Jayshree Ullal
Arista NetworksAbout Jayshree Ullal
Jayshree Ullal is Chief Executive Officer, President, and Chairperson of Arista Networks; age 64; CEO since October 2008 and Chair since December 2023. She holds a B.S. in Electrical Engineering (San Francisco State University) and an M.S. in Engineering Management (Santa Clara University), with prior senior leadership at Cisco as SVP of data center switching and services (1993–2008) . Under her leadership, FY2024 revenue was $7.0B (+19.5% YoY) and non-GAAP operating income was $3.33B (+27.8% YoY, 14.7% above plan), metrics directly used in incentive design; multi-year pay-versus-performance data shows strong alignment, with a $100 initial investment equivalent value reaching $869 by 2024 and PEO compensation-actually-paid rising with performance and equity value realization .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cisco Systems | SVP, Data Center Switching & Services | 1993–2008 | Led core switching/services; scaled data center portfolio |
| Crescendo Communications | VP Marketing | — | Early high-speed switching; Cisco’s first acquisition (1993) |
| Ungermann-Bass | Product/Engineering roles | — | Networking engineering foundation |
| Advanced Micro Devices | Product/Engineering roles | — | Semiconductor engineering experience |
| Fairchild Semiconductor | Product/Engineering roles | — | Semiconductor engineering experience |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Snowflake Inc. | Director | Since June 2020 | Cloud data platform director service |
Board Governance
- Board service: Director since 2008; Chairperson since Dec 2023; not independent under NYSE due to executive role .
- Committees: Independent directors only on committees; Ullal (employee director) not a committee member .
- Lead independent director: Daniel Scheinman; independent oversight complements combined Chair/CEO structure .
- Attendance: Each director attended at least 75% of board/committee meetings in 2024; all directors except Kenneth Duda attended the 2024 annual meeting .
- Director compensation: Employee directors (including Ullal) do not receive additional pay for board service .
Fixed Compensation
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Base Salary ($) | $300,000 | $300,000 | $300,000 |
| Target Bonus ($) | $300,000 (CEO target equals base) | $300,000 (CEO target equals base) | $300,000 (CEO target equals base) |
| Actual Non-Equity Incentive ($) | $255,000 | $200,000 | $250,000 |
| All Other Compensation ($) | $14,899 | $10,399 | $1,542,901 (includes $780,000 HSR filing fees and $753,541 related tax gross-up) |
Notes:
- Employment terms: At-will; eligible for standard benefits; target annual bonus equals base salary .
- Red flag: HSR tax gross-up paid in 2024—shareholder-unfriendly feature despite broader policy of no golden parachute excise tax gross-ups .
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| FY2024 Revenue (AOP PRSUs) | 50% | $6.6B | $7.0B | 200% | 100% on first quarterly vest date post-determination (quarterly dates on/after Feb 20/May 20/Aug 20/Nov 20) |
| FY2024 Non-GAAP Operating Income (AOP PRSUs) | 50% | $2.9B | $3.3B | 200% | 100% on first quarterly vest date post-determination |
| 3-Year Cloud/AI CAGR (2024–2026) | 50% | 14% (50% min: 12%; 200% max: 16%) | In progress (performance period 2024–2026) | 50–200% grid | 100% vests on Feb 20, 2027 subject to service |
| 3-Year Enterprise CAGR (2024–2026) | 50% | 10% (50% min: 9%; 200% max: 12%) | In progress (performance period 2024–2026) | 50–200% grid | 100% vests on Feb 20, 2027 subject to service |
FY2024 AOP PRSU results (shares eligible to vest upon achievement):
| PRSU Type | Shares Eligible to Vest |
|---|---|
| Revenue PRSUs | 20,612 |
| Non-GAAP Op Income PRSUs | 20,612 |
CEO 2024 equity mix and scale:
- Granted 61,840 2024 AOP PRSUs and 61,840 2024 CAGR PRSUs (total intended value $7.8M converted to targets using 30-day average price) .
- CEO equity is 100% performance-based; no RSUs for CEO in 2024 .
Multi-year stock awards (grant-date fair value, from Summary Compensation Table):
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Stock Awards ($) | $10,165,988 | $15,051,588 | $6,856,502 |
Equity Ownership & Alignment
- Beneficial ownership: 37,493,269 shares; 2.99% of 1,255,625,511 outstanding (as of Apr 2, 2025) .
- Breakdown: Includes 24,493,968 shares in the 2000 Ullal Trust; 12,846,400 shares in family trusts; 92,641 shares held directly; 60,260 shares issuable within 60 days via RSU vesting or option exercise .
- Ownership guidelines: CEO must hold 3x base salary; CEO is on track to meet guideline; hedging prohibited; pledging prohibited for certain executive officers under insider trading policy .
- Outstanding awards (unvested, as of Dec 31, 2024):
- 2024 PRSUs: 61,840 (AOP) and 61,840 (CAGR) .
- 2023 PRSUs: 248,938 (2023 performance award) and 76,320 (2023–2024 performance award) .
- 2022 PRSUs: 102,976 (quarterly vest 2023–2024–2025–2026) and 77,640 (50% vest Feb 20, 2025; 50% vest Feb 20, 2026) .
- 2021 PRSUs: 44,588 and 49,984 with scheduled quarterly vesting patterns .
- Options exercisable: 5,328 (2018 option, $15.26 strike), 6,672 (2019 option, $14.15 strike) .
- Insider selling/vesting pressure indicators (FY2024):
- Options exercised: 44,000 shares; value realized $2,762,077 .
- Shares vested: 658,584; value realized $52,603,778 .
Employment Terms
- Offer letter: At-will; base salary $300,000; target annual bonus $300,000; standard benefits .
- Severance/Change-in-Control: No specific severance or CIC provisions disclosed for Ullal; Company discloses severance/CIC benefits for CFO and General Counsel but not for CEO .
- Clawback policy: Adopted July 2023; non-discretionary recovery of excess incentive-based compensation upon accounting restatement, irrespective of fault .
- Insider trading policy: Prohibits hedging and certain pledging; bans short sales and derivative transactions; details filed with 10-K .
Compensation Committee Analysis
- Design: CEO equity 100% performance-based (AOP and multi-year CAGR) to align with revenue growth and profitability; non-GAAP operating income is a key metric and included in bonus plan and PRSUs .
- Program actions (FY2024): No base salary increases; bonus funding at 92.3% based on revenue and non-GAAP operating income outperformance; NEO bonuses reflect contributions to diversification, product quality, innovation, and support .
- Consultant: Aon retained as independent advisor; peer groups updated—FY2025 peers position Arista at 56th percentile revenue and 89th percentile market cap at approval; increased emphasis on long-term incentives vs cash .
- Say-on-Pay: 93% approval in 2024; committee maintained core design given strong shareholder support .
Director Compensation (for Ullal as Director)
- Employee directors (Ullal, Duda) receive no additional board fees; outside directors receive cash retainers and RSUs per revised policy .
Risk Indicators & Red Flags
- Tax gross-up: Company paid HSR filing fees and tax gross-up on Ullal’s behalf ($780,000 fees; $753,541 gross-up) and for Duda, contrary to shareholder-preferred practice; Company otherwise states no excise tax gross-ups for parachutes .
- Related party transactions: None material beyond standard compensation and indemnification; board confirms independence determinations and oversight .
- Section 16 compliance: One amended Form 4 for Ullal due to administrative error; one late filing for Duda; company asserts procedures and overall compliance .
Performance & Track Record
- FY2024 business performance: Revenue $7.0B (+19.5% YoY); GAAP operating income $2.94B (42.0% margin, +30.45% YoY); non-GAAP operating income $3.33B (47.5% margin, +27.8% YoY, 14.7% above plan), demonstrating operating leverage and prudent expense management; revenue/margin metrics directly integrated in CEO pay design .
- Pay-versus-performance linkage: CAP for CEO and NEOs increases with TSR, net income, and revenue; most important measures cited: revenue, non-GAAP operating income, non-GAAP gross margin, CAGR of revenue .
Equity Award Detail (CEO PRSUs and Vesting Schedules)
| Grant | Type | Target Shares Unvested | Key Vesting Terms |
|---|---|---|---|
| Feb 9, 2024 | 2024 AOP PRSUs | 61,840 | Earned based on FY2024 targets; 100% vest on first quarterly date post-determination |
| Feb 9, 2024 | 2024 CAGR PRSUs | 61,840 | Earned on 2024–2026 CAGR goals; 100% vest on Feb 20, 2027 |
| Feb 10, 2023 | 2023 PRSUs | 248,938 | Quarterly vest after initial schedule; performance conditions set for 2023 |
| Feb 10, 2023 | 2023–2024 PRSUs | 76,320 | 50% vest Feb 20, 2025 and 50% Feb 20, 2026, subject to achievement |
| Feb 11, 2022 | 2022 PRSUs | 102,976 | 25% vest Feb 20, 2023; then 6.25% quarterly |
| Feb 11, 2022 | 2022 (2023–2024 perf) | 77,640 | 50% vest Feb 20, 2025; 50% Feb 20, 2026 |
| Feb 12, 2021 | 2021 PRSUs | 44,588 | 1/4 vest Feb 20, 2022; then 1/16 quarterly |
| Feb 12, 2021 | 2021 PRSUs | 49,984 | 1/3 vest Feb 20, 2022; then 1/12 quarterly |
Investment Implications
- Strong pay-for-performance alignment: CEO’s compensation is predominantly performance PRSUs tied to revenue and profitability (AOP) and multi-year revenue CAGR by segment (Cloud/AI, Enterprise). Outperformance led to 200% payout on FY2024 AOP PRSUs, reinforcing alignment with shareholder value creation .
- Retention and selling pressure: Significant annual vesting and realized values (over $52.6M vesting value in 2024) imply ongoing supply from scheduled vesting; however, multi-year performance gates and service-based schedules (2027 vest cliff for CAGR PRSUs) support retention and medium-term alignment .
- Governance checks offset dual-role risk: Combined Chair/CEO structure is balanced by a strong lead independent director and fully independent committees, with high board attendance; independence rigor for committees is explicit .
- Red flag to monitor: HSR-related tax gross-ups are atypical and shareholder-unfriendly; continued scrutiny of perquisites and “other comp” is warranted despite no golden parachute excise tax gross-ups policy .
- Ownership alignment: CEO’s ~3% stake, trust-controlled holdings, and ownership guidelines (3x salary) underscore skin-in-the-game; hedging/pledging prohibitions reduce misalignment risk .