Tim Adams
Rapid7About Tim Adams
Tim Adams, age 65, is Rapid7’s Chief Financial Officer (CFO) since January 2022; he holds a B.S. in accounting from Murray State University and an MBA from Boston University, and previously served as CFO at BitSight and ObsEva and began his career at PricewaterhouseCoopers . Company performance in 2024: revenue $844 million, ARR $840 million, GAAP income from operations $35 million, non-GAAP operating income $164 million, Adjusted EBITDA $188 million, operating cash flow $172 million, and free cash flow $154 million . Rapid7’s pay-versus-performance disclosure shows the value of a fixed $100 investment in Company TSR at $71.81 for 2024, with Revenue $844,007k and Net Income $25,526k (company TSR measured cumulatively per SEC rules) .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Rapid7, Inc. | Chief Financial Officer | Jan 2022–present | Finance leadership at a global cybersecurity software and services company . |
| BitSight Technologies, Inc. | Chief Financial Officer | Apr 2020–Dec 2021 | CFO of a cybersecurity ratings company . |
| ObsEva SA | Chief Financial Officer | Jan 2017–Mar 2020 | CFO of a biotech company . |
| PricewaterhouseCoopers LLP | Public accounting (start of career) | Not disclosed | Foundational audit/accounting experience . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Model N (NYSE: MODN) | Director; Nominating & Corporate Governance Committee member; Chair of Audit Committee | Dec 2016–Jun 2024 | Public revenue management solutions company; board service concluded June 2024 . |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $390,000 | $410,000 | $410,000 |
| Stock Awards ($) | $11,999,997 | $3,596,128 | $4,305,521 |
| Non-Equity Incentive ($) | — | — | $145,000 |
| All Other Compensation ($) | $3,000 | $3,000 | $3,000 |
| Total ($) | $12,392,997 | $4,009,128 | $4,863,521 |
| 2024 Base Salary | % Increase from 2023 |
|---|---|
| $410,000 | 0% |
| 2024 Target Bonus ($) | Actual Payout ($) | Actual Payout % |
|---|---|---|
| $290,000 | $145,000 | 50% |
Performance Compensation
Annual Performance Bonus (FY 2024)
| Metric | Weighting | Target | Actual | Payout as % of Target | Weighted payout |
|---|---|---|---|---|---|
| Non-GAAP Operating Income | 50% | $165–176m (100% payout band) | $166.8m | 100% | 50% |
| Annualized Recurring Revenue (ARR) | 50% | $905–911m (100% payout band) | $840m | 0% | 0% |
| Total | 100% | — | — | — | 50% |
Notes:
- Thresholds and payout ranges established ex-ante; bonus capped at 125% of target; no discretionary adjustments applied for 2024 .
- Executives could elect fully-vested RSUs in lieu of cash with a 5% value uplift; Adams did not elect RSUs; CEO did .
PSUs (Grant in 2024; Performance Period FY 2024; Vesting 2025–2027)
| Metric | Weighting | Target | Actual | Payout as % of Target | PSU Earned % |
|---|---|---|---|---|---|
| Net ARR | 50% | ≥$91m (100% payout) | $34.1m | 0% | 0% |
| Adjusted EBITDA | 50% | $186–197m (100% payout band) | $188m | 100% | 50% |
| Total | 100% | — | — | — | 50% |
| Tim Adams PSU Grant (#) | PSU Earned (%) | Earned PSUs (#) | Vesting Schedule |
|---|---|---|---|
| 35,689 | 50% | 17,845 | Vest in equal tranches on Feb 15, 2025, 2026, 2027, subject to continued service . |
Equity Ownership & Alignment
| Beneficial Ownership (as of Mar 31, 2025) | Shares (#) | % of Outstanding |
|---|---|---|
| Tim Adams | 98,205 | <1% (*) |
Footnote: Includes 19,076 shares issuable upon RSU settlement within 60 days of March 31, 2025 .
| Unvested Awards (12/31/2024) | Shares (#) | Market/Payout Value ($) at $40.23 |
|---|---|---|
| RSUs (grant 2/15/2024) | 26,767 | $1,076,836 |
| PSUs (earned; grant 2/15/2024) | 17,845 | $717,904 |
| RSUs (grant 2/15/2023) | 27,224 | $1,095,222 |
| RSUs (grant 1/3/2022) | 31,732 | $1,276,578 |
| Total unvested units | 103,568 | $4,166,541 |
Vesting schedules:
- RSUs granted 2/15/2024: twelve equal quarterly installments starting May 15, 2024, over 3 years .
- PSUs earned 2024: vest equally on Feb 15, 2025, 2026, 2027 .
- RSUs granted 2/15/2023: twelve equal quarterly installments starting May 15, 2023 .
- RSUs granted 1/3/2022: 25% on Feb 15, 2023; 6.25% quarterly thereafter over 4 years .
Ownership guidelines and pledging:
- Rapid7 requires CEO and non-employee directors to meet stock ownership guidelines; other executive officers (including the CFO) are not subject to minimum ownership requirements .
- Insider Trading Policy prohibits short sales, hedging, and transactions in derivatives; 10b5-1 plan adoption allowed only in open windows and when not in possession of MNPI; pledging is not disclosed as permitted and no pledging is reported for Adams .
Employment Terms
| Scenario | Cash Severance | Target Bonus Payout | COBRA Premiums | Equity Acceleration |
|---|---|---|---|---|
| Termination without cause / resignation for good reason (outside CIC window) | 6 months base salary | None | Up to 6 months | None |
| Termination within 3 months prior to or 12 months after Change in Control (double-trigger) | 12 months base salary | 100% of target bonus | Up to 12 months | Accelerated vesting of all outstanding equity on termination; if awards are not assumed/continued at closing, unvested portion accelerates at closing |
Estimated benefits (assuming event on 12/31/2024):
- Outside CIC: $205,000 cash, $9,435 COBRA; total $214,435 .
- Double-trigger CIC termination: $410,000 cash, $304,500 target bonus, $18,870 COBRA, $4,166,541 equity acceleration; total $4,899,911 .
Other terms:
- Offer letter modified Aug 2023; initial grant of 101,540 RSUs and $250,000 one-time sign-on bonus in 2022, repayable if employment terminates under certain circumstances during first year .
- Clawback: Nasdaq-compliant recoupment policy adopted Oct 19, 2023; 2024 accounting restatement (stock-based compensation error correction) resulted in no recovery because performance measures excluded stock-based comp; recovery is mandatory on restatement under policy terms .
- Benefits: 401(k) match (50% up to 6% salary; $3,000 annual cap), ESPP (15% discount), standard health/welfare benefits; perquisites not material; no tax gross-ups .
Compensation Structure Notes and Peer Benchmarking
- Pay mix emphasizes performance-based compensation; RSUs considered performance-aligned via stock price exposure; PSUs tied to ARR and Adjusted EBITDA with rigorous conditions; bonus capped at 125% and requires threshold performance .
- 2024 program weighted ARR and Non-GAAP Operating Income equally (shift from 30/70 in prior year) to focus on profitable growth; bonus paid at 50% due to ARR miss despite OpInc target achievement .
- Peer groups used for market benchmarking (2024/2025 sets include BlackLine, Elastic, Five9, PagerDuty, Qualys, SentinelOne, Tenable, Varonis, Workiva, Zscaler; plus additions/removals noted) .
- Say-on-pay approval: 96% in 2024, reflecting investor support for alignment approach .
Investment Implications
- Alignment: Adams’ compensation is highly equity-based with multi-year vesting and PSUs linked to profitability (Adjusted EBITDA) and growth (ARR), supporting long-term alignment; quarterly RSU vesting and annual PSU tranches may create predictable sale events to cover taxes, indicating steady supply rather than lump-sum selling pressure .
- Retention: Double-trigger CIC protection (12 months base, 100% target bonus, full equity acceleration) and severance outside CIC (6 months base) provide balanced retention without tax gross-ups; unassumed awards accelerate at closing, potentially affecting transaction incentives .
- Execution risk: 2024 results missed ARR thresholds while meeting profitability targets, leading to 50% bonus and 50% PSU earn; compensation design penalizes growth shortfalls, signaling discipline but highlighting growth execution risk in near term .
- Governance/controls: Robust clawback and insider trading controls; no pledging disclosed; say-on-pay support (96%) reduces governance overhang .
Overall, Adams’ package is structurally aligned to profitable growth with measured CIC protections; current vesting cadence suggests orderly equity settlement rather than concentrated selling, while ARR underperformance embeds performance risk into future payouts .