Stefan Schulz
PROS HoldingsAbout Stefan Schulz
Stefan B. Schulz, 58, is Executive Vice President and Chief Financial Officer of PROS Holdings, Inc., a role he has held since March 2015. He oversees accounting, FP&A, legal, treasury, facilities, IR, internal audit, tax, and corporate development; prior roles include CFO at Digital River and senior finance posts at Lawson Software, BMC Software, and Arthur Andersen; he holds a B.B.A. in Accounting from Lamar University . Under the team’s stewardship in 2024, PROS delivered total revenue of $330.4M (+9% y/y), 14% subscription revenue growth, 78% subscription gross margin, and an 8% free cash flow margin with operating cash flow up 177% y/y . But relative TSR lagged: the value of a fixed $100 in PROS fell to $37 in 2024 versus $134 for the Russell 2000 peer group; 2022 MSUs paid 0%, and 2023/2024 MSUs tracked at ~3%/0% of target as of 12/31/24, evidencing strong pay-for-performance sensitivity to shareholder returns .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| PROS Holdings, Inc. | EVP & Chief Financial Officer | Mar 2015–Present | Leads finance, legal, treasury, IR, internal audit, tax, corp dev; scaled SaaS metrics (subscription growth, margins, FCF) . |
| Digital River, Inc. | Chief Financial Officer | 2011–2015 | Public company CFO; global e-commerce/payments exposure . |
| Lawson Software | SVP, CFO & Chief Accounting Officer | 2005–2011 | Enterprise software finance leadership through transformation cycles . |
| BMC Software | Various finance/accounting roles incl. VP & Corporate Controller | 1993–2005 | Public software finance operations and controllership . |
| Arthur Andersen LLP | Audit Manager (Enterprise Group) | Not disclosed | Public accounting foundation . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| — | — | — | No external directorships or other public company roles disclosed for Schulz in the proxy . |
Fixed Compensation
| Component | 2023 | 2024 | Notes |
|---|---|---|---|
| Base Salary ($) | 405,000 | 422,000 | 4.2% increase after three years flat, based on peer data . |
| Target Annual Bonus (% of Base) | 80% (implied by plan) | 80% | Company-wide NEO targets; payout linearly 0–150% of target subject to plan . |
| Actual Bonus Payout ($) | 427,356 | 222,816 | 2024 payout at 66% of target (missed aggressive targets; EBITDA threshold met) . |
Key annual incentive design (2024):
- Metrics and weights: 50% Total Revenue; 50% Free Cash Flow; EBITDA threshold $17.5M .
- 2025 plan continues revenue/FCF metrics and removes the EBITDA threshold (positive EBITDA track record) .
Performance Compensation
Annual cash incentive mechanics (Company-level goals, 2024):
| Metric | Threshold | Target | Maximum | Actual | Payout vs Target |
|---|---|---|---|---|---|
| Total Revenue ($M) | 330.0 | 338.0 | 342.0 | 330.4 | 66% blended plan payout |
| Free Cash Flow ($M) | 22.0 | 29.0 | 33.0 | 26.2 | 66% blended plan payout |
2024 equity grants to Schulz:
| Grant Type | Grant Date | Target Award Value ($000) | Mix | Units Granted | Grant-Date Price/Valuation | Vest/Performance |
|---|---|---|---|---|---|---|
| RSU | Jan 12, 2024 | 4,000 | 60% of LTI | 68,220 | $35.18 per unit | 25% at 1st anniversary; then 6.25% quarterly over next 3 years |
| MSU (relative TSR) | Jan 12, 2024 | 4,000 (40% portion in MSUs) | 40% of LTI | 45,480 target | $41.07 Monte Carlo per unit | Earn 0–200% vs Russell 2000 over 1/1/24–12/31/26; vest 1/31/27 |
MSU performance curve (2024 grant):
| Outcome | TSR Outperformance vs Russell 2000 | Units Earned |
|---|---|---|
| Maximum | +45% | 200% |
| Target | +5% | 100% |
| Minimum | -35% | 0% |
Performance history on prior MSUs:
- 2022 MSUs (3-year period ended 12/31/24): earned 0% of target .
- 2023 MSUs (period ends 12/31/25): tracking 3% of target as of 12/31/24 .
- 2024 MSUs (period ends 12/31/26): tracking 0% of target as of 12/31/24 .
Vesting and realized value events (2024):
| Event | RSUs Vested (shares) | MSUs Vested (shares) | Value Realized ($) |
|---|---|---|---|
| 2024 vestings (Schulz) | 59,034 | 7,426 (2021 MSUs settled in Jan’24) | 2,122,594 |
Equity Ownership & Alignment
- Stock ownership guidelines: NEOs must hold 2x salary; Schulz is in compliance; anti-hedging and anti-pledging policies apply to all insiders .
- Beneficial ownership (Record Date: 3/12/2025): 290,214 shares; includes 11,809 RSUs scheduled to vest within 60 days; <1% of outstanding shares .
- Options: Company does not currently grant options; no options outstanding as of 3/3/2025 .
Outstanding unvested awards (12/31/2024; share price $21.96):
| Award | Shares (Schulz) | Notes |
|---|---|---|
| 2021 RSUs | 9,315 | Annual 1/11 vesting through 2025 . |
| 2022 RSUs | 14,580 | 25% at 1 year; then quarterly 6.25% . |
| 2023 RSUs | 41,669 | 25% at 1 year; then quarterly 6.25% . |
| 2023 MSUs (target) | 49,382 | 3-year relative TSR; tracking ~3% at 12/31/24 . |
| 2024 RSUs | 68,220 | 25% at 1 year; then quarterly 6.25% . |
| 2024 MSUs (target) | 45,480 | 3-year relative TSR; tracking 0% at 12/31/24 . |
Employment Terms
Key terms (Schulz A&R employment agreement Nov 2023):
- Term/renewal: Three-year initial term; auto-renews for three-year terms unless Company elects not to renew .
- Non-compete/non-solicit: During employment and for 12 months post-employment .
- Clawback: SEC/NYSE-compliant executive clawback; equity plan clawback also covers misconduct leading to restatement .
- Trading/pledging: Anti-hedging and anti-pledging; no margin accounts; prohibits shorts and derivatives .
Severance economics (as of 12/31/2024):
| Scenario (Schulz) | Severance | Bonus Payment | Equity Acceleration | Welfare Benefits | Total |
|---|---|---|---|---|---|
| Death/Disability | — | — | 2,975,852 | — | 2,975,852 |
| Termination without Cause / Good Reason | 759,600 | 222,816 | 1,044,191 | 22,164 | 2,048,771 |
| Termination on Change of Control (double trigger) | 1,139,400 | 222,816 | 2,975,852 | 33,246 | 4,371,314 |
| Vesting on Change of Control (performance proration) | — | — | 25,303 | — | 25,303 |
Narrative detail:
- Non-CoC termination: 12 months base salary, 12 months COBRA equivalent, bonus at 100% of target for 12 months, acceleration of time-based equity scheduled to vest within 12 months and MSUs scheduled to vest within 12 months (performance period deemed ended at termination) .
- Change-of-control: Company-wide plan uses double-trigger; if terminated within six months before or any time after a CoC, provides enhanced severance multiples and equity acceleration mechanics; MSUs measured at CoC and paid pro rata; remaining earned MSUs vest at original end date .
Compensation Structure Analysis
| Feature | 2024 Design | Implication |
|---|---|---|
| Cash vs. equity mix | Majority at-risk; equity 60% RSUs / 40% MSUs; annual bonus 80% of salary target | Retention from 4-year RSU vesting; accountability via 3-year relative TSR MSUs. |
| Performance metrics | Annual: Revenue (50%), FCF (50%) with EBITDA threshold (removed in 2025); LTI: relative TSR vs Russell 2000 (±2.5x slope) | Clear line-of-sight to growth/profitability, plus capital markets alignment; 2025 maintains profitable growth focus. |
| Realized pay sensitivity | 2024 bonus paid 66% of target; 2022 MSUs paid 0%; 2023/2024 MSUs tracking ~3%/0% | Strong pay-for-performance; limited windfalls when TSR lags. |
| Governance | Clawbacks; anti-hedge/pledge; minimum 1-year vesting; no option repricing; no evergreen | Shareholder-friendly safeguards reduce risk-taking and alignment concerns. |
Equity Plan and Dilution Context
- 2025 proposal: +3,000,000 shares to 2017 Plan and extend term to 2035; removed legacy per-employee grant limits (post-162(m) change) .
- Overhang: As of 3/3/2025, outstanding RSUs/MSUs (at target) plus available shares equaled 11.0% of fully diluted; with +3M shares, projected potential dilution ~15.7% .
Say-on-Pay & Peer Benchmarking
- Say-on-Pay support: 98% approval at 2024 AGM for prior year NEO pay .
- Benchmarking: FW Cook as independent consultant; peer group refreshed annually; company does not target a fixed percentile .
Investment Implications
- Pay alignment: Below-target cash bonus and zero/near-zero MSU outcomes show high sensitivity to performance and TSR, constraining realized pay when returns underperform—reducing misalignment risk .
- Vesting supply: RSUs vest 25% at year 1 then quarterly thereafter, creating a steady cadence of potential share settlements that could contribute to incremental supply absent retention elections or net share withholding .
- Ownership/pledging risk: Schulz beneficially owns 290,214 shares (<1%); he meets 2x salary ownership guidelines; anti-hedging/anti-pledging policies mitigate alignment and collateral risks .
- Retention and CoC risk: Double-trigger CoC protections and 12-month severance for non-CoC terminations support retention; however, equity acceleration on CoC could motivate continuity through strategic outcomes but also introduce cost in a sale .
- Dilution overhang: Share reserve increase lifts potential dilution to ~15.7%, a headwind if share price/TSR does not inflect; however, governance features (no evergreen/repricing; minimum vesting) are constructive .