Paul Scannell
CADENCE DESIGN SYSTEMSAbout Paul Scannell
Paul Scannell is Senior Vice President, Customer Success Team at Cadence Design Systems, promoted in May 2024 from Corporate Vice President, Sales, to lead worldwide field operations, later renamed Customer Success Team . His FY2024 leadership was credited with exceeding revenue targets, delivering record bookings, expanding into new markets and hyperscalers, and strengthening top customer partnerships while maintaining operational discipline . Company-wide performance during his first year in role included revenue of $4.641 billion and 13.5% revenue growth with record $6.8 billion backlog, and a five-year total shareholder return (TSR) of 327% through 2024 . Cadence’s pay-for-performance framework ties executive outcomes to revenue and non-GAAP operating margin, supplemented by leadership and culture factors, reinforcing alignment with shareholder value creation .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cadence Design Systems | Corporate Vice President, Sales | — | Led global sales prior to promotion; foundation for FY2024 bookings strength and hyperscaler expansion |
| Cadence Design Systems | Senior Vice President, Worldwide Field Operations (renamed Customer Success Team) | Since May 2024 | Exceeded revenue targets, record bookings, expanded services and hyperscaler traction; operational excellence in customer-first execution |
Fixed Compensation
| Component | FY2024 Amount | Notes |
|---|---|---|
| Base Salary | $500,000 | Set upon May 2024 promotion to SVP CST |
| Target Bonus % (SEBP) | 100% of base salary | Semi-annual determination; Company and Individual factors |
| Actual Bonus Paid (FY2024) | $476,473 | Sum of 1H and 2H payouts shown below |
Performance Compensation
| SEBP Metric | Weighting | 1H 2024 Target | 1H 2024 Actual | 1H Company Perf. Factor | 2H 2024 Target | 2H 2024 Actual | 2H Company Perf. Factor |
|---|---|---|---|---|---|---|---|
| Revenue ($ millions) | 45% | $2,102 | $2,056 (excl. BETA CAE, inv. reserve) | 87.0% | $2,560 | $2,571 | 101.68% |
| Non-GAAP Operating Margin (%) | 55% | 39.7% | 39.5% (excl. items) | 87.0% | 45.3% | 45.4% | 101.68% |
| Individual Performance (Exec Leadership 80% | Culture 20%) | — | Criteria set at start of year | Mr. Scannell exceeded revenue/booking targets, hyperscalers and services plan | — | — | — |
| Executive | 1H % of Target | 1H Bonus ($) | 2H % of Target | 2H Bonus ($) |
|---|---|---|---|---|
| Paul Scannell | 98.7% | $177,534 | 119.6% | $298,939 |
Notes:
- SEBP payouts = Base Salary × Target Bonus % × Company Performance Factor × Individual Performance Factor; Company factor based on revenue and non-GAAP operating margin; Individual factor based on leadership and culture .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership (as of Mar 10, 2025) | 17,687 shares; ownership <1% of outstanding |
| Options exercisable within 60 days | 3,540 shares |
| Unvested RSUs (counts and market value at $300.46 as of Dec 31, 2024) | 5/6/2024: 9,446 RSUs ($2,838,145); 7/15/2022: 1,394 RSUs ($418,841); 10/15/2022: 432 RSUs ($129,799); 7/17/2023: 1,844 RSUs ($554,048); 10/15/2023: 764 RSUs ($229,551) |
| Stock options outstanding | 2,065 exercisable; 12,098 unexercisable; $285.19 strike; expire 5/6/2031; vest 1/48 monthly |
| LTP award (2022 grant) | 22,500 shares; first measurement 3/15/2025 (33% cap); TSR and price hurdles; one-year holding on earned shares |
| Stock ownership guidelines | Executive officers: 1× base salary within 5 years; all NEOs and executive officers met guidelines as of FY2024 year-end/Record Date |
| Hedging/pledging | Prohibited; no pledges or margin accounts allowed under Securities Trading Policy |
Equity Awards and Vesting
| Award Type | Grant Date | Shares/Options | Vesting Terms | Performance Conditions |
|---|---|---|---|---|
| RSU (Promotion award) | 5/6/2024 | 9,446 | 1/3 at ~12 months, then 4 equal semi-annual installments over 3 years | RSU performance-goal requirement maintained |
| Stock Options (Promotion award) | 5/6/2024 | 14,163 | 1/48 monthly over 4 years; 7-year term | — |
| RSU (prior grants) | 7/15/2022; 10/15/2022; 7/17/2023; 10/15/2023 | 1,394; 432; 1,844; 764 | 1/6 every 6 months over 3 years for 2022/2023 grants | — |
| LTP Award (2019 Program context) | — | — | 2019 LTP fully vested by 3/15/2024 for participants who held awards; price/TSR hurdles | Price hurdles and relative TSR |
| LTP Award (2022 – Scannell) | 4/18/2022 | 22,500 | First measurement 3/15/2025 (max 33% cumulative), second 3/15/2026 (max 67% cumulative), final 3/15/2027; one-year holding after each vest | 20-day avg price ≥$245 starts vesting; ≥$359 max; TSR ≥35th percentile vs S&P IT indices |
Employment Terms
| Provision | Summary |
|---|---|
| Plan participation | Executive Severance Plan (all NEOs except CEO also in plan); Scannell designated participant |
| Severance trigger (without CIC) | Termination without “cause” (or constructive termination for certain participants) → transition agreement up to 1 year; salary continuation ($4,000/mo up to six months payable after a 6-month delay), continued medical/dental/vision during transition; partial acceleration of time-based awards vesting over next 12 months; Lump Sum 1 (one year base salary) and Lump Sum 2 (% of salary: Scannell 100%) |
| Change-in-control trigger (“double trigger”) | If termination without cause or constructive termination within 3 months before/13 months after CIC → 100% vesting of unvested equity (subject to award terms); enhanced Lump Sum 1 (+50% salary) and enhanced Lump Sum 2 (+50% salary for Scannell); best after-tax alternative (no tax gross-up) |
| Highest cash entitlement cap | <1.6× base salary + target bonus under CIC |
| Non-compete/solicit (transition) | During the transition period, prohibited from competing, soliciting employees, or interfering with Cadence relationships; continued cooperation required |
| Clawback policy | Mandatory recovery of erroneously awarded incentive compensation after restatements per Nasdaq Rule 10D-1; legacy clawback for pre-10/2/2023 awards |
Potential payments (assuming termination 12/31/2024 and stock at $300.46):
| Scenario | Transition Salary | Lump Sum 1 | Lump Sum 2 | COBRA Premiums | Stock Options Vesting Value | RSUs/LTP Vesting Value | Pre-Tax Total |
|---|---|---|---|---|---|---|---|
| Without CIC | $24,000 | $500,000 | $500,000 | $33 | $54,071 | $5,892,369 | $6,970,473 |
| With CIC | $24,000 | $750,000 | $750,000 | $33 | $184,736 | $6,401,300 | $8,110,070 |
Deferred Compensation
| Item | FY2024 Amount |
|---|---|
| Executive contributions | $1,278,012 |
| Aggregate earnings | $192,052 |
| Aggregate balance at FY2024-end | $7,166,899 |
Investment Implications
- Compensation alignment: Scannell’s 2024 cash bonuses mirrored company revenue/margin outcomes and individual execution, with at-risk pay predominant and equity-heavy mix aligning with long-term TSR and price performance .
- Vesting calendar and potential selling pressure: Key upcoming events include RSU tranches vesting around 5/6/2025 and semi-annually thereafter , and 2022 LTP shares earned on 3/15/2025 subject to a one-year holding (deliverable ~3/15/2026), with additional measurement dates on 3/15/2026 and 3/15/2027 potentially increasing earned shares; options vest monthly and may be exercised opportunistically .
- Retention risk: “Double-trigger” CIC protections, one-year transition structure, equity acceleration mechanics, and significant unvested awards (RSUs and LTP) mitigate near-term retention risk; severance economics are moderate and shareholder-friendly (no tax gross-ups; cap <1.6× salary+bonus) .
- Alignment safeguards: Executive stock ownership guidelines met; hedging and pledging prohibited, reducing misalignment/credit risk; robust clawback policy reduces financial restatement incentive misalignment .