Corey Thomas
Rapid7About Corey Thomas
Corey Thomas is Chairman and Chief Executive Officer of Rapid7, serving as CEO and director since October 2012 and appointed Chairman in February 2019; he is 49 and holds a B.E. in electrical engineering and computer science from Vanderbilt University and an M.B.A. from Harvard Business School . He also serves on the boards of LPL Financial Holdings Inc. (Audit Committee) and Blue Cross Blue Shield of Massachusetts (Compensation, Audit, and Health Care Quality & Affordability Committees), and was appointed to the President’s National Security Telecommunications Advisory Committee in February 2023 . In 2024, Rapid7 delivered revenue of $844 million (+9% YoY), ARR of $840 million (+4% YoY), Non-GAAP operating income of $164 million, operating cash flow of $172 million, and free cash flow of $154 million, while pay-versus-performance disclosures emphasize alignment of “compensation actually paid” with company TSR over time .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Rapid7 | Chief Executive Officer | Since Oct 2012 | Daily insight into corporate matters and leadership of strategy execution as CEO . |
| Rapid7 | Chairman of the Board | Since Feb 2019 | Board states CEO-Chair role adds strategic perspective/continuity; mitigated by Lead Independent Director structure . |
| Rapid7 | Director | Since 2012 | Long-tenured board member supporting governance continuity . |
External Roles
| Organization | Role | Years | Committees / Notes |
|---|---|---|---|
| LPL Financial Holdings Inc. | Director | Current | Audit Committee member . |
| Blue Cross Blue Shield of Massachusetts | Director | Current | Compensation, Audit, and Health Care Quality & Affordability Committees . |
| U.S. President’s National Security Telecommunications Advisory Committee (NSTAC) | Member | Appointed Feb 2023 | National advisory role . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | 443,000 | 443,000 | 526,000 (18.7% increase vs. 2023) |
| All Other Compensation ($) | 3,000 (401k match) | 3,000 (401k match) | 2,989 (401k match) |
| Total Compensation ($) | 8,446,001 | 3,140,768 | 14,854,209 |
Performance Compensation
Annual Performance Bonus (2024)
- Target bonus opportunity: $655,200 (reflects 5% uplift for electing fully-vested RSUs in lieu of cash); payout at 50% of target based on results; Corey Thomas was granted 9,216 fully-vested RSUs in satisfaction of the earned bonus .
| Metric | Weighting | Payout Curve (Key Points) | Actual | Achievement vs Target | Weighted Payout |
|---|---|---|---|---|---|
| Non-GAAP Operating Income | 50% | 0% if < $154m; 100% at $165–$176m; 125% ≥ $180m | $166.8m | 100% | 50% |
| Annualized Recurring Revenue (ARR) | 50% | 0% if < $885m; 100% at $905–$911m; 125% ≥ $916m | $840m | 0% | 0% |
| Total | — | — | — | — | 50% |
Long-Term Incentives (2024 grants)
- Mix: 67% PSUs (Adjusted EBITDA and ARR goals) and 33% RSUs for CEO .
- PSU earn-out: 50% of target earned for 2024 (Net ARR below threshold; Adjusted EBITDA at 100% of target) .
| Award | Grant Date | Shares/Target | 2024 Earned | Vesting |
|---|---|---|---|---|
| RSUs | 2/15/2024 | 75,536 | n/a | 12 equal quarterly installments; first vest 5/15/2024, subject to service . |
| PSUs (ARR, Adjusted EBITDA) | 2/15/2024 | 151,089 target | 75,545 (50% of target) | Earned PSUs vest 1/3 each on 2/15/2025, 2/15/2026, 2/15/2027, subject to service . |
PSU Performance Detail (2024):
- Net ARR: Actual $34.1m; 0% payout on this metric .
- Adjusted EBITDA: Actual $188m; 100% payout on this metric; overall PSU earn-out 50% .
Stock Options and 2024 Exercises
| Grant | Exercisable | Exercise Price | Expiration |
|---|---|---|---|
| 1/31/2017 | 134,000 | $12.47 | 1/31/2027 |
| 2/2/2016 | 200,000 | $12.98 | 2/2/2026 |
| 2/4/2015 | 150,000 | $9.77 | 2/4/2025 |
- 2024 activity: 50,000 options exercised; value realized on exercise $2,165,000 .
Equity Ownership & Alignment
- Beneficial ownership: 1,004,894 shares (1.6% of outstanding) as of March 31, 2025; includes 334,000 options exercisable within 60 days, 26,816 RSUs vesting within 60 days, 30,000 shares in the Corey E. Thomas Irrevocable Trust of 2016, 218,748 in Thomas Family Holdings LLC, and 48,137 held by Ancore Foundation, Inc. .
- CEO stock ownership guideline: 6x base salary; CEO and non-employee directors have met, exceeded, or are on track to meet guidelines per 2024 assessment .
- Hedging/derivatives are prohibited by Insider Trading Policy; the proxy summary does not state a pledging prohibition .
- 2024 vesting and realized value: 93,909 RSUs vested for value of $4,316,151 .
Unvested Awards at 12/31/2024 (selected):
| Grant | Unvested/Unearned Shares | Reported Market/Payout Value ($) |
|---|---|---|
| 2/15/2024 RSUs | 56,652 | 2,279,110 |
| 2/15/2024 PSUs (earned portion) | 75,545 | 3,039,175 |
| 2/15/2023 RSUs | 17,016 | 684,554 |
| 2/15/2022 RSUs | 25,520 | 1,026,670 |
| 2/2/2021 awards (various) | 6,189; 5,106 | 248,983; 205,414 |
Employment Terms
- CEO Severance (outside CIC): If terminated without cause or resigns for good reason, 12 months base salary, up to 12 months COBRA premiums, and pro‑rated target bonus for year of termination; equity does not accelerate absent CIC unless unassumed as described below .
- CEO Severance (within 3 months prior to or 12 months post-CIC): 18 months base salary, up to 18 months COBRA premiums, 150% of target bonus for year of termination, and full acceleration of all outstanding equity; if awards are not assumed/continued in a CIC, unvested portions accelerate at closing .
Estimated Payments if Terminated on 12/31/2024:
| Scenario | Cash Severance ($) | Target Bonus ($) | COBRA ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|---|---|
| Not in connection with CIC | 526,000 | 655,200 | 26,838 | — | 1,208,038 |
| In connection with CIC | 784,500 | 982,800 | 40,257 | 7,483,906 | 9,291,463 |
| CIC (awards not assumed) | — | — | — | 7,483,906 | 7,483,906 |
Other governance protections:
- Clawback policy adopted Oct 19, 2023; 2024 restatement had no impact on erroneously awarded compensation under policy (no recovery required) .
- No tax gross-ups on severance/CIC; double-trigger change-in-control protections .
Board Governance
- Roles: Corey Thomas is Chairman and CEO; he is not independent by virtue of employment .
- Independence/duty of oversight: Lead Independent Director J. Benjamin Nye has defined responsibilities (sets agendas for independent sessions, presides over independent meetings, coordinates independent directors, and engages in CEO evaluation/succession planning) .
- Board committees: All committees are fully independent; Audit Committee (Chair Michael Berry), Compensation Committee (Chair J. Benjamin Nye), Nominating & Corporate Governance Committee (Chair Benjamin Holzman) .
- Meetings/attendance: Board met 9 times in 2024; each director attended at least 75% of board and committee meetings held during their service .
- Director pay: Non-employee director retainer $35,000 plus chair/committee retainers; annual RSU grant ~$200,000; Corey receives no additional compensation for director service .
Board service history snapshot:
| Name | Director Since | Role Notes |
|---|---|---|
| Corey Thomas | 2012 | Chairman (since 2019) and CEO; no committee membership . |
| J. Benjamin Nye | 2008 | Lead Independent Director; Compensation Committee Chair . |
Dual-role implications:
- The board explicitly maintains a Lead Independent Director and separate committee chairs to counterbalance the CEO/Chair structure, and reviews leadership structure periodically .
Compensation Structure Analysis and Peer Benchmarks
- Pay mix and rigor: 96% of CEO target total direct compensation is performance-based; 2024 annual bonus equally weighted to ARR and Non-GAAP Operating Income; 2024 bonus paid at 50% of target due to missing ARR despite meeting non-GAAP operating income target .
- Long-term incentives: Continued use of PSUs (ARR and Adjusted EBITDA), with 50% earn-out for 2024 performance .
- Peer group and consultant: Compensia advises the Compensation Committee; pay decisions informed by peer benchmarks (no targeted percentile) .
Peer Groups:
| Year Used for Decisions | Peer Companies (selected list) |
|---|---|
| 2024 | Alteryx, AppFolio, BlackLine, Elastic, Everbridge, Five9, New Relic, PagerDuty, Q2 Holdings, Qualys, SentinelOne, Tenable, Varonis, Workiva, Zscaler . |
| 2025 | BlackBerry, BlackLine, Elastic, Everbridge, Five9, PagerDuty, Q2 Holdings, Qualys, SentinelOne, SolarWinds, Tenable, Varonis, Verint Systems, Workiva, Zscaler . |
Say-on-Pay and investor engagement:
- 96% approval of say-on-pay at the 2024 Annual Meeting; extensive outreach in 2023 with shareholders representing >63% of outstanding shares, receiving feedback emphasizing pay-performance alignment .
Performance & Track Record
- 2024 outcomes: ARR $840m (+4% YoY), revenue $844m (+9% YoY), Non-GAAP operating income $164m, operating cash flow $172m, free cash flow $154m .
- Pay-versus-performance alignment narrative: Compensation actually paid to CEO has moved with company TSR over the disclosed period; in 2024, value of $100 investment in company TSR measured at $71.81 vs $284.38 for the Nasdaq Computer Index peer group in the SEC PVP table .
- CEO pay ratio: 111:1 for 2024 (CEO total compensation $14,854,209; median employee $134,316) .
Related Party, Policies, and Risk Indicators
- Insider trading/hedging: Prohibits short sales, hedging, and derivative transactions; trading windows enforced; 10b5‑1 plan guidelines in place .
- Restatement: 2024 error correction related to stock-based compensation; clawback policy review concluded no erroneously awarded compensation; no recoveries .
- Activism and board refresh: Cooperation agreement with JANA Partners expanded board from 8 to 11 and added three directors with committee placements; JANA agreed to support company slate under the agreement terms .
- Change-in-control protections: Double-trigger required; unassumed awards accelerate at closing; no tax gross-ups .
Investment Implications
- Pay-for-performance alignment is explicit: 2024 bonus paid at 50% and PSUs earned at 50% due to missing ARR targets, showing downside sensitivity to growth underperformance, while retaining profitability emphasis via non-GAAP operating income and Adjusted EBITDA .
- Retention vs selling pressure: Significant unvested RSUs/PSUs (e.g., 2024 RSUs 56,652 unvested; 2024 PSUs 75,545 earned-unvested; additional unvested from 2022–2023) support retention; near-dated option expirations (e.g., 2/4/2025, 2/2/2026, 1/31/2027) and 2024 exercises suggest periodic liquidity needs but are balanced by ongoing vesting .
- Governance mitigants to CEO/Chair dual-role (Lead Independent Director, independent committees) and a robust clawback policy reduce governance risk; 2024 restatement required no recoupment under the policy .
- Activist involvement (JANA cooperation) and board refresh may accelerate strategic changes and execution oversight; committee placements (Audit, Compensation) suggest tangible influence on financial oversight and pay design going forward .