Leon Trefler
PEGASYSTEMSAbout Leon Trefler
Leon Trefler is Chief of Clients and Markets at Pegasystems, age 64, with a B.A. from Dartmouth College. He joined Pega in April 1998 and progressed through senior sales roles including VP Sales North America (2007–2010), SVP Sales (2010), SVP Global Customer Success (Americas) (2014–2021), SVP Global Customer Success (2021), and was appointed Chief of Clients and Markets in February 2022; he is the brother of CEO Alan Trefler. Company performance metrics driving executive pay include ACV growth (9% in 2024, 11% constant currency) and non-GAAP free cash flow ($338.2M, up 68% YoY), which underpin Rule-of-40 funding of incentives. The company tracks TSR and peer TSR vs the S&P North American Technology – Software Index; clawback and no-hedging policies are in place.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Pegasystems | Account Executive, Strategic Business Development | Apr 1998 onwards | Early commercialization of core products and enterprise client development. |
| Pegasystems | Led commercialization of PegaRULES Process Commander | 2002 | Launched commercialization of the predecessor to Pega Platform. |
| Pegasystems | VP Sales, North America | Apr 2007–Jan 2010 | Scaled North American sales execution. |
| Pegasystems | SVP Sales | Jan 2010 onwards | Senior leadership of global sales. |
| Pegasystems | SVP Global Customer Success (Americas) | Jul 2014–Apr 1, 2021 | Drove client success amid regional reorganization of sales/consulting. |
| Pegasystems | SVP Global Customer Success | Apr 1, 2021–Feb 2022 | Led global customer success operations. |
| Pegasystems | Chief of Clients and Markets | Feb 2022–present | Executive role with sales commissions aligned to Global ACV Bookings. |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| None disclosed | N/A | N/A | No external directorships or roles disclosed. |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $390,712 | $400,000 | $410,962 |
| Target Bonus (% of earned base) | 50% (exec plan design) | 50% (exec plan design) | 50% (exec plan design) |
| All Other Compensation ($) | $9,150 | $9,900 | $10,350 |
Notes:
- 2024 base salaries authorized effective April 1, 2024: Leon $415,000 (pro-rated as shown above).
Performance Compensation
| Component | Metric | Weighting | Target | Actual/Payout | Vesting |
|---|---|---|---|---|---|
| Corporate Incentive Compensation Plan (CICP) 2024 | Rule of 40 (ACV growth + FCF margin) | 75% | Full achievement at ≥39% Rule of 40 | Funding set at 105% for executive officers; Leon’s CICP payout $215,755 | CICP RSUs vest 1-year if elected; Leon not listed among those electing RSUs in 2024 |
| Corporate Strategic Initiatives | Board-approved strategic goals | 25% | As approved annually | Included in corporate Funding Percentage above | N/A |
| Sales Incentive Compensation (2024) | Global ACV Bookings | N/A (additional cash incentives) | $410,000 target commissions | $486,000 actual commissions | Paid in cash (commission plan) |
| Sales Incentive (2025) | Global ACV Bookings | N/A | $450,000 target commissions | N/A | N/A |
| Performance Stock Options (PSO) 2024 | Rule of 40 (2024) and ACV Growth + Rule of 40 (2025) | N/A | Up to 25% earn in Year 1; up to 180% in Year 2 | Company achieved 100% metrics for 2024; 25% vested at first anniversary | 25% vest on 3/5/2025; remaining 75% eligible on 3/5/2026 subject to 2025 scale |
PSO Achievement Scales:
- FY2024 scale: full achievement at Rule of 40 ≥39 (25% tranche)
- FY2025 scale: matrix of ACV Growth and Rule of 40 (up to 180% earn for second tranche)
Equity Awards and Vesting Detail (Grants in 2024)
| Grant Date | Instrument | Number | Exercise Price | Grant-date Fair Value ($) | Vesting |
|---|---|---|---|---|---|
| 3/5/2024 | RSUs | 17,609 | N/A | $1,088,941 | Over 4 years; RSUs typically 1/4 after 1 year, remainder quarterly |
| 3/5/2024 | Options (time-based) | 35,218 | $62.10 | $911,009 | Over 4 years; 1/4 after 1 year, remainder quarterly |
| 3/5/2024 | Performance Stock Options (PSO) | 35,000 | $62.10 | $860,822 (target) | 25% on first anniversary (earned at 100% for 2024); up to 180% earn at second anniversary for 2025 |
Additional 2025 planned options under amended plan (subject to shareholder approval; target achievement):
- 32,145 options for Leon Trefler (no vest prior to shareholder approval; max earn 200%).
Multi-Year Compensation Mix
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $390,712 | $400,000 | $410,962 |
| Bonus/Additional Cash Incentives ($) | $278,433 | $324,198 | $485,764 |
| Stock Awards ($) | $1,000,030 | $999,621 | $1,088,941 |
| Option Awards ($) | $3,177,303 | $1,059,451 | $1,771,831 |
| Non-Equity Incentive Plan Compensation ($) | $175,820 | $200,000 | $215,755 |
| All Other Compensation ($) | $9,150 | $9,900 | $10,350 |
| Total ($) | $5,031,448 | $2,993,170 | $3,983,603 |
Equity grant fair value trajectory (periodic NEO grants):
- Leon: $2,061k (2023) to $2,861k (2024), +39% YoY.
Equity Ownership & Alignment
| As of Jan 31, 2025 | Shares Owned | Shares Acquirable within 60 Days | Total Beneficial Ownership | % of Outstanding |
|---|---|---|---|---|
| Leon Trefler | 37,973 | 361,132 | 399,105 | * (<1%) |
Ownership guidelines and pledging:
- Stock ownership guidelines require CEO’s direct reports to hold shares ≥1x salary; all directors/officers satisfied or within phase-in; no hedging is permitted; clawback policy adopted in 2023.
- No pledging disclosure for Leon; pledging noted for CEO Alan Trefler (not Leon).
2024 realized equity/option activity:
| 2024 Activity | Quantity | Value Realized ($) |
|---|---|---|
| Options Exercised | 44,553 | $1,805,944 |
| RSUs Vested | 14,150 | $980,937 |
Selected outstanding equity (12/31/2024):
| Type | Quantity | Exercise Price | Expiration | Notes |
|---|---|---|---|---|
| Options (time-based) | 35,218 | $62.10 | 3/5/2034 | Four-year vest schedule (1/4 then quarterly). |
| Options (three-year vest) | 56,000 | $62.10 | 3/5/2034 | One-third then quarterly over remaining two years. |
| RSUs (unvested) | 17,609 | N/A | N/A | Granted 3/5/2024. |
Employment Terms
| Term | Detail |
|---|---|
| Employment agreement | No individual employment agreement or severance arrangement disclosed for Leon; agreements disclosed for Stillwell and Higgins only. |
| Change-in-control treatment | Under 2004 LTIP, Board may accelerate all outstanding RSUs/options upon sale of Pega (discretionary single-trigger plan-level acceleration). |
| Clawback | Compensation recovery policy adopted in 2023 per SEC Rule 10D-1/Nasdaq. |
| Hedging/Pledging | Hedging prohibited by policy; Board monitors pledged/margined shares; no pledging disclosure specific to Leon. |
| Ownership guidelines | CEO direct reports: 1x salary minimum; retention of 50% of net shares until compliance; officers either satisfied or within phase-in period. |
| Related-party | Disclosure of family relationship (brother of CEO); no related-party transactions >$120k in 2024. |
Compensation Benchmarking & Say-on-Pay Context
- Benchmark peer set includes Atlassian, Dynatrace, FICO, Guidewire, MongoDB, Okta, PTC, Twilio, Veeva; total cash typically targeted at 50th–75th percentile; Leon is compensated above the 75th percentile.
- Say-on-Pay approval: 93% support at 2024 annual meeting.
Investment Implications
- Alignment: Leon’s pay is heavily variable via sales commissions linked to Global ACV Bookings and equity/PSOs tied to Rule-of-40/ACV growth, aligning incentives with subscription scale and cash generation. 2024 commissions exceeded target ($486k vs $410k), and PSOs hit 100% for the 25% first-year tranche, signaling operational execution versus ACV/FCF goals.
- Vesting/Selling pressure: Significant 2024 option exercises (44,553 shares, $1.81M realized) and RSU vesting ($0.98M) point to ongoing liquidity events; additional 2024 grants (RSUs 17,609; options 35,218; PSOs 35,000) and 2025 planned options (32,145) create future vesting over 2025–2026 that may contribute to periodic insider sales.
- Governance/COC risk: While Leon lacks a bespoke severance deal, plan-level single-trigger acceleration at Board discretion on sale could accelerate large unvested awards; no hedging permitted and clawback policy lowers misstatement risk.
- Pay inflation risk: Equity grant value rose 39% YoY (2023→2024) and Leon’s cash comp benchmarks above 75th percentile, warranting scrutiny on pay-for-performance calibration as ACV/FCF targets evolve; continued strong Say-on-Pay support (93%) mitigates near-term governance overhang.
Overall, Leon’s incentives are levered to ACV growth and Rule-of-40 progress; monitoring PSO second-year earn (FY2025 matrix) and commission attainment offers timely trading signals on execution momentum and potential insider selling windows.