Sumedh S. Thakar
QUALYSAbout Sumedh S. Thakar
Sumedh S. Thakar (age 49) is President & CEO of Qualys and a director since February 2021; he became interim CEO in February 2021 and CEO in April 2021, and has been President since October 2019. He holds a BCS from the University of Pune, India . Under his leadership in 2024, revenue grew 10% to $607.6M, adjusted EBITDA rose 9% to $282.8M (47% margin), and diluted EPS increased 15% to $4.65; PRSU tranches tied to revenue growth and adjusted EBITDA margin paid at ~103% for 2024 performance . Company TSR (value of $100 initial investment) measured for pay-versus-performance disclosure stood at $168.19 in 2024 (vs $134.62 in 2022), reflecting multi‑year value creation during his tenure as CEO from 2021 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Qualys, Inc. | Principal Engineer; Engineering Manager; Director of Engineering; VP, Engineering | 2003–2014 | Built and scaled engineering teams/platform foundational to Qualys cloud security suite . |
| Qualys, Inc. | Chief Product Officer | Jun 2014 – Apr 2021 | Led product strategy during platform expansion into broader risk and compliance capabilities . |
| Qualys, Inc. | President | Oct 2019 – present | Drove go-to-market/product alignment across portfolio . |
| Qualys, Inc. | Interim CEO | Feb 2021 – Apr 2021 | Transition leadership . |
| Qualys, Inc. | CEO | Apr 2021 – present | Oversaw profitable growth; 2024 revenue +10%, adj. EBITDA 47% margin . |
| Qualys, Inc. | Director | Feb 2021 – present | Management director on a 6‑member board with independent Chair . |
External Roles
- No other public company boards disclosed (Other Public Co. Boards: 0) .
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (paid) | $550,000 | $558,333 | $601,667 |
| Base Salary (structural – start→end of year) | — | $550,000 → $600,000 | $600,000 → $610,000 |
| Target Bonus % (Corporate Bonus Plan) | 100% | 100% | 100% each quarter |
| Target Bonus $ (annual) | — | $562,500 | $602,500 |
| Actual Bonus Paid | $467,570 | $283,796 | $488,923 |
Notes:
- 2024 Corporate Bonus Plan paid ~81% of target on average; metrics were bookings growth, revenue growth, and non‑GAAP EPS (equally weighted, 125% cap per metric) .
- 2023 Corporate Bonus Plan paid ~50% of target overall; same three metrics, 100% cap per metric .
Performance Compensation
Annual Cash Bonus Mechanics
| Element | 2023 Plan | 2024 Plan |
|---|---|---|
| Metrics (equal weight) | Bookings growth; Revenue growth; Non‑GAAP EPS | Bookings growth; Revenue growth; Non‑GAAP EPS |
| Payout Cap per metric | 100% | 125% |
| Aggregate Outcome | ~50% of target | ~81% of target |
Selected 2024 quarterly outcomes (illustrative):
- Q1 revenue growth: 11.6% vs 12.1% target (72% payout); EPS: $1.45 vs $1.39 (125%); weighted payout 95% .
- Q3 EPS $1.56 vs $1.34 (125%); weighted payout 101% .
- Bookings actuals are non‑disclosed internal measures; payouts shown reflect plan results .
Equity (PRSUs and RSUs)
- Design: Annual mix of time‑based RSUs (4‑year quarterly vesting) and PRSUs split into three annual tranches with metrics: revenue growth and adjusted EBITDA margin; per‑tranche earn‑out up to 200% of target; however, vesting/release is capped at 100% for first two years with cumulative achievement >100% banked to vest with the third tranche (retention feature) .
- 2024 PRSU performance: Company achieved 10% revenue growth and 47% adjusted EBITDA margin; PRSU tranches tied to 2024 performance paid at ~103% of target (portion above 100% deferred to third‑year vest) .
| Grant/Tranche (for Thakar) | Basis | Earned or Granted in 2024 | Notes |
|---|---|---|---|
| 2021 PRSU (3rd tranche, 2024 performance) | 2024 rev growth 10%, adj. EBITDA margin 47% | 13,442 PRSUs earned (≈103%) | Vested on certification (first/second‑year cap rules already applied) . |
| 2022 PRSU (2nd tranche, 2024 performance) | Same | 15,579 PRSUs became eligible (≈103%); 15,178 vested on certification; remainder banked to year 3 | Overperformance portion vests at end of third tranche subject to service . |
| 2023 PRSU (1st tranche, 2024 performance) | Same | 15,584 PRSUs became eligible (≈103%); 15,183 vested on certification; remainder banked | 100% immediate vest; 2.6% excess deferred to year 3 . |
| 10/30/2024 RSUs | Time‑based | 59,953 RSUs; vest quarterly over 4 years starting Feb 1, 2025 | Retention alignment. |
Annual intended equity values:
- 2024: RSUs $7.5M (59,953 units at $125.10); PRSUs target $7.5M (59,953 target units; max $15.0M) .
- 2023: RSUs $7.1M (45,551 units at $155.87); PRSUs target $7.1M (45,551 target units; max $14.2M) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (4/15/2025) | 195,397 shares (<1%): 130,896 directly; 12.501 RSUs vesting within 60 days; 52,000 options exercisable within 60 days . |
| Options outstanding | 80,000 options at $25.56, fully vested; expire 4/27/2026 . |
| 2024 equity vested/realized | 68,911 options exercised in 2024; value realized $8,008,889; 96,914 shares vested from stock awards; value $15,495,949 . |
| Unvested RSUs at 12/31/2024 | 59,953 (10/30/2024 grant, quarterly vest from 2/1/2025); 34,164 (10/26/2023 grant); 22,768 (10/27/2022 grant); 9,822 (10/28/2021 grant); 1,209 (4/27/2021 grant) . |
| PRSUs earned but unvested (banked) | Excess over 100% for 2024 tranches deferred to vest with 3rd tranche, subject to service . |
| PRSUs – future (targets pending at 12/31/2024) | 105,500 target PRSUs across 2022–2024 approvals pending goal setting for 2025–2027 . |
| Ownership guidelines | CEO requirement: 5x base salary; Status: In compliance . |
| Hedging/pledging | Prohibited for directors and officers; no pledging allowed . |
Implication for supply/pressure:
- Significant quarterly RSU vesting from large 2023–2024 grants and option expiry in 2026 may create periodic liquidity windows; policy prohibits hedging/pledging, mitigating alignment concerns .
Employment Terms
| Provision | CEO Terms |
|---|---|
| Non‑CIC termination (without cause) | 12 months base salary; COBRA premiums up to 12 months (or taxable equivalent) . |
| CIC double‑trigger (termination without cause/for good reason; death/disability) | 150% of base salary + target bonus; 18 months COBRA (or taxable equivalent); 100% acceleration of unvested equity; performance awards at target for future periods (plus credit for previously achieved >100%) . |
| Estimated payouts (12/31/2024 scenario) | Non‑CIC: $639,021 (cash + COBRA); CIC: $42,186,081 (incl. $40,312,549 equity acceleration); Death/Disability: $40,312,549 (equity) . |
| Clawback | Exchange Act Rule 10D‑1 compliant recovery policy (in addition to existing misconduct-based clawback) . |
| Tax gross‑ups | None . |
| Change‑in‑control vesting mechanics (plan) | If no assumption/substitution, 100% vest; performance awards deemed at 100% (plus prior overachievement banked) . |
Board Governance
- Board service: Director since 2021; employee director; not on board committees; board has 6 members, 5 independent; independent Chair (Jeffrey P. Hank) since January 2023 .
- Committee roles: Thakar serves as President & CEO and director; independent directors chair Audit (Berquist), Compensation & Talent (Zangardi), and Nominating & Governance (Rogers) .
- Attendance: Board held 4 meetings in 2024; each incumbent director attended ≥75% of meetings/committees; six directors attended 2024 AGM .
- Dual-role implications: CEO is not Chair; separation of Chair/CEO provides oversight balance; no Lead Independent Director needed as Chair is independent .
- Director compensation: Employee directors (including CEO) receive no additional pay for board service .
Compensation Structure Analysis
- Mix and shift: CEO target total direct compensation skews to equity; 2024 introduced 125% per‑metric cap in cash bonus (from 100%), increasing pay-for-top‑end performance sensitivity while maintaining equal weighting across growth/profitability metrics .
- Equity design: Continued emphasis on PRSUs tied to revenue growth and adjusted EBITDA margin, with overachievement “banked” to year 3 to enforce multi‑year retention and discourage short‑term optimization .
- Goal timing change: Performance goals for PRSU tranches now set in Q1 of each performance year to improve calibration; results in accounting timing shifts across years; 2024 footnotes reconcile intended vs reported grant-date fair values .
- Peer group and consultants: Compensia advises; 2024 peer group updated (added Fastly, Gen Digital; removed New Relic, Splunk) .
- Say-on-pay: Strong support—~93% in 2024; ~88% in 2023 .
- Governance safeguards: Clawback policies, stock ownership guidelines, no gross‑ups, no hedging/pledging .
Multi‑Year Reported Compensation (Summary Compensation Table)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary | $550,000 | $558,333 | $601,667 |
| Stock Awards (GDFV) | $10,361,307 | $6,931,496 | $14,549,332 |
| Non‑Equity Incentive | $467,570 | $283,796 | $488,923 |
| All Other Compensation | $13,676 | $9,607 | $10,350 |
| Total | $11,392,553 | $7,783,232 | $15,650,272 |
Performance & Track Record
- 2024 performance: Revenue $607.6M (+10% YoY); adjusted EBITDA $282.8M (+9% YoY; 47% margin); GAAP EPS $4.65 (+15% YoY); Non‑GAAP diluted EPS $6.13 (+16% YoY) .
- Pay vs performance: Compensation Actually Paid declined in 2024 alongside TSR normalization versus 2023 spike; TSR (fixed $100) at $168.19 vs peer group $301.44 for 2024 (disclosure basis) .
- Option/RSU realizations: 2024 realizations from vesting/exercise reflect monetization of performance‑linked equity while continuing to hold significant unvested/target equity .
Related Party Transactions
- Sister (Deepti S. Thakar) employed as Product Director, Technical Content Experience; 2024 total compensation $260,530; reviewed/approved under related‑party policy .
Compensation Peer Group (2024 update)
- Added: Fastly, Gen Digital. Removed: New Relic, Splunk (no longer public). Peer group spans application/systems software firms of similar size/growth, primarily Northern California .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay support ~93%; outreach to top holders (~72% of shares) continued; program retained core design with guarded enhancements (e.g., bonus cap increase) .
- 2023 say‑on‑pay support ~88%; outreach to holders representing ~31% of shares .
Expertise & Qualifications
- Technical pedigree: deep engineering and product leadership from 2003 onward; BCS in Computer Science (University of Pune) .
- Board qualification: technology and product strategy expertise; management director within an otherwise independent board structure .
Employment Terms (Severance/CIC Economics) – Detail
| Scenario (12/31/2024) | Vesting Acceleration | Cash Severance | COBRA/Equiv. | Total |
|---|---|---|---|---|
| Non‑CIC termination | — | $610,000 | $29,021 | $639,021 |
| CIC double‑trigger | $40,312,549 | $1,830,000 | $43,532 | $42,186,081 |
| Death/Disability | $40,312,549 | — | — | $40,312,549 |
Investment Implications
- Alignment: High equity mix with PRSUs tied to revenue growth and profitability, stock ownership compliance, and anti‑hedging/pledging strengthen alignment; strong say‑on‑pay support indicates investor acceptance .
- Retention vs pressure: Large, multi‑year RSU/PRSU over‑achievement “banking” and quarterly RSU vesting promote retention; option expiry in 2026 and regular vesting could create episodic selling pressure, but governance limits (no pledging/hedging) mitigate misalignment risks .
- Performance sensitivity: 2024 bonus cap increase (125% per metric) adds upside for exceptional quarterly performance; PRSU calibration moved to Q1 to better align with plan realism—both can improve pay‑for‑performance fidelity .
- Change‑in‑control cost: Double‑trigger CIC value is substantial (~$42.2M) driven by equity acceleration—important in M&A scenarios when assessing deal friction and potential dilution .
- Governance quality: Independent Chair, fully independent key committees, active shareholder engagement, clawbacks, and no tax gross‑ups support governance robustness; related‑party employment (sister) noted but managed under policy with modest dollar magnitude .