J. Frederic Kerrest
OktaAbout J. Frederic Kerrest
Co-founder of Okta and current Vice Chairperson of the Board; age 48; director since 2009. Former Chief Operating Officer (2009–Nov 2023); currently Managing Partner and Founder of Windproof Partners (enterprise software growth-stage investment and advisory firm). Education: MBA, MIT Sloan; BS, Computer Science, Stanford. Not classified as an independent director under Nasdaq rules given former executive status and related affiliations.
Past Roles
| Organization | Role | Tenure | Committees/Impact |
|---|---|---|---|
| Okta, Inc. | Co-founder; Chief Operating Officer; Executive Vice Chairperson (Mar 2019); Vice Chairperson (since Nov 2023) | 2009–Nov 2023 (COO); Board since 2009 | Co-founder operating perspective; transitioned from executive to non-employee director in Nov 2023 |
| Salesforce.com, Inc. | Sales and Business Development roles | Aug 2002–Feb 2007 | Enterprise go-to-market experience |
External Roles
| Organization | Role | Tenure | Notes |
|---|---|---|---|
| Windproof Partners | Managing Partner and Founder | Current | Enterprise software growth-stage investor/advisor |
Board Governance
- Status and tenure: Vice Chairperson; director since 2009; not independent under Nasdaq standards. Board maintains a majority of independent directors and all standing committees consist of independent directors. Lead Independent Director is Jeff Epstein (since June 2024).
- Committee assignments: No committee memberships listed for Mr. Kerrest (Audit, Compensation, Nominating, and Cybersecurity Risk committees are chaired/constituted solely by independent directors).
- Attendance: Board held 5 meetings in fiscal 2025; each director attended at least 75% of Board and applicable committee meetings; all but one director attended the 2024 Annual Meeting.
- Committee activity (for context): Audit (8 meetings), Compensation (5), Nominating (5), Cybersecurity Risk (standing committee).
- Governance infrastructure: Stockholder outreach conducted with holders representing ~61% of outstanding shares; Say-on-Pay support 93% in 2024; robust clawback, stock ownership guidelines, and hedging/pledging prohibitions in place.
Fixed Compensation
| Component | Structure/Amount | Vesting/Terms | Sources |
|---|---|---|---|
| Annual cash retainer | $35,000 for Board member; additional retainers for leadership/committee roles (e.g., Lead Independent Director $20,000; Committee Chairs $12,000–$26,000; members $6,000–$13,000) | Paid in cash; pro-rated for service | |
| Annual equity retainer (RSUs) | $245,000 grant-date fair value (non-employee directors continuing post-meeting) | Fully vests on first anniversary or immediately prior to next annual meeting; accelerates on Sale Event | |
| Initial equity grant (RSUs) | $530,000 grant-date fair value at board appointment (non-employee) | 3-year annual installments | |
| FY2025 actual – J.F. Kerrest | Cash fees: $21,495; Stock awards (RSUs): $245,025; Total: $266,520 | Began receiving non-employee director compensation on June 20, 2024 (post-employee transition) | |
| Transition note | In lieu of an initial non-employee director RSU grant, he forfeited 76,549 out-of-the-money options; outstanding RSUs and 5,963 options continued vesting per original terms | N/A |
Directors do not receive performance-based equity; their annual grants are time-based RSUs with standard vesting and Sale Event acceleration under the 2017 Plan.
Performance Compensation
Directors are not granted PSUs or performance cash. For pay-for-performance oversight, the Board (via Compensation Committee) uses the following executive incentive metrics and designs:
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Annual Bonus Plan (NEOs) – FY2025 performance measures and goals: | Measure (Weight) | Threshold | Target | Maximum | FY2025 Result | Payout Basis | |---|---|---|---|---|---| | Revenue (60%) | $2,385.9M (80% payout) | $2,650.9M (100%) | $2,916.0M (120%) | $2,610.3M (98.5% of target) | 97.0% funding for this component | | Non-GAAP Operating Income (40%) | $466.5M (60%) | $583.1M (100%) | $699.7M (120%) | $582.7M (99.9% of target) | 99.9% funding for this component |
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Committee applied negative discretion to reduce FY2025 executive bonus funding from 98.1% to 90% to align with broader employee outcomes.
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PSU program (NEOs) – relative TSR vs Nasdaq Composite; three overlapping performance periods (1, 2, 3 years) with 0–200% payout:
- Achievement factor guideposts: at 30th percentile (0.5x for Y1/Y2), at/above 55th percentile (1.0x for Y1/Y2); Y3 has a stair-stepped schedule based on prior achievement sum, capped at 200% cumulative.
- FY2025 determinations: FY2025 PSUs tranche 1 earned at 100% (cap applied); FY2024 PSUs tranche 2 at 100% (cap applied); FY2023 PSUs tranche 3 at 72%.
Implications: The absence of director performance equity limits pay-driven conflicts for non-employee directors, while executive incentive structures emphasize revenue, profitability, and market-based TSR—areas the Board oversees through independent committees.
Other Directorships & Interlocks
| Company | Role | Committee roles | Notes |
|---|---|---|---|
| None disclosed (public companies) | — | — | Okta biography lists operating/investing roles; no other public company directorships for Mr. Kerrest are disclosed. |
Compensation Committee Interlocks: During fiscal 2025, Compensation Committee members were Dixon, Saeger, Stankey (Chair); no interlocks or insider participation reported.
Expertise & Qualifications
- Co-founder/operator with deep enterprise software GTM and operating experience (Okta COO; Salesforce sales/business development).
- Technology and leadership credentials with formal technical education (Stanford CS; MIT Sloan MBA).
- Brings historical and strategic continuity to the Board; Board maintains a Lead Independent Director structure and fully independent key committees to balance founder influence.
Equity Ownership
| Holding | Amount | % Class / Voting | Notes |
|---|---|---|---|
| Class B common stock | 1,376,431 shares | 17.4% of Class B | Held via Kerrest Family Revocable Trust and affiliated entities (KIT Holdings LLC; KLT 218 Holdings LLC) as noted in footnote; shared/control rights described therein. |
| Class A options (exercisable within 60 days of Apr 1, 2025) | 267,010 | — | Beneficial ownership includes exercisable options. |
| Total voting power | — | 5.7% | Based on combined Class A/Class B voting as of Apr 1, 2025. |
| Outstanding director RSUs (as of Jan 31, 2025) | 8,895 | — | Director equity awards outstanding; from non-employee director table. |
Ownership alignment and safeguards:
- Stock ownership guidelines: Directors must hold 3x annual cash retainer; as of the most recent review, all directors were in compliance.
- Hedging and pledging prohibitions: Directors and employees (including executives) are prohibited from hedging and from pledging company securities; trades by directors/officers only via Rule 10b5-1 plans.
- No related-party transactions involving Mr. Kerrest were described in the proxy’s related party transactions section for fiscal 2025; audit committee oversees Item 404 processes.
Governance Assessment
Strengths affecting investor confidence:
- Fully independent Audit, Compensation, Nominating, and Cybersecurity Risk committees; robust Lead Independent Director role with direct stockholder engagement.
- Strong shareholder outreach (61% of outstanding engaged), with responsive changes (greater PSU mix for executives); Say-on-Pay support at 93% in 2024.
- Risk controls: Clawback policy compliant with Rule 10D-1/Nasdaq; prohibitions on hedging/pledging; mandatory ownership guidelines.
Potential concerns/RED FLAGS to monitor:
- Independence and control: As a non-independent co-founder with super-voting Class B shares (17.4% of Class B; ~5.7% total voting), concentration of voting power can influence governance outcomes; however, he holds no committee seats and independent structures are in place.
- Related-party exposure: Family-affiliated entities hold portions of Class B; no Item 404 transactions disclosed, but continued vigilance by the Audit Committee is appropriate.
- Director pay structure: Time-based RSUs (no performance condition) are standard but do not include explicit performance linkage; balance comes from robust executive incentive performance metrics under Compensation Committee oversight.
Change-in-control context:
- Director RSUs fully accelerate upon a Sale Event under the 2017 Plan; executive CIC severance is double-trigger with equity acceleration at target for PSUs—no single-trigger cash or service-vesting equity benefits.
Say-on-Pay & shareholder feedback:
- 2024 Say-on-Pay support: 93.0%; stockholder outreach drove increases in PSU weight and expanded disclosures on leadership structure/succession.
Compensation committee oversight/consultants:
- Compensation Committee: Stankey (Chair), Dixon, Saeger—all independent; retains Compensia as independent consultant; annual risk assessments of comp programs; no interlocks.
Environmental/social oversight and cyber:
- Dedicated Cybersecurity Risk Committee (independent members) with management reporting; audit committee oversight of responsible AI within ERM.