Matthew Prince
CloudflareAbout Matthew Prince
Matthew Prince is Co-Founder, Chief Executive Officer, and Co-Chair of Cloudflare, Inc., serving as CEO since July 2009; he was Chair until February 2025 and currently serves as Co-Chair of the Board with President Michelle Zatlyn . He is 50 years old and holds a BA in English with a minor in Computer Science (Trinity College), a JD (University of Chicago), and an MBA (Harvard Business School) . Under his leadership, Cloudflare delivered FY2024 revenue of $1,669.6 million (+29% YoY), expanded GAAP gross margin to 77.3%, improved GAAP net loss to $78.8 million, and generated $166.9 million in free cash flow (10% of revenue) . Pay-versus-performance disclosures indicate strong multi-year TSR and compensation alignment mechanisms; CAP and TSR metrics are disclosed across 2020–2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cloudflare, Inc. | Co-Founder; Chief Executive Officer | 2009–present | Founding leader; scaled connectivity cloud; drove revenue growth and margin improvement . |
| Cloudflare, Inc. | Chair → Co-Chair of the Board | Chair: 2009–Feb 2025; Co-Chair: Feb 2025–present | Board leadership; transition to Co-Chair structure alongside President to enhance governance balance . |
| Unspam Technologies, Inc. | Co-Founder; Chair | 2001–present | Technology entrepreneurship; ongoing chair role . |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Cloudflare Board | Co-Chair (Employee Director) | Feb 2025–present | Board leadership; not independent; oversight mitigated by Lead Independent Director . |
| Unspam Technologies, Inc. | Chair | 2001–present | External technology leadership . |
Fixed Compensation
| Component | FY2023 | FY2024 | Feb 2025 Change |
|---|---|---|---|
| Base Salary ($) | 400,000 | 400,000 | Increased to 550,000 |
| Annual Cash Bonus | None | None | Policy allows prorated “target annual bonus” for CIC severance; no standing bonus program |
| Perquisites (Air Travel Security Policy) | Aircraft personal use incremental cost included; example disclosure prior years | $1,551,141 aircraft personal use; $129,953 personal security costs | Policy continued; no tax gross-ups |
Notes:
- Cloudflare maintains limited perquisites for security; amounts disclosed annually. No tax gross-ups on perquisites .
- Hedging and pledging are prohibited absent waiver; policy applies to executives and directors .
Performance Compensation
| Award Type | Grant Date | Shares/Units | Performance Metric | Vesting | Triggers/Notes |
|---|---|---|---|---|---|
| RSU (Co-Founder) | Apr 19, 2023 | 307,482 | N/A (time-based) | 16 equal quarterly installments; first vest May 15, 2023; double-trigger CIC acceleration for time-based awards | |
| RSU (Co-Founder) | Feb 5, 2025 | 259,672 | N/A (time-based) | 20 quarters (5 years), quarterly; first vest May 15, 2025; double-trigger CIC acceleration | |
| PSU (Co-Founder) | Feb 5, 2025 | 175,111 total across 6 tranches | Stock Price Goals (90-day VWAP) | Upon certification of each price goal achievement, 1/6 vests on subsequent quarterly vest dates; time-based vesting waived upon change in control |
PSU tranche structure (Prince; identical for Zatlyn):
| Tranche | % of PSU | Shares | Stock Price Goal ($) |
|---|---|---|---|
| 1 | 12.5% | 21,888 | 156.00 |
| 2 | 12.5% | 21,889 | 203.00 |
| 3 | 12.5% | 21,889 | 263.00 |
| 4 | 12.5% | 21,889 | 343.00 |
| 5 | 25.0% | 43,778 | 446.00 |
| 6 | 25.0% | 43,778 | 579.00 |
Additional policies:
- Clawback policy compliant with SEC/NYSE; applies to cash and equity incentives for current/former executive officers .
- No single-trigger CIC vesting; time-based awards granted on/after policy effective date accelerate only on double-trigger .
Equity Ownership & Alignment
| Measure | Detail |
|---|---|
| Beneficial Ownership (Mar 31, 2025) | 32,200 Class A shares (RSUs vesting within 60 days) and 28,148,285 Class B shares; total voting power 41.7% (Class B carries 10 votes/share) . |
| Vehicles | Multiple trusts incl. Revocable Trust and 2023/2024 GRATs; explicit share counts disclosed by trust . |
| Outstanding/Unvested Awards (Dec 31, 2024) | 172,959 unvested RSUs (from 2023 award) . |
| 2024 Equity Vested | 76,871 shares from RSU vesting; value realized $6,676,251 . |
| Stock Ownership Guidelines | CEO required minimum 5x salary; all NEOs and non-employee directors in compliance as of Dec 31, 2024 . |
| Hedging/Pledging | Prohibited absent waiver; applies to executives and directors . |
Insider-selling pressure considerations:
- Recurring quarterly RSU vesting and future PSU vesting can create periodic sell-to-cover tax events; no hedging/pledging and strong ownership levels support alignment .
- No 2024 option exercises disclosed for Prince; 2024 realized value tied to RSU vesting .
Employment Terms
| Provision | Outside CIC | Within CIC (Double-Trigger) | Notes |
|---|---|---|---|
| Severance Cash | 6 months base salary | 12 months base salary + prorated target annual bonus | Severance Policy effective Sep 13, 2024; replaces 2019 policy; no excise tax gross-ups; cutback vs full-pay best net after-tax . |
| Health Benefits | 12 months COBRA premiums | 12 months COBRA premiums | . |
| Equity Acceleration | None (except per plan if not assumed) | 100% acceleration of unvested time-based equity granted on/after policy effective date; performance awards time-based waived only . | |
| Potential Payments (as of Dec 31, 2024) | $225,662 total (cash + health) | $19,049,887 total (incl. equity acceleration valued at $18,624,225) | Equity valued at $107.68/share; RSUs only; performance awards excluded from automatic acceleration . |
Confirmatory employment agreement; at-will; participation in Severance Policy .
Board Governance
- Structure: Prince and Zatlyn serve as Co-Chairs; Lead Independent Director (Scott Sandell) provides independent leadership and executive session facilitation; majority of board is independent (excluding Prince, Zatlyn, Graham-Cumming) .
- Committees: Audit (Hawkins—Chair, Ledbetter, Suder); Compensation (Ledbetter—Chair, Sandell); Nominating/Governance (Cunningham, Lakhani, Suder); Prince does not serve on committees .
- Meetings: Board held six meetings in FY2024; directors met attendance thresholds except one non-employee director (not Prince) .
- Director Compensation: Employee directors (Prince) receive no additional director compensation .
Dual-role implications:
- CEO + Co-Chair is a non-independent leadership structure; mitigated by Lead Independent Director and independent committees; executive sessions of non-employee directors at least twice annually .
Related Party Transactions
- Aircraft Lease: Beginning Aug 2024, Cloudflare leases an aircraft beneficially owned by Prince’s affiliate for business/personal travel under Air Travel Security Policy; hourly rates vetted versus comparable charter rates; $1.9 million paid in 2024; reviewed/approved by Compensation and Audit Committees .
- Limitation of Liability/Indemnification: Standard Delaware and company provisions; D&O insurance maintained .
Say‑on‑Pay & Shareholder Feedback
| Year | Approval % |
|---|---|
| 2023 | 73.7% |
| 2024 | 81.2% |
Compensation committee engages independent consultant (Compensia) and considers shareholder feedback; annual Say‑on‑Pay cadence .
Compensation Peer Group (Benchmarking)
- 2024/2025 peer group used for market context includes BILL Holdings, CrowdStrike, Datadog, DocuSign, Dynatrace, Elastic, HubSpot, MongoDB, Okta, Palantir, Paycom, Paylocity, Samsara, Snowflake, The Trade Desk, Twilio, UiPath, Unity Software, Zscaler; updated for revenue ($1.4B) and market cap ($26.8B) scaling .
- Emphasis on high-growth cloud and security platforms; no formal percentile target disclosed; committee uses judgment balancing performance, role scope, retention .
Company Performance Context (selected metrics)
| Metric | FY2023 | FY2024 |
|---|---|---|
| Revenue ($mm) | 1,296.7 | 1,669.6 |
| GAAP Gross Margin (%) | 76.3% | 77.3% |
| GAAP Loss from Operations ($mm) | (185.5) | (154.8) |
| Non‑GAAP Operating Income ($mm) | 122.0 | 230.1 |
| GAAP Net Loss ($mm) | (183.9) | (78.8) |
| Non‑GAAP Net Income ($mm) | 169.7 | 269.0 |
| Free Cash Flow ($mm; % of revenue) | 119.5; 9% | 166.9; 10% |
Risk Indicators & Red Flags
- Governance structure: CEO + Co-Chair non-independence mitigated by Lead Independent Director and independent committees .
- Related party transaction: Aircraft lease with Prince’s affiliate; independent committee approvals and third-party rate benchmarking disclosed .
- Equity award governance: No single-trigger CIC; PSUs tied to rigorous stock-price goals; clawback policy in place .
- Hedging/pledging prohibited; no excise tax gross-ups; limited perquisites focused on security .
Compensation Structure Analysis
- Mix shifts: Co‑Founder base salaries increased in Feb 2025 (first since IPO) while long-dated RSUs and multi-tranche PSUs emphasize equity alignment and retention .
- At‑risk pay: Absence of annual cash bonus; equity awards are primary incentive mechanism; PSUs add explicit performance linkage to multi-year stock price goals .
- Award governance: Double-trigger acceleration only for time-based awards; performance awards exclude automatic acceleration; clawback policy enhances discipline .
- Peer benchmarking: Committee relies on peer group and surveys without rigid percentiles; independent consultant engages on design .
Equity Ownership & Alignment Details
| Item | Detail |
|---|---|
| Voting Structure | Dual-class; Class A = 1 vote/share; Class B = 10 votes/share; votes together except as otherwise required . |
| Prince’s Voting Power | 41.7% total voting power . |
| Ownership Vehicles | Multiple trusts; explicit share counts by each vehicle disclosed . |
| Policy Compliance | Ownership guidelines met as of Dec 31, 2024 . |
Employment & Contracts
- Confirmatory employment; at-will; Severance Policy updated in 2024; no tax gross-ups; best-net excise cutback .
- CIC economics: Double-trigger cash and time-based equity acceleration; performance awards time-based requirement waived on CIC but unvested shares forfeited if price goals not met .
- Non-compete/non-solicit specifics not separately disclosed in proxy; standard participation in benefits and equity plans .
Investment Implications
- Alignment and control: Founder’s 41.7% voting power and strong equity ownership anchor strategic continuity; dual-class structure concentrates decision-making and supports long-term investment horizon .
- Incentive design: 2025 PSU program creates high-powered stock-price alignment with rigorous VWAP hurdles across six tranches; long vest tails on RSUs bolster retention and can drive disciplined execution focus .
- Trading signals: Quarterly RSU vesting and potential future PSU certifications may create periodic sell-to-cover dynamics; no hedging/pledging reduces risk of misalignment trades .
- Governance oversight: CEO + Co-Chair structure relies on Lead Independent Director and independent committees; recent Say‑on‑Pay support improved (81.2%) indicating investor acceptance of pay design evolution .
- RPT monitoring: Aircraft lease is transparent and committee-approved; investors should monitor continued scale, rate benchmarking, and perquisite cost trends as the enterprise grows .
Overall, Prince’s compensation emphasizes long-term equity alignment and founder-level ownership, with robust governance controls (clawback, no single-trigger CIC, hedging/pledging prohibitions). Key watch items are PSU goal attainment, vest-driven liquidity, and ongoing related-party oversight.