Subi Sethi
About Subi Sethi
Clearwater Analytics’ Chief Operating Officer (age 49) since April 23, 2025; previously Chief Client Officer since January 2020. Prior roles include leading end‑to‑end operations at UnitedHealth Group’s Optum Global Solutions (2014–2020) and leadership positions at Genpact (2005–2014). Education: Mathematics (Delhi University) and Advanced Management (IMT Ghaziabad) . Company performance in 2024: revenue grew 23% to $451.8M, Adjusted EBITDA grew 38% to $145.7M, and non‑GAAP gross margin/EBITDA margin expanded to 78%/32%; Net Revenue Retention reached 116% .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Clearwater Analytics | Chief Client Officer | 2020–Apr 2025 | Executive leadership of client organization; role tied to scorecard metrics such as revenue, bookings, NPS, ESS . |
| UnitedHealth Group – Optum Global Solutions | Head of end‑to‑end operations | 2014–2020 | Led end‑to‑end operations for a large-scale platform . |
| Genpact | Leadership roles (Operations, Quality, Transitions, Technology) | 2005–2014 | Multi‑function leadership across Ops/Quality/Tech . |
External Roles
- No public company directorships or external board roles disclosed .
Fixed Compensation
| Year | Base Salary ($) | Notable fixed/perquisite items |
|---|---|---|
| 2023 | 312,198 | Relocation allowance $60,000 (2023) and housing $7,140; COLA subsidy $50,000 for 2023 . |
| 2024 | 350,000 | COLA subsidy $75,000 (as long as based in Boise); included in “All Other Compensation” . |
Performance Compensation
Annual Cash Incentive (Scorecard)
| Year | Target ($) | Actual Payout ($) | Scorecard Achievement | Notes |
|---|---|---|---|---|
| 2024 | 250,000 | 255,000 | 102% | Metrics for Sethi included Revenue, Bookings, Rev from 2023 Booked‑not‑Billed, Non‑GAAP Gross Profit, Rev from 2024 Bookings, NPS, ESS; weights not disclosed . |
| 2024 Special | — | 100,000 | — | One‑time discretionary bonus approved in 2025 for 2024 achievements . |
Company scorecard targets vs actuals (informing all NEO payouts):
| Metric ($M) | 2024 Target | 2024 Actual | Achievement % |
|---|---|---|---|
| Revenue | 432.7 | 451.8 | 104 |
| Adjusted EBITDA | 135.4 | 145.7 | 108 |
| Non‑GAAP Gross Profit | 335.1 | 353.5 | 105 |
Equity Awards (Grants and Structure)
| Grant Date | Type | Shares (Target) | Fair Value ($) | Vesting / Performance |
|---|---|---|---|---|
| 2/28/2024 | PSUs | 125,000 | 2,430,000 | Earned 0–110% each year based on 1‑yr revenue growth; 2024 growth 22.7% → 100% earn for 2024 tranche (1/3), certified Feb 19, 2025 . |
| 2/28/2024 | RSUs | 125,000 | 2,430,000 | Time‑based; 25% per year over 4 years, continued employment required . |
| 2/20/2023 | PSUs | 200,000 | — | Same metric; earn 0–110% per year (2023–2025); 2024 tranche at 100% . |
| 2/20/2023 | RSUs | 200,000 | — | 4‑year time‑based vesting . |
PSU metric and payout schedule:
- Threshold/Target/Max (annual revenue growth): <18% = 0%; 18–<20% = 80%; 20–<23% = 100%; ≥23% = 110% .
- 2024 revenue growth was 22.7%, so 2024 tranches of 2021/2022/2023/2024 PSUs earned at 100%; Sethi’s PSUs earned for 2024 performance: 90,100 units (across outstanding grants) .
2024 Compensation Mix (disclosed)
| Component | 2024 Value ($) |
|---|---|
| Salary | 350,000 |
| Non‑Equity Incentive (Annual Bonus) | 255,000 |
| Special Bonus (2025 for 2024) | 100,000 |
| Stock Awards (Grant‑date fair value) | 4,860,000 |
| All Other Compensation (incl. TRA payment and COLA) | 339,211 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total beneficial ownership | 403,684 Class A shares as of April 25, 2025 (<1% of outstanding) . |
| Outstanding unvested RSUs (12/31/24) | 93,750 (2024 grant), 150,000 (2023 grant), plus legacy 35,150 and 23,433 from 2021 awards; select line items show market values at $27.52/share: $2.58M (93,750), $4.13M (150,000), $0.97M (35,150) . |
| Outstanding unearned PSUs (12/31/24) | 41,667 (2024 grant), 66,666 (2023 grant); market/payout values shown for PSU columns on certain lines: $2.52M (aggregate indicated) . |
| Stock options | 3/8/2021: 141,461 exercisable and 3,125 unexercisable at $12.40; 1/02/2020: 41,875 unexercisable at $4.40; 1/21/2020: 6,701 unexercisable at $4.40 . |
| 2024 realizations (liquidity) | Options exercised: 150,000 shares, value realized $2,481,861; Stock vested: 188,925 shares, value realized $3,800,226 . |
| Ownership guidelines | Executives (other than CEO) must hold 2x base salary within 5 years; counts RSUs (vested/unvested) but not PSUs . |
| Pledging/hedging | Anti‑hedging and anti‑pledging policy; pre‑approval required for any pledging; short sales and derivatives prohibited; encourages 10b5‑1 plans . |
Employment Terms
| Topic | Key terms |
|---|---|
| Employment agreement | At‑will; sets base and target bonus; provides severance protections . |
| Severance (no CoC) | 3 months of base salary (Sethi) . |
| Change‑in‑control (CoC) | Double‑trigger equity acceleration for RSUs/PSUs if assumed/substituted and employment is terminated without cause/for good reason within 2 years post‑CoC; pre‑IPO options accelerate on CoC even without termination per IPO amendments . |
| Potential payments (as of 12/31/24) | Termination without cause/for good reason in connection with CoC: cash $87,500; equity acceleration $13,386,455. CoC without termination: equity acceleration (options) $1,170,327 . |
| Restrictive covenants | Non‑compete during employment and 12 months post‑employment; non‑solicit during employment and 18 months post‑employment; perpetual confidentiality; mutual non‑disparagement (for certain NEOs incl. Sethi) . |
| 280G/gross‑ups | 280G cut‑down to avoid excise tax (no gross‑ups) . |
| Clawback | NYSE‑compliant clawback of erroneously awarded incentive comp upon restatement . |
Compensation Structure Analysis
- Shift to annual equity cadence and reduced equity burn in 2024; Sethi’s 2024 grants (125k PSUs/125k RSUs) were materially smaller than 2023 (200k/200k), aligning with shareholder feedback to moderate SBC as % of revenue .
- Performance emphasis: annual bonus tied to multi‑metric scorecard (revenue, bookings, non‑GAAP gross profit, NPS, ESS), and PSUs tied to annual revenue growth with threshold/target/max rigor; 2024 tranches paid at target (22.7% growth) .
- Discretionary overlay: one‑time 2025 bonuses (e.g., Sethi $100k) recognizing 2024 execution; Committee indicates such discretion is limited to extraordinary circumstances .
- Anti‑risk features: Clawback, anti‑hedging/pledging, independent consultant, stock ownership guidelines (2x salary) .
Multi‑Year Compensation (Sethi)
| Metric ($) | 2023 | 2024 |
|---|---|---|
| Salary | 312,198 | 350,000 |
| Bonus (special/discretionary) | 99,500 | 100,000 |
| Stock Awards (grant‑date fair value) | 7,596,000 | 4,860,000 |
| Non‑Equity Incentive (annual bonus) | 227,250 | 255,000 |
| All Other Compensation | 140,347 | 339,211 |
| Total | 8,378,545 | 5,904,211 |
Ownership Snapshot (Sethi)
| As of date | Beneficial shares | % Outstanding (if disclosed) |
|---|---|---|
| Apr 25, 2025 | 403,684 | <1% (denoted “*”) |
Performance & Track Record (Context)
- 2024 company outcomes underpinning incentive payouts: Revenue +23% to $451.8M; Adjusted EBITDA +38% to $145.7M; NRR 116%; non‑GAAP margin expansion .
- 2024 scorecard targets were exceeded on revenue, Adjusted EBITDA, and non‑GAAP gross profit; Sethi’s scorecard paid at 102% .
- 2024 PSU tranches paid at target (100%) based on 22.7% revenue growth .
Compensation Governance
- Peer group (Dec 2023) across fintech/application software (e.g., BL, VERX, QTWO, APPF, AI, CCCS, SMAR, PCTY, etc.) informs competitive positioning .
- Say‑on‑pay support ~92% in 2024; Committee reduced equity grants and moved toward annual cadence in response to investor feedback .
Risk Indicators & Red Flags
- No pledging/hedging permitted absent pre‑approval; policy prohibits short and derivative transactions .
- Clawback policy in force; no tax gross‑ups; 280G cut‑down .
- Related‑party TRA program resulted in a one‑time TRA bonus payment in 2024 ($255,449 for Sethi), with TRA bought out in Q4’24; no ongoing TRA bonuses post‑amendment .
- Insider liquidity events: 2024 exercises/vestings (options 150,000; RSU/PSU 188,925) indicate potential ongoing sell‑to‑cover activity, a common withholding/tax practice; not necessarily directional selling .
Investment Implications
- Alignment: High equity mix (PSUs/RSUs) with annual revenue‑growth PSUs and scorecard cash incentives ties Sethi’s pay to growth, profitability, client satisfaction (NPS) and employee health (ESS) .
- Retention: Significant unvested RSUs/PSUs plus a low cash severance (3 months) suggests retention primarily via equity vesting, not cash protections; double‑trigger equity acceleration on CoC mitigates cliff risk in a sale scenario .
- Selling pressure: Expect periodic share supply from scheduled RSU/PSU vesting and option exercises (notably quarterly/annual cycles); 10b5‑1 plans are encouraged by policy, which can smooth execution .
- Governance: 92% say‑on‑pay support and reduced 2024 equity burn reflect constructive shareholder dialogue; clawback and anti‑pledging further reduce governance risk .
- Performance linkage: With 2024 revenue and EBITDA surpassing targets, and PSU tranches paying at target, incentive realizations appear consistent with disclosed rigor and outcomes .