Yogesh Gupta

About Yogesh Gupta

• President and Chief Executive Officer of Progress Software since October 2016; age 64 .
• Under his tenure, Progress’ non-GAAP operating income grew from $229.2M (FY2021) to $298.5M (FY2024) while non-GAAP net income was $219.0M in FY2024 .
• 2022 PSU cycle paid at 126.25% (TSR at 78th percentile; cumulative operating income above target), reflecting above-target long-term performance outcomes .
• Beneficial owner of 640,211 shares (1.5% of outstanding) as of March 1, 2025, aligning him with shareholders .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Annual Bonus Plan (2024)

• Total corporate bonus payout: 127% for FY2024; CEO earned $762,000 .

Annual plan evolution (FY2025): adds ARR at 20%; revenue weight reduced to 20%; operating income 40%; adjusted FCF 20% .

Long‑Term Incentives (Structure)

• Mix: 50% PSUs, 30% RSUs (time-based), 20% stock options; annual grants .
• PSU metrics: 75% cumulative non-GAAP operating income (with 35% annual margin gate), 25% relative TSR vs S&P Software & Services Select Industry Index; 0–200% payout; TSR capped at 100% if absolute TSR is negative .
• Vesting: PSUs 3-year cliff; RSUs vest in six equal installments over 3 years; options vest in eight equal installments over 4 years; option term ~7 years .

2024 Grants (CEO)

Realized LTI Performance

• 2022 PSU cycle (performance 2022–2024): payout 126.25%; CEO earned 78,036 PSUs vs 61,812 target (TSR 160% factor; operating income 115% factor) .
• FY2024 exercises/vesting: 69,195 options exercised ($1,109,196 realized); 136,980 shares vested from stock awards ($7,941,736 realized) .

Equity Ownership & Alignment

• Beneficial ownership: 640,211 shares (1.5% of common stock) as of March 1, 2025 .
• Outstanding/Unvested (11/30/2024, selected items):
  • Unvested RSUs: 6,182 (2022 grant), 20,425 (2023 grant), 36,746 (2024 grant) .
  • Unvested PSUs (target): 61,812 (2022—vested 2/1/2025), 68,081 (2023), 73,492 (2024) .
  • Options outstanding include grants from 2019–2024; most recent 108,488 @ $57.83 expiring 1/17/2031 .
• Ownership guidelines: CEO must hold ≥3x base salary; all NEOs met guidelines; hedging prohibited; pledging/margining prohibited absent prior approval .
• Insider selling pressure indicators: significant scheduled semi-annual RSU and option vesting; FY2024 exercises and vesting totaled ~$9.05M of value realized .

Employment Terms

• Start date and tenure: CEO since Oct 2016; Board member since 2016 .
• Severance (non‑CIC “involuntary termination”):
  • 18 months of total target cash compensation; pro‑rata target bonus; 18 months benefits; 18 months acceleration of options/RSUs (not PSUs); non‑compete applies during severance period .
• Change‑in‑control (CIC) provisions:
  • On CIC (if awards not assumed): 12 months acceleration for options/RSUs; pro‑rata target bonus .
  • Double‑trigger CIC termination (within 24 months): 24 months of total target cash comp (lump sum); 24 months benefits; full acceleration of options/RSUs (PSUs per plan) .
  • 280G best‑net cutback (no excise tax gross‑up) .
• Estimated benefits (as of 11/30/2024):
  • Involuntary termination: $8.05M total (includes equity acceleration and benefits) .
  • Double‑trigger CIC termination: $10.66M total .

Board Governance (Director Role)

• Board service: Director since 2016; only non‑independent director (8 of 9 nominees independent). Independent Board Chair (John R. Egan); all committees are fully independent .
• Committee roles: Not a member of Audit, Compensation, Nominating, or M&A/Strategy committees (independent only) .
• Attendance: Board met 7 times in FY2024; directors expected to attend; independent directors meet in executive session without the CEO at every regular meeting .
• Director compensation: Employee directors receive no compensation for board service .

Director Compensation and Ownership Guidelines (Board‑wide context)

• Non‑employee directors: annual retainer $275,000 ($50,000 cash; $225,000 equity); additional fees for chair/memberships; DSUs/RSUs vest at the next annual meeting; ownership guideline ≥5x cash retainer .
• Governance practices: independent compensation consultant retained by Compensation Committee .

Compensation Structure Analysis

• Pay mix emphasizes at‑risk compensation: 50% PSUs, 30% RSUs, 20% options; annual bonus 100% formulaic on revenue, operating income, and FCF (adds ARR in 2025), with capped payouts .
• Strong shareholder support: Say‑on‑pay approval ~97% in 2024; ~96%+ for each of the prior six years, indicating investor endorsement of pay design and outcomes .
• Peer positioning: Target total direct compensation set near the 50th percentile of peer group; peers include Appian, Dynatrace, Qualys, Rapid7, Verint, etc. .
• Clawback: Policy updated to comply with SEC/Nasdaq; recover excess incentive pay after restatements .
• No hedging/pledging; no excise tax gross‑ups; no related‑party transactions disclosed in FY2024 .

Say‑on‑Pay & Shareholder Feedback

• 2024 say‑on‑pay support: ~97% approval; continued strong support over six years (~96%+ annually). Committee engages and evolves plan design (e.g., adds ARR to annual plan in 2025) in response to investor focus on durable recurring revenue .

Expertise & Qualifications

• Decades of leadership across infrastructure and application software (CA Technologies CTO; CEO roles at FatWire and Kaseya). Public company board experience (Blackbaud director) .
• Age 64; CEO tenure since 2016, providing continuity through multiple acquisitions and integration cycles .

Risk Indicators & Red Flags

• Policies mitigate alignment risks: no hedging; pledging restricted; robust clawback; independent committees; independent Chair .
• No related‑party transactions; no excise tax gross‑ups in CIC provisions .
• Cybersecurity oversight and board risk oversight processes described; independent directors meet without CEO each meeting .

Equity Ownership & Vesting Detail (Selected, as of 11/30/2024)

Investment Implications

• Alignment: High at‑risk mix (PSUs/options) tied to multi‑year operating income and relative TSR, with a 35% margin gate, incentivizes durable profitability and disciplined M&A integration; addition of ARR to 2025 bonus plan further aligns with recurring revenue durability focus .
• Retention and M&A dynamics: Double‑trigger CIC protection (24 months of target cash comp; full time‑based equity acceleration) supports leadership continuity through strategic transactions without shareholder‑unfriendly gross‑ups; estimated CIC termination value ~$10.7M as of FY2024 .
• Trading/flow watch‑outs: Semi‑annual RSU/option vesting cadence and demonstrated exercises/vestings in FY2024 can create periodic supply; hedging prohibited and pledging restricted .
• Governance comfort: Independent Chair and fully independent committees, strong say‑on‑pay history, and no related‑party transactions reduce governance risk; CEO is the sole non‑independent director .