Shay Banon

About Shay Banon

Shay Banon is Elastic’s co-founder, creator of Elasticsearch, and current Chief Technology Officer; he has served on the board since July 2012, was CTO (2012–2017), CEO (2017–2022), and Chairperson+CEO (2018–2022). He holds a B.Sc. in Computer Science from the Technion and is 47 years old . Company performance-linked pay is anchored to revenue: FY2025 PSUs paid at 100% on $1.483B total revenue; one-third vested at year-end with the remainder quarterly over two years . Say‑on‑pay support was ~84% at the 2024 AGM, indicating shareholder acceptance of pay design . Pay‑versus‑performance uses revenue and TSR; in FY2024 Elastic’s cumulative TSR index was 159 vs 233 for the S&P 500 Info Tech peer index, with revenue $1.267B .

Past Roles

Organization	Role	Years	Strategic Impact
Elastic N.V.	CTO	Jul 2012 – Apr 2017	Creator of Elasticsearch; founding technical leadership .
Elastic N.V.	CEO	May 2017 – Jan 2022	Led company as CEO; transitioned leadership to CTO in 2022 .
Elastic N.V.	Chairperson + CEO	Jun 2018 – Jan 2022	Combined board leadership and CEO responsibilities during this period .
Elastic N.V.	CTO	Jan 2022 – Present	Executive director/CTO; board member since Jul 2012 .

Fixed Compensation

Metric	FY 2023	FY 2024	FY 2025
Base Salary ($)	428,891	475,235	514,006
Target Bonus (% of Base)	—	60%	75%
Actual Annual Cash Incentive ($)	226,917	301,314	428,124

Notes:

FY2025 base salary framework for CTO role set at $500,000 with a 75% target bonus; the salary may be increased (not decreased) under the employment agreement .

Performance Compensation

Annual Cash Bonus Plan – Metrics and Payouts

FY2024 executive bonus plan metrics, targets, and outcomes:

Metric	Target	Achievement	Attainment %	Payout %	Weight	Weighted Contribution
Cloud Revenue ($M)	563	548	97.3%	93.3%	30%	28.0%
Total Revenue ($M)	1,285	1,267	98.6%	96.6%	35%	33.8%
Non‑GAAP Operating Margin %	10.4%	11.2%	107.9%	108.3%	35%	37.9%
Total	—	—	—	—	100%	99.7%

FY2025 PSU plan attainment and vesting:

FY2025 PSUs were based solely on total revenue; actual revenue was $1.483B, yielding 100% target PSUs earned . One‑third vested at performance determination, with the remaining two-thirds vesting in eight quarterly installments over two years, subject to continued service .
FY2024 PSUs paid at 97% of target on $1.267B revenue; one‑third vested at performance determination, with balance quarterly over two years .

FY2025 Equity Grants to Shay Banon

Award Type	Approval Date	Grant Date	Target (#)	Max (#)	Grant Date Fair Value ($)	Vesting Terms
PSUs	6/5/2024	6/8/2024	11,723	23,446	1,312,390	1/3 at FY end after performance; remaining 2/3 quarterly over 8 quarters .
RSUs	6/5/2024	6/8/2024	21,773	—	2,437,487	16 equal quarterly installments starting 9/8/2024 .

Program mix and trend:

FY2025: 35% of annual executive equity delivered as PSUs; FY2026 mix set to 50% PSUs, increasing performance linkage .

Equity Ownership & Alignment

Beneficial Ownership (Multi‑Year)

As Of	Shares Owned	Awards Vesting ≤60 Days	Options Exercisable ≤60 Days	Total Beneficial Ownership	% of Shares Outstanding
Aug 21, 2024	7,204,949	8,688	96,907	7,310,544	7.1% (102,745,499 shs o/s)
Aug 21, 2025	6,732,037	11,293	112,598	6,855,928	6.4% (106,270,940 shs o/s)

Of the 2025 “Shares Owned,” 2,254,978 are held indirectly in a fund for his minor children; Mr. Banon has sole control and remains indirect beneficial owner .
Pledging/hedging: Company policy prohibits hedging and pledging; directors and employees may not pledge company securities or hold them in margin accounts .
Ownership guidelines: Senior officers must hold shares ≥2x base salary within 5 years; compliance monitored annually (CEO 5x; directors 5x annual cash retainer) .

Outstanding Equity Awards (as of Apr 30, 2025)

Grant Date	Award Type	Exercisable Options (#)	Unexercisable Options (#)	Exercise Price ($)	Expiration	Unvested RSUs/PSUs (#)	Market Value ($) at $86.20
12/8/2021	Option (NQ)	43,632	8,727	128.31	12/07/2031	—	—
12/8/2020	Option (NQ)	62,421	—	145.83	12/07/2030	—	—
6/8/2024	RSU	—	—	—	—	17,691	1,524,964
6/8/2024	PSU (target)	—	—	—	—	11,723	1,010,523
12/8/2023	RSU	—	—	—	—	14,545	1,253,779
6/8/2023	PSU (earned)	—	—	—	—	4,431	381,952
12/8/2022	RSU	—	—	—	—	24,234	2,088,971
12/8/2021	RSU	—	—	—	—	4,978	429,104

As of 4/30/2025, remaining options carry exercise prices ($128.31, $145.83) above the $86.20 share price, implying they were out‑of‑the‑money at that date .

Insider Selling/Vesting Activity (FY2025)

Activity	Shares	Value Realized ($)
Options Exercised	126,341	12,435,767
Stock Awards Vested (RSUs/PSUs)	43,930	4,395,190

Employment Terms

Employment: At‑will; serves as CTO and executive director; salary subject to review and may be increased; eligible for annual performance bonus and standard executive benefits .
Severance (non‑CIC): Upon termination without cause or resignation for good reason, lump sum of 6 months base salary and 50% of target annual bonus; up to 12 months COBRA premiums; for Mr. Banon, statutory severance offsets apply .
Change‑in‑Control (Double Trigger): If terminated without cause or resigns for good reason within 3 months prior to or 12 months post‑CIC, receives 12 months base salary, 100% of target bonus, up to 12 months COBRA, and 100% acceleration of outstanding equity (performance awards deemed at greater of actual to date or 100% target unless award agreement specifies otherwise) .
No excise tax gross‑ups; payments cut to achieve best after‑tax outcome if 280G applies .
Clawbacks: NYSE 10D‑1 compliant recovery policy plus Dutch law clawback; Sarbanes‑Oxley 304 obligations apply .

Potential Payments as of Apr 30, 2025 (Illustrative)

Scenario	Base Salary ($)	Bonus ($)	Equity Acceleration ($)	COBRA ($)	Total ($)
CIC + Qualifying Termination	500,000	375,000	6,689,292	4,426	7,568,719
Qualifying Termination (No CIC)	250,000	187,500	—	4,426	441,926

Board Governance

Role and independence: Executive director (CTO); not independent by virtue of being an executive . Board is one‑tier with two executive directors (CEO, CTO) and a majority of independent non‑executive directors; board is classified with staggered terms .
Board tenure and term: Director since 2012; current term expires 2027 .
Committees: Executive directors do not sit on Audit, Compensation, or Nominating & Corporate Governance Committees under NYSE and DCGC rules; committees are composed solely of independent directors .
Chair/lead independent: Chetan Puttagunta serves as Chairperson and Lead Independent Director; independent board leadership mitigates dual‑role concerns of executives on the board .
Attendance: In FY2025, the board held 4 meetings; all directors attended at least 75% of board and committee meetings for their service periods .

Compensation Structure Analysis

Mix and risk: Equity is the dominant component; for FY2025, 35% of executive annual equity was in PSUs (up from 25% in FY2024), moving to 50% PSUs in FY2026, increasing performance sensitivity and reducing “guaranteed” equity .
Cash incentives: FY2024 plan tied to Cloud Revenue (30%), Total Revenue (35%), and NGOM (35%) with calibrated payout curves; FY2025 PSU plan used Total Revenue with 100% attainment, reinforced pay‑for‑performance design .
Governance safeguards: Double‑trigger CIC vesting; robust clawbacks; prohibition on hedging/pledging; independent Compensation Committee; independent compensation consultants (Compensia, Semler Brossy) engaged; no option repricing/exchanges .

Equity Ownership & Director Service Considerations

Significant insider ownership: 6.4% beneficial ownership as of Aug 21, 2025; one of the largest management stakes at Elastic, aligning with shareholders .
Year‑over‑year change: Beneficial ownership declined from 7.1% (Aug 21, 2024) to 6.4% (Aug 21, 2025), reflecting activity including option exercises/vesting and potential dispositions; see vesting/exercise table above .
Trading overhang: Regular quarterly vesting of RSUs/PSUs (16 installments for RSUs; 8 installments post‑performance for PSUs) may create periodic supply; however, remaining options are out‑of‑the‑money at $86.20 as of 4/30/2025, reducing option‑related selling pressure .

Say‑on‑Pay & Shareholder Feedback

Say‑on‑pay support: ~84% approval at the 2024 AGM .
Responsive design: Increased PSU proportion (35% in FY2025; 50% in FY2026) tied to shareholder feedback and pay‑for‑performance objectives .

Investment Implications

Alignment: Large founder stake (6.4%) and anti‑hedging/pledging plus ownership guidelines support strong alignment and lower governance risk premiums .
Retention/economics: Double‑trigger CIC with full equity acceleration maintains retention in strategic scenarios without windfalls absent termination; no tax gross‑ups reduce parachute cost risk .
Supply dynamics: Quarterly RSU/PSU vesting cadence and recent option exercises/vesting (~170k shares realized value in FY2025) suggest ongoing, modest supply; remaining options are out‑of‑the‑money, limiting incremental option‑driven selling .
Pay‑for‑performance: Transition toward higher PSU mix and revenue‑based PSU plans (100% attainment in FY2025) tie outcomes to top‑line execution; historical say‑on‑pay support (84%) lowers the risk of adverse shareholder reactions .