Hugo Sarrazin
UdemyAbout Hugo Sarrazin
Hugo Sarrazin (age 56) was appointed President & Chief Executive Officer of Udemy and joined the Board as a Class III director effective March 12, 2025. He holds a Ph.D. and M.Sc. in engineering from Stanford University and a B. App. Sc. in engineering from the University of Ottawa . Prior to his appointment, Udemy delivered 2024 revenue of $786.6M (+8% YoY), Adjusted EBITDA of $43.0M (+451% YoY), and Adjusted EBITDA margin of 5.5% (+400 bps YoY); the company’s 2024 short-term bonus paid 0% due to revenue below threshold despite above-target margin, and 2024 PSU payouts for other NEOs funded at 45% on blended metrics . Say‑on‑pay support was 99% at the 2024 annual meeting, and the 2025 proxy reiterates pay-for-performance design with independent oversight .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| UKG Inc. | EVP, Chief Product & Technology Officer (Oct 2021–Apr 2024); President, CPTO (Apr 2024–Feb 2025) | 2021–2025 | Led global product and technology; accelerated innovation via cloud migration and M&A; UKG recognized by Fortune and Fast Company for HR tech innovation . |
| McKinsey & Company | Senior Partner; led Silicon Valley business technology practice; Executive Committee member (2019–2021) | ~1994–2021 | Guided global technology/digital transformations; co‑founded McKinsey Digital Labs and McKinsey Design . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Udemy, Inc. | Director (Class III) | Mar 2025–Present | Management director; no Board committees . |
| Spencer Stuart | Director | Current (as of Mar 2025) | Provides strategic guidance on corporate performance, governance, cybersecurity . |
Fixed Compensation
| Component | Terms |
|---|---|
| Base Salary | $600,000 per year . |
| Target Annual Bonus | 100% of base salary; goals set by Board/Comp Committee . |
| Benefits | Eligible for standard executive benefits; at‑will employment; arbitration provisions . |
Performance Compensation
| Element | Value/Metric | Design and Vesting | Notes |
|---|---|---|---|
| Initial CEO RSU | $10,000,000 | Time‑based RSUs under 2021 Plan: 1/3 vests on 1‑year anniversary of Start Date (Mar 12, 2026), remainder vests in equal quarterly installments over the next 24 months, subject to continued service . | Number of RSUs based on 14‑day trailing simple moving average closing price ending on Start Date . |
2024 company incentive framework (context for design; Sarrazin was not a 2024 NEO):
- Short‑Term Incentive (cash): 100% based on corporate Revenue and Adjusted EBITDA Margin; 2024 bonus paid 0% as revenue ($786.6M) fell below threshold, despite adjusted EBITDA margin for comp purposes at 5.9% (target 2.7%, max 5.0%) .
- Long‑Term Incentive (for other senior leaders): 50% RSUs / 50% PSUs; PSUs weighted 70% UB ARR and 30% Adjusted EBITDA Margin. 2024 PSU payout funded at 45% (UB ARR below threshold; adjusted EBITDA margin above max) with vesting 25% at certification in Mar 2025 and remainder quarterly over three years, service‑based .
| 2024 STI Matrix Inputs | Threshold | Target | Maximum | Actual |
|---|---|---|---|---|
| Revenue ($) | $795M | $815.5M | $835M | $786.6M → below threshold . |
| Adjusted EBITDA Margin (for comp) | 1.5% | 2.7% | 5.0% | 5.9% . |
| Payout | — | — | — | 0% (both metrics must meet threshold) . |
| 2024 PSU Metrics | Weight | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|---|
| UB ARR | 70% | $550.0M | $586.4M | $622.5M | $516.0M | 0% . |
| Adjusted EBITDA Margin (for PSU) | 30% | 1.5% | 2.7% | 5.3% | 5.9% | 150% . |
| Blended Outcome | — | — | — | — | — | 45% . |
Equity Ownership & Alignment
- Beneficial ownership (as of Mar 31, 2025): no common shares reported for Sarrazin (initial RSUs unvested and not reportable within 60 days) .
- Anti‑hedging and anti‑pledging: Company prohibits hedging and pledging by directors, officers, and employees; margin accounts prohibited; derivatives trading barred (except company awards) .
- Stock ownership guidelines: CEO required to hold 5x base salary; executives must maintain meaningful ownership; clawback policy compliant with Nasdaq/SEC adopted and updated (2022/2023) .
- 10b5‑1 plans: Permitted subject to strict conditions (cooling‑off, good‑faith, single‑plan limits); pre‑clearance and blackout policies apply .
| Ownership (Mar 31, 2025) | Amount | Notes |
|---|---|---|
| Common Shares Beneficially Owned | 0 | Reported as “—” in beneficial ownership table . |
| Initial CEO RSU Grant | $10,000,000 (value) | Time‑vested; share count set by 14‑day SMA at grant; cliff on Mar 12, 2026; then quarterly vesting over 24 months . |
Employment Terms
| Scenario | Cash Severance | Health Benefits | Equity Treatment | Other |
|---|---|---|---|---|
| Termination without Cause / Good Reason outside CIC period | Lump sum equal to 12 months base salary; earned prior‑year bonus (if unpaid); pro‑rated target bonus for year of termination . | Company‑paid COBRA up to 12 months (or taxable equivalent if needed) . | Special protection for initial RSUs: if termination before 1‑year anniversary, 1/3 vests; if on/after 1‑year anniversary, an additional 1/12 vests beyond vested amounts . | At‑will; arbitration; return of property; release required . |
| CIC + Qualifying Termination (double trigger) | Lump sum equal to 12 months base salary + 100% of target bonus . | Company‑paid COBRA up to 12 months (or taxable equivalent) . | 100% acceleration of unvested equity; performance awards deemed at target unless award says otherwise . | 280G “best‑net” cutback; no excise tax gross‑ups . |
Board Governance
- Role/independence: Sarrazin serves as CEO and director and is not independent under Nasdaq rules; Udemy separates Chair and CEO roles, with an independent Chair (Sohaib Abbasi) and fully independent standing committees (Audit; Compensation; Nominating & Corporate Governance) .
- Executive sessions: Independent directors meet in executive session; the Board holds robust annual self‑evaluations .
- Insider trading/pledging: Strict policy prohibits hedging/pledging/margin; quarterly and special blackouts; pre‑clearance for covered insiders .
- Management directors and pay: Management directors do not receive separate director compensation .
Compensation Committee Analysis
- Committee composition and advisor: Compensation Committee is independent and engages FW Cook as its independent advisor; reviews peer group annually and oversees clawback policy and stock ownership guidelines .
- Peer group for 2024 benchmarking included sixteen SaaS/EdTech comparables (e.g., Chegg, Coursera, Duolingo, Five9, Smartsheet, Zuora) with defined size criteria; removals/additions explained .
- Practices: Double‑trigger CIC vesting; no excise tax gross‑ups; annual say‑on‑pay; emphasis on equity and performance metrics (UB ARR, Adjusted EBITDA margin); 2024 say‑on‑pay approval 99% .
Employment & Contracts (Retention Risk, Transition)
- Start date/tenure: Effective March 12, 2025; at‑will; no fixed term .
- Non‑compete/solicit: Agreement contains confidentiality and inventions obligations; the filed exhibits do not specify a non‑compete term; arbitration applies .
- Related party transactions: None disclosed regarding Sarrazin; no family relationships; appointment included Board seat fixed at nine members .
Performance & Track Record
- UKG: Led product and technology, accelerated innovation via cloud migration and M&A; industry recognition for HR tech innovation .
- McKinsey: Senior Partner; executive committee (2019–2021); founded Digital Labs and Design; advised on product scaling, SaaS strategy, and M&A .
- Company context prior to his start: 2024 revenue $786.6M (+8% YoY), Adjusted EBITDA $43.0M (+451% YoY), Adjusted EBITDA margin 5.5% (+400 bps YoY) .
Director Compensation (for completeness)
- Outside directors receive cash/RSU retainers per policy; management directors (including Sarrazin) receive no separate Board pay .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay received 99% approval; company continues annual advisory vote and stockholder outreach on executive pay .
Risk Indicators & Red Flags
- Clawback policy in place and updated under SEC/Nasdaq rules .
- No excise tax gross‑ups; 280G “best‑net” cutback used .
- Anti‑hedging/pledging/margin restrictions reduce misalignment/pledge risk .
- Officer exculpation charter amendment proposed in 2025 to aid attraction/retention while preserving stockholder rights under Delaware law .
Compensation Peer Group (Benchmarking)
- 2024 peer group: Zuora; Chegg; Alteryx; Coursera; Five9; Skillsoft; Appian; Duolingo; Stride; Alarm.com; Fastly; Upwork; Instructure; BlackLine; Smartsheet; Everbridge .
Equity Ownership & Beneficial Holders (Company‑wide context)
- Major holders include Insight Partners affiliates (25.6%), MIH Edtech/Prosus (9.4%), Caledonia (7.9%), and Vanguard (6.3%) as of March 31, 2025 .
Investment Implications
- Alignment/retention: The $10M initial CEO RSU is entirely time‑based with a 1‑year cliff (first vest Mar 12, 2026) and subsequent quarterly vesting over two years—strong multi‑year retention and alignment but lower near‑term performance linkage versus PSUs; other senior packages retain a 50% PSU structure tied to UB ARR and Adjusted EBITDA margin .
- Governance mitigants: Independent Chair, fully independent committees, clawback, ownership guidelines, and anti‑pledging/hedging policies help offset dual CEO/Director concerns .
- Economics in downside/CIC: Competitive severance with double‑trigger equity acceleration and no excise tax gross‑ups, plus COBRA for 12 months; special protection on the initial RSU reduces early‑termination risk before the 1‑year cliff .
- Execution focus: Background in scaling SaaS, product innovation, and AI at UKG/McKinsey aligns with Udemy’s 2024 shift to profitable growth and enterprise expansion; investors should monitor 2025–2026 KPI targets (UB ARR, margin) and compensation design evolution for the CEO beyond the initial RSU .