamai Technologies | SVP, Global Services & Support | Jan 2014–Feb 2017 | Drove services quality and customer success execution . |
| Akamai Technologies | Various leadership roles | 2005–2013 | Multiple leadership posts post-joining Akamai in 2005 . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Leftbrain, Inc. | Client Director | N/D | Prior to Akamai . |
| Transportation Components, Inc. | Director of Technology | N/D | Prior to Akamai . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base salary (USD) | $550,000 | $550,000 | $570,000 (increase effective Oct-2024) |
| Target bonus (% of salary) | 100% | 100% | 100% |
| Annual bonus payout (USD) | N/D | $858,174 (156.03% plan funding) | $402,413 (72.57% plan funding) |
Performance Compensation
Annual Incentive Plan structure and outcomes
- Paid entirely in vested Akamai common stock for executives; metrics: 50% Revenue (FX-adjusted), 50% Non-GAAP Operating Income; ESG modifier ±10% .
2024 Annual Incentive
| Metric | Weight | Threshold (0%) | Target (100%) | Max (200%) | Actual | Payout % |
|---|---|---|---|---|---|---|
| Revenue (FX-adjusted) | 50% | $3,706.6M | $4,118.4M | $4,530.2M | $4,032.7M | 79.2% |
| Non-GAAP Operating Income | 50% | $1,094.7M | $1,216.3M | $1,337.9M | $1,187.5M | 76.3% |
| Overall (pre-ESG) | — | — | — | — | — | 77.75% |
| ESG modifier | — | — | — | — | — | −6.66 pts |
| Final bonus funding | — | — | — | — | — | 72.57% |
2023 Annual Incentive
| Metric | Weight | Threshold (0%) | Target (100%) | Max (200%) | Actual | Payout % |
|---|---|---|---|---|---|---|
| Revenue (FX-adjusted) | 50% | $3,423.7M | $3,804.1M | $4,184.6M | $3,818.6M | 103.81% |
| Non-GAAP Operating Income | 50% | $907.5M | $1,008.3M | $1,109.1M | $1,143.2M | 200.00% |
| Overall (pre-ESG) | — | — | — | — | — | 151.9% |
| ESG modifier | — | — | — | — | — | +2.72 pts |
| Final bonus funding | — | — | — | — | — | 156.03% |
Long-term incentives (grants and design)
- Mix: 50% Time-vesting RSUs (1/3 annually over 3 years); 20% PRSUs (three 1-year performance tranches over 2024–2026; vests after 3-year period upon certification); 30% Relative TSR-Based RSUs (3-year performance vs S&P 500 Index, 0–200% payout) .
- No stock options granted in 2024 .
2024 LTI Grant (Grant-date target values)
| Award | Value (USD) | Vesting/method |
|---|---|---|
| Time-vesting RSUs | $2,780,000 | 1/3 annually over 3 years |
| PRSUs | $1,112,000 | Earned 0–200% based on annual Revenue (FX-adjusted) and Non-GAAP EPS for 2024–2026; vests after 3-year period |
| Relative TSR-Based RSUs | $1,668,000 | Earned 0–200% vs S&P 500 percentile; 3-year cliff (2024–2026) |
| Total | $5,560,000 | — |
2023 LTI Grant (for reference)
| Award | Value (USD) |
|---|---|
| Time-vesting RSUs | $2,450,000 |
| PRSUs | $980,000 |
| Relative TSR-Based RSUs | $1,470,000 |
| Total | $4,900,000 |
2024 PRSU target and result (applies to 2024 tranche of 2022–2024 awards)
| Metric | Weight | Threshold | Target | Max | Actual | % Earned |
|---|---|---|---|---|---|---|
| Revenue (FX-adjusted) | 50% | $3,706.6M | $4,118.4M | $4,530.2M | $4,032.7M | 79.2% |
| Non-GAAP EPS | 50% | $6.04 | $6.71 | $7.38 | $6.59 | 81.8% |
| Overall | — | — | — | — | — | 80.5% |
Relative TSR outcomes
| Cycle | Target | Akamai TSR | Percentile | Payout |
|---|---|---|---|---|
| 2022–2024 | 50th percentile vs S&P 500 | −10.7% | 26th | 28% of target |
Equity Ownership & Alignment
- Stock ownership guidelines: NEOs must hold shares equal to 3x salary (raised from 2x in 2024); anti-hedging/anti-pledging policy prohibits pledging and hedging; all NEOs in compliance as of 12/31/2024 .
- Bonuses paid in stock further align incentives with shareholders .
Beneficial ownership (Adam Karon)
| As-of date | Beneficial shares | Notes |
|---|---|---|
| Feb 12, 2024 | 66,917 (incl. 44,954 RSUs vesting within 60 days) | <1% outstanding; subject to stock ownership guidelines . |
| Feb 25, 2025 | 45,344 (incl. 24,620 RSUs vesting within 60 days) | <1% outstanding . |
Policy highlights
- Hedging and pledging prohibited for executives and directors .
- Clawbacks: 2014 policy for misconduct and profit disgorgement; 2023 SEC/Nasdaq-compliant policy mandates recovery of erroneously awarded incentive pay after restatements (regardless of misconduct) .
- No related-party transactions disclosed for 2024 .
Employment Terms
Key plan designs
- Executive Severance Plan (non-CIC): upon termination without cause, lump-sum 1x base salary + 1x target bonus + up to 12 months COBRA reimbursement (release required) .
- Change-in-Control (CIC) agreement (2022 form): on qualifying termination within 1 year post-CIC, lump-sum base salary + target bonus + pro-rated current-year target bonus + up to 12 months COBRA reimbursement; equity awards are double-trigger; no excise tax gross-ups .
Potential payments (valued as of 12/31/2024; stock at $95.65)
| Scenario | Cash severance | Time-based RSU acceleration | Performance RSU acceleration |
|---|---|---|---|
| Involuntary separation without cause (non-CIC) | $1,124,539 | $0 | $0 |
| Involuntary termination following a CIC | $1,679,078 | $4,997,808 | $7,295,704 |
| Death or Disability | $0 | $4,997,808 | $4,649,610 |
Equity treatment in CIC
- If awards are not assumed at CIC, unvested time-based and earned performance awards accelerate at CIC close; if assumed, double-trigger acceleration upon qualifying termination within 1 year; PRSUs convert based on target for incomplete periods and actual for completed periods .
Compensation Structure Analysis
- Mix shift and retention: Karon’s 2024 LTI target rose to $5.56M from $4.90M in 2023 (50% time RSUs / 20% PRSUs / 30% TSR), with the proxy citing market competitiveness and retention of leaders critical to Akamai’s transformation .
- Pay-for-performance: 2024 bonus funded at 72.57% amid below-target revenue and non-GAAP operating income, while 2024 PRSU tranche earned 80.5%; 2023 saw strong payouts (156.03% bonus; 151.9% PRSU tranche) .
- Shareholder alignment: bonuses paid in stock; robust ownership guidelines; hedging/pledging prohibited; dual clawbacks; double-trigger equity on CIC; no excise tax gross-ups .
- Peer benchmarking and inflation risk: For 2025, peer set adjustments added Cloudflare, OpenText, Twilio, Zscaler—closer to Akamai’s operations and financial ranges—potentially pressuring LTI targets upward over time .
Performance & Track Record (select indicators)
| Indicator | 2023 | 2024 |
|---|---|---|
| Revenue (USD) | $3.8B (Security $1.8B; Compute >$500M) | $3.99B (Security >$2.0B, +16% YoY; Compute >$630M, +25% YoY) |
| Operating cash flow | $1.35B | $1.52B (38% of revenue) |
| Annual bonus funding | 156.03% | 72.57% |
| PRSU tranche payout | 151.9% | 80.5% |
| 3-yr relative TSR payout | 51.5% (2021–2023 cycle) | 28% (2022–2024 cycle) |
Governance, Say-on-Pay, and Committee Process
- Say-on-Pay support: ~92% approval at 2024 meeting; ~88% at 2023 meeting—indicative of broad investor support for program design .
- Compensation oversight: TL&C Committee uses independent consultants; includes objective financial metrics; caps payouts; annual risk assessment found programs do not encourage excessive risk-taking .
Investment Implications
- Alignment and dilution: Heavy equity mix (RSUs/PRSUs/TSR) and stock-paid bonuses tightly align Karon’s pay with shareholder outcomes and can moderate cash burn, but create predictable vesting supply; 24,620 RSUs were scheduled to vest within 60 days of Feb 25, 2025, indicating near-term share issuance on vesting that could create incidental selling pressure around tax withholdings .
- Execution and payout sensitivity: 2024 below-target revenue and non-GAAP profitability drove reduced bonus and PRSU funding (72.6%/80.5%), while 2022–2024 TSR underperformance (26th percentile) cut TSR RSU payouts to 28%—a lever that lowers realized comp when shareholders underperform, reinforcing pay-for-performance discipline .
- Retention risk mitigants: 2024 LTI step-up for key leaders (including Karon) and double-trigger CIC protection balance retention with investor protections (no single-trigger, no tax gross-ups, strong clawbacks) .
- Peer and pay inflation watch: 2025 peer changes (adding growth/cloud security names) can raise competitive benchmarks over time; monitor whether rising LTI targets outpace performance amid continued mix shift to Security/Compute .