Rafe Brown
Rapid7About Rafe Brown
Rafe Brown (age 57) is Rapid7’s incoming Chief Financial Officer, effective on or about December 1, 2025, and will serve as principal financial officer. He is a CPA with a Master of Accounting (Brigham Young University) and a B.S. in Accounting (Southern Utah University), with prior senior finance and operating roles across public SaaS and cybersecurity companies (Mimecast President/COO and CFO; Pegasystems SVP/CFO/CAO; SevOne CFO; Salesforce SVP Finance). He joins Rapid7 as the company reports ARR of $838M (+2% y/y), Q3’25 revenue of $218M (+2% y/y), and non-GAAP operating income of $37M; FY2024 revenue was $844M and GAAP net income $25.5M, providing context for growth and profitability priorities he’ll oversee .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Francisco Partners | Operating Partner | Sep 2024–Nov 2025 | Portfolio operating leadership in technology; advisory on scaling SaaS operations . |
| Mimecast Limited | President & COO | Aug 2022–Nov 2023 | Led operations at global email/security SaaS; execution on scaling and risk management . |
| Mimecast Limited | Chief Financial Officer | Mar 2019–Aug 2022 | Drove SaaS financial scaling, capital allocation, and investor relations . |
| SevOne, Inc. | SVP, CFO & Treasurer | Dec 2015–Mar 2019 | Led finance for network/infrastructure management firm; operational finance discipline . |
| Pegasystems, Inc. | SVP, CFO & CAO | Sep 2013–Nov 2015 | Oversight of public company finance and administration; transformation of finance ops . |
| Salesforce.com, inc. | SVP Finance | ~2004–2013 | Senior finance leadership over nine years in hyper-growth SaaS environment . |
| Arthur Andersen; PwC | Public Accounting | Early career | Foundation in audit/accounting; CPA credential . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Francisco Partners | Operating Partner | Sep 2024–Nov 2025 | External role prior to RPD appointment . |
Fixed Compensation
| Component | Detail | Amount | Timing/Notes |
|---|---|---|---|
| Base Salary | Annual | $450,000 | Effective upon start, expected Dec 1, 2025; at-will employment . |
| Signing Bonus | One-time | $250,000 | Pay within 45 days of start; pro-rata repayment if terminated for Cause or resigns without Good Reason within first year . |
| Benefits | Health/ESPP/401(k) eligibility | — | On same terms as similarly situated employees . |
Performance Compensation
| Incentive Type | Target/Value | Metrics | Payout Mechanics | Vesting |
|---|---|---|---|---|
| Annual Performance Bonus | 75% of base salary (target) | Objectives mutually agreed with Comp Committee; subject to executive bonus plan | Must be employed through payment date; plan caps subject to plan terms . | Cash unless RSU election is offered per plan (company allows RSU bonus for some execs historically) . |
| RSU Award (time-based) | ~$7.5M grant-date value | N/A (time-based) | Shares determined by 30-day average closing price | 3-year vest; 1/3 on Dec 15, 2026, then quarterly, subject to continued service . |
| PSU Award (performance-based) | ~$2.5M grant-date value by Mar 31, 2026 | To be set by Comp Committee | Performance-based RSUs | Terms to be determined; company program commonly uses ARR and Adjusted EBITDA for PSUs , but Rafe’s award metrics not yet disclosed . |
| Supplemental Equity | Up to ~$5.0M | TBD | TBD | Expected in Q1 2026, terms set by Comp Committee . |
Company practice context: In 2024, executive annual bonuses used equal-weight ARR and Non-GAAP Operating Income; PSUs used Net ARR and Adjusted EBITDA (50% overall earned due to EBITDA met, ARR below threshold) .
Equity Ownership & Alignment
- Initial ownership: Not disclosed yet; equity awards are specified as above and will begin vesting starting Dec 2026 .
- Hedging/derivatives: Prohibited for directors, officers, and employees per Insider Trading Policy; trading subject to blackout windows and 10b5-1 guidelines .
- Pledging: No explicit pledging prohibition disclosed; not mentioned in policies .
- Stock ownership guidelines: CEO must hold ≥6x base salary; directors ≥4x cash retainer; other executive officers (including CFO) are not required to meet minimum ownership thresholds .
Employment Terms
| Term | Detail |
|---|---|
| Start date & role | Appointed CFO effective on or about Dec 1, 2025; principal financial officer . |
| Employment nature | At-will; reports to CEO; standard indemnification agreement expected . |
| Agreements | Offer Letter and Severance & Equity Award Vesting Acceleration Letter Agreement executed Nov 1, 2025 . |
| Confidentiality/Restrictive covenants | Must sign Confidentiality, Assignment and Non-Solicitation Agreement; non-compete not disclosed . |
| Severance (non-CIC) | If terminated without Cause or resigns for Good Reason: 6 months base salary and up to 6 months COBRA premiums, subject to release . |
| Change-in-Control (CIC) Window | If Qualifying Termination within 3 months prior to or 12 months after CIC: 12 months base, up to 12 months COBRA, full target bonus for year of termination, and accelerated vesting of all outstanding equity awards (double-trigger) . |
| Equity assumption at CIC | If acquirer refuses to assume awards, acceleration terms per agreement; company-wide policy emphasizes double-trigger or assumption . |
| Tax gross-ups | None on severance/CIC payments . |
| Clawback | Nasdaq-compliant clawback for Section 16 officers; restatement in 2024 did not trigger recovery (measures excluded SBC) . |
Performance Compensation (Plan Design Detail)
| Metric | Weighting | Target | Actual (FY2024 company context) | Payout | Vesting |
|---|---|---|---|---|---|
| Annual Bonus: Non-GAAP Operating Income | 50% | Tiered thresholds and target ranges | $166.8M achieved (100% vs target) | 50% overall plan payout (combined) | N/A (cash/RSU payout) . |
| Annual Bonus: ARR | 50% | Tiered thresholds and target ranges | $840M achieved (below threshold, 0%) | 50% overall plan payout | N/A. |
| PSUs: Net ARR | 50% (program) | Tiered | $34.1M achieved; 0% payout on this leg | 0% leg contribution | Vests over years if earned. |
| PSUs: Adjusted EBITDA | 50% (program) | Tiered | $188M achieved; 100% payout on this leg | 50% overall PSU achievement | Three annual tranches if earned . |
Note: The above reflects Rapid7’s 2024 company-wide NEO design, not yet Rafe Brown’s 2026 metrics; his PSU metrics will be set by the Compensation Committee and disclosed subsequently .
Compensation Governance and Peer Benchmarking
- Compensation Committee: Independent; members Brown, Galligan, Nye (Chair), Schodorf; meets quarterly; retains Compensia as independent advisor; uses peer data without targeting a fixed percentile .
- Peer groups: Updated in 2024 and 2025 to reflect industry/size (e.g., BlackLine, Elastic, SentinelOne, Tenable, Varonis, Workiva, Zscaler; adds for 2025 include BlackBerry, SolarWinds, Verint) .
- Say-on-pay: 96% approval at 2024 annual meeting; emphasis on pay-for-performance alignment and increased PSU usage .
- No perquisite inflation: Perquisites not material; no tax gross-ups; double-trigger CIC; clawback compliant .
Equity Ownership & Insider Activity (Current)
| Item | Status |
|---|---|
| Beneficial ownership | Not yet disclosed for Mr. Brown prior to start; equity awards outlined in Offer Letter . |
| Form 4 insider activity | None yet; appointment effective Dec 1, 2025; future filings will detail grants and any 10b5-1 plans . |
| Ownership guidelines compliance | CFOs are not subject to minimum ownership requirements; CEO/director guidelines disclosed . |
| Pledging/Hedging | Hedging and short sales prohibited; pledging not specified . |
Employment Economics: Severance and CIC Scenarios
| Scenario | Cash | Bonus | Health (COBRA) | Equity |
|---|---|---|---|---|
| Qualifying Termination (non-CIC) | 6 months base salary | — | Up to 6 months premiums | No acceleration (unless separate conditions) . |
| Qualifying Termination in CIC window | 12 months base salary | Full target bonus for year of termination | Up to 12 months premiums | Full acceleration of all outstanding equity on termination date (double-trigger) . |
Track Record, Value Creation, and Execution Risk
- Relevant experience: Deep SaaS and cybersecurity leadership with end-to-end finance and operations mandates at Mimecast, Salesforce, Pegasystems, and SevOne; aligns with Rapid7’s shift toward “profitable growth” and AI-enabled Command Platform GTM messaging .
- Company performance backdrop: FY2024 revenue $844M (+9% y/y), non-GAAP operating income $164M; but ARR targets missed in 2024; compensation plan design tightened via equal weighting ARR/profitability and PSUs—Brown’s incentives are likely to emphasize ARR durability and EBITDA discipline .
Risk Indicators & Red Flags
- Restatement/Clawback: 2024 restatement related to stock-based compensation accounting did not trigger clawback recovery; policy is mandatory for Section 16 officers .
- CIC protection: Full acceleration plus full target bonus in CIC window—strong retention through uncertainty, but potential overhang if strategic alternatives emerge .
- Ownership alignment: Absence of minimum ownership requirement for CFO reduces forced ownership alignment relative to CEO/directors .
- Related party transactions: None involving Mr. Brown disclosed under Item 404(a) .
Compensation Structure Analysis
- Cash vs equity mix: Heavy initial equity ($7.5M RSU + $2.5M PSU + up to $5M supplemental) points to long-term retention and stock-linked alignment; annual cash comp modest relative to grant values .
- Options vs RSUs: Company has shifted from options to RSUs/PSUs; RSUs lower risk of zero-value outcomes; PSUs add performance gating tied to operating metrics .
- Bonus plan rigor: Equal weighting of ARR and Non-GAAP Operating Income increases sensitivity to growth/profit balance; payout capped at 125%; historical 2024 payout at 50% underscores rigor .
Employment & Contracts (Restrictive Covenants)
- Non-compete: Not disclosed in the filing; non-solicitation and confidentiality are required .
- Term length: No fixed term; at-will employment .
- Indemnification: Standard indemnification agreement expected .
Investment Implications
- Alignment and retention: Significant time-based and performance-based equity with double-trigger CIC acceleration should reduce near-term departure risk and align Brown with multi-year TSR outcomes; watch for PSU metric disclosure (likely ARR/EBITDA continuity) .
- Insider selling pressure: RSU vesting begins Dec 15, 2026 with quarterly cadence; monitor Form 4s and any 10b5-1 plans for scheduled sales, which could introduce periodic supply; near-term selling pressure minimal prior to first vest .
- Governance quality: Independent Compensation Committee, external advisor (Compensia), clawback compliance, no tax gross-ups, and rigorous bonus/PSU structure support pay-for-performance discipline; lack of CFO ownership minimum is a mild alignment gap vs CEO/directors .
- Watch items: 8-K/DEF 14A updates for PSU metrics and supplemental equity terms; Q4’25–FY2026 guidance impact from CFO transition; potential CIC scenarios given activist engagement earlier in 2025 (JANA board additions) .
Sources: Appointment, compensation, and severance terms ; company performance context ; compensation design/governance and policies . Additional confirmations: SEC filing mirrors via StockTitan/Last10K and Rapid7 IR release .