Jay Kreps
ConfluentAbout Jay Kreps
Jay Kreps is Confluent’s co‑founder, Chief Executive Officer, and Chairman, serving on the board since the company’s inception in September 2014. He was one of the original creators of Apache Kafka at LinkedIn and holds B.S. and M.S. degrees in Computer Science from UC Santa Cruz . He is 44 and is listed among Confluent’s executive officers in 2025 . Under his leadership, FY2024 subscription revenue grew 26% to $922M, Confluent Cloud revenue grew 41% to $492M, GAAP operating margin improved 18 points, and non‑GAAP operating margin turned positive for the first time in company history; Confluent ended 2024 with 1,381 $100K+ ARR customers (+12% YoY) . Pay‑versus‑performance disclosures show 2024 total shareholder return valued at $62.11 for a hypothetical $100 initial investment (company methodology) .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Engineer, Engineering Manager, Software Architect | 2009–2014 | Co‑created Apache Kafka, foundational to Confluent’s data streaming category |
External Roles
No additional public company directorships or external roles for Mr. Kreps are disclosed in Confluent’s latest proxy.
Fixed Compensation
- CEO salary: Mr. Kreps voluntarily reduced his annual base salary to $65,000 for 2023 to advance profitability and maintained $65,000 for 2024 and will maintain $65,000 for 2025 (from a 2021 confirmatory offer letter at $350,000) .
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $350,000 | $65,000 | $65,000 |
| Total Reported Comp ($) | $380,004 (includes $30,004 other comp) | $65,000 | $15,105,701 (incl. $15,040,701 stock awards) |
Additional notes:
- CEO does not participate in the annual executive cash bonus plan; all other NEO bonuses depend on subscription revenue attainment (threshold/target/max with caps) .
Performance Compensation
- Long‑term equity is the primary at‑risk pay element. Confluent emphasizes RSUs; it has not granted options since 2021 and uses peer market data without targeting a fixed percentile .
| Award | Grant Date | Units/Value | Vesting | Notes |
|---|---|---|---|---|
| Time‑based RSUs | Feb 26, 2024 | 452,488 RSUs; $15,040,701 grant‑date fair value | Four years from Feb 20, 2024; 1/12 vests 15 months after Feb 20, 2024 (May 2025), then 1/12 every 3 months thereafter, subject to continued service | Board‑approved CEO annual grant; equity is the primary CEO compensation lever |
Annual bonus framework (company plan; CEO excluded):
- 2024 metric: subscription revenue; target ≈$934M; actual ≈$922M (98% attainment) → 97.5% payout for participants .
- Caps and thresholds: no payout below 90% of target; threshold payout 77.5% at 90%; max 167.5% at 120% .
Clawback:
- Confluent maintains an Incentive Compensation Recoupment (clawback) Policy aligned with SEC/Nasdaq; applicable to current/former Section 16 officers in the event of an accounting restatement .
Equity Ownership & Alignment
- Stock ownership guidelines: CEO 5× base salary; all Section 16 officers and directors were in compliance as of Dec 31, 2024 .
- Hedging/pledging prohibited: no hedging, short sales, options trading (outside compensatory awards), or pledging/margin accounts permitted .
Beneficial ownership (as of March 31, 2025):
| Holder | Class A | Class B | Total Beneficial Ownership | % Voting Power |
|---|---|---|---|---|
| Jay Kreps | 37,707 (RSUs vesting within 60 days) | 23,593,289 (incl. 15,645,000 direct; 149,984 in revocable trust; 2,000,000 in family trusts; 5,798,305 options exercisable within 60 days, 5,762,364 vested) | 6.8% of outstanding Class A + B | 24.3% (10 votes per Class B share) |
Outstanding and exercisable equity (as of Dec 31, 2024):
| Security | Strike | Expiration | Status/Vesting |
|---|---|---|---|
| Stock Option (grant 10/22/2018) | $2.24 | 10/21/2028 | 48 monthly installments from Oct 1, 2018; fully vested as of 12/31/24 |
| Stock Option (grant 10/22/2018) | $2.24 | 10/21/2028 | 48 monthly from Jun 23, 2021; 1,509,508 vested as of 12/31/24 |
| Stock Option (grant 3/19/2021) | $15.68 | 3/18/2031 | 48 monthly from Mar 19, 2021; 2,201,249 vested as of 12/31/24 |
| RSUs (grant 2/26/2024) | — | — | Four‑year schedule from Feb 20, 2024 with 15‑month initial vest, then quarterly; 1/12 per tranche |
Insider selling pressure watchpoints:
- Scheduled RSU releases begin May 2025 and then occur quarterly, creating a steady supply cadence; significant in‑the‑money options may also be exercised over time (subject to trading windows and policy) .
Employment Terms
| Topic | Terms |
|---|---|
| Employment agreement | 2021 confirmatory letter; base salary (originally $350,000), later voluntarily reduced to $65,000 for 2023 and maintained at $65,000 for 2024 and 2025 |
| Bonus eligibility | CEO does not participate in the executive cash bonus plan |
| Clawback | Applies to recoverable incentive comp post‑restatement per SEC/Nasdaq |
| Hedging/pledging | Prohibited |
Change‑in‑control and severance economics:
- The Severance Plan (effective at 12/31/2024) vs. Amended Severance Plan (Feb 12, 2025):
| Provision | Pre‑Amendment (in effect at 12/31/24) | Amended (Feb 12, 2025) |
|---|---|---|
| CIC termination window | 3 months before to 12 months after CIC | Same |
| Cash severance (CIC) | 6 months base salary | CEO: 18 months base salary |
| Bonus (CIC) | 50% of target bonus | 100% of target bonus |
| COBRA (CIC) | Up to 6 months | CEO: up to 18 months |
| Equity (CIC) | 50% acceleration of outstanding unvested equity | 100% acceleration of time‑vesting equity |
| Non‑CIC termination | 6 months base + up to 6 months COBRA | CEO: 12 months base + up to 12 months COBRA |
Estimated payouts under pre‑amendment plan (as of 12/31/2024 assumptions used by company):
| Scenario | Cash Severance | COBRA | Equity Accel | Total |
|---|---|---|---|---|
| Involuntary (non‑CIC) | $32,500 | $14,997 | — | $47,497 |
| CIC Termination | $32,500 + 50% target bonus | $14,997 | $10,000,022 | $10,047,519 |
Board Governance
- Dual role: CEO and Chairman. Board determined this structure is in stockholders’ best interests given his knowledge/vision; a Lead Independent Director (Greg Schott) presides over executive sessions and mitigates conflicts .
- Independence: All directors except Mr. Kreps are independent under Nasdaq rules .
- Committees: Audit (Chadwick, Chair), Compensation (Henry, Chair), Nominating & Governance (Volpi, Chair), and M&A (Volpi, Chair). Mr. Kreps serves on the Mergers & Acquisitions Committee (alongside Caimi, Henry, Volpi) .
- Board operations: 6 board meetings in FY2024; each director attended ≥75% of combined board and committee meetings; seven of nine directors attended the 2024 annual meeting .
- Classified board: Class I (including Mr. Kreps) up for election at the 2025 annual meeting for terms ending 2028 .
- Director pay: Mr. Kreps receives no additional director compensation .
Say‑on‑Pay & Shareholder Feedback
- At the 2024 annual meeting, ~98% of votes cast approved 2023 NEO compensation; the company holds annual say‑on‑pay votes .
Compensation Structure Analysis
- Cash vs equity: CEO cash comp is minimal ($65K); equity is dominant, improving pay‑for‑performance alignment and dilution control (RSUs favored over options) .
- Shift to RSUs: Confluent has not granted options since 2021 to executives; RSUs are the primary vehicle (more durable and potentially less dilutive) .
- Performance metrics: Executive bonuses tied to subscription revenue with clear threshold/target/max; CEO excluded, increasing his long‑term alignment with stock performance .
- Governance features: No excise tax gross‑ups; no single‑trigger CIC benefits; clawback in place; hedging/pledging prohibited; ownership guidelines applied (CEO 5× salary) .
- 2025 change: Amended CIC benefits materially increased (salary multiple, bonus, COBRA, full time‑based equity acceleration) which improves retention but raises potential pay‑for‑performance scrutiny in a sale scenario .
Risk Indicators & Red Flags
- Hedging/pledging prohibited (reduces misalignment risk) .
- Enhanced CIC severance and full time‑based equity acceleration post‑amendment may be viewed as more generous “golden parachute” terms (though double‑trigger is preserved) .
- CTO retirement (Nov 2024) with engineering reporting to CEO during transition; President of Field Operations retirement announced Feb 2025—key leader transitions increase near‑term execution demands on the CEO .
Equity Ownership & Alignment (Detail)
| Item | Detail |
|---|---|
| Ownership % and votes | 6.8% beneficial ownership; 24.3% voting power due to Class B 10:1 votes |
| Holdings breakdown | 15,645,000 Class B directly; 149,984 Class B in revocable trust; 2,000,000 Class B in family trusts; 5,798,305 Class B options exercisable within 60 days (5,762,364 vested); 37,707 Class A via RSUs vesting within 60 days |
| Option positions | 2018 options at $2.24 (through 2028); 2021 option at $15.68 (through 2031) |
| RSU cadence | 2024 grant begins vesting May 2025, then quarterly 1/12 tranches |
| Policy guardrails | Ownership guidelines; clawback; hedging/pledging prohibitions |
Investment Implications
- Strong alignment: Minimal cash salary, no annual bonus participation, and substantial multi‑year RSUs concentrate CEO incentives on durable value creation and stock performance .
- Supply overhang: The CEO’s significant in‑the‑money options and the 2024 RSU’s quarterly vesting from May 2025 could create periodic selling capacity (subject to policy/trading windows), a consideration for short‑term trading flows .
- Retention vs. change‑of‑control optics: 2025 severance amendments materially increase CIC protections (18 months cash + 100% time‑based equity acceleration for CEO), bolstering retention but potentially elevating optics risk in a sale scenario; still structured as double‑trigger .
- Execution focus: Positive 2024 operating metrics (subscription and cloud growth, margin gains) support the pay design; near‑term leadership transitions (CTO and Field President) heighten the importance of CEO oversight and continuity .