François Locoh-Donou
F5About François Locoh-Donou
François Locoh-Donou (age 53) is President, Chief Executive Officer, and the sole management director of F5, Inc. (FFIV) since April 2017; he previously held COO and senior product leadership roles at Ciena and serves on the board of Capital One Financial Corporation . Education: Engineering degree from École Centrale de Marseille, Master’s in Sciences from Télécom ParisTech, and MBA from Stanford Graduate School of Business . Under his leadership, F5 has transformed from hardware-centric to software-first, with over 70% of revenues now recurring; FY2024 delivered the firm’s 23rd consecutive year of revenue growth, $2.816B revenue, $792M cash from operations, and $567M GAAP net income, while returning $500M via buybacks . On pay-versus-performance disclosure, the value of an initial $100 investment in F5 was $179.36 at FY2024 year-end versus $222.15 for the S&P 500 Information Technology Index; FY2024 revenue and net income were $2,816.1M and $566.8M, respectively .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| F5, Inc. | President, Chief Executive Officer, and Director | Apr 2017–present | Led transformation to software-first; >70% recurring revenue; expanded SaaS portfolio |
| Ciena | Chief Operating Officer | Nov 2015–Jan 2017 | Senior operational leadership across global telecom solutions |
| Ciena | SVP, Global Products Group | Aug 2011–Nov 2015 | Leadership in Sales, Marketing, Operations, Product functions |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Capital One Financial Corporation | Director | Mar 2019–present | Public company directorship |
| Cajou Espoi (Togo) | Co‑Founder & Chairperson | N/A | Social enterprise employing hundreds in cashew processing |
| Digi.job (Togo) | Co‑Founder & Chairperson | N/A | Company focused on simplifying digital transformation |
Fixed Compensation
| Metric (CEO) | FY2022 | FY2023 | FY2024 |
|---|---|---|---|
| Base Salary ($) | 925,000 | 962,000 | 962,000 |
2024 annual cash incentive details:
| Item | Value |
|---|---|
| Target bonus (% of base) | 130% |
| Attainment (% of target, pre-cap) | 99.1% |
| Compensation Committee cap | 50% of target |
| Actual bonus paid ($) | 625,300 |
Notes:
- In response to macro uncertainty, F5 capped the CEO’s annual cash bonus at 50% of target and executives at 75% of target for FY2024 .
- No base salary increases for NEOs in FY2024 .
Performance Compensation
Short-term incentive (STI) metrics and FY2024 outcomes:
| Metric | Weight | Threshold | Target | Maximum | Actual | Payout (% of target) |
|---|---|---|---|---|---|---|
| Revenue ($M) | 45% | 2,216.0 | 2,770.0 | 5,540.0 | 2,816.1 | 101.7% |
| Non-GAAP Operating Income ($M) | 45% | 743.2 | 929.0 | 1,858.0 | 945.6 | 101.8% |
| Diversity & Inclusion (composite) | 10% | Component thresholds per D&I goals | Composite target | 200% cap | 75.4% | 75.4% |
- STI weighting rebalanced in FY2024 to 45% revenue, 45% non-GAAP operating income, 10% D&I; EBITDA replaced with non-GAAP operating income to better reflect near-term performance .
- Aggregate STI attainment for executives was 99.1% of target, then capped for payout as noted above .
Long-term incentive (LTI) performance RSU metrics (2024 awards):
| Metric | Weight | Threshold | Target | Maximum | 2024 Actual | Payout |
|---|---|---|---|---|---|---|
| GAAP Revenue | 42.9% | $2,216B | $2,770B | $5,540B | $2,816.1B | 101.7% |
| Non-GAAP EPS | 21.4% | $11.21 | $12.46 | $13.71 | $13.37 | 172.8% |
| Relative TSR (vs S&P 500) | 35.7% | 25th percentile (50%) | 50th percentile (100%) | >75th percentile (200%) | 63.8th percentile | 155.1% |
Additional LTI design details:
- CEO 2024 LTI split: ~36.4% service-based RSUs (quarterly vesting over 3 years) and ~63.6% performance-based RSUs (annual vesting over 3 years, subject to one-year revenue/EPS results and multi-year rTSR) .
- rTSR transitioning to 3-year measurement and 3-year cliff vesting over coming years to strengthen long-term alignment; 2024 rTSR tranches vest based on 1-, 2-, and 3-year performance (25%/25%/50% weighting within rTSR) .
2024 equity award grants (CEO):
| Award Type | Shares Granted | Vesting |
|---|---|---|
| Service-based RSUs | 30,280 | Equal quarterly vest over 3 years (to Nov 1, 2026) |
| Performance-based RSUs | 52,989 | Annual vest over 3 years; revenue/EPS based on FY2024 one-year performance with subsequent two annual cliff vests; rTSR vests over 1/2/3 years |
Equity Ownership & Alignment
| Metric | Value | As-of |
|---|---|---|
| Beneficial ownership (shares) | 160,584; includes 7,173 RSUs issuable within 60 days | Jan 7, 2025 |
| Ownership % of outstanding | <1% | Jan 7, 2025 |
| Unvested RSUs (service + performance earned) | 116,813 | Sep 30, 2024 |
| Market value of unvested RSUs | $25,722,223 | Sep 30, 2024 (price $220.20) |
| Unearned performance RSUs (target, future periods) | 29,417 | Sep 30, 2024 |
| Market value of unearned performance RSUs (target) | $6,477,623 | Sep 30, 2024 (price $220.20) |
| Shares acquired on vesting (FY2024) | 59,742 | FY2024 |
| Value realized on vesting (FY2024) | $9,739,299 | FY2024 |
| Stock ownership guideline | 5x base salary (CEO) | Policy |
| Post-vesting holding | Minimum one-year hold for RSUs granted in FY2022+; 20% retention until guideline met | Policy |
| Hedging/pledging | Prohibited; executives complied with policy and had no pledged/margin shares | FY2024 |
Notes:
- F5 prohibits hedging, short sales, publicly traded options, and pledging/margin accounts; limited pledge exceptions apply only to non-executives under strict conditions .
- Stock ownership guidelines are enforced with post-vesting holding requirements to reduce near-term selling pressure .
Employment Terms
| Provision | Terms | Notes |
|---|---|---|
| Change-of-control (CoC) agreements | Double-trigger; protection period 2 years post-CoC; severance if termination not for cause/death/disability or without good reason | Applies to CEO and other NEOs |
| Severance multiple (after CoC) | CEO: 2x (base + highest target bonus in prior 12 months); Other NEOs: 1x | Plus pro-rata bonus, 1 year benefit continuation, up to $25K outplacement, and vesting of equity awards; no excise tax gross-ups |
| Estimated CEO CoC severance | $4,425,200 cash; $32,199,846 RSU acceleration; $34,778 benefits; $25,000 outplacement; total $36,684,824 | As if CoC and termination occurred Sep 30, 2024; price $220.20 |
| CEO off‑CoC termination (without cause/for good reason) | Cash equal to first-year base salary + target bonus; acceleration or cash for RSUs scheduled to vest next 6 months; 12-month non-compete; resignation from Board required | Estimated severance $1,794,567; 63,068 RSUs within 6 months valued $13,887,574 (at $220.20) |
| Clawback policy | Compliant with Exchange Act Rule 10D‑1/Nasdaq; recovers excess incentive comp including TSR-based awards upon restatement | Board‑adopted |
Board Governance
- Role: CEO and director; no committee memberships; not independent (sole management member on Board) .
- Structure: Independent Chair (Alan J. Higginson); CEO and Chair roles separated; majority independent Board (11 of 12 nominees) .
- Attendance: Board met or acted 10 times in FY2024; outside directors met 2 times without management; each director attended ≥75% of aggregate Board/committee meetings .
- Director compensation: CEO receives no compensation for director service; non-employee director fees disclosed separately .
Director Compensation (for non-employee directors, reference only)
- Standard annual cash retainer $60,000; Chair of Board additional $100,000; committee chair/member fee schedules disclosed; annual RSU grant 1,309 shares (grant-date fair value ~$250,032) vesting on next annual meeting .
Compensation Peer Group & Shareholder Feedback
- FY2024 peer group updated (adds: Ciena, Dropbox, NetApp, Pure Storage; removes: Citrix, CrowdStrike, Datadog, ServiceNow) to reflect comparability and industry focus; peer list includes Akamai, Arista, Autodesk, Cadence, Check Point, Fortinet, Juniper, Gen Digital, Nutanix, Palo Alto Networks, Splunk, Synopsys, Teradata, VeriSign, VMWare, Workday .
- Target pay positioning: CEO and certain NEOs targeted around 50th percentile of peers (adjusted by role scope and performance) .
- Say‑on‑Pay: FY2023 advisory approval ~92%, reflecting overall support for program; ongoing shareholder engagement informed 2024 design changes (rTSR 3‑year transition; STI metric rebalancing) .
Performance & Track Record
| Metric | FY2021 | FY2022 | FY2023 | FY2024 |
|---|---|---|---|---|
| Revenue ($M) | 2,603.4 | 2,695.8 | 2,813.2 | 2,816.1 |
| Net Income ($M) | 331.2 | 322.2 | 394.9 | 566.8 |
| Value of $100 Investment (TSR) | 161.91 | 117.89 | 131.25 | 179.36 |
| Peer Group TSR ($100 in S&P 500 IT) | 128.90 | 103.12 | 145.50 | 222.15 |
Highlights:
- FY2024: $500M buybacks; cash from operations $792M; GAAP net income $567M .
- LTI outcomes for FY2024: total achievement 132.8% (2024 awards), 129.0% (2023 awards’ FY2024 tranche), 109.7% (2022 awards’ FY2024 tranche) .
Risk Indicators & Red Flags
- Hedging/pledging prohibited; executives had no pledged/margin shares; post-vesting holding required: mitigates misalignment risk .
- No excise tax gross‑ups; option repricing prohibited; no options outstanding for NEOs .
- Section 16(a): one late filing by Mr. Locoh‑Donou (one day) due to company administrative error .
- CFO transition: Frank Pelzer ended CFO role Nov 18, 2024; entered short‑term consulting agreement with lump-sum and monthly payments; equity acceleration of 6,740 service RSUs disclosed .
Equity Ownership & Alignment Details (Vesting Pipeline)
| Category | Shares | Vesting Description |
|---|---|---|
| Service-based RSUs (CEO, outstanding) | 1,550; 12,685; 22,710 | Equal quarterly to Nov 1, 2024; Nov 1, 2025; Nov 1, 2026, respectively |
| Performance-based RSUs (CEO, earned FY2024) | 10,194 (FY2022 award); 19,628 (FY2023 award); 50,046 (FY2024 award) | Earned on FY2024 performance; remaining vests per annual schedules and rTSR tranches |
Employment & Contracts (Covenants)
- Non-compete: 12 months following off‑CoC termination for CEO; severance contingent on compliance and Board resignation .
- Double‑trigger CoC vesting: RSUs accelerate upon certain CoC events; vesting occurs regardless of termination; cash severance requires qualifying termination within 2 years .
Investment Implications
- Strong pay-for-performance alignment: LTI tilted toward performance-based RSUs with explicit revenue, EPS, and rTSR metrics; 3‑year rTSR transition tightens long-term discipline and reduces short-termism risk .
- Selling pressure mitigants: One-year post-vesting hold and ongoing 20% retention until guideline met; anti-hedging/pledging policies; no options outstanding, reducing incentive to time exercises .
- Retention and change‑of‑control economics: CEO severance is 2x salary+bonus under double-trigger CoC, with significant RSU acceleration; off‑CoC severance includes six‑month vest acceleration—a retention lever but sizeable equity exposure may create event-driven trading sensitivity .
- Governance safeguards: Independent Chair, majority independent board, clawback policy, and annual Say‑on‑Pay support (92%) limit governance risk around dual CEO/director role; CEO holds no committee seats and is explicitly not independent .
All data sourced from FFIV FY2024 DEF 14A (published Jan 27, 2025); citations shown in brackets.