Aman Narang

About Aman Narang

Aman Narang, age 42, is Toast’s Co-Founder, Chief Executive Officer (since January 1, 2024), and a Class III director whose term expires in 2027. He holds B.S. and M.S. degrees in Computer Science from MIT and previously worked in product management at Oracle/Endeca; he has served on Toast’s board in multiple periods and continuously since January 2021 . In 2024, Toast achieved first-time GAAP profitability with net income of $19M, Adjusted EBITDA of $373M, and 34% YoY growth in non-GAAP subscription services and financial technology solutions gross profit to $1,417M; the company added ~28,000 net new locations (ending ~134,000) and continued expansion into enterprise, international, and retail . Since the IPO, cumulative TSR implies a $100 investment fell to $58 by year-end 2024 versus $170 for the S&P 500 IT peer index; pay-versus-performance exhibits directional alignment to Adjusted EBITDA and TSR given equity-heavy compensation .

Past Roles

External Roles

Fixed Compensation

Performance Compensation

Annual Short-Term Incentive (STI) – 2024 design and outcome

Notes:

• Targets/ranges set ex-acquisition contributions; MBOs used as multiplier; no bonus if financial funding is zero .

Long-Term Incentives (LTI) – 2024 awards

Compensation mix and practices:

• 2024 LTI split: 60% options (pay-for-performance leverage), 40% RSUs (retention and lower dilution); options vest contingent on price appreciation above $24.65 .
• Anti-hedging/anti-pledging policy; use of Rule 10b5-1 plans required for insider sales; clawback policy effective Oct 2, 2023 .

Equity Ownership & Alignment

• Beneficial ownership: 793,566 Class A shares; 22,075,340 Class B shares; options and RSUs exercisable/settling within 60 days: 517,680 Class A equivalent (493,665 options + 24,015 RSUs); voting power ~16.6% (Class B carries 10 votes/share) .
• Outstanding equity awards (selected CEO line items at 12/31/2024):
  • Options exercisable/unexercisable: 2019 grants fully exercisable (1,425,000 and 1,662,500, $1.51); 2021 grant 75,000 exercisable ($15.26); 2022 grant 210,621/95,737 at $17.38; 2023 grant 114,120/190,201 at $17.33; 2024 grant 46,295/324,068 at $24.65 .
  • Unvested RSUs: tranches of 3,125 (2021), 17,605 (2022), 63,305 (2023), 176,363 (2024), all scheduled quarterly vesting; market value references provided at $36.45 as of 12/31/2024 .
• 2024 realized vesting/transactions: 70,850 shares vested from RSUs valued at ~$1.79M; no option exercises by Mr. Narang in 2024 .
• Ownership policy: CEO/founders must hold the lesser of 50,000 shares or $2.5M in value by 12/31/2027; directors/executives also subject to guidelines; hedging and pledging are prohibited .
• Insider selling pressure considerations: quarterly vesting cadence (RSUs and options) and required 10b5-1 plans create systematic, pre-planned liquidity events; pledging/margin sales are prohibited .

Employment Terms

• Severance and Change-in-Control (CIC) Policy (double-trigger; no single-trigger vesting):
  • Non-CIC termination without cause (or CEO good reason): 12 months base salary, prorated target bonus, 12 months employer-equivalent health contributions, and acceleration of time-based equity that would have vested in the next 12 months .
  • CIC termination without cause or good reason (within CIC period): 1.5x (12 months base + target bonus) in cash, prorated target bonus, up to 18 months employer-equivalent health contributions, and full acceleration of unvested time-based equity; performance awards per award terms .
  • 280G gross-up: none; single-trigger equity vesting prohibited .
• CEO Severance Letter (effective Jan 1, 2024): enhances “good reason” definition; ensures severance eligibility upon CEO good reason resignations outside/within CIC period; sets floors for severance calculations at ≥$250,000 base and ≥$185,000 target bonus; requires board service resignation to receive severance unless waived .
• Potential payout table (as of 12/31/2024, share price $36.45): Non-CIC scenario estimated equity acceleration ~$7.7M; CIC scenario full equity acceleration ~$19.2M, with corresponding cash and healthcare amounts per policy .

Board Governance

• Board service: Class III director through 2027; not independent as CEO; no committee assignments .
• Chair/CEO split: independent Chair (Mark Hawkins) since Jan 1, 2024; board majority independent; committee independence confirmed .
• Meeting attendance: each director attended ≥75% of board and committee meetings in 2024; all directors attended the 2024 annual meeting .
• As an employee director, Mr. Narang receives no separate director compensation .

Director Compensation (as relevant to dual role)

• Non-employee director program includes $50,000 annual retainer, committee retainers, and $225,000 annual RSU grants (vesting by next annual meeting). Employee directors receive no additional fees .
• Director stock ownership guideline: 4x annual cash retainer by the later of 12/31/2027 or 5 years from joining the board .

Compensation Architecture, Peer Group, and Shareholder Feedback

• Pay mix: base salary + STI + equity (options/RSUs). Equity awards vest over multiple years; options are not discounted or repriced .
• 2024 STI metrics: RGP (70%) and Adjusted EBITDA (30%) with rigorous thresholds/maximums; 2024 payout at 136% of target based on above-target performance .
• Independent consultant: Compensia; annual peer group review; uses 25th/50th/75th percentiles as references (not hard targets) .
• 2024 say-on-pay support ~97%; no changes made to 2024 program as a result .

Performance & Track Record (company context)

Compensation Risk, Controls, and Policies

• Anti-hedging and anti-pledging policy; no margin pledges; 10b5-1 plan usage required for exec sales .
• Clawback policy (Oct 2, 2023) aligned with SEC rules; applies to incentive-based pay for 3 fiscal years prior to restatement .
• No 280G tax gross-ups; no single-trigger equity vesting; multi-year vesting to mitigate risk .
• Equity award grant policy formalized; RSU sizing methodology moved from 90-day to 10-day average price effective Aug 1, 2024 .

Equity Ownership & Beneficial Owners (governance context)

• Mr. Narang’s beneficial holdings: 22.1M Class B (26.4% of Class B outstanding) and 0.79M Class A, with 16.6% voting power; options/RSUs exercisable/settling within 60 days noted above .
• Anti-pledging policy suggests no shares are pledged; none disclosed .

Employment & Contracts (additional)

• CEO is to be nominated to the board while serving as CEO; severance subject to board resignation at termination unless waived .
• Non-compete/non-solicit terms are not disclosed in the proxy; no tax gross-ups; standard indemnification applies .

Investment Implications

• Alignment: Heavy at-risk pay (options 60% of LTI) linked to share price and multi-year vesting aligns CEO incentives with long-term value creation; prohibition on hedging/pledging and ownership guidelines further reinforce alignment .
• Retention vs dilution: Material outstanding unvested equity and double-trigger CIC protection reduce flight risk; quarterly vesting creates predictable supply that may modestly pressure float around vest dates, mitigated by 10b5-1 plans and anti-pledging .
• Pay-for-performance: 2024 STI tied to growth (RGP) and profitability (Adjusted EBITDA) produced above-target payouts on strong execution; shareholders showed strong support (97% say-on-pay) .
• Governance: Separation of Chair/CEO and majority-independent board address dual-role concerns; Aman is CEO and director, but not Chair, reducing independence issues typically linked with combined roles .
• Track record: Return to GAAP profitability and significant Adjusted EBITDA improvement in 2024 support confidence; however, cumulative TSR since IPO trails sector peers, increasing pressure for durable cash generation and efficient growth under the new CEO .