Kenneth Duda

About Kenneth Duda

Kenneth Duda is a founder of Arista Networks and has served in various roles since 2004; he is Chief Technology Officer and Senior Vice President of Software Engineering (since September 2011) and a Class I director (since December 2023), age 53, with BS/MS in Computer Science and Electrical Engineering from MIT and a PhD in Computer Science from Stanford University . Arista’s fiscal 2024 results underpin pay-for-performance: revenue was $7.0B (+19.5% YoY), GAAP operating income was $2.9B (42.0% margin), and non-GAAP operating income was $3.33B (+27.8% YoY; 47.5% margin), above internal targets; company TSR reached a value of $869 for a $100 initial investment by year-end 2024 .

Past Roles

Organization	Role	Years	Strategic impact
Arista Networks	Founder; CTO & SVP, Software Engineering	2004–present; CTO since 2011	Founding operator with deep networking expertise and operational insight; core leadership on software and technology
Cisco Systems	Led software development of switch kernel (Gigabit System Business Unit)	1996–1999	Kernel development leadership in high-speed switching
There, Inc.	Chief Technology Officer	1999–2004	CTO role at virtual worlds company; platform innovation

External Roles

None disclosed in the proxy (no current public company directorships or committee roles listed) .

Fixed Compensation

Metric	FY 2022	FY 2023	FY 2024
Base salary ($)	$300,000	$300,000	$300,000
Target bonus (%)	60% of base (Company-wide policy for NEOs other than CEO)	60% of base	60% of base and $180,000 target per offer letter
Actual bonus paid ($)	$202,500	$205,000	$240,000

Performance Compensation

Metric	Weight	Target	Actual	Payout	Vesting mechanics
Revenue (AOP PRSUs)	50%	$6.6B	$7.0B	200%	Earned shares vest on Feb 20 following performance year; first quarterly vesting date thereafter
Non-GAAP operating income (AOP PRSUs)	50%	$2.9B	$3.3B	200%	Earned shares vest on Feb 20 following performance year; first quarterly vesting date thereafter
Duda PRSUs earned and eligible to vest (2024 performance)	—	—	—	—	52,612 Revenue PRSUs; 52,612 Operating Income PRSUs

Notes:

For non-CEO NEOs, PRSUs eligible in 2024 (from 2022/2023/2024 grants) paid at 200% based on achievement .
Duda also received 2024 PRSUs (target 29,360; one-third eligible in 2024, with maximum 200%) .

Equity Ownership & Alignment

Item	Detail
Total beneficial ownership	4,299,977 shares (<1% of outstanding) as of April 2, 2025
Ownership breakdown (direct/indirect)	317,857 in Duda & spouse family trust; 600,000 in Duda GRATs (trustee); 600,000 in spouse GRATs; 1,383,168 in children’s trusts (Duda trustee); 634,400 in 501(c) foundation (co-trustees); 12,976 direct; plus 751,576 shares issuable within 60 days via RSUs/options
Options (exercisable)	240,000 @ $4.0288 exp. 9/10/2025; 400,000 @ $3.5150 exp. 2/11/2026; 128,000 @ $15.2625 exp. 4/12/2028; 48,000 @ $15.2769 exp. 11/8/2028; 160,000 @ $14.1463 exp. 2/7/2029
Unvested RSUs (12/31/2024)	396,320 (5-year quarterly vest starting 11/20/2025, 5% per quarter) ; 29,360 RSUs (standard quarterly vest starting 2/20/2025, 6.25% per quarter)
Unvested PRSUs (targets at 12/31/2024)	29,360 (2024 grant; 1/3 earned per year, max 200%); plus prior 2022/2023 PRSUs outstanding (performance-based)
Hedging/pledging	Hedging prohibited; short sales prohibited; pledging prohibited for certain executive officers; no pledges disclosed for Duda
Ownership guidelines	Company stock ownership guidelines apply to CEO and directors (CEO 3x base); no Duda-specific guideline disclosed

Employment Terms

At-will employment; current base salary $300,000; annual bonus target $180,000; eligible for standard employee benefits .
No severance or change-in-control agreement disclosed for Duda; severance terms provided for CFO and GC only .

Board Governance

Board service: Class I director since 2023; current term expires 2027; not independent (employee director) .
Committees: None; only independent directors serve on board committees .
Attendance: All directors except Kenneth Duda attended the 2024 annual meeting (company encourages but does not require attendance) .
Dual-role implications: Duda’s executive + director status limits committee participation; overall board led by non-independent Chair/CEO (Ullal) with lead independent director structure and independent committees mitigating independence concerns .

Director Compensation

Employee directors (Ullal and Duda) receive no additional compensation for board service .

Compensation Structure Analysis

Cash vs equity mix: Base salary flat 2022–2024; 2024 non-equity incentive increased to $240,000 on strong performance . Equity awards surged in 2024 ($34.43M grant-date fair value) driven by a special $25M RSU award with extended five-year vesting commencing November 2025 for retention amid expanded responsibilities .
Shift to RSUs: Duda historically held options (fully exercisable); 2024 grants emphasize RSUs and PRSUs, lowering risk compared to options and aligning payouts to company performance .
Clawback: Non-discretionary recovery for executive officers adopted July 2023 (SEC/Nasdaq compliant) .
Tax gross-ups: Company policy has no 280G/4999 excise tax gross-ups; however, Duda received HSR filing fee coverage ($135,000) and related tax gross-up ($130,421) in 2024 (administrative compliance-related) .

Vesting Schedules and Insider Selling Pressure

Time-based RSUs: 6.25% quarterly vest starting Feb 20, 2025; 5% quarterly vest starting Nov 20, 2025 for the extended retention RSUs, creating predictable quarterly supply from 2025 onward .
Performance-based PRSUs: Earned shares (AOP PRSUs) vest on the first quarterly vest date after achievement determination; 2024 AOP PRSUs paid at 200% based on results .
Insider activity: A Form 4 reflecting Duda’s exercise and sale on June 13, 2024 was filed late due to administrative error, indicating periodic liquidity events; combined with upcoming RSU vesting, this suggests ongoing but scheduled selling potential .

Compensation & Incentives Detail

Item	FY 2024
PRSU grants (target shares)	29,360 target shares; 1/3 eligible each FY; max 200% payout; vest Feb 20 following performance year
RSU grants (time-based)	396,320 RSUs; 5-year quarterly vest starting 11/20/2025 (5% per quarter); plus 29,360 RSUs with standard quarterly vest starting 2/20/2025 (6.25% per quarter)
AOP PRSU metrics (2024)	Revenue and Non-GAAP Op Income (50/50 weight); targets $6.6B/$2.9B; actual $7.0B/$3.3B; payout 200%
Duda PRSUs earned (2024)	52,612 revenue PRSUs; 52,612 operating income PRSUs eligible to vest

Performance & Track Record

Fiscal outcomes tied to incentives: Revenue $7.0B (+19.5% YoY); non-GAAP operating income $3.33B (+27.8% YoY; 14.7% above internal targets), underpinning 200% PRSU payout for 2024 AOP awards .
Say-on-pay: 93% approval in 2024; committee maintained program design emphasizing performance equity and long-term alignment .
Pay-versus-performance: Compensation Actually Paid reflects strong equity value creation alongside TSR, net income, and revenue growth .

Compensation Peer Group (Benchmarking)

FY 2024 peers: Akamai, Autodesk, Cadence, Ciena, F5, Fortinet, Juniper Networks, NetApp, Palo Alto Networks, ServiceNow, Splunk, Synopsys, Workday, Zscaler .
FY 2025 updated peers: Akamai, Autodesk, Cadence, Ciena, CrowdStrike*, Digital Realty, Equinix*, Fortinet, Intuitive Surgical*, NetApp, Palo Alto Networks, ServiceNow, Synopsys, Workday, Zscaler (*added) .

Equity Awards Outstanding (12/31/2024)

Type	Grant date	Shares/Units	Vesting	Notes
RSU	2/9/2024	396,320	5% quarterly from 11/20/2025	Extended 5-year retention award
RSU	2/9/2024	29,360	6.25% quarterly from 2/20/2025	Standard RSU schedule
PRSU (target)	2/9/2024	29,360	1/3 per FY; vests following year-end	Max 200%; AOP for 2024; additional years TBD
Options (exercisable)	2015–2019	240,000; 400,000; 128,000; 48,000; 160,000	Fully exercisable; various expirations	Exercise prices $3.52–$15.28; expirations 2025–2029

Policies and Risk Controls

Clawback policy (non-discretionary) for executive officers (SEC/Nasdaq-compliant) .
Insider trading policy: prohibits derivatives, hedging, short sales; pledging prohibited for certain executive officers .
No timing of awards around MNPI; delegated grant authority rules for CEO exclude Section 16 officers .

Related Party & Red Flags

Related party transactions: none >$120k involving Duda disclosed .
Filing compliance: One late Form 4 for Duda (exercise and sale on June 13, 2024) due to administrative error .
Tax gross-ups: Limited to HSR filing fee coverage and related tax gross-up in 2024 for Duda .

Employment Contracts, Severance, and Change-of-Control

Executive	Contract term	Severance (non-CIC)	Severance (CIC)	Accelerated vesting terms
Kenneth Duda	At-will	Not disclosed	Not disclosed	Not disclosed

Investment Implications

Alignment and retention: The 5-year RSU package beginning November 2025 materially increases long-term retention and alignment; quarterly vesting from 2025 implies predictable insider share supply, but extended start date reduces near-term selling pressure .
Performance linkage: AOP PRSUs tied to revenue and non-GAAP operating income paid at 200% on 2024 outperformance, reinforcing pay-for-performance and execution confidence in Duda’s technical leadership role .
Governance: As an employee director, Duda is not independent and serves on no committees; independent committee structures and a lead independent director mitigate dual-role concerns, but monitoring board independence remains prudent .
Trading signals: Documented exercise/sale in June 2024 and substantial future RSU vesting schedules suggest ongoing, scheduled insider supply; hedging/pledging prohibitions reduce misalignment risk, and the clawback policy enhances downside governance protection .