PTC PTC Inc

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549​

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.   )

CHECK THE APPROPRIATE BOX:

(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)​

PAYMENT OF FILING FEE (CHECK ALL BOXES THAT APPLY):

 

ABOUT PTC

 

MESSAGE FROM OUR LEAD INDEPENDENT DIRECTOR

 

 

NOTICE OF 2024 ANNUAL STOCKHOLDERS’ MEETING

Other matters that are properly brought before the meeting may also be considered.

HOW TO VOTE

 

 

TABLE OF CONTENTS

​	1	​	​	2023 HIGHLIGHTS​	​
​	1	​	​	Business Performance Highlights	​
​	1	​	​	Sustainability Highlights	​
​	2​	​	​	Proxy Summary​	​
​	2	​	​	Director Nominees	​
​	3	​	​	Corporate Governance Highlights	​
​	3	​	​	Executive Compensation Highlights	​
​	4	​	​	2023 PricewaterhouseCoopers LLP Services and Fees	​
​	5​	​	​	Corporate Governance and Board of Directors​	​
​	5​	​	​	Proposal 1 — Election of Directors​	​
​	5	​	​	Board Leadership Structure	​
​	6	​	​	Snapshot of Board Composition	​
​	7	​	​	Specific Qualifications, Skills, and Experience	​
​	8	​	​	Board Diversity	​
​	9	​	​	Director Nominees	​
​	9	​	​	Independence of Our Directors	​
​	9	​	​	Biographies	​
​	14	​	​	Board and Committee Meetings and Attendance at the Annual Meeting	​
​	14	​	​	Director Election Process and Voting Standard	​
​	14	​	​	Board Evaluation Process	​
​	15	​	​	Director Nominations and Board Refreshment	​
​	15	​	​	Board Risk Oversight	​
​	17	​	​	The Committees of the Board	​
​	20	​	​	Director and Executive Officer Stock Ownership Requirements	​
​	20	​	​	No Hedging or Pledging of PTC Equity	​
​	20	​	​	Director Compensation	​
​	21	​	​	Director Compensation Table	​
​	22	​	​	Communications with the Board	​
​	23​	​	​	Executive Compensation​	​
​	23	​	​	Information About Our Executive Officers	​
​	25​	​	​	Proposal 2 — Advisory Vote on the Compensation of Our Named Executive Officers	​
​	27	​	​	Compensation Discussion and Analysis	​
​	27	​	​	Our Compensation Philosophy	​
​	27	​	​	Our Compensation Design and Practices	​
​	29	​	​	FY2023 Performance-Based Compensation	​
​	32	​	​	FY2023 Compensation Decisions	​
​	34	​	​	How We Set Executive Compensation	​

​	35	​	​	Other Important Elements of Our Compensation Program	​
​	38	​	​	Annual Assessment of Risks Associated with Our Compensation Programs	​
​	39	​	​	Compensation Committee Report	​
​	40	​	​	Compensation Tables	​
​	40	​	​	Summary Compensation Table	​
​	41	​	​	Grants of Plan-Based Awards	​
​	42	​	​	Outstanding Equity Awards at Fiscal Year-End	​
​	44	​	​	Option Exercises and Stock Vested	​
​	44	​	​	Potential Payments Upon Termination or Change in Control	​
​	47	​	​	Pay Ratio Disclosure	​
​	48	​	​	Pay versus Performance Disclosure	​
​	50​	​	​	Auditor Matters​	​
​	50​	​	​	Proposal 3 — Advisory Vote to Confirm the Selection of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm for 2024​	​
​	50	​	​	Engagement of Independent Auditor and Approval of Professional Services and Fees	​
​	52	​	​	PricewaterhouseCoopers LLP Services and Fees	​
​	53	​	​	Report of the Audit Committee	​
​	54​	​	​	Information about PTC Common Stock Ownership​	​
​	54	​	​	Stockholders Who Own at Least 5% of PTC	​
​	54	​	​	Stock Owned by Directors and Officers	​
​	55	​	​	Delinquent Section 16(a) Reports	​
​	56​	​	​	Transactions with Related Persons​	​
​	56	​	​	Review of Transactions with Related Persons	​
​	56	​	​	Transactions with Related Persons	​
​	57​	​	​	Information about the Annual Meeting and Voting​	​
​	57	​	​	General Information	​
​	60	​	​	Stockholder Proposals and Nominations	​
​	61	​	​	Help Us Reduce Our Environmental Impact	​
​	A-1​	​	​	Appendix A — Operating and Non-GAAP Financial Measures​	​
​	A-1	​	​	Operating Measure	​
​	A-1	​	​	Non-GAAP Financial Measures	​
​	A-2	​	​	Performance Measures Used under Our Executives’ Performance-Based Compensation	​
​	A-2	​	​	Calculations and Reconciliations	​

 

 

CAUTIONARY NOTE ABOUT
FORWARD-LOOKING STATEMENTS

This Proxy Statement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. In particular, statements that are not historical facts, including but not limited to, statements about our anticipated financial results, capital development and growth, as well as about the development of our products, markets and workforce, are forward-looking statements. These forward-looking statements are generally identifiable by use of the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” or similar expressions, whether in the negative or affirmative. Forward-looking statements are based on our current plans, expectations and assumptions and are not guarantees of future performance. Information about factors that could cause actual results to differ materially from those in the forward-looking statements can be found in PTC’s Annual Report on Form 10-K, Forms 10-Q and other filings with the U.S. Securities and Exchange Commission. We caution readers not to place undue reliance on any forward-looking statements, which only speak as of the date made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made.

WEBSITE REFERENCES

Website references included throughout this Proxy Statement are provided for convenience. The content on the referenced websites is not incorporated herein and is not part of this Proxy Statement.

 

2023 HIGHLIGHTS

​

ARR (Annual Run Rate) is the value of our portfolio of recurring revenue contracts at the end of the period. Free cash flow is cash flow from operations net of capital expenditures. These measures are described and reconciled in Appendix A.

​

 

PROXY SUMMARY

This summary highlights information contained elsewhere in this proxy statement and does not contain all the information you should consider. You should read the entire proxy statement before voting.

All references to 2023 and 2022 refer to PTC’s fiscal years ended September 30, 2023 and 2022, respectively, unless otherwise indicated.

 

See Corporate Governance and Board of Directors for more information about our board nominees and corporate governance practices.

​

ALIGNMENT OF EXECUTIVES AND SHAREHOLDERS

FY2023 TARGET COMPENSATION MIX

(1)

Average for our named executive officers other than Mr. Barua due to the fact he was not an executive officer until July 2023.

​

See Proposal 2, Compensation Discussion and Analysis, and Executive Compensation for more information about our executive compensation policies and practices.

​

 

​

See Proposal 3 for more information about PricewaterhouseCoopers LLP’s services.

​

 

CORPORATE GOVERNANCE AND BOARD
OF DIRECTORS

​	​		​	​	JAMES HEPPELMANN	​
				​	Chairman of the Board of Directors, CEO	​

​	​		​	​	JANICE CHAFFIN	​
				​	Lead Independent Director	​

Our Board was led by an independent Chairman through July 2023. In connection with announcing our CEO succession in July 2023, Mr. Heppelmann, our CEO, was named Chairman of the Board and Ms. Chaffin was named Lead Independent Director. We believe this Board leadership structure serves the company and our shareholders well during the CEO transition by balancing our CEO’s strategic vision and priorities for the company with effective independent Board leadership and oversight. Upon the conclusion of Mr. Heppelmann’s term as Chairman in February 2024, we expect to name an independent Board Chair.

 

 

The Corporate Governance Committee believes that certain qualifications, skills, and experience should be represented on the Board, as described below, although not every member of the Board must possess all such qualifications, skills, and experience to be considered capable of making valuable contributions to the Board.

 

BOARD NOMINEES HAVE A BALANCE OF QUALIFICATIONS, SKILLS, EXPERIENCE, AND DIVERSITY

The Corporate Governance Committee’s mandate is to create and maintain a Board with a diverse set of skills and attributes that aligns with PTC’s current and anticipated future strategic needs. The Board and Corporate Governance Committee value diversity and believe that diversity among the directors as to personal and professional experiences, opinions, perspectives, and backgrounds, including diversity with respect to race, ethnicity, gender, age, and cultural backgrounds is desirable.

The Corporate Governance Committee actively seeks diverse candidates by requiring that all slates of proposed candidates include at least two racially and/or ethnically diverse candidates and opening the aperture to identify candidates that might not otherwise be identified.

BOARD DIVERSITY MATRIX AS OF JANUARY 3, 2024

 

 

 

 

 

 

We expect that each director will attend the Annual Meeting of Stockholders each year. All outside directors attended the 2023 Annual Meeting of Stockholders.

All directors stand for election each year. Directors are elected by a plurality of votes received. We maintain a Majority Voting Policy for uncontested director elections that requires a director who does not receive a majority of the votes cast for his or her proposed election to promptly tender his or her resignation from the Board. The Corporate Governance Committee will consider the resignation and recommend to the Board whether to accept the resignation. The Board will use its best efforts to act on the resignation and publicly disclose its decision and its rationale within 90 days following certification of the election results. The director tendering the resignation may not participate in the decisions of the Corporate Governance Committee or the Board that concern such resignation.

The Board conducts an annual evaluation process, which is facilitated by a third-party once every three years. In 2023, the Board completed an externally facilitated evaluation.

 

The Corporate Governance Committee is responsible for identifying and evaluating nominees for director and for recommending to the Board a slate of nominees for election at each Annual Meeting of Stockholders. Candidates may be suggested by directors, management, shareholders, or a search firm retained by the Committee. Stockholders may nominate candidates in accordance with the procedures described in Stockholder Proposals and Nominations. Candidates properly nominated by shareholders will be given the same consideration as other proposed candidates.

The Corporate Governance Committee considers the Board’s composition, including the alignment of the skills and professional experience of the directors with our long-term strategy and the Board’s gender, racial, ethnic, and LGBTQ+ diversity. The Corporate Governance Committee evaluates candidates against the standards and qualifications set forth in our Corporate Governance Guidelines and the Corporate Governance Committee Charter as well as other relevant factors.

BOARD REFRESHMENT

The Corporate Governance Committee considers each candidate’s character and professional ethics, judgment, leadership experience, business experience and acumen, familiarity with relevant industry issues, national and international experience and such other relevant skills and experience as may contribute to the Board’s effectiveness and PTC’s success. In addition, all candidates must be able to dedicate sufficient time and resources for the diligent performance of the duties required of a member of the Board and must not hold positions or interests that conflict with their responsibilities to PTC. Candidates must also comply with any other minimum qualifications for either individual directors or the Board under applicable laws or regulations. The Committee will also consider whether the candidate is independent of PTC as at least a majority of members of the Board must qualify as independent in accordance with Nasdaq independence rules.

The Board and the relevant committees review with PTC’s management the risk management practices for which they have oversight responsibility. Since overseeing risk is an ongoing process and inherent in PTC’s strategic decisions, the Board and the relevant committees do not view risk in isolation but discuss risk throughout the year in relation to ongoing operations and proposed actions and initiatives.