Dharmesh Shah
HUBSPOTAbout Dharmesh Shah
Dharmesh Shah is HubSpot’s co‑founder, Chief Technology Officer, and a director, serving in both roles since 2006; he is 57 years old as of April 24, 2025 . Prior to HubSpot, he founded Pyramid Digital Solutions, which was acquired by SunGard Data Systems in 2005; he is also an author and angel investor . Company performance under current leadership has been strong: 2024 revenue was $2.63 billion (+21% YoY), ARR reached nearly $2.9 billion, and non‑GAAP operating margin was 17.5% ; HubSpot’s TSR turned $100 (12/31/2018) into $554 by 12/31/2024 .
Board service and governance
- Class II director nominee in 2025 with a term through the 2028 annual meeting .
- Not independent due to executive role; HubSpot maintains a Lead Independent Director (Lorrie Norrington) to balance dual‑role influence .
- Does not serve on any standing board committee; board held 7 meetings in 2024 and all directors attended at least 75% of meetings; independent directors hold regular executive sessions .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pyramid Digital Solutions | Founder & CEO | Through 2005 | Built and exited to SunGard Data Systems in 2005, demonstrating product and scaling execution |
External Roles
| Organization/Activity | Role | Years | Strategic Impact |
|---|---|---|---|
| Publishing/Investing | Author; Angel investor | Ongoing | Ecosystem connectivity, technology thought leadership, potential deal flow awareness |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus (% of Salary) | Actual Bonus Paid ($) |
|---|---|---|---|
| 2022 | 1 | 0% (forewent Bonus Plan) | — (forewent bonus) |
| 2023 | 1 | 0% (forewent Bonus Plan) | — (forewent bonus) |
| 2024 | 1 | 0% (forewent Bonus Plan) | — (forewent bonus) |
Notes:
- Shah voluntarily kept base salary at $1 and forewent any annual cash bonus opportunity in 2024 (and previously) .
Performance Compensation
2024 equity compensation mix emphasized long-term equity aligned to performance (no stock options granted in 2024).
2024 PSU design and payout
| Element | Metric | Weighting | Target | Actual | Payout (% of Target) | Vesting |
|---|---|---|---|---|---|---|
| Performance Stock Units (PSUs) | Constant currency revenue growth (“Revenue CC”) | 100% | 21.0% Revenue CC growth | 20.8% Revenue CC growth | 97.5% earned | 1/3 vests upon certification (Feb 2025), 2/3 vests quarterly over next 2 years |
2024 equity grants to Dharmesh Shah (approved value allocation)
| Grant Type | Approved Value ($) | Grant Date | Approval Date | Target Shares (#) | Threshold/Max (#) | Grant-Date Fair Value ($) |
|---|---|---|---|---|---|---|
| PSUs | 5,000,000 (component of approved value; mix 50% PSU/50% RSU) | 3/1/2024 | 1/31/2024 | 4,112 | 2,056 / 6,198 | 2,606,186 |
| RSUs | 5,000,000 (component of approved value; mix 50% PSU/50% RSU) | 3/1/2024 | 1/31/2024 | 4,112 | N/A | 2,606,186 |
RSU vesting schedule
- RSUs vest in 16 equal quarterly installments over four years, subject to continued employment .
Historical option awards (selected outstanding as of 12/31/2024)
| Grant Date | Vesting Start | Exercisable (#) | Unexercisable (#) | Exercise Price ($) | Expiration |
|---|---|---|---|---|---|
| 2/10/2015 | 1/1/2015 | 16,667 | — | 34.76 | 2/10/2025 |
| 1/29/2016 | 1/1/2016 | 19,990 | — | 40.59 | 1/29/2026 |
| 2/01/2017 | 1/1/2017 | 15,595 | — | 52.80 | 2/01/2027 |
| 3/01/2018 | 1/1/2018 | 11,254 | — | 112.15 | 3/01/2028 |
| 2/03/2020 | 1/1/2020 | 6,274 | — | 182.91 | 2/03/2030 |
| 2/01/2022 | 1/1/2022 | 2,215 | 1,008 | 490.47 | 2/01/2032 |
| 3/01/2023 | 1/1/2023 | 1,247 | 1,604 | 383.13 | 3/01/2033 |
2024 realized values (trading signal context)
| Category | Quantity | Value ($) |
|---|---|---|
| Option exercises | 5,000 | 2,595,450 |
| Stock awards vested | 8,215 | 4,824,055 |
Equity Ownership & Alignment
| Ownership Category | Shares (#) | Notes |
|---|---|---|
| Direct common stock | 1,292,996 | Directly held |
| Shares issuable within 60 days (options/RSUs/PSUs) | 70,974 | Within 60 days of March 1, 2025 |
| Polaris I Trust | 16,000 | Shah is trustee; disclaims beneficial ownership beyond pecuniary interest |
| Polaris II Trust | 11,000 | Shah is trustee; disclaims beneficial ownership beyond pecuniary interest |
| Humani Foundation | 5,768 | Charitable foundation; donor; disclaims beneficial ownership beyond pecuniary interest |
| Total beneficially owned | 1,396,738 | 2.7% of shares outstanding (base 52,215,728) |
| Shares pledged as collateral | 0 | Anti‑pledging policy; no requests made or approved to date |
| Ownership guidelines status | Company‑wide: met or within phase‑in | Executives must hold ≥2× salary; directors ≥5× board retainer; CEO ≥6× salary; status met/phase‑in as of proxy |
Unvested equity at FY‑end 2024 (alignment and retention)
| Award | Unvested Units (#) | Market Value ($) at 12/31/2024 |
|---|---|---|
| RSUs (various grants, e.g., 2021–2024) | 291; 1,302; 2,612; 3,341 | 202,760; 907,195; 1,819,963; 2,327,909 |
| PSUs (earned/target, e.g., 2023–2024) | 2,589; 4,112 | 1,803,938; 2,865,118 |
Employment Terms
| Topic | Disclosure |
|---|---|
| Employment agreement | No employment agreements with executive officers |
| Severance policy | Executive Severance Plan adopted Apr 10, 2025; NEOs eligible except founders Halligan and Shah (i.e., Shah not covered) |
| Change‑in‑control equity | Double‑trigger vesting for equity; PSUs earned at actual or target on sale event; acceleration on qualifying termination within window |
| Equity acceleration value (CIC/death) | $10,711,628 (equity only; based on $696.77 share price at 12/31/2024) |
| Clawback | SEC/NYSE‑compliant clawback covering cash and equity incentive comp for restatements (3 fiscal years lookback) |
| Anti‑hedging/anti‑pledging | Hedging, short sales, derivatives prohibited; pledging generally prohibited; no approvals to date |
| Perquisites/tax gross‑ups | No perquisites >$10,000; no excise tax gross‑ups |
| Non‑compete/other restrictions | Company insider trading and policy framework disclosed; non‑compete specifics not disclosed for Shah (general NDA policies referenced in filings) |
Performance & Track Record
| Metric | 2024 |
|---|---|
| Revenue ($) | $2.63B (+21% YoY) |
| Customers (#) | 247,939 (+21% YoY) |
| ARR ($) | Nearly $2.9B |
| Non‑GAAP operating margin (%) | 17.5% (up >200 bps YoY) |
| TSR (2018–2024) | $100 → $554 |
Selected 2024 product/AI execution highlights under platform roadmap
- Launched “Breeze” (Copilot, Agents, 80+ AI features), Breeze Intelligence, and Content Hub; enhanced Service Hub; acquired Cacheflow (billing/CPQ) to build into Commerce Hub .
Compensation Structure Analysis
- Mix shift: Founders (including Shah) chose $1 base salary and no cash bonus; compensation is overwhelmingly equity‑based (RSUs/PSUs), increasing alignment but reducing guaranteed cash .
- Performance linkage: PSUs tied to Revenue CC growth with capped leverage (max 150%); 2024 payout earned at 97.5%—near target, demonstrating rigor yet achievable targets .
- Options policy: No option grants in 2024; shift to RSUs/PSUs lowers risk vs options and tightens pay-for-performance via explicit financial metrics .
- Governance protections: Double‑trigger CIC equity, clawback, anti‑hedging/pledging, no repricing/gross‑ups; Say‑on‑Pay support was ~89% in 2024, indicating investor acceptance .
Board Governance (Director‑Specific)
| Item | Status |
|---|---|
| Committee memberships | None (does not serve on Audit, Compensation, or Nominating/Governance/Sustainability) |
| Independence | Not independent due to executive role |
| Lead Independent Director | Lorrie M. Norrington |
| Attendance | ≥75% board/committee meetings (board held 7 meetings in 2024) |
| Director compensation | No additional director pay for executive directors (comp captured in executive tables) |
Peer group and shareholder feedback
- 2024 compensation peer group included: ANSYS, Cloudflare, CrowdStrike, Datadog, DocuSign, Dropbox, Elastic, MongoDB, Okta, Paycom, Paylocity, Snowflake, Splunk, The Trade Desk, Twilio, Veeva, ZoomInfo, Zscaler .
- Say‑on‑Pay (2023 comp) approval ≈89% at June 11, 2024 meeting; PSUs retained in 2024 program given investor support .
Investment Implications
- Alignment: Shah’s $1 salary and no cash bonus heighten equity alignment; 2024 awards split 50/50 RSU/PSU with PSUs tied to Revenue CC growth and earned near target (97.5%), supporting pay‑for‑performance and medium‑term retention via multi‑year vesting .
- Selling pressure: 2024 realized option exercise (5,000 shares; $2.6M) and vesting (8,215 shares; $4.8M) are notable for liquidity but do not, by themselves, indicate hedging or pledging (prohibited by policy); monitor ongoing Form 4s for trend/burden .
- Retention/CIC risk: Shah is excluded from the Executive Severance Plan (no cash severance), but equity has double‑trigger acceleration ($10.7M modeled at FY‑end prices), which both retains and could incentivize stability around potential strategic events .
- Governance balance: Dual role (CTO + director) mitigated by Lead Independent Director structure and independent committees; no committee memberships for Shah reduce direct compensation policy influence .
- Performance backdrop: Robust 2024 fundamentals (21% revenue growth; margin expansion) and continued AI/product cadence underpin PSU frameworks and execution confidence; TSR track record remains strong over 2018–2024 .