Todd McKinnon
OktaAbout Todd McKinnon
Todd McKinnon is Okta’s co-founder, Chief Executive Officer, and Chairperson of the Board (since 2017), serving as director since 2009; age 53. He previously held senior roles at Salesforce.com (SVP of Development, 2003–2009) and engineering leadership roles at PeopleSoft (1995–2003). He holds an M.S. in Computer Science from Cal Poly San Luis Obispo and a B.S. in Management & Information Systems from BYU . Under his leadership, fiscal 2025 revenue grew 15% year over year to $2.610B, non-GAAP operating income more than doubled to $587M, and GAAP net income turned positive at $28M; free cash flow was $730M (28% margin) . Pay-versus-performance disclosures show a $100 investment value of $74 for Okta vs $280 for the peer index in fiscal 2025, and revenue of $2.610B as the company-selected measure .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Salesforce.com, Inc. | SVP of Development | 2003–2009 | Senior product development leadership at a major cloud CRM platform |
| PeopleSoft, Inc. | Engineering and leadership positions | 1995–2003 | Enterprise application software engineering leadership |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No other public company directorships disclosed in the proxy biography |
Fixed Compensation
| Metric | FY 2023 | FY 2024 | FY 2025 |
|---|---|---|---|
| Base Salary ($) | 306,000 | 306,000 | 306,000 |
| Target Bonus % of Salary | — | — | 65% |
| Actual Bonus Paid ($) | 98,853 | 169,065 | 179,010 |
Performance Compensation
Annual Bonus Plan (FY 2025)
| Metric | Weighting (%) | Target | Actual | Payout (% of target) | Notes |
|---|---|---|---|---|---|
| Revenue | 60% | $2,650.9M | $2,610.3M | 97.0% | GAAP revenue; payout scales 2% per 1% achievement from 90–110% |
| Non-GAAP Operating Income | 40% | $583.1M | $582.7M | 99.9% | Weighting increased by 10 pts vs FY24 to promote profitability |
| Overall Funding | — | — | — | 98.1% | Compensation committee applied negative discretion to 90% for executives |
| CEO Target/Actual | — | $198,900 | $179,010 | 90% (after discretion) | Max payout capped at 120% (down from 150% in FY24) |
PSU Program (Relative TSR vs Nasdaq Composite)
| Award/Tranche | Metric | Target Earn (%) | Actual Earn (%) | Vesting |
|---|---|---|---|---|
| FY2025 PSUs – Performance Period 1 (one-year) | Relative TSR | 100% | 100% (capped; would have been 112%) | Earned units vest March 15, 2025 |
| FY2024 PSUs – Performance Period 2 (two-year) | Relative TSR | 100% | 100% (capped; would have been 178%) | Per award terms |
| FY2023 PSUs – Performance Period 3 (three-year) | Relative TSR | 100% | 72% | Per award terms |
FY 2025 Annual Equity Grants (Granted March 29, 2024)
| Component | Value ($) | Target Shares |
|---|---|---|
| PSUs (60% mix for CEO) | 7,800,000 | 90,635 |
| RSUs (40% mix for CEO) | 5,200,000 | 60,423 |
| RSU vesting schedule | — | 8.33% on June 15, 2024, then 11 equal quarterly installments; March/June/Sept/Dec 15 dates |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Class A shares beneficially owned | 312,613 |
| Class B shares beneficially owned | 6,512,134 |
| Total ownership % | 3.9% |
| Total voting power | 26.5% (Class B carries 10 votes/share) |
| Options exercisable within 60 days | Class A: 277,062; Class B: 64,109 |
| Notable unvested equity as of Jan 31, 2025 | RSUs: 52,526; 45,318; 72,232 units across grants . PSUs unearned at target: 168,083 (FY2023 commencement), 151,059 (FY2024 commencement) |
| FY 2025 realized value | Options exercised: 1,521,214 shares; value realized $111,299,527. RSUs vested: 108,528 shares; value realized $10,266,165 |
| Ownership guidelines | CEO required 5x base salary; executives/directors met guidelines as of most recent review |
| Hedging/pledging | Prohibited; Section 16 insiders may trade only pursuant to compliant Rule 10b5-1 plans |
Employment Terms
| Provision | Not in Change-in-Control | In Change-in-Control (double trigger) | Death/Disability |
|---|---|---|---|
| Cash severance | CEO: 12 months base salary | CEO: 18 months base salary + target annual incentive | — |
| Health benefits | CEO: 12 months continuation (company contribution) | CEO: 18 months continuation (company contribution) | — |
| Equity acceleration | — | Full acceleration of all outstanding unvested equity; PSUs at target | Death: service deemed through vest date for completed periods; incomplete performance periods vest as if 55th percentile; Disability: service deemed through vest dates; vest to extent goals achieved |
| Clawback | Exchange Act Rule 10D-1/Nasdaq-compliant compensation clawback policy | ||
| Tax gross-ups | No tax gross-ups on severance/change-in-control payments (company-wide policy) | ||
| Employment nature | At-will; offer letter in place since February 2017 |
Board Governance
- Dual role: CEO and Chairperson; board determined combined role appropriate given co-founder insight; Lead Independent Director (Jeff Epstein) enhances independent oversight and engages stockholders .
- Committee memberships: McKinnon is not listed on Audit, Compensation, Nominating, or Cybersecurity Risk Committees; these are composed of independent directors .
- Board independence: Majority independent under Nasdaq rules .
- Meetings/attendance: Board held five meetings in fiscal 2025; each director attended at least 75% of meetings of the board and committees served; all but one attended the 2024 Annual Meeting .
Director Compensation
- As CEO, McKinnon receives no director fees; non-employee director compensation is detailed separately in the proxy .
Say-on-Pay & Shareholder Feedback
- 2024 advisory Say-on-Pay support: 93.0%; committee expanded PSUs and increased performance-based mix in response to engagement .
Compensation Peer Group (used for FY 2025 decisions)
| Peers |
|---|
| Cloudflare; CrowdStrike Holdings; DocuSign; Dynatrace; Elastic; GoDaddy; HubSpot; MongoDB; Nutanix; Palo Alto Networks; Paycom Software; RingCentral; Splunk; UiPath; Workday; Zoom Video Communications; Zscaler |
Compensation Structure Analysis
- Increased non-GAAP operating income weighting in the bonus plan to 40% (profitability focus) .
- Reduced bonus maximum to 120% from 150% (risk moderation) .
- Elevated PSU mix to 60% of CEO equity grants (greater pay-for-performance) .
- Mandatory ownership guidelines implemented and satisfied (alignment) .
- No single-trigger change-in-control cash/service-vesting equity; performance-vesting accelerates only to extent of pre-set goals (governance discipline) .
Risk Indicators & Red Flags
- Combined CEO/Chair role—mitigated by Lead Independent Director and majority-independent board; ongoing shareholder outreach on leadership structure .
- Scheduled quarterly RSU vesting and PSU tranches may create predictable selling windows; trades must occur under Rule 10b5-1 plans per insider trading policy .
- Large super-voting Class B stake (26.5% voting power) can entrench control, but materially aligns CEO with shareholder value creation .
- Clawback policy in place; no tax gross-ups on CIC/severance (shareholder-friendly) .
Investment Implications
- Strong fiscal 2025 operational improvements (revenue +15%, non-GAAP operating income up to $587M, positive GAAP net income) support the increased use of performance-linked PSUs and heightened profitability weighting in cash incentives, indicating better alignment with sustainable value creation .
- Governance trade-offs include a combined CEO/Chair with significant voting control; mitigants are an empowered Lead Independent Director, majority-independent committees, ownership guidelines, and a robust clawback—collectively reducing independence concerns while preserving founder-driven execution .
- Predictable vesting schedules and sizable FY 2025 option exercises/RSU vesting suggest ongoing insider supply under Rule 10b5-1 plans; investors should monitor Form 4 filings around quarterly vest dates (Mar/Jun/Sep/Dec 15) for near-term selling pressure signals .