Freshworks Cancels Performance Award for CEO Girish Mathurbootham
Board of Directors at Freshworks Revokes 6 Million Stock Units
The board of directors at Freshworks, a Software-as-a-Service (SaaS) firm, has decided to cancel the performance award of six million stock units designated for the company's founder and CEO, Girish Mathurbootham, in 2022. This significant decision was recently disclosed in a filing with the US Securities and Exchange Commission (SEC).
Challenging Macroeconomic Conditions as the Reason for Cancellation
Freshworks, a Nasdaq-listed company, attributed the cancellation of the CEO's performance award to adjustments in performance targets caused by difficult macroeconomic conditions. The decision was made due to factors beyond the control of the company's leadership. The filing, dated February 16, clarified that the stock price milestones set by the award had become unattainable based on the current stock price. Consequently, the CEO's Performance-based Restricted Stock Units (PRSU) award no longer held the expected retention value initially anticipated during its allocation.
New Long-Term Equity Incentive Award Valued at $19 Million for Mathurbootham
Despite the cancellation of the performance award, Mathurbootham is still set to receive a new annual long-term equity incentive award valued at $19 million. The decision to revoke the CEO PRSU award and replace it with an annual long-term equity incentive award for 2024 was thoughtfully evaluated, taking into consideration the interests of the company's stockholders as part of the long-term equity incentive program.
Freshworks' Stock-Based Compensation Expense for 2023
Freshworks reported a total stock-based compensation expense of $212 million for the year 2023. Following its successful initial public offering (IPO) in 2021, the company's board originally granted a multi-year performance-based restricted stock unit award to Mathurbootham, consisting of 6 million stock units valued at a total of $131 million.
Strong Q4 Revenue Recorded, Projected Revenue for 2024
Freshworks experienced a robust fourth quarter, driven by the increased demand for its AI-powered customer support and IT services products. The company reported a Q4 revenue of $160.1 million. Headquartered in San Mateo, California, Freshworks serves prominent clients such as Nucor, S&P Global, and Bridgestone. One of their main products, Freshservice, is an IT service management solution that helps businesses streamline employee onboarding and other services. Despite competing against larger companies like Salesforce and Zendesk, Freshworks projects its revenue for 2024 to range between $703.5 million and $711.5 million.
Analyst comment
Positive news: Freshworks recorded strong revenue in Q4 and is projecting high revenue for 2024. They will be granting the CEO a new annual long-term equity incentive award valued at $19 million.
Analyst prediction: Despite the cancellation of the performance award, the market is expected to remain stable as Freshworks continues to see strong revenue growth and projects promising numbers for the future.
