Kip Compton

About Kip Compton

Kip Compton, age 53, was appointed Chief Executive Officer of Fastly on June 16, 2025 and joined the Board as a Class I director with a term expiring at the 2026 annual meeting . He joined Fastly in January 2024 as Chief Product Officer, with over 25 years of senior leadership experience across cloud, video, and networking, including roles at Cisco and Comcast; he holds B.S. and M.S. degrees in Computer Science/Electrical Engineering from MIT and an MBA from Wharton . Company performance context: Fastly delivered 2024 revenue of $543.7 million (7% YoY), GAAP gross margin of 54.4%, GAAP operating loss of $167.9 million, and GAAP net loss of $158.1 million; non-GAAP operating loss improved to $27.0 million . Fastly introduced new products (Bot Management, DDoS Protection, AI Accelerator, Object Storage) and reduced top-10 revenue concentration from 40% to 32% exiting 2024, underpinning strategic focus areas Compton inherits .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Reference vesting cadence: in 2024 PSUs for executives vested 33% upon certification with 8.375% quarterly thereafter, indicating potential post-certification settlement windows that can create insider selling pressure if awards are earned; 2025 financial PSUs follow “same terms and conditions” for executive focal grants .

Equity Ownership & Alignment

• Ownership guidelines: CEO must hold shares valued at 6x annual base salary; other executive officers at 3x; non-employee directors at 4x annual cash retainer .
• Anti-hedging: Prohibits hedging, margin accounts, derivatives, or short-term speculative trading in Company securities .
• Anti-pledging: Pledging prohibited unless exception approved; pledges by executives require prior Compensation Committee approval; no pledges disclosed for Compton .
• 2025 grant sizing implication: Using the $9/share minimum conversion value, the maximum share count implied by the $5,000,000 equity award is approximately 555,556 shares, split by mix into at most ~277,778 RSUs, ~194,444 financial PSUs, and ~83,333 rTSR PSUs; actual granted shares may be lower if the Company uses a conversion value above $9 per share .

Employment Terms

Board Governance

• Appointment and independence: Compton appointed as Class I director on June 16, 2025; as CEO, he is not independent under NYSE rules .
• Leadership structure: Fastly maintains an independent Chair (David Hornik) and separates Chair and CEO roles to reinforce objective oversight and management accountability .
• Committees: Executives historically do not serve on board committees; the 2025 proxy shows the CEO and CTO did not serve on any committees, consistent with best practice for independence and conflict mitigation .
• Board activity/attendance: The Board met nine times in 2024; committees met 13x (Audit), 4x (Compensation), 4x (Nominating & Governance), with directors meeting attendance thresholds; provides context for governance rigor Compton joins .

Compensation Structure Analysis

• Pay mix emphasizes equity and performance: 2025 CEO LTI split between PSUs (financial and rTSR) and RSUs, with at least 50% performance-based for CEO per program design changes that responded to stockholder feedback .
• rTSR addition and multi-year measurement: 2025 introduced a 3-year rTSR PSU against the Russell 2000, diversifying metrics and extending the performance horizon—indicative of stronger alignment with shareholder returns .
• Bonus delivery in equity: 2025 CEO bonus payable in RSUs (pro-rated), aligning near-term pay with stock performance post-vesting and creating potential vest-driven selling windows .
• Governance guardrails: Double-trigger equity acceleration, mandatory ownership guidelines (CEO 6x salary), and anti-hedging/anti-pledging policies reduce misalignment risk .

Say-on-Pay & Shareholder Feedback

• 2024 say-on-pay passed with 51.6% support (second consecutive low vote), prompting enhanced performance orientation and rTSR PSUs in 2025 and adjusted LTI mixes for CEO and other NEOs .
• Board-led outreach (Chair and Committee Chairs) engaged investors representing ~28% of shares in late 2023, continuing into 2024/early 2025 to incorporate feedback into program design .

Expertise & Qualifications

• Degrees: B.S. and M.S. in Computer Science/Electrical Engineering from MIT; MBA from Wharton .
• Technical credentials: Multiple patents in digital video, security, networking; deep product and portfolio leadership experience .
• Strategic execution: Led strategy, portfolio, investments, and acquisitions at Cisco Networking; accelerated Fastly product strategy and velocity as CPO .

Investment Implications

• Alignment and retention: Strong performance linkage (financial PSUs and rTSR PSUs) plus robust ownership guidelines indicate improved pay-for-performance alignment; generous severance (18 months regular, 24 months CIC) mitigates retention risk but elevates change-in-control costs .
• Potential insider supply overhang: RSUs typically vest quarterly over multi-year periods, and PSUs (financial) vest post one-year certification with staged quarterly settlement, creating predictable windows that can add selling pressure as awards vest and convert .
• Governance structure offsets dual-role risk: Independent Chair and the practice of executives not serving on board committees maintain oversight quality despite Compton’s executive-director status .
• Program credibility post low say-on-pay: The addition of multi-year rTSR PSUs, sustained focus on revenue/profitability, and increased performance-based LTI for executives address prior investor concerns, supporting sentiment and potentially reducing future vote risk .