Rathna Girish Mathrubootham
FreshworksAbout Rathna Girish Mathrubootham
Co‑founder of Freshworks, Rathna Girish Mathrubootham (age 50) served as CEO from October 2010–April 2024 and has been Executive Chairman since May 2024; he has been a director since August 2010 and Chairman since May 2021. He holds a B.E. in Electrical and Electronics from Shanmugha Arts, Science, Technology and Research Academy and an M.B.A. from the University of Madras . Under his leadership, 2024 revenue reached $720.4 million (+21% y/y), non‑GAAP operating margin improved to 13.8%, and free cash flow increased to $146.0 million; ARR milestones included EX >$400m and CX >$360m, with 72,000+ customers and larger‑customer growth . Notably, cumulative TSR since listing measured $34 for a $100 initial investment in 2024 versus $170 for the S&P 500 IT sector peer group, underscoring execution progress amid share performance volatility .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Freshworks Inc. | Chief Executive Officer | 2010–Apr 2024 | Founded and scaled Freshworks; led IPO; broadened product suite and ARR base |
| Freshworks Inc. | Executive Chairman; Chairman of the Board | May 2024–present (Chair since May 2021) | Product vision, innovation, AI strategy; governance leadership with Lead Independent Director checks |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Together Fund | Co‑founder (planned full‑time focus post‑retirement) | Dec 2025 onward | Transitioning to venture investing; retirement from FRSH effective Dec 1, 2025 to devote full‑time to Together Fund |
Fixed Compensation
| Metric | 2023 | 2024 |
|---|---|---|
| Base Salary ($) | 500,000 | 600,000 |
| Target Bonus ($) | 500,000 | 600,000 |
| Actual Bonus Earned ($) | 461,644 (paid $400,493 after voluntary recoupment reduction) | 326,375 |
Performance Compensation
2024 Annual Incentive Plan Design
- Metrics and weightings: 70% Net New ARR; 30% Non‑GAAP Operating Margin .
- Quarterly targets:
| Performance Metric | Q1 FY24 Target | Q2 FY24 Target | Q3 FY24 Target | Q4 FY24 Target |
|---|---|---|---|---|
| Net New ARR ($m) | 25.7 | 29.5 | 30.5 | 36.2 |
| Non‑GAAP Operating Margin (%) | 9.4% | 4.3% | 9.2% | 11.6% |
- Quarterly attainment:
| Performance Metric | Q1 FY24 Attainment | Q2 FY24 Attainment | Q3 FY24 Attainment | Q4 FY24 Attainment |
|---|---|---|---|---|
| Net New ARR ($m) | 22.5 | 24.4 | 21.2 | 31.9 |
| Non‑GAAP Operating Margin (%) | 13.4% | 5.6% | 12.8% | 20.2% |
- Bonus outcome: 2024 aggregate bonus earned $326,375 (56.8% of target variable pay) .
2024 Long‑Term Equity (granted March 1, 2024)
| Component | Approved Value ($) | Grant/Target (#) | Earned (#) | Vesting |
|---|---|---|---|---|
| RSUs | 13,300,000 of 19,000,000 total (70%) | 620,432 | — | Equal quarterly over 4 years from 3/1/2024, continued service required |
| PRSUs (Revenue 70% / FCF 30%) | 5,700,000 of 19,000,000 total (30%) | 265,899 target | 272,014 (102.3% payout) | One‑third vested 3/1/2025 post‑certification; remaining in equal quarterly installments over 2 years, continued service required |
Key design changes and implications:
- Board canceled the 2021 stock‑price‑hurdle PRSU (up to 6.0m shares) effective March 1, 2024, citing macro conditions reducing retention value at then‑current stock price; replaced with annual RSUs/PRSUs tied to revenue/FCF performance .
- 2024 PRSU targets and payout calibration disclosed (revenue thresholds up to 200% payout; FCF up to 125% payout), with total 2024 payout at 102.3% .
Equity Ownership & Alignment
- Beneficial ownership (3/31/2025): 125,545 Class A shares; 11,015,166 Class B shares; 14.11% of total voting power (10 votes per Class B share) .
- Outstanding/unvested equity (12/31/2024):
- RSUs: 750,000 (2021 grant) unvested; 504,101 (2024 grant) unvested as of year‑end .
- PRSUs: 265,899 earned for 2024 performance; time‑vesting one‑third on 3/1/2025 and remainder over 2 years .
- Hedging/Pledging: Policy prohibits hedging and pledging; no margin accounts allowed .
- Ownership guidelines (adopted Dec 2024): Executive Chairman and CEO must hold shares equal to 5x base salary; covered individuals were in compliance as of Dec 31, 2024 or within the five‑year compliance window .
Employment Terms
| Scenario | Cash Severance | Equity Acceleration | Key Terms |
|---|---|---|---|
| Termination without cause / resignation for good reason (outside change‑in‑control period) | $1,100,000 | $9,137,683 (value as of 12/31/2024) | 12 months base salary, up to 12 months COBRA, pro‑rata target bonus for year of termination, 6 months of time‑based vesting acceleration |
| Termination without cause / resignation for good reason (during change‑in‑control period) | $1,800,000 | $24,677,280 (value as of 12/31/2024) | 18 months base salary, up to 18 months COBRA, 150% of target bonus, full acceleration of time‑based vesting (double‑trigger) |
Additional governance protections:
- Clawback policy (adopted Oct 2023) requiring recoupment of incentive compensation for restatements within a 36‑month lookback .
- At‑will employment via offer letters; standard confidentiality/IP assignment agreements .
Board Governance
- Role: Executive Chairman and Chairman of the Board (Class III director) .
- Independence: Not independent (executive officer). Board majority (non‑employee directors) are independent per Nasdaq standards, with heightened independence for Audit and Compensation committees .
- Leadership structure: Lead Independent Director (Roxanne S. Austin) empowered to set agendas, preside over independent sessions, and act as liaison; designed to counterbalance Executive Chairman role .
- Committees: Not a member of Audit, Compensation, or Nominating & Governance committees; committee compositions disclosed (e.g., Compensation chaired by Sameer Gandhi) .
- Attendance: Board met 11 times in 2024; all directors met ≥75% attendance .
- Director compensation: As Executive Chairman, he received no additional pay for director service; director compensation provided only to non‑employee directors .
- Transition: He will retire as Executive Chairman, Chairman, and director effective Dec 1, 2025; Lead Independent Director Roxanne Austin appointed to become Chair effective that date .
Director Compensation (for context; he receives none as director)
- Non‑employee director program (2024/2025): Annual cash retainer $34,500 (2024), rising to $35,000 (2025); lead independent director premium ($16,500 → $20,000); annual RSU grant $195,000 (2024) → $200,000 (2025); ability to elect stock in lieu of cash .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑Pay (2023): Over 96% approval; frequency set to triennial, with next advisory vote expected at 2026 annual meeting .
Compensation Peer Group (used for 2024 decisions)
- Peers included: Alteryx, AppFolio, Asana, Braze, C3.ai, Cloudflare, Confluent, Dropbox, Five9, GitLab, Guidewire, MongoDB, Smartsheet, Sprinklr, Workiva, HubSpot, AppFolio (full list in filing). Compensia served as independent compensation consultant .
Performance & Track Record Highlights
- 2024 achievements: Revenue $720.4m; non‑GAAP operating margin 13.8%; free cash flow $146.0m; EX ARR >$400m; CX ARR >$360m; larger customers >$50k ARR +22% y/y; >60% of ARR from customers with >250 employees; Device42 acquisition .
- Pay‑versus‑performance context: 2024 cumulative TSR $34 vs peer group $170; net loss $(95.4)m; non‑GAAP operating margin 13.8% .
Compensation Structure Analysis
- 2024 tilt toward time‑based RSUs (70%) plus one‑year PRSUs (30%) based on revenue and free cash flow (vs prior multi‑year stock‑price hurdles), improving line‑of‑sight and retention but reducing pure stock‑price contingency .
- Base salary increased 20% y/y to $600k; target bonus increased to $600k; 2024 cash bonus paid at 56.8% of target vs 92.3% in 2023, reflecting tougher Net New ARR attainment despite strong margin improvement .
Risk Indicators & Red Flags
- Cancellation of 2021 stock‑price PRSU (effective Mar 1, 2024) and replacement with new annual LTI program (RSUs/PRSUs) – board cited diminished retention value at then stock price due to macro factors .
- Dual‑class structure concentrates voting power (Mathrubootham 14.11% voting power as of 3/31/2025) .
- Governance mitigants: robust Lead Independent Director authority; clawback; anti‑hedging/anti‑pledging; stock ownership guidelines .
Board Service History, Committees, Independence Considerations
- Board tenure: Director since 2010; Chair since 2021; Executive Chairman since 2024 .
- Committee roles: None; he is management/Chair. Independence: not independent; board committees fully independent per Nasdaq standards .
- Dual‑role implications: Separation of CEO (Woodside) and Executive Chairman roles with Lead Independent Director oversight and independent committees aims to preserve oversight quality while leveraging founder institutional knowledge .
Investment Implications
- Alignment: Significant Class B holdings (11.0m shares; 14.11% voting power) and ownership guidelines promote long‑term alignment; anti‑pledging reduces financing‑driven sale risk .
- Near‑term selling pressure: RSUs vesting quarterly (2021 and 2024 grants) and earned 2024 PRSUs vesting through 2027 create a predictable, time‑based supply cadence; monitor Form 4s during vesting windows .
- Pay design and retention: Shift from stock‑price PRSUs to annual RSUs/PRSUs tightens pay‑for‑operating‑performance linkage and restores retention value after canceling the 2021 award, but reduces pure stock‑price contingency; 2024 payout at ~102% on PRSUs indicates balanced target setting .
- Succession/transition: Retirement effective Dec 1, 2025 transitions Board leadership to the Lead Independent Director (as Chair), reducing dual‑role risk and formalizing independent board leadership; execution continuity remains focused under CEO Woodside .