0001474432DEF 14AFALSE00014744322022-02-072023-02-05iso4217:USD00014744322021-02-012022-02-0600014744322020-02-032021-01-310001474432ecd:PeoMemberpstg:EquityAwardsReportedValueMember2022-02-072023-02-050001474432ecd:PeoMemberpstg:EquityAwardsReportedValueMember2021-02-012022-02-060001474432ecd:PeoMemberpstg:EquityAwardsReportedValueMember2020-02-032021-01-310001474432ecd:PeoMemberpstg:EquityAwardsGrantedDuringTheYearUnvestedMember2022-02-072023-02-050001474432ecd:PeoMemberpstg:EquityAwardsGrantedDuringTheYearUnvestedMember2021-02-012022-02-060001474432ecd:PeoMemberpstg:EquityAwardsGrantedDuringTheYearUnvestedMember2020-02-032021-01-310001474432ecd:PeoMemberpstg:EquityAwardsGrantedDuringTheYearVestedMember2022-02-072023-02-050001474432ecd:PeoMemberpstg:EquityAwardsGrantedDuringTheYearVestedMember2021-02-012022-02-060001474432ecd:PeoMemberpstg:EquityAwardsGrantedDuringTheYearVestedMember2020-02-032021-01-310001474432pstg:EquityAwardsGrantedInPriorYearsUnvestedMemberecd:PeoMember2022-02-072023-02-050001474432pstg:EquityAwardsGrantedInPriorYearsUnvestedMemberecd:PeoMember2021-02-012022-02-060001474432pstg:EquityAwardsGrantedInPriorYearsUnvestedMemberecd:PeoMember2020-02-032021-01-310001474432ecd:PeoMemberpstg:EquityAwardsGrantedInPriorYearsVestedMember2022-02-072023-02-050001474432ecd:PeoMemberpstg:EquityAwardsGrantedInPriorYearsVestedMember2021-02-012022-02-060001474432ecd:PeoMemberpstg:EquityAwardsGrantedInPriorYearsVestedMember2020-02-032021-01-310001474432ecd:PeoMemberpstg:EquityAwardsGrantedInPriorYearsForfeitedMember2022-02-072023-02-050001474432ecd:PeoMemberpstg:EquityAwardsGrantedInPriorYearsForfeitedMember2021-02-012022-02-060001474432ecd:PeoMemberpstg:EquityAwardsGrantedInPriorYearsForfeitedMember2020-02-032021-01-310001474432ecd:NonPeoNeoMemberpstg:EquityAwardsReportedValueMember2022-02-072023-02-050001474432ecd:NonPeoNeoMemberpstg:EquityAwardsReportedValueMember2021-02-012022-02-060001474432ecd:NonPeoNeoMemberpstg:EquityAwardsReportedValueMember2020-02-032021-01-310001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedDuringTheYearUnvestedMember2022-02-072023-02-050001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedDuringTheYearUnvestedMember2021-02-012022-02-060001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedDuringTheYearUnvestedMember2020-02-032021-01-310001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedDuringTheYearVestedMember2022-02-072023-02-050001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedDuringTheYearVestedMember2021-02-012022-02-060001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedDuringTheYearVestedMember2020-02-032021-01-310001474432pstg:EquityAwardsGrantedInPriorYearsUnvestedMemberecd:NonPeoNeoMember2022-02-072023-02-050001474432pstg:EquityAwardsGrantedInPriorYearsUnvestedMemberecd:NonPeoNeoMember2021-02-012022-02-060001474432pstg:EquityAwardsGrantedInPriorYearsUnvestedMemberecd:NonPeoNeoMember2020-02-032021-01-310001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedInPriorYearsVestedMember2022-02-072023-02-050001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedInPriorYearsVestedMember2021-02-012022-02-060001474432ecd:NonPeoNeoMemberpstg:EquityAwardsGrantedInPriorYearsVestedMember2020-02-032021-01-310001474432pstg:EquityAwardsGrantedInPriorYearsForfeitedMemberecd:NonPeoNeoMember2022-02-072023-02-050001474432pstg:EquityAwardsGrantedInPriorYearsForfeitedMemberecd:NonPeoNeoMember2021-02-012022-02-060001474432pstg:EquityAwardsGrantedInPriorYearsForfeitedMemberecd:NonPeoNeoMember2020-02-032021-01-31000147443212022-02-072023-02-05000147443222022-02-072023-02-05000147443232022-02-072023-02-05000147443242022-02-072023-02-05000147443252022-02-072023-02-05
COMPENSATION COMMITTEE REPORT
The compensation committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the compensation committee recommended to the Pure board of directors that the section titled "Compensation Discussion and Analysis" be incorporated by reference in Pure's Annual Report on Form 10-K for fiscal 2023 and included in this proxy statement.
Compensation and Talent Committee
ANDREW BROWN (chair)
ROXANNE TAYLOR
SUSAN TAYLOR
GREG TOMB
The material in this report is not “soliciting material,” is not deemed “filed” with the SEC and is not to be incorporated by reference in any filing of the company under the Securities Act or the Exchange Act, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
OUR EXECUTIVE OFFICERS
The biographical information for Messrs. Giancarlo and Colgrove are as set forth above in the section titled “Election of Directors.” The following is the biographical information for our other named executive officers, as of the date of this proxy statement:
| | | | | |
| KEVAN KRYSLER Chief Financial Officer Age: 52 |
|
| |
Kevan Krysler has served as our Chief Financial Officer since December 2019. Previously Mr. Krysler worked at VMware, Inc., a provider of information infrastructure technology and solutions, from August 2013 to December 2019, and most recently served as Senior Vice President, Finance, and Chief Accounting Officer. Prior to VMware, Inc., Mr. Krysler was a partner with KPMG, an accounting firm, where he served both multinational and emerging software and technology companies. Mr. Krysler received bachelor degrees in Accountancy and Business Administration from the University of Oklahoma. |
| |
| | | | | |
| AJAY SINGH Chief Product Officer Age: 65 |
|
| |
Ajay Singh has served as our Chief Product Officer since January 2021. Previously, Mr. Singh worked at VMware from May 2015 to January 2021, most recently as the Senior Vice President – General Manager of the Cloud Management Business Unit. Mr. Singh received a Bachelor of Technology degree in Electrical Engineering from the Indian Institute of Technology, Kanpur, an M.S. Electrical Engineering (Computer Engineering) from Carnegie-Mellon University and an M.B.A. from Stanford University Graduate School of Business. |
| |
| | | | | |
| DAN FITZSIMONS Chief Revenue Officer Age: 56 |
|
| |
Dan FitzSimons has served as our Chief Revenue Officer since November 2021. Previously, Mr. FitzSimons served in various sales leadership roles at Pure from May 2015 to November 2021, most recently serving as Pure's Vice President of Americas Sales. Prior to joining Pure, Mr. FitzSimons held sales leadership roles at a number of technology companies, including SOASTA, Limelight Networks, Symantec and Gartner. |
| |
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis provides an overview of the material elements of our executive compensation program during fiscal 2023 for our “named executive officers,” whose compensation is set forth in the Summary Compensation Table and other compensation tables contained in this proxy statement. This section discusses our executive compensation philosophy, objectives and design; how and why our compensation committee arrived at the specific compensation policies and decisions relating to fiscal 2023; the role of our compensation committee’s compensation consultant; and the compensation peer group used in evaluating our executive compensation program. This section also discusses the executive compensation-setting process in the first half of fiscal 2023 and final payout determinations following the end of fiscal 2023.
EXECUTIVE SUMMARY
For fiscal 2023, our compensation committee approved compensation packages for our executive officers that maintained our robust “pay for performance” philosophy, incentivizing continued revenue growth balanced with improved profitability. The committee retained a customer satisfaction measure, Net Promoter Score (NPS), which Pure has tracked and published for several years and which it views as critical to Pure’s long term success, and incorporated growth in subscription annual recurring revenue (ARR) as a new component, which it believes to be a valuable indicator of Pure’s success in growing its recurring subscription services revenue.
Our compensation committee aimed to tie the majority of our named executive officers’ compensation to these key performance measures, as well as share price through the use of equity awards. Specifically, in addition to a base salary, our named executive officers’ target total direct compensation included annual short-term and long-term incentives that are based on our attainment of key business objectives. For fiscal 2023, our cash bonuses were dependent on revenue, profitability and NPS, as well as individual executive goals, and our 100% performance-based equity awards were earned based on a combination of revenue and subscription ARR growth. The value of these equity awards fundamentally depends on Pure's share price. The structure of our corporate bonus program is the same for our executive officers and our broad-based employee bonus participants, driving focus on the same company priorities.
FISCAL 2023 BUSINESS AND FINANCIAL HIGHLIGHTS
We achieved impressive business and financial results in fiscal 2023, growing full year revenue to $2.75 billion, an increase of 26% year-over-year. We had record operating profits and grew subscription services revenue by 30% year-over-year.
| | | | | | | | | | | | | | |
SUSTAINED, HIGH REVENUE GROWTH | | ACCELERATED SUBSCRIPTION SERVICES REVENUE GROWTH | | |
(in billions) | | (in millions) | | ✔We maintained a high customer NPS at 81.4, the highest in the industry, and added over 1,000 new customers. ✔We grew subscription ARR to $1.1 billion, up 30% year-over-year. ✔We launched FlashBlade//S and expanded our offerings with Pure Fusion, Portworx Data Services, and our FlashArray family, and laid the groundwork for our new FlashBlade//E product. ✔We were again named a leader in the Gartner Magic Quadrants for both Primary Storage and Distributed File Systems & Object Storage. |
| | | |
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
FISCAL 2023 EXECUTIVE COMPENSATION HIGHLIGHTS
In fiscal 2023, the key highlights of our executive compensation program included:
| | | | | | | | | | | | | | | | | | | | |
| | | | | | |
UPDATED PEER GROUP | | BASE SALARY AND BONUS TARGETS | | BONUS BASED ON PERFORMANCE | | EQUITY BASED ON PERFORMANCE |
We updated our compensation peer group to ensure our executive compensation was comparable and competitive relative to similar software-driven technology companies. | | We increased base salaries by a range of 0% to 14% and set bonus targets at similar rates as prior years — ranging from 80% to 100% of base salary. | | We set cash bonus targets based on annual revenue, operating profit and NPS. We met or exceeded on these corporate metrics, and bonuses were earned based on a corporate performance factor of 125% and individual performance factors ranging from 100% to 120%. | | We granted equity awards that were 100% dependent on annual revenue and subscription ARR growth. We exceeded on this combined corporate metric, and our equity awards were earned at maximum — 150% of target. |
| | | | | | |
Our “pay for performance” design works. In fiscal 2023, we delivered revenue of $2.75 billion, growing 26% year-over-year, exceeding our 20% growth target, and non-GAAP operating profit was $457 million, exceeding our $305 million target. We increased our subscription ARR from $849 million to $1.1 billion, up 30% year-over-year, and maintained a high NPS of 81.4, the highest in our industry. We also held each executive officer accountable with individual performance objectives. Our executive officers delivered results in fiscal 2023 that exceeded the financial targets we set at the start of the year, and accordingly they received actual pay above target pay, evidencing that our financial incentives are aligning the pay of our executives with the company’s success and our stockholders' best interests.
NAMED EXECUTIVE OFFICERS DURING FISCAL 2023
Our named executive officers for fiscal 2023 are:
•Charles Giancarlo, our Chairman and Chief Executive Officer (our CEO);
•Kevan Krysler, our Chief Financial Officer;
•John Colgrove, our Chief Visionary Officer and Founder;
•Ajay Singh, our Chief Product Officer; and
•Dan FitzSimons, our Chief Revenue Officer.
EXECUTIVE DESIGNATION DURING FISCAL 2023
In December 2022, our board of directors designated Dan FitzSimons as an officer under Rule 16a-1(f) of the Exchange Act and as an executive officer under Rule 3b-7 of the Exchange Act. Mr. FitzSimons has served as our Chief Revenue Officer since November 2021. He previously served in various sales leadership roles at Pure from May 2015 to November 2021. His compensation is described throughout this section, including compensation decisions made prior to his designation as an executive officer. We believe that our ability to offer competitive compensation enables us to hire and retain the most qualified candidates for these important leadership roles.
ADVISORY VOTE ON EXECUTIVE COMPENSATION
| | | | | |
| At our annual meeting of stockholders held in June 2022, we held a non-binding advisory vote on the compensation of our named executive officers (a Say-on-Pay vote). Our stockholders approved the compensation of our named executive officers, with 97% of the votes cast in favor of our fiscal 2022 compensation program. Our compensation committee has considered and intends to continue to consider the results of annual Say-on-Pay votes. The prior results validate our overall compensation philosophy and policies, and help inform future compensation decisions relating to our executive officers. |
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
DISCUSSION OF OUR EXECUTIVE COMPENSATION PROGRAM
COMPENSATION PHILOSOPHY AND OBJECTIVES
We design our executive compensation program to achieve the following objectives, consistent with our “pay for performance” philosophy:
•attract and retain executive officers of outstanding ability and experience;
•motivate and reward behavior that results in exceeding our corporate performance objectives; and
•ensure that compensation is meaningfully tied to the creation of stockholder value.
We believe that our executive compensation program should include short-term and long-term elements and reward consistent performance that meets or exceeds expectations. We evaluate both performance and compensation to ensure that the compensation provided to our executive officers remains competitive relative to the compensation paid by similar companies operating in the technology industry, in particular comparable software and hardware companies, taking into account the role and performance of the individual executive officer and the performance and strategic objectives of the company.
COMPENSATION DESIGN
The compensation arrangements for our executive officers consist of base salary, annual performance-based cash bonuses, performance-based equity awards, and broad-based employee benefit programs.
Our cash bonuses are funded based on annual corporate performance metrics, and may be increased or decreased based on the individual performance of an executive officer against organization-specific goals during the applicable year. We believe that these cash awards incentivize our executive officers to meet our short-term corporate objectives.
While we offer competitive cash compensation, equity compensation is the primary incentive element of our executive compensation program. We emphasize the use of equity compensation to encourage our executive officers to focus on the growth of our overall enterprise value which in turn creates value for our stockholders. For the last few years, we have used full value performance-based equity awards that may only be earned upon the achievement of company performance objectives. 100% of the annual equity awards granted to our executive officers are dependent on our corporate performance and any amount earned upon the achievement of company performance objectives is also subject to time-based vesting requirements. We believe that these equity awards align the interests of our executive officers with our stockholders and drive a longer-term focus through a multi-year vesting schedule.
Our compensation committee reviews our executive compensation program throughout the year. As part of this review process, the committee applies the objectives described above within the context of our overall philosophy while simultaneously considering the compensation levels needed to ensure that our program remains competitive. The committee also evaluates whether we are meeting our retention objectives and the potential cost of replacing key executive officers.
COMPENSATION-SETTING PROCESS
Our compensation committee is responsible for reviewing, evaluating and approving the compensation arrangements of our executive officers and for establishing and maintaining our executive compensation policies and practices. The committee seeks input and receives recommendations from members of our executive team when discussing the performance and compensation of executive officers and in evaluating the financial and accounting implications of our compensation programs and hiring decisions. The committee is authorized to engage, and has engaged, its own advisor to provide advice on matters related to executive compensation and general compensation programs. For additional information on our compensation committee, see “Board Structure and Process—Board Committees” elsewhere in this proxy statement.
ROLE OF OUR EXECUTIVE OFFICERS
Our CEO and Chief Human Resources Officer assist our compensation committee in evaluating the performance of our executive officers (other than their own performance) and make recommendations to the committee with respect to base salary adjustments, target cash bonus opportunities, actual bonus payments and equity awards for each executive officer, other than for our CEO. While the committee takes these recommendations into consideration, it exercises its own independent judgment in approving the compensation of our executive officers.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
ROLE OF COMPENSATION CONSULTANT
Our compensation committee retained compensation consultants to provide support and advice regarding our executive compensation program for fiscal 2023. Aon’s Human Capital Solutions group (Aon Radford) consulted on compensation trends and regulatory developments, assisted the committee in evaluating and updating the compensation peer group that we use to understand competitive market compensation practices, provided compensation data and analysis with respect to compensation decisions at the start of fiscal 2023, and conducted a compensation risk assessment. In July 2022, the committee engaged Meridian Compensation Partners (Meridian) as its independent executive compensation consultant. Meridian consulted with the committee and performed projects for the committee, including reviewing our compensation philosophy, advising the committee on final compensation determinations after the end of fiscal 2023, and preparing for program design and compensation decisions relating to future fiscal periods.
Pure’s management also engaged with Aon plc and its affiliate for various insurance-related products and services and purchased compensation surveys and reports from Aon Radford as part of non-executive compensation practices for general survey data. Our compensation committee was aware of the nature and volume of the services performed by Aon affiliates and the compensation surveys and reports provided by Aon Radford collectively. In fiscal 2023, Meridian provided services to us relating to our executive and director compensation programs. Our compensation consultants maintain internal policies specifically designed to prevent conflicts of interest. The committee assessed the independence of Aon Radford and Meridian, taking into account, among other things, the factors set forth in Exchange Act rules and NYSE listing standards and concluded that no conflict of interest has arisen with respect to the work these consultants perform for the committee.
COMPENSATION PEER GROUP
Our compensation committee generally refers to peer group data when reviewing our executive officers’ compensation. This compensation peer group is intended to reflect companies with similar revenues, significant revenue growth, headcount and comparable market capitalization, in the following sectors: applications software, systems software, internet software and services or information technology.
In preparation for fiscal 2023, our compensation committee, in consultation with Aon Radford, evaluated our compensation peer group and made adjustments, removing companies that were deemed less relevant or had been acquired during the previous year and adding other more relevant technology companies of comparable size with which we may compete for talent. The committee generally selected a group of peer companies that, at the time of evaluation, had annual revenue between $750 million and $5.5 billion, as well as market capitalizations generally between two to eight times annual revenue. The committee generally selected companies with strong annual revenue growth, and it continued to retain some companies with substantially higher market capitalizations, as the committee believed that these companies aligned well with Pure's underlying business fundamentals.
Our compensation peer group for fiscal 2023 consisted of the following companies:
| | | | | | | | | | | |
| | | |
Akamai (AKAM) | Envestnet (ENV) | Ziff Davis (ZD) | Nutanix (NTNX) |
Arista Networks (ANET) | F5 (FFIV) | Logitech (LOGI) | Palo Alto Networks (PANW) |
Box (BOX) | Guidewire (GWRE) | NetApp (NTAP) | Splunk (SPLK) |
Dropbox (DBX) | Juniper Networks (JNPR) | New Relic (NEWR) | Zendesk (ZEN) |
| | | |
Our compensation committee considers the compensation levels of the executives at the companies in our compensation peer group to provide general guidance and a reference for market practices, without rigidly setting compensation based on specific percentiles relative to the peer group.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM
Our executive compensation program consists of three principal elements:
•base salary;
•annual performance-based cash bonuses; and
•long-term performance-based equity awards.
The following charts show the pay mix for our CEO and, on average, Messrs. Krysler, Colgrove, Singh and FitzSimons (based on base salary, target cash bonus and the grant date fair value of equity awards at target):
| | |
CEO - % OF TOTAL TARGET PAY |
|
| | |
AVERAGE OF KRYSLER, COLGROVE, SINGH AND FITZSIMONS - % OF TOTAL TARGET PAY |
|
BASE SALARY
We offer base salaries that are intended to provide a stable level of fixed compensation to our executive officers for performance of their day-to-day responsibilities. Each executive officer’s base salary was first established based on market competitive ranges and as the result of arm’s-length negotiations with each individual at the time of his initial hiring. Base salaries for our executive officers are reviewed annually to determine whether an adjustment is warranted based on factors such as performance, role criticality and scope, market data and internal comparisons.
In February 2022, our compensation committee reviewed and discussed the compensation arrangements for our executive officers and considered compensation data provided by Aon Radford, as well as observations regarding executive performance and compensation from our CEO. In March 2022, our compensation committee reviewed the base salaries of our executive officers, and after considering its prior review and a competitive market analysis, increased the base salaries of Messrs. Giancarlo, Krysler, Colgrove and FitzSimons to remain competitive with current market practices and to keep their target total cash compensation in-line with similarly situated executives within our company and at the companies in our compensation peer group. The annual base salary for Mr. Singh, who joined us in January 2021, remained unchanged based on this process.
The following table sets forth the annual base salaries for our executive officers for fiscal 2023, effective as of March 1, 2022, compared to the annual base salaries for our executive officers for fiscal 2022:
| | | | | | | | | | | |
Name | Fiscal 2022 Base Salary ($) | Fiscal 2023 Base Salary ($) | Percentage Increase |
Charles Giancarlo | 700,000 | 800,000 | 14% |
Kevan Krysler | 475,000 | 500,000 | 5% |
John Colgrove | 450,000 | 475,000 | 6% |
Ajay Singh | 550,000 | 550,000 | 0% |
Dan FitzSimons | 500,000 | 510,000 | 2% |
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
ANNUAL CASH BONUSES
We provide our executive officers the opportunity to earn annual cash bonuses on substantially the same basis as our employees who are eligible under our corporate bonus program. These cash bonuses are intended to encourage the achievement of corporate performance objectives, particularly our financial goals, as well as individual performance factors. The metrics and goals are set annually in connection with our annual business planning cycle, and are directly connected to our business plans and goals, and more specifically to organization-specific goals for each executive officer.
In March 2022, our compensation committee reviewed the target cash bonus opportunities of our executive officers and determined that their target cash bonus opportunities would remain at the same levels, other than for Mr. Krysler. Mr. Krysler’s target cash bonus opportunity was increased to align with our CEO’s pay structure and emphasize our pay-for-performance approach. Target cash bonuses increased in absolute dollars by the same amount as the associated salary increase.
The following table sets forth the annual target cash bonus opportunities (expressed as a percentage of base salary) of our named executive officers for fiscal 2023:
| | | | | | | | |
Name | Fiscal 2023 Target Bonus ($) | Bonus Opportunity as a % of Base Salary |
Charles Giancarlo | 800,000 | 100% |
Kevan Krysler | 500,000 | 100% |
John Colgrove | 475,000 | 100% |
Ajay Singh | 440,000 | 80% |
Dan FitzSimons | 510,000 | 100% |
Our compensation committee also met with management and its compensation consultant, and reviewed potential corporate performance metrics relating to fiscal 2023 cash bonuses. The committee decided to continue with the same performance metrics as the prior fiscal year for our fiscal 2023 company-wide cash bonus program, specifically: (i) revenue, (ii) non-GAAP operating profit, and (iii) NPS, which in combination constitute the corporate performance factor.
These metrics were weighted as follows:
| | | | | | | | |
Metric | Weighting | Rationale |
Revenue | 60% | To drive continued double-digit revenue growth |
Operating Profit | 25% | To demonstrate improved operating discipline and leverage |
NPS Score | 15% | To maintain or improve customer experience |
In selecting these metrics, our compensation committee believed that our management would be incentivized to grow the size of Pure's business and take market share, while improving profitability and maintaining Pure’s customer experience, during fiscal 2023.
Our compensation committee set stretch goals for the revenue and profit components that it viewed as difficult to achieve:
•Revenue target: $2.615 billion in revenue, or 20% year-over-year growth.
•Profit target: $305 million in non-GAAP operating profit, or a 30% year-over-year increase.
Our compensation committee selected NPS as the best generally-accepted customer satisfaction measure. Our customer-centric business model has been recognized by customers and the industry as a differentiator. We use a third party to conduct an NPS survey of our customers regarding whether they would recommend us to their peers on a 1-10 scale. Our prior audited NPS was 85.2, the highest score benchmarked for B2B companies by our third party vendor at that time. For fiscal 2023, the committee set a target range for funding of the NPS portion that was deemed an appropriate measure of our success in maintaining or improving Pure's customer experience.
For purposes of the cash bonus program, non-GAAP operating profit was defined as GAAP operating income excluding the following: effects of stock-based compensation expense, payments to former stockholders of an acquired company, payroll tax expense related to stock-based activities, impairment of right-of-use assets associated with cease-use of a certain facility, amortization expense of acquired intangible assets and acquisition-related transaction and integration expenses. A reconciliation of this measure to the comparable GAAP financial measure can be found in exhibit 99.1 to the current report on Form 8-K furnished to the SEC on March 1, 2023.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
The cash bonus components were subject to scaled payout ranges as follows:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Revenue ($M) | Funding | | | Operating Profit ($M) | Funding | | | NPS Score | Funding |
Maximum | 2,725 | | 150 | % | | Maximum | 330 | | 150 | % | | Maximum | 86 | 150 | % |
| 2,070 | | 125 | % | | | 318 | 125 | % | | | 85 | 125 | % |
Target | 2,615 | | 100 | % | | Target | 305 | 100 | % | | Target range | 83 to 80 | 100 | % |
| 2,560 | | 75 | % | | | 293 | 75 | % | | Threshold | < 80 | — | % |
| 2,505 | | 50 | % | | | 280 | 50 | % | | | | |
Threshold | < 2,505 | — | % | | Threshold | < 280 | — | % | | | | |
In addition to the corporate performance factor, specific goals for the individual performance factors were determined by our CEO, or in the case of the CEO, by the committee, and in each case were designed to be stretch goals. The committee considered the individual performance of each executive officer and determined an individual performance factor to increase or decrease a bonus payout based on the individual performance of an executive officer during the year.
During fiscal 2023, the committee monitored company performance and the individual performance of our executive officers. In September 2022, we paid 40% of the target cash bonus opportunity, consistent with the past practice and following confirmation that the company was on track to reach target corporate performance under the bonus program.
| | | | | | | | | | | | | | |
REVENUE | | NON-GAAP OPERATING PROFIT | | NPS SCORE |
$2.75 billion | | $457 million | | 81.4 |
(up 26% year-over-year) | | (up from $235 million in prior year) | | |
In March 2023, our compensation committee reviewed our corporate performance for fiscal 2023, which was achieved as follows: (i) full year revenue of $2.75 billion, growth of 26%, against a target of $2.615 billion and exceeding the maximum revenue target of $2.725 billion, (ii) full year non-GAAP operating profit of $457 million, against a target of $305 million and far exceeding the maximum profit target of $330 million, and (iii) an audited NPS of 81.4, against a target range of 80 to 83. The committee considered this strong corporate performance and approved bonus funding for the corporate performance factor at 125%, which aligned with the corporate funding rate for our broad-based group of bonus-eligible employees.
Our compensation committee then evaluated the individual performance of our executive officers during fiscal 2023, including the specific organizational goals set for each individual early in the fiscal year. These goals were focused around a few key themes for fiscal 2023, as follows: Grow Subscriptions, Accelerate Innovation, Become a Talent Magnet, Delight Customers and Improve Business Excellence.
Our executive officers made key strategic decisions and led their respective teams to:
•Grow subscription services revenue by 30% year-over-year, extend Pure's as-a-Service model across the full suite of Portworx solutions and introduce the new fleet-level Evergreen//Flex offerings.
•Expand our core product portfolio with FlashBlade//S, Pure Fusion and Portworx Data Services, and design FlashBlade//E, an unstructured data repository built to handle exponential data growth with industry-leading energy efficiency.
•Develop our employee base globally, including in Prague and Bangalore, with headcount increasing by approximately 22%, predominantly to advance our innovation, customer experience, and sales coverage, and deliver on key diversity, equity, and inclusion initiatives.
•Lead in key awards and recognitions by customers and industry analysts, including Gartner Magic Quadrants, and advance sustainability by further improving the environmental profile of Pure's portfolio and offering the first-of-its-kind Energy Efficiency SLA guarantee.
•Establish and drive transformational, cross functional initiatives within the company, as well as the selection and build out of our new headquarters facility.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
Our compensation committee considered these accomplishments and Pure's financial and sales results, as well as the impact of the emerging global economic slowdown and other market dynamics. Our CEO recommended individual performance factors for each executive officer and provided the committee with the reasoning behind his recommendations. The committee discussed the individual performance factor for each executive officer and, with the CEO absent, for our CEO. After discussion, the committee made determinations relating to each executive officer’s individual performance.
The following table provides information regarding the annual target bonus opportunities, corporate funding, individual performance factor, and the actual cash bonuses earned by our named executive officers for fiscal 2023:
| | | | | | | | | | | | | | |
Name | Target Bonus ($) | Corporate Performance Factor | Individual Performance Factor | Actual Bonus Earned ($) |
Charles Giancarlo | 800,000 | 125% | 100% | 1,000,000 |
Kevan Krysler | 500,000 | 125% | 120% | 750,000 |
John Colgrove | 475,000 | 125% | 120% | 712,500 |
Ajay Singh | 440,000 | 125% | 120% | 660,000 |
Dan FitzSimons | 510,000 | 125% | 100% | 637,500 |
The committee evaluated each of our named executive officers individually and ultimately decided the individual performance factor for each of our named executive officers, which was multiplied by the 125% corporate performance factor for the final bonus amount. The actual bonus amounts above include the partial bonus payout in September 2022, and the remaining amount of the bonus, which was paid in April 2023, after the final determinations described above.
EQUITY COMPENSATION
We provide our executive officers the opportunity to earn shares of our common stock through performance-based restricted stock unit (PSU) awards. We believe that strong long-term corporate performance is achieved with a compensation program that encourages a multi-year focus by our executive officers through the use of equity compensation, the value of which depends on the performance of our common stock. For this reason, our long-term incentive compensation to date has largely been provided in the form of PSU awards as the primary form of equity incentive compensation to further align the interests of our executive officers with the interests of our stockholders and to incentivize our executive officers through the appreciation in stock price of our common stock.
The size and form of the equity awards for our executive officers are determined in the discretion of our compensation committee at a level that it believes is competitive with current market conditions (as reflected by data from our compensation peer group), and after taking into consideration each individual executive officer’s role and scope of responsibilities, past performance, current equity holdings and expected future contributions. For the last several years, the committee has granted 100% PSU awards to align our executive officers' financial incentives with company performance and the creation of stockholder value.
Consistent with the bonus design process, the committee evaluated the PSU program design for fiscal 2023 at its meeting in February 2022 and finalized the corporate performance metrics for the PSU awards in March 2022. Similar to prior years, our compensation committee granted PSU awards to our executive officers that were subject to a one-year performance period, with the earned share amount to be adjusted down or up within a range of 0% to 150% of the target share amount based on our achievement of a metric that was a combination of total revenue and the increase in our subscription ARR in fiscal 2023.
Subscription ARR serves as a reasonable directional measure for sales of our subscription services – a valuable indicator as Pure desires to grow its subscription services business. It is a key business metric that refers to total annualized contract value of all active subscription agreements on the last day of the quarter, plus on-demand revenue for the quarter multiplied by four. For example, if we met our original revenue guidance for fiscal 2023 of 20% growth, or $2.615 billion in revenue, but failed to grow our subscription ARR from $849 million at the end of fiscal 2022, then less than 1% of the shares subject to the PSU awards would have been earned in fiscal 2023. This combined metric incentivized our executive team to prioritize both growth in overall revenue and in sales of subscription services. The earned shares, if any, are subject to a time-based vesting requirement over a three-year period from March 2022, with 1/3rd vesting in March 2023 and the remainder vesting quarterly thereafter, subject to continued service with us on each vesting date.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
The following table sets forth the PSU awards (at target and maximum) granted to our named executive officers for fiscal 2023:
| | | | | | | | |
Name | Target Shares | Maximum Shares |
Charles Giancarlo | 303,890 | 455,835 |
Kevan Krysler | 106,362 | 159,543 |
John Colgrove | 106,362 | 159,543 |
Ajay Singh | 106,362 | 159,543 |
Dan FitzSimons | 91,167 | 136,751 |
The following table presents potential payout multiples relative to the combined performance metric (total revenue and subscription ARR), with payouts between the minimum and maximum, to be determined on a linear basis:
| | | | | | | | |
| Revenue + Subscription ARR ($M) | Funding |
Maximum | 3,860 | | 150 | % |
| 3,804 | | 130 | % |
| 3,776 | | 120 | % |
| 3,748 | | 110 | % |
Target | 3,720 | | 100 | % |
| 3,685 | | 88 | % |
| 3,659 | | 75 | % |
| 3,580 | | 50 | % |
Minimum | < 3,440 | — | % |
During fiscal 2023, our compensation committee monitored the combined performance metric for the PSU awards, and in March 2023, the committee reviewed the financial performance of the company and determined that we delivered annual revenue of $2.75 billion, and subscription ARR of $1.1 billion, resulting in a combined result of over $3.85 billion, or 149.6% of target. | | | | | | | | | | | | | | |
| | | | |
| REVENUE | | SUBSCRIPTION ARR | |
| | | | |
| $2.75 billion | | $1.1 billion | |
| (up 26% year-over-year) | | (up 30% year-over-year) | |
Based on this level of achievement, our compensation committee approved a payout of 150% of the shares subject to the PSU awards, or the maximum shares under the awards, as disclosed above. The earned shares started vesting in March 2023.
BENEFITS PROGRAMS
Our employee benefit programs, including our 401(k) plan with a company matching contribution, employee stock purchase plan, and health, and welfare programs, are designed to provide a competitive level of benefits to our employees generally, including our executive officers and their families. We adjust our employee benefit programs as needed based upon regular monitoring of applicable laws and practices and the competitive market. Our executive officers are eligible to participate in the same employee benefit plans on the same terms and conditions as all other U.S. full-time employees.
PERQUISITES AND OTHER PERSONAL BENEFITS
Currently, we do not view perquisites or other personal benefits as a significant component of our executive compensation program. Accordingly, we do not provide perquisites to our executive officers that are not also available to our employees generally. In the future, we may provide perquisites or other personal benefits in limited circumstances, such as where we believe it is appropriate to assist an individual executive in the performance of his or her duties, to make our executive officers more efficient and effective and for recruitment, motivation or retention purposes. All future practices with respect to perquisites or other personal benefits will be subject to review and approval by our compensation committee.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
POST-EMPLOYMENT COMPENSATION
Our executive officers and certain other employees are eligible to receive severance payments, equity acceleration and health care benefits in the event of a termination of employment in connection with a change in control of the company. Our compensation committee has determined that these arrangements are both competitively reasonable and necessary to recruit and retain key executives. The material terms of these post-employment payments to our named executive officers are set forth below in the section titled “Employment, Severance and Change in Control Agreements.”
OTHER COMPENSATION POLICIES
EQUITY AWARDS GRANT POLICY
The grant of equity awards must be approved either by our board of directors or our compensation committee. Our compensation committee has adopted a policy governing equity awards that are granted to our non-executive employees. This policy provides that our CEO may approve awards to non-executive employees within prescribed limits. Generally, equity awards will be effective on the 20th day of the second month of the fiscal quarter. If applicable, the exercise price of all stock options and stock appreciation rights must be equal to or greater than the fair market value of our common stock on the date of grant.
DERIVATIVES TRADING, PLEDGING AND HEDGING POLICY
Our insider trading policy prohibits our directors, officers, employees and consultants, as well as all family members and other household members of such persons and all companies controlled by such persons, from engaging in trades of our derivatives, short sales, transactions in put or call options, hedging transactions, opening margin accounts, pledging our securities, or other inherently speculative transactions with respect to our equity securities at any time.
COMPENSATION CLAWBACK/RECOUPMENT
Our board of directors has adopted a policy for the recoupment of certain “incentive compensation,” as defined in the policy, paid to our current and former Section 16 officers, also known as a clawback policy. Under the policy, recoupment is possible either in the event of a financial “restatement” by the company or “misconduct” by the covered officer, in each case as defined in the policy and subject to the determination and discretion of our board of directors. The policy applies to all incentive compensation paid, received, granted or awarded on or after the date the policy was adopted. We will adopt a Dodd-Frank compliant clawback policy, within the required timeframe, once the NYSE has adopted an SEC-approved listing standard that complies with Exchange Act Rule 10D-1. In addition to the foregoing, our CEO and Chief Financial Officer are subject to the compensation recovery provisions of Section 304 of the Sarbanes-Oxley Act.
STOCK OWNERSHIP GUIDELINES
Our board of directors adopted stock ownership guidelines for our executive officers and non-employee directors. Under these guidelines, each executive officer and director is required to own shares of our common stock with a value equal to:
•5 times annual base salary for our CEO.
•2 times annual base salary for our executive officers, other than our CEO.
•5 times annual base retainer for our non-employee directors.
In determining ownership levels, credit is provided for shares held outright, shares “beneficially owned,” vested RSUs, and vested shares under any deferred compensation plan, if applicable, but not for vested or unvested stock options. Compliance with these guidelines is required within five years of becoming subject to them. The policy includes procedures for granting exemptions in the case of severe hardship or in the event that the guidelines would prevent a director or officer from complying with a court order or applicable law. At the end of fiscal 2023, all of our executive officers and non-employee directors met, exceeded, or were on track to meet these guidelines based on their current rate of stock accumulations in the time frames set out in the guidelines.
PROPOSAL 3 - ADVISORY VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION
POLICY REGARDING 10b5-1 PLANS FOR DIRECTORS AND EXECUTIVE OFFICERS
Our insider trading policy generally requires that our executive officers and non-employee members of our board of directors may not trade in our equity securities during “blackout” periods and that such individuals must pre-clear trades or adopt plans in accordance with Exchange Act Rule 10b5-1 for sales of securities which they beneficially own.
COMPENSATION POLICIES AND PRACTICES AS THEY RELATE TO RISK MANAGEMENT
Our compensation committee has reviewed our executive and employee compensation programs and does not believe that our compensation policies and practices encourage undue or inappropriate risk taking or create risks that are reasonably likely to have a material adverse effect on us. The reasons for the committee’s determination include the following:
•We structure our compensation program to consist of both fixed and variable components. The fixed component of our program (or base salary) is designed to provide income independent of our stock price performance so that employees will not focus exclusively on stock price performance to the detriment of other important business metrics;
•We maintain internal controls over the measurement and calculation of financial information, which are designed to prevent this information from being manipulated by any employee, including our executive officers;
•We maintain internal controls over the determination of sales commissions, although we do not cap cash incentive awards for our sales commission plans because we wish to reward our sales force for exceeding their objectives;
•Our employees are required to acknowledge and comply with our code of conduct which covers, among other things, accuracy in keeping financial and business records;
•Our compensation committee approves the overall annual equity pool and the employee equity award guidelines;
•A significant portion of the compensation paid to our executive officers is in the form of equity awards to align their interests with the interests of stockholders; and
•As part of our insider trading policy, we prohibit hedging transactions involving our equity securities so that our executive officers and other employees cannot insulate themselves from the effects of poor stock price performance.
TAX AND ACCOUNTING CONSIDERATIONS
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Under Section 162(m) (Section 162(m)) of the Internal Revenue Code of 1986, as amended (the Code), compensation paid to any publicly held corporation’s "covered employees" that exceeds $1 million per taxable year for any covered employee is generally non-deductible. In designing our executive compensation program and determining the compensation of our executive officers, our compensation committee considers a variety of factors, including the potential impact of the Section 162(m) deduction limit. The committee retains the flexibility to provide compensation for our executive officers in a manner consistent with the goals of our compensation program and the best interests of the company and its stockholders, which includes providing for compensation that is not deductible by the company due to the Section 162(m) deduction limit.
NO TAX REIMBURSEMENT OF PARACHUTE PAYMENTS AND DEFERRED COMPENSATION
We have not provided any executive officer with a “gross-up” or other reimbursement payment for any tax liability that he or she might owe as a result of the application of Sections 280G, 4999, or 409A of the Code during fiscal 2023, and we have not agreed and are not otherwise obligated to provide any executive officer with such a “gross-up” or other reimbursement.
ACCOUNTING TREATMENT
We account for stock-based compensation in accordance with the provisions of FASB ASC Topic 718, which requires companies to measure and recognize the compensation expense for all share-based awards made to employees and directors, including stock options and full-value equity awards, over the period during which the award recipient is required to perform services in exchange for the award (for executive officers, generally the three-year or four-year performance and/or vesting period of the award). Compensation expense for shares acquired through our ESPP is recognized over the offering period. We estimate the fair value of stock options and shares acquired through our ESPP using the Black-Scholes option pricing model. This calculation is performed for accounting purposes and reported in the compensation tables below.
| | | | | |
PROPOSAL 4 FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION |
|
Our board of directors recommends a vote for 1 YEAR as the frequency for future advisory votes to approve executive compensation | |
We are providing stockholders with the opportunity to vote, on an advisory basis, to approve the frequency for the advisory vote on Pure Storage’s executive compensation. In particular, we are asking whether the advisory vote on executive compensation should occur once every year, every two years or every three years. Our board of directors has determined that an annual advisory vote on executive compensation is the most appropriate alternative for Pure Storage.
Our board of directors’ determination was influenced by the fact that the compensation of our named executive officers is evaluated, adjusted, and approved on an annual basis. As part of the annual review process, the board of directors believes that stockholder sentiment should be a factor that is taken into consideration by our board of directors and compensation committee in making decisions with respect to executive compensation. By providing an advisory vote on executive compensation on an annual basis, our stockholders will be able to provide us with direct input on our compensation philosophy, policies and practices as described in the proxy statement every year. We understand that our stockholders may have different views as to what is the best approach for Pure Storage, and we look forward to hearing from our stockholders on this agenda item every year.
This vote is advisory and therefore not binding on Pure Storage or our board of directors. Our board of directors and its committees value the opinions of our stockholders, and even though this vote will not be binding, our board of directors will take into account the outcome of this vote in making a determination on the frequency of future advisory votes to approve executive compensation.
Vote Required
An affirmative vote from holders of a majority in voting power of the shares present at the meeting or represented by proxy and entitled to vote on the proposal will be required for a frequency alternative to constitute the recommendation of our stockholders. However, if none of the alternatives receives a majority vote, we will consider the frequency that receives the highest number of votes to be the frequency that has been selected by our stockholders.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE FOR FISCAL 2023
The following table presents all of the compensation awarded to, or earned by, our named executive officers during fiscal 2023 and, if applicable, the prior two fiscal years.
| | | | | | | | | | | | | | | | | | | | | | | |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Non–Equity Incentive Plan Compensation ($)(2) | All Other Compensation ($)(3) | Total ($) |
Charles Giancarlo Chief Executive Officer | 2023 | 791,667 | | — | | 9,469,212 | | 1,000,000 | | 23,244 | | 11,284,123 | |
2022 | 696,250 | | — | | 7,735,478 | | 1,358,378 | | 4,276 | | 9,794,382 | |
2021 | 643,750 | | — | | 6,695,186 | | 738,510 | | 4,295 | | 8,081,741 | |
Kevan Krysler Chief Financial Officer | 2023 | 497,917 | | — | | 3,314,240 | | 750,000 | | 6,096 | | 4,568,253 | |
2022 | 472,917 | | — | | 2,707,416 | | 738,057 | | 4,378 | | 3,922,768 | |
2021 | 450,000 | | — | | 2,901,247 | | 428,688 | | 4,127 | | 3,784,062 | |
John Colgrove Chief Visionary Officer | 2023 | 472,917 | | — | | 3,314,240 | | 712,500 | | 11,074 | | 4,510,731 | |
2022 | 445,833 | | — | | 2,707,416 | | 870,141 | | 11,920 | | 4,035,310 | |
2021 | 395,833 | | — | | 3,124,420 | | 453,753 | | 11,007 | | 3,985,013 | |
Ajay Singh (4) Chief Products Officer | 2023 | 550,000 | | — | | 3,314,240 | | 660,000 | | 5,871 | | 4,530,111 | |
2022 | 550,000 | | — | | 2,514,031 | | 858,000 | | 5,836 | | 3,927,867 | |
Dan FitzSimons (5) Chief Revenue Officer | 2023 | 509,167 | | — | | 2,840,764 | | 637,500 | | 32,501 | | 4,019,932 | |
(1)The amounts shown in this column does not reflect the dollar amount actually received by our named executive officers. Instead, these amounts reflect the aggregate grant date fair value of the PSU awards granted to our named executive officers, computed in accordance with the provisions of FASB ASC Topic 718. Assumptions relating to such calculations are included in the notes to our consolidated financial statements in our Annual Report on Form 10-K, as filed with the SEC on April 3, 2023, except that amounts for PSU awards are based on the aggregate fair value as of the grant date and are reported at 100% target achievement. See “Compensation Discussion and Analysis” above for the share amounts actually earned for fiscal 2023. Assuming the highest level of the performance conditions is achieved, the value of the fiscal 2023 awards in the “Stock Awards” column would be as follows: Mr. Giancarlo, $14,203,819; Mr. Krysler, $4,971,360; Mr. Colgrove, $4,971,360; Mr. Singh, $4,971,360 and Mr. FitzSimons, $4,261,146.
(2)The amounts shown in this column represents bonuses earned by our named executive officers under our cash bonus program for employees for the stated fiscal years.
(3)The amounts shown in this column for fiscal 2023 represent company contributions that we made on behalf of the named executive officers under Pure's 401(k) plan, tax gross ups on work-from-home stipends made by us to eligible employees, cost for guests to participate in certain corporate events and tax gross ups on such costs. In addition, the amount for Mr. Colgrove includes amounts associated with our patent award program and a tax gross up on such amount. Tax gross ups paid were less than $25,000 in the aggregate for each named executive officer, and none of the perquisites or personal benefits exceeded $25,000.
(4)Mr. Singh was designated an executive officer as of December 15, 2021.
(5)Mr. FitzSimons was designated an executive officer as of December 14, 2022.
GRANTS OF PLAN–BASED AWARDS TABLE IN FISCAL 2023
The following table presents information regarding each grant of a cash or equity award made during fiscal 2023. This information supplements the information about these awards set forth in the “Summary Compensation Table” above.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(1) | | Estimated Future Payouts Under Equity Incentive Plan Awards(2) | Grant Date Fair Value of Stock Awards ($)(3) |
Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | | Threshold (#) | Target (#) | Maximum (#) |
Charles Giancarlo | 3/15/2022 | — | | 800,000 | | — | | | — | | — | | — | | — | |
| 4/20/2022 | — | | — | | — | | | — | | 303,890 | | 455,835 | | 9,469,212 | |
Kevan Krysler | 3/15/2022 | — | | 500,000 | | — | | | — | | — | | — | | — | |
| 4/20/2022 | — | | — | | — | | | — | | 106,362 | | 159,543 | | 3,314,240 | |
John Colgrove | 3/15/2022 | — | | 475,000 | | — | | | — | | — | | — | | — | |
| 4/20/2022 | — | | — | | — | | | — | | 106,362 | | 159,543 | | 3,314,240 | |
Ajay Singh | 3/15/2022 | — | | 440,000 | | — | | | — | | — | | — | | — | |
| 4/20/2022 | — | | — | | — | | | — | | 106,362 | | 159,543 | | 3,314,240 | |
Dan FitzSimons | 3/15/2022 | — | | 510,000 | | — | | | — | | — | | — | | — | |
| 4/20/2022 | — | | — | | — | | | — | | 91,167 | | 136,751 | | 2,840,764 | |
(1)The target bonus amounts for fiscal 2023 were established by our compensation committee in March 2022. For further information regarding the fiscal 2023 target cash bonuses, please see the “Compensation Discussion and Analysis-Cash Bonuses” above, with the actual amounts earned and paid as set forth in the “Summary Compensation Table” in the column titled “Non-Equity Incentive Plan Compensation.”
(2)This performance-based stock award may be earned from 0% to 150% based on the achievement of a combined metric based on total revenue and subscription ARR for fiscal 2023, which was established by our compensation committee in March 2022. Once earned, this award continued to be subject to time-based vesting, with 1/3rd of the earned shares vesting on March 20, 2023 and the remaining earned shares vesting quarterly over the following two years. See “Compensation Discussion and Analysis” above for the share amounts actually earned in fiscal 2023.
(3)The amount shown in this column does not reflect the dollar amount actually received by our named executive officers. Instead, this amount reflects the aggregate grant date fair value of the stock awards granted to our named executive officers, computed in accordance with the provisions of FASB ASC Topic 718. Assumptions used in the calculation of this amount are included in the notes to our consolidated financial statements in our Annual Report on Form 10-K, as filed with the SEC on April 3, 2023.
OUTSTANDING EQUITY AWARDS AS OF
FEBRUARY 5, 2023
The following table presents information regarding outstanding equity awards held by our named executive officers as of February 5, 2023.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Option Awards(1) | | Stock Awards(1) |
Name | Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Number of Shares or Units of Stock That Have Not Vested (#) | | Market Value of Shares or Units of Stock That Have Not Vested ($)(2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(3) | Equity Incentive Plan Awards: Market Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(2) |
Charles Giancarlo | 500,000 | | — | | 12.84 | | 8/22/2027 | | — | | | — | | — | | — | |
| 500,000 | | — | | 17.00 | | 8/22/2027 | | — | | | — | | — | | — | |
| — | | — | | — | | — | | | 35,925 | | (4) | 1,074,517 | | — | | — | |
| — | | — | | — | | — | | | 251,156 | | (5) | 7,512,076 | | — | | — | |
| — | | — | | — | | — | | | — | | | — | | 303,890 | | 9,089,350 | |
Kevan Krysler | — | | — | | — | | — | | | 111,035 | | (6) | 3,321,057 | | — | | — | |
| — | | — | | — | | — | | | 15,568 | | (4) | 465,639 | | — | | — | |
| — | | — | | — | | — | | | 87,906 | | (5) | 2,629,268 | | — | | — | |
| — | | — | | — | | — | | | — | | | — | | 106,362 | 3,181,287 |
John Colgrove | 499,329 | | — | | 2.98 | | 3/28/2024 | | — | | | — | | — | | — | |
| 125,000 | | — | | 17.00 | | 9/23/2025 | | — | | | — | | — | | — | |
| 83,333 | | — | | 17.00 | | 9/23/2025 | | — | | | — | | — | | — | |
| — | | — | | — | | — | | | 16,765 | | (4) | 501,441 | | — | | — | |
| — | | — | | — | | — | | | 87,906 | (5) | 2,629,268 | | — | | — | |
| — | | — | | — | | — | | | — | | | — | | 106,362 | | 3,181,287 | |
Ajay Singh | — | | — | | — | | — | | | 158,227 | (7) | 4,732,570 | | — | | — | |
| — | | — | | — | | — | | | 81,627 | | (5) | 2,441,464 | | — | | — | |
| — | | — | | — | | — | | | — | | | — | | 106,362 | | 3,181,287 | |
Dan FitzSimons | 25,000 | | — | | 17.00 | | 10/6/2025 | | — | | | — | | — | | — | |
| — | | — | | — | | — | | | 1,569 | | (8) | 46,929 | | — | | — | |
| — | | — | | — | | — | | | 26,658 | | (9) | 797,341 | | — | | — | |
| — | | — | | — | | — | | | 28,254 | | (10) | 845,077 | | — | | — | |
| — | | — | | — | | — | | | 62,736 | | (5) | 1,876,434 | | — | | — | |
| — | | — | | — | | — | | | — | | | — | | 91,167 | | 2,726,805 | |
(1)Continued vesting on all awards is subject to the individual's continuous service. Further, the unvested shares subject to these awards may be subject to accelerated vesting upon a qualifying termination, as described in the section titled “Employment, Severance and Change in Control Agreements.” Option awards were granted under both our 2009 Equity Incentive Plan and our 2015 Equity Incentive Plan, and RSU awards were granted under our 2015 Equity Incentive Plan.
(2)Based on $29.91, which was the closing price of our common stock on NYSE on February 3, 2023 (the last trading day of our fiscal year).
(3)Amounts in this column represent the target shares for PSU awards relating to fiscal 2023. In March 2023, our compensation committee determined the actual number of earned shares, based on our fiscal 2023 performance, as follows: Mr. Giancarlo, 455,835 shares; Mr. Krysler, 159,543 shares; Mr. Colgrove, 159,543 shares; Mr. Singh, 159,543 shares; and Mr. FitzSimons, 136,751 shares. One-third of the earned shares vested on March 20, 2023, with the remainder vesting quarterly in equal installments over the next two years.
(4)These RSUs vested as to 33% on March 20, 2021, with the remaining vesting quarterly in equal installments over the next two years.
(5)These RSUs vested as to 33% on March 20, 2022, with the remaining vesting quarterly in equal installments over the next two years.
(6)These RSUs vested as to 25% on December 20, 2020, with the remaining vesting quarterly in equal installments over the next three years.
(7)These RSUs vested as to 25% on March 20, 2022, with the remaining vesting quarterly in equal installments over the next three years.
(8)These RSUs vested, and continue to vest, in equal quarterly installments over a four year period that commenced on March 20, 2019.
(9)These RSUs vested, and continue to vest, in equal quarterly installments over a four year period that commenced on March 20, 2020.
(10)These RSUs vested, and continue to vest, in equal quarterly installments over a four year period that commenced on March 20, 2021.
STOCK AWARDS VESTED IN FISCAL 2023
The following table summarizes the shares of common stock that were acquired by our named executive officers upon the vesting of stock awards during fiscal 2023.
| | | | | | | | |
| Stock Awards |
Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) |
Charles Giancarlo | 521,073 | | 16,070,654 | |
Kevan Krysler | 296,363 | | 8,873,214 | |
John Colgrove | 200,470 | | 6,155,883 | |
Ajay Singh | 237,335 | | 7,439,428 | |
Dan FitzSimons | 133,049 | | 4,075,531 | |
(1)The value realized on vesting is calculated by multiplying the number of shares vesting by the closing market price of our common stock on the vesting date.
NONQUALIFIED DEFERRED COMPENSATION
The following table shows executive contributions, earnings and account balances at the end of fiscal 2023 for each named executive officer participating in Pure's Deferred Compensation Plan.(1)
| | | | | | | | | | | | | | | | | |
Name | Executive Contributions in Last FY ($)(2) | Registrant Contributions in Last FY ($) | Aggregate Earnings in Last FY ($)(3) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) |
Charles Giancarlo | — | | — | | — | | — | | — | |
Kevan Krysler | — | | — | | — | | — | | — | |
John Colgrove | — | | — | | — | | — | | — | |
Ajay Singh | 34,375 | | — | | 469 | | — | | 34,844 | |
Dan FitzSimons | — | | — | | — | | — | | — | |
(1)In January 2023, our compensation committee adopted the Deferred Compensation Plan (the DCP), a non-qualified deferred compensation plan established in compliance with Section 409A of the Code. U.S. employees of Pure at the Vice President level and above, including our executive officers, are eligible to participate in the Plan. The DCP allows eligible participants to defer a portion of cash compensation derived from base salary, commissions and certain bonus awards. Deferred compensation will be paid on the date or dates selected by the participant at the time of enrollment or any amendment of that election made in compliance with the requirements of Section 409A of the Code.
(2)The executive contributions listed in this column are reported as compensation in the "salary" column of the Summary Compensation Table for the fiscal 2023 year.
(3)The amounts reported in this column reflect notional earnings and losses based on investment of funds held in the participant's account that are made at the participant's direction. Investment vehicles available mirror those offered through our 401(k) Plan. Participants are not permitted to invest in Pure common stock through the DCP. Deferred compensation will be paid on the date or dates selected by the Participant at the time of enrollment or any amendment of that election made in compliance with the requirements of section 409A of the Code. The Company has not included any portion of the earnings listed in this column as compensation in the Summary Compensation Table.
EMPLOYMENT, SEVERANCE AND CHANGE IN CONTROL AGREEMENTS
OFFER LETTERS
We have employment offer letters with each of our named executive officers, other than Messrs. Colgrove and FitzSimons. The offer letters generally provide for “at-will” employment and set forth the named executive officer’s initial base salary, initial target cash bonus opportunity, initial equity grant amount, eligibility for employee benefits and in some cases severance payments and benefits upon a qualifying termination of employment. In addition, each of our named executive officers has executed our standard proprietary information and inventions agreement. The key terms of employment with our named executive officers are described below. Please see “Outstanding Equity Awards as of February 5, 2023” above for a presentation of equity awards held by our named executive officers.
CHARLES GIANCARLO
In August 2017, we entered into an offer letter agreement with Mr. Giancarlo, our Chairman and CEO. Mr. Giancarlo’s current annual base salary is $800,000, and he is eligible to earn a bonus with an annual target of 100% of his annual base salary to be paid in semi-annual installments based on the achievement of performance objectives, as determined by our compensation committee.
If Mr. Giancarlo is terminated without cause (as defined in his offer letter) or Mr. Giancarlo resigns for good reason (as defined in his offer letter), Mr. Giancarlo will be eligible to receive (i) continuation of his base salary for a period of 12 months following his termination and (ii) reimbursement of COBRA payments for a period of 18 months following his termination (or if earlier upon him obtaining health care coverage from another source). If Mr. Giancarlo is terminated without cause or Mr. Giancarlo resigns for good reason during the period beginning three months prior to a change in control (as defined in his offer letter) and ending 12 months following the closing of such change in control, then, in lieu of the foregoing severance payments and benefits, he will be eligible to receive (i) an amount of cash severance equal to 12 months of his base salary plus his then target annual bonus amount, paid in a single lump sum on the 60th day following his termination, (ii) reimbursement of COBRA payments for a period of 18 months following his termination (or if earlier upon him obtaining health care coverage from another source) and (ii) the accelerated vesting of all of his unvested equity awards in full. Mr. Giancarlo must sign a release of claims agreement in favor of the company as a precondition of receiving these severance payments and benefits.
KEVAN KRYSLER
Mr. Krysler’s current base salary is $500,000, and he is eligible to earn a bonus with an annual target of 100% of his annual base salary to be paid in semi-annual installments based on the achievement of performance objectives, as determined by our compensation committee.
JOHN COLGROVE
Mr. Colgrove’s current annual base salary is $475,000, and he is eligible to earn a bonus with an annual target of 100% of his annual base salary to be paid in semi-annual installments based on the achievement of performance objectives, as determined by our compensation committee.
AJAY SINGH
Mr. Singh’s current base salary is $550,000, and he is eligible to earn a bonus with an annual target of 80% of his annual base salary to be paid in semi-annual installments based on the achievement of performance objectives, as determined by our compensation committee.
DAN FITZSIMONS
Mr. FitzSimons’ current base salary is $510,000, and he is eligible to earn a bonus with an annual target of 100% of his annual base salary to be paid in semi-annual installments based on the achievement of performance objectives, as determined by our compensation committee.
CHANGE IN CONTROL AND SEVERANCE BENEFIT PLAN
We have adopted a Change in Control and Severance Benefit Plan (Severance Plan). Employees with the title of vice president or above, including each of our named executive officers, are eligible participants under the Severance Plan. Under the Severance Plan, any named executive officer who suffers an involuntary termination of employment within the period starting three months prior to a change in control of the company and ending on the 12-month anniversary of the change in control, will receive (i) a lump sum cash payment equal to (a) 12 months of the then-current base salary for all named executive officers, other than our CEO, or (b) 18 months of the then-current base salary for our CEO, (ii) a lump sum cash payment equal to 12 months of the participant’s then-current annual target bonus, (iii) up to (a) 12 months of company-paid health insurance coverage for all named executive officers, other than our CEO, or (b) 18 months of company-paid health insurance coverage for our CEO, and (iv) accelerated vesting of 100% of the shares subject to each time-based vesting equity award held by such participant. The acceleration of outstanding performance-based awards will be based on the number of shares subject to the award as if the applicable performance criteria had been attained at 100% of target and the acceleration of performance-based awards granted after the effective date to be governed by the applicable award agreement.
Under the Severance Plan, upon a named executive officer's termination without cause or a resignation for good reason, such officer will receive (i) a lump sum cash payment equal to (a) 6 months of the then-current base salary for all named executive officers, other than our CEO, or (b) 12 months of the then-current base salary for our CEO and (ii) up to (a) 6 months of company-paid health insurance coverage for all named executive officers, other than our CEO, or (b) 18 months of company-paid health insurance coverage for our CEO.
All payments and benefits made under the Severance Plan are subject to a “best after tax” provision in case they would trigger excise tax penalties and loss of deductibility under Sections 280G and 4999 of the Code. The tables below do not apply potential reductions due to the “best after tax” provision, if any. If an employee is an eligible participant and otherwise eligible to receive severance payments and benefits under the Severance Plan that are of the same category and would otherwise duplicate the payments and benefits available under the terms of any other agreement the participant has with us, the participant will receive severance payments and benefits under such other agreement in lieu of any Severance Plan benefits to the extent such benefits are duplicative, and severance payments and benefits will be provided under the Severance Plan only to the extent, if any, that Severance Plan benefits are not duplicative benefits.
ACCELERATION UPON DEATH
In the event of the death of an employee while in a service relationship with us, all equity awards held by the employee would vest in full. Pursuant to such award terms, each of Messrs. Giancarlo, Krysler, Colgrove, Singh and FitzSimons would receive full acceleration of any time-based equity awards in the event of his death as of February 5, 2023, for an aggregate value of $17,675,943, $9,597,252, $6,311,997, $10,355,321, and $6,292,585 respectively, based on the closing market price of our common stock on February 3, 2023 (the last trading day of our fiscal year), which was $29.91 per share, and assuming full vesting of the performance-based awards based on the number of shares subject to the award as if the applicable performance criteria had been attained at 100% of target.
POTENTIAL PAYMENTS UPON TERMINATION OR RESIGNATION
The following table provides an estimate of the value of the payments and benefits due to each of our named executive officers assuming a termination of employment without cause or if he had terminated his employment for good reason, effective as of February 5, 2023, other than in connection with a change of control of the company, under the Severance Plan. The actual amounts to be paid can only be determined at the time of any such event.
| | | | | | | | | | | |
Name | Cash Payment ($)(1) | Benefit Continuation ($) | Total ($) |
Charles Giancarlo | 800,000 | | 46,575 | | 846,575 | |
Kevan Krysler | 250,000 | | 15,525 | | 265,525 | |
John Colgrove | 237,500 | | 15,308 | | 252,808 | |
Ajay Singh | 220,000 | | 14,248 | | 234,248 | |
Dan FitzSimons | 255,000 | | 15,308 | | 270,308 | |
(1)Reflects a cash payment (i) to Mr. Giancarlo equal to 12 months of his then-current base salary and 18 months of company-paid health insurance coverage, and (ii) to each of the other executive officers equal to six months of their then-current base salary and six months of company-paid health insurance coverage.
POTENTIAL PAYMENTS UPON TERMINATION OR RESIGNATION IN CONNECTION WITH A CHANGE OF CONTROL
The following table provides an estimate of the value of the payments and benefits due to each of our named executive officers assuming a termination of employment by the company without cause or termination of employment by the executive for good reason, effective as of February 5, 2023, in connection with a change of control of the company, under the Severance Plan. The actual amounts to be paid can only be determined at the time of any such event.
| | | | | | | | | | | | | | |
Name | Cash Payment ($)(1) | Benefit Continuation ($)(1) | Value of Accelerated Equity Awards ($)(1)(2) | Total ($) |
Charles Giancarlo | 2,000,000 | | 53,747 | | 17,675,943 | | 19,729,690 | |
Kevan Krysler | 1,000,000 | | 31,050 | | 9,597,252 | | 10,628,302 | |
John Colgrove | 950,000 | | 30,616 | | 6,311,997 | | 7,292,613 | |
Ajay Singh | 880,000 | | 28,495 | | 10,355,321 | | 11,263,816 | |
Dan FitzSimons | 1,020,000 | | 30,616 | | 6,292,585 | | 7,343,201 | |
(1)Reflects (i) with respect to Mr. Giancarlo, a cash payment equal to 18 months of his base salary, 12 months of his annual target bonus and 18 months of company-paid health insurance coverage, as well as vesting of all shares subject to all outstanding equity awards (including performance-based equity awards granted during fiscal 2023 as if earned at 100%) held by Mr. Giancarlo, and (ii) with respect to each of the other executive officers, a cash payment equal to 12 months of the executive's base salary, 12 months of the executive's annual target bonus and 12 months of company-paid health insurance coverage, as well as vesting of all shares subject to all outstanding equity awards (including performance-based equity awards granted during fiscal 2023 as if earned at 100%) held by the executive.
(2)Based on the closing market price of our common stock as of February 3, 2023 (the last trading day of our fiscal year), which was $29.91.
PAY RATIO INFORMATION
We are required to disclose the ratio of our CEO’s annual total compensation to the annual total compensation of our median employee, referred to as “pay ratio” disclosure.
In identifying the median employee for fiscal 2023, we identified our total employee population as of December 31, 2022, other than our CEO. We compared the total of each employee’s aggregate salary, hourly pay, bonus and other cash compensation (such as on-call or overtime pay) actually paid, and the value of stock awards vested, during calendar 2022, as reflected in our payroll records. We did not annualize the compensation of employees who were employed for less than the entire fiscal year or make cost of living adjustments. Using this approach, we identified an employee whose compensation was anomalous, as that individual was newly hired in 2022. As a result, we substituted an employee near the median whose compensation was viewed as more representative of our median employee. We then calculated the annual total compensation for this employee using the same methodology used to calculate annual total compensation for our CEO as set forth in the “Summary Compensation Table.”
For fiscal 2023, the median of the annual total compensation of all employees of Pure (other than our CEO), based on the selected median employee, was $186,143, and based on the annual total compensation for our CEO of $11,284,123, our ratio of CEO pay to the median employee pay was 61 to 1. The amounts included in the above pay ratio calculation reflect the grant date fair value of equity awards granted during fiscal 2023.
The pay ratio above represents Pure’s reasonable estimate calculated in a manner consistent with the SEC rules, which allow for significant flexibility in how companies identify the median employee, and each company may use a different methodology and make different assumptions particular to that company. As a result, and as explained by the SEC when it adopted the pay ratio rules, the ratio was not designed to facilitate comparisons of pay ratios among different companies, even companies within the same industry, but rather to allow stockholders to better understand our compensation practices and pay-ratio disclosures.
PAY VERSUS PERFORMANCE
We are providing the following information about the relationship between executive compensation actually paid (CAP), as defined under Item 402(v) of Regulation S-K, and certain financial performance measures of Pure. For further information concerning Pure’s variable pay-for-performance philosophy and how Pure aligns executive compensation with Pure’s performance, refer to “Executive Compensation – Compensation Discussion and Analysis.”
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Average Summary Compensation Table Total for Non-PEO NEOs (d)($)(3) | Average Compensation Actually Paid to Non-PEO NEOs (e)($)(2) | | Value of Initial Fixed $100 Investment Based on: | | |
Fiscal Year (a) | Summary Compensation Table for PEO (b)($)(1) | Compensation Actually Paid to PEO (c)($)(2) | | Total Shareholder Return (f)($) | Peer Group Total Shareholder Return (g)($)(4) | Net Income (Loss) (in thousands) (h)($) | Revenue (in thousands) (i)($) |
2023 | 11,284,123 | | 15,303,936 | | 4,407,257 | | 6,151,443 | | | 149 | | 161 | | 73,071 | | 2,753,434 | |
2022 | 9,794,382 | | 14,575,257 | | 3,961,982 | | 8,732,531 | | | 131 | | 171 | | (143,259) | | 2,180,848 | |
2021 | 8,081,741 | | 14,452,520 | | 4,127,981 | | 8,083,765 | | | 115 | | 152 | | (282,076) | | 1,684,179 | |
(1)Total Compensation as set forth in the Summary Compensation Table in this proxy statement. Mr. Giancarlo served as our Principal Executive Officer (PEO) in each of fiscal 2023, 2022 and 2021.
(2)The Compensation Actually Paid (CAP) is determined in accordance with Item 402(v) of Regulation S-K. The fair value of stock options was determined using a Black-Scholes model, the fair value of PSUs reflect the probable outcome of the performance vesting conditions as of each measurement date and the fair value of RSUs was based on the stock price on the vesting date. For each covered year, the values included in column (c) for the CAP to our PEO and in column (e) for the average CAP to our non-PEO named executive officers reflect the adjustments set forth below. Pure does not maintain a pension plan and does not pay dividends on its common stock so no adjustments for these factors were necessary.
| | | | | | | | | | | | | | | | | | | | |
PEO | | 2023 ($) | | 2022 ($) | | 2021 ($) |
Summary Compensation Table (SCT) Total for PEO (column b) | | 11,284,123 | | | 9,794,382 | | | 8,081,741 | |
- Amounts reported in the SCT for equity awards (stock awards or options granted in the Covered Year) | | 9,469,212 | | | 7,735,478 | | | 6,695,186 | |
+ Year-end fair value of unvested equity awards granted in the Covered Year | | 9,089,350 | | | 10,600,618 | | | 10,386,295 | |
+ Fair value as of the vesting date for equity awards granted in the Covered Year that vested during the Covered Year | | — | | | — | | | — | |
+/- Change in fair value as of the end of the Covered Year (compared to the end of the prior fiscal year) for equity awards granted in prior fiscal years which are outstanding and unvested as of the end of the Covered Year | | 2,086,128 | | | 1,973,507 | | | 4,319,563 | |
+/- Change in fair value as of the vesting dates (compared to the end of the prior fiscal year) for equity awards granted in prior years that vested in the Covered Year | | 2,313,548 | | | (57,773) | | | (1,639,893) | |
- Fair value at the end of the prior fiscal year for equity awards granted in prior years that were forfeited during the Covered Year. | | — | | | — | | | — | |
CAP TO PEO (column c) | | 15,303,936 | | | 14,575,257 | | | 14,452,520 | |
| | | | | | | | | | | | | | | | | | | | |
AVERAGE FOR NON-PEO NEOS | | 2023 ($) | | 2022 ($) | | 2021 ($) |
Summary Compensation Table (SCT) Total for PEO (column b) | | 4,407,257 | | | 3,961,982 | | | 4,127,981 | |
- Amounts reported in the SCT for equity awards (stock awards or options granted in the Covered Year) | | 3,195,871 | | | 2,642,954 | | | 3,050,029 | |
+ Year-end fair value of unvested equity awards granted in the Covered Year | | 3,067,667 | | | 6,095,363 | | | 4,731,534 | |
+ Fair value as of the vesting date for equity awards granted in the Covered Year that vested during the Covered Year | | — | | | — | | | — | |
+/- Change in fair value as of the end of the Covered Year (compared to the end of the prior fiscal year) for equity awards granted in prior fiscal years which are outstanding and unvested as of the end of the Covered Year | | 960,605 | | | 1,177,864 | | | 2,172,166 | |
+/- Change in fair value as of the vesting dates (compared to the end of the prior fiscal year) for equity awards granted in prior years that vested in the Covered Year | | 911,786 | | | 140,277 | | | 102,112 | |
- Fair value at the end of the prior fiscal year for equity awards granted in prior years that were forfeited during the Covered Year. | | — | | | — | | | — | |
AVERAGE CAP TO NON-PEO NEOs (column e) | | 6,151,443 | | | 8,732,531 | | | 8,083,765 | |
(1)Average of the Total Compensation as set forth in the Summary Compensation Table in the proxy statement for the applicable year for the named executive officers, other than our PEO, which are comprised of the following individuals: for 2023, Messrs. Krysler, Colgrove, Singh and FitzSimons; for 2022, Messrs. Krysler, Colgrove and Singh; and for 2021, Messrs. Krysler, Colgrove and Paul Mountford.
(2)Based on the NYSE Arca Tech 100 Index.
| | | | | |
Compensation Actually Paid vs. Company TSR & Peer Group TSR | Compensation Actually Paid vs. Net Income |
| |
| |
Compensation Actually Paid vs. Revenue | |
| We have identified the performance measures below as the most important in setting compensation for our named executive officers for fiscal 2023, each of which is described in more detail in the section above titled “Executive Compensation – Compensation Discussion and Analysis.” |
Revenue Non-GAAP Operating Profit Subscription Services Revenue Subscription ARR NPS |
STOCK OWNERSHIP INFORMATION
SECURITY OWNERSHIP
The following table sets forth, as of April 2, 2023, certain information with respect to the beneficial ownership of our common stock: (a) by each person known by us to be the beneficial owner of more than five percent of the outstanding shares of our common stock, (b) by each of our directors, (c) by each of our named executive officers, and (d) by all of our current executive officers and directors as a group.
The percentage of shares beneficially owned shown in the table is based on 307,787,050 shares of common stock outstanding as of April 2, 2023. In computing the number of shares of capital stock beneficially owned by a person and the percentage ownership of such person, we deemed to be outstanding all shares of our common stock subject to options held by the person that are currently exercisable or exercisable within 60 days of April 2, 2023 and shares or our common stock subject to RSUs which vest within 60 days of April 2, 2023. However, we did not deem such shares of our capital stock outstanding for the purpose of computing the percentage ownership of any other person.
Beneficial ownership is determined in accordance with the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power. Unless otherwise indicated, the persons or entities identified in this table have sole voting and investment power with respect to all shares shown beneficially owned by them, subject to applicable community property laws. The information contained in the following table is not necessarily indicative of beneficial ownership for any other purpose, and the inclusion of any shares in the table does not constitute an admission of beneficial ownership of those shares. Except as otherwise noted below, the address for persons listed in the table is c/o Pure Storage, Inc., 650 Castro Street, Suite 400, Mountain View, California 94041.
| | | | | | | | | | | | | | | | | |
Name of Beneficial Owner | Common Stock | Shares Subject to Options Exercisable as of April 2, 2023 or Which Become Exercisable Within 60 Days of This Date | Shares Subject to RSUs Which Vest Within 60 Days of April 2, 2023 | Total Shares | % |
Executive Officers: | | | | | |
Charles Giancarlo | 1,362,957 | | 1,000,000 | | — | | 2,362,957 | | * |
John Colgrove (1) | 14,090,896 | | 707,662 | | — | | 14,798,558 | | 4.8 |
Kevan Krysler | 324,091 | | — | | — | | 324,091 | | * |
Ajay Singh | 139,164 | | — | | — | | 139,164 | | * |
Dan FitzSimons | 4,731 | | 25,000 | | — | | 29,731 | | * |
Directors: | | | | | |
Andrew Brown | 32,195 | | — | | — | | 32,195 | | * |
Scott Dietzen (2) | 2,153,193 | | — | | — | | 2,153,193 | | * |
John Murphy | 13,051 | | — | | — | | 13,051 | | * |
Jeff Rothschild | 80,830 | | — | | — | | 80,830 | | * |
Roxanne Taylor | 73,474 | | — | | — | | 73,474 | | * |
Susan Taylor | 72,993 | | — | | — | | 72,993 | | * |
Greg Tomb | 12,801 | | — | | 2,161 | | 14,962 | | * |
Mallun Yen | 18,180 | | — | | — | | 18,180 | | * |
All directors and executive officers as a group (13 persons) | 18,378,556 | | 1,732,662 | | 2,161 | | 20,113,379 | | 6.5 |
5% Stockholders: | | | | | |
FMR and affiliated entities (3) | 40,587,362 | | — | | — | | 40,587,362 | | 13.2 |
The Vanguard Group (4) | 27,762,874 | | — | | — | | 27,762,874 | | 9 | |
BlackRock, Inc. (5) | 15,495,310 | | — | | — | | 15,495,310 | | 5 |
* Denotes less than 1%
STOCK OWNERSHIP INFORMATION
(1)Includes (i) 2,765,000 shares held by Eric Edward Colgrove Irrevocable Trust DTD Feb 8, 2011, Jeff Rothschild TTEE, (ii) 2,765,000 shares held by Richard Winston Colgrove Irrevocable Trust DTD Feb 8, 2011, Jeff Rothschild TTEE, and (iii) 701,959 shares held by the Colgrove Family Living Trust, over which Mr. Colgrove shares voting and dispositive power.
(2)Includes (i) 1,556,083 shares of Class A Common Stock held by Scott Dietzen and Katherine Dietzen, Co-Trustees of the Dietzen Living Trust, dated 1/16/2009, (ii) 173,500 shares of Class A Common Stock held by JP Morgan Trust Company of Delaware, as Trustee of the Davis Louis Dietzen GST Exempt Trust under agreement dtd 3/25/2014, and (iii) 173,500 shares of Class A Common Stock held by JP Morgan Trust Company of Delaware, as Trustee of the Willa Sloan Dietzen GST Exempt Trust under agreement dtd 3/25/2014.
(3)Based on information contained in a schedule 13G/A filed on February 9, 2023. The Schedule 13G reports that FMR LLC has sole voting power with respect to 40,578,527 shares and sole dispositive power with respect to 40,587,362 shares. FMR LLC is located at 245 Summer St, Boston, MA 02210.
(4)Based on information contained in a schedule 13G/A filed on February 9, 2023. The Schedule 13G reports that The Vanguard Group has shared voting power with respect to 127,804 shares, sole dispositive power with respect to 27,357,907 shares, and shared dispositive power with respect to 404,967 shares. The Vanguard Group is located at 100 Vanguard Blvd, Malvern, PA 19355.
(5)Based on information contained in a schedule 13G filed on February 7, 2023. The Schedule 13G reports that BlackRock, Inc. has sole voting power with respect to 14,748,528 shares and sole dispositive power with respect to 15,495,310 shares. BlackRock, Inc. is located at 55 East 52nd Street, New York, NY 10055.
DELINQUENT SECTION 16(a) REPORTS
Section 16(a) of the Exchange Act and the rules of the SEC require our directors and executive officers to file reports of their ownership and changes in ownership of common stock with the SEC. Our personnel generally prepare and file these reports for our directors and officers on the basis of information obtained from each director and officer and pursuant to a power of attorney. Based upon a review of filings with the SEC and/or written representations, we believe that all of our directors and executive officers and, to our knowledge, beneficial owners of more than 10% of our common stock complied with the reporting requirements of Section 16(a) of the Exchange Act during fiscal 2023.
STOCK OWNERSHIP INFORMATION
EQUITY COMPENSATION PLAN INFORMATION
The following table summarizes our equity compensation plan information as of February 5, 2023.
| | | | | | | | | | | |
Plan Category | (a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights(1) | (b) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights(2) | (c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(3) |
Equity plans approved by stockholders | 34,353,040 | | $ | 11.92 | | 25,971,394 | |
Equity plans not approved by stockholders(4) | — | | $ | — | | — | |
TOTAL | 34,353,040 | | | 25,971,394 | |
(1)Includes our 2009 Equity Incentive Plan and the 2015 Plan, but does not include future rights to purchase shares under our ESPP, which depend on a number of factors described in our ESPP.
(2)The weighted average exercise price is calculated based solely on outstanding stock options and excludes the shares of common stock included in column (a) that are issuable upon the vesting of (i) 26,059,734 shares under stock awards then outstanding under our 2015 Plan and (ii) 700,786 shares under stock awards then outstanding under the Portworx Inc. 2020 Equity Incentive Plan, none of which have an exercise price.
(3)Includes our 2015 Plan and ESPP. Our 2015 Plan provides that the total number of shares of common stock reserved for issuance thereunder will be automatically increased, on the first day of each fiscal year in an amount equal to 5% of the total number of shares of our capital stock outstanding on the last day of the calendar month prior to the date of each automatic increase, or a lesser number of shares determined by our board of directors. Our ESPP provides that the number of shares of common stock available for issuance thereunder is automatically increased on February 1st of each fiscal year by the lesser of (i) 1% of the total number of shares of our common stock outstanding on the last day of the calendar month prior to the date of the automatic increase, and (ii) 3,500,000 shares; provided that our board of directors may determine that such increase will be less than the amount set forth above.
(4)Excludes stock options and RSUs assumed by Pure in connection with the acquisition of Portworx Inc. As of February 5, 2023, a total of 975,192 shares of common stock were issuable upon the exercise of outstanding stock options and 700,786 shares of common stock were issuable upon the vesting of RSUs under those assumed awards. The weighted average exercise price of those outstanding stock options is $1.76 per share. No additional awards may be granted under those assumed arrangements.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Stockholders to Be Held on June 14, 2023
Why did I receive a notice regarding the availability of proxy materials on the internet?
Pursuant to rules adopted by the SEC, we have elected to provide access to our proxy materials over the internet. Accordingly, we have sent you a Notice of Internet Availability of Proxy Materials (the Notice) because our board of directors is soliciting your proxy to vote at the 2023 annual meeting of stockholders, including at any adjournments or postponements thereof. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice or to request a printed set of the proxy materials. Instructions on how to access the proxy materials over the internet or to request a printed copy may be found in the Notice. The proxy statement and annual report are available at www.proxyvote.com.
We intend to mail the Notice on or about May 5, 2023 to all stockholders of record.
How do I attend and participate in the annual meeting online?
We will be hosting the meeting via live webcast only. Any stockholder of record can attend the meeting live online at www.virtualshareholdermeeting.com/PSTG2023. The webcast will start at 8:30 am PT on June 14, 2023. Stockholders may vote and submit questions while attending the meeting online. The webcast will open at 8:15 am PT on June 14, 2023.
In order to enter the meeting, you will need the 16-digit control number, which is included in the Notice or on your proxy card if you are a stockholder of record of shares of common stock, or included with your voting instruction card and voting instructions received from your broker, bank or other agent if you hold your shares of common stock in “street name.” Instructions on how to attend and participate online are available at www.virtualshareholdermeeting.com/PSTG2023. If you encounter difficulties accessing the virtual meeting, please call the technical support number that will be posted at www.virtualshareholdermeeting.com/PSTG2023.
Who can vote at the meeting?
Only stockholders of record at the close of business on April 17, 2023 will be entitled to vote at the meeting. On the record date, there were 307,240,635 shares of common stock outstanding and entitled to vote.
A list of stockholders entitled to vote will be available for 10 days prior to the annual meeting at our headquarters, 650 Castro Street, Suite 400, Mountain View, California 94041. If you would like to view the stockholder list, please contact our Investor Relations Department at ir@purestorage.com to schedule an appointment. In addition, a list of stockholders of record will be available in the online meeting portal during the meeting for inspection by stockholders of record for any legally valid purpose related to the meeting.
Stockholder of Record: Shares Registered in Your Name
If, on April 17, 2023, your shares were registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, then you are a stockholder of record. As a stockholder of record, you may vote online during the meeting or vote by proxy. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted.
Beneficial Owner: Shares Registered in the Name of a Broker or Bank
If, on April 17, 2023, your shares were held, not in your name, but rather in an account at a brokerage firm, bank, dealer or other similar organization, then you are the beneficial owner of shares held in “street name” and the Notice is being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the meeting. As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You are also invited to attend the virtual annual meeting. Because you are not the stockholder of record, you may vote your shares online during the meeting only by following the instructions from your broker, bank or other agent.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
What am I voting on?
There are four matters scheduled for a vote:
•Election of three Class II directors to hold office until our 2026 annual meeting of stockholders;
•Ratification of the selection of Deloitte & Touche as our independent registered public accounting firm for the fiscal year ending February 4, 2024;
•Approval, on an advisory basis, of the compensation of our named executive officers, as described in this proxy statement; and
•Approval, on an advisory basis, the frequency of future advisory votes to approve the compensation of our named executive officers.
What if another matter is properly brought before the meeting?
Our board of directors knows of no other matters that will be presented for consideration at the meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the accompanying proxy to vote on those matters in accordance with their best judgment.
Will I be able to ask questions at the annual meeting?
You will be able to submit written questions during the annual meeting by following the instructions that will be available on the annual meeting website during the annual meeting. Only questions pertinent to meeting matters or the Company and submitted in accordance with the meeting’s Rules of Conduct will be answered during the meeting, subject to time constraints. Questions that are substantially similar may be grouped and answered together to avoid repetition. The meeting’s Rules of Conduct will be available on the annual meeting website.
If there are questions pertinent to meeting matters that cannot be answered during the meeting due to time constraints, management will post answers to a representative set of such questions at investor.purestorage.com. The questions and answers will remain available until Pure’s next proxy statement is filed. We also encourage you to read our Form 10-K for fiscal 2023, which is available at www.proxyvote.com.
How do I vote?
The procedures for voting are fairly simple as follows:
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record, you may vote online during the meeting, vote by proxy through the internet, vote by proxy over the telephone, or vote by proxy using a proxy card that you may request. Whether or not you plan to attend the meeting, we urge you to vote by proxy to ensure your vote is counted. Even if you have submitted a proxy before the meeting, you may still attend online and vote during the meeting. In such case, your previously submitted proxy will be disregarded.
•To vote online during the meeting, follow the provided instructions to join the meeting at www.virtualshareholdermeeting.com/PSTG2023, starting at 8:15 am PT on June 14, 2023.
•To vote online before the meeting, go to www.proxyvote.com.
•To vote by telephone, call 1-800-690-6903.
•To vote by mail, simply complete, sign and date the proxy card or voting instruction card, and return it promptly in the envelope provided.
If we receive your vote by internet or phone or your signed proxy card up until 11:59 p.m. Eastern Time the day before the 2023 annual meeting of stockholders, we will vote your shares as you direct. To vote, you will need the 16-digit control number in the Notice, on your proxy card or in the instructions that accompanied the proxy materials.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner of shares registered in the name of your broker, bank or other agent, you should have received a Notice containing voting instructions from that organization rather than from us. Simply follow the voting instructions in the Notice to ensure that your vote is counted. To vote online during the meeting, you must follow the instructions from your broker, bank or other agent.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Can I change my vote after submitting my proxy?
Yes. If you are a record holder of shares, you may revoke, subject to the voting deadlines above, your proxy by:
•Submitting another properly completed proxy card with a later date;
•Granting a subsequent proxy by telephone or through the internet;
•Sending a timely written notice that you are revoking your proxy to our Secretary at 650 Castro Street, Suite 400, Mountain View, California 94041; or
•Attending and voting online during the meeting. Simply attending the meeting will not, by itself, revoke your proxy.
If your shares are held by your broker or bank as a nominee or agent, you should follow the instructions provided by such party.
What happens if I do not vote?
Stockholder of Record: Shares Registered in Your Name
If you are a stockholder of record and do not vote online during the meeting, through the internet, by telephone or by completing your proxy card, your shares will not be voted.
Beneficial Owner: Shares Registered in the Name of Broker or Bank
If you are a beneficial owner and do not instruct your broker, bank or other agent how to vote your shares, the question of whether your broker or nominee will still be able to vote your shares depends on whether the NYSE deems the particular proposal to be a “routine” matter. Brokers and nominees can use their discretion to vote “uninstructed” shares with respect to matters that are considered to be “routine,” but not with respect to “non-routine” matters. Under the rules and interpretations of the NYSE, “non-routine” matters are matters that may substantially affect the rights or privileges of stockholders, such as mergers, stockholder proposals, elections of directors (even if not contested), executive compensation, and certain corporate governance proposals, even if management-supported. Accordingly, your broker or nominee may not vote your shares on Proposals 1, 3 or 4 without your instructions but may vote your shares on Proposal 2 even in the absence of your instruction.
Please instruct your bank, broker or other agent to ensure that your vote will be counted.
What if I return a proxy card or otherwise vote but do not make specific choices?
If you return a signed and dated proxy card or otherwise vote but do not make specific choices, your shares will be voted FOR the election each of the nominees for Class II director, FOR the ratification of the selection of Deloitte & Touche as our independent registered public accounting firm, FOR the advisory approval of named executive officer compensation and every ONE year regarding the frequency of future advisory votes on named executive officer compensation. If any other matter is properly presented at the meeting, your proxyholder (one of the individuals named on your proxy card) will vote your shares using his best judgment.
How many votes do I have?
Each holder of common stock will have the right to one vote per share.
How many votes are needed to approve each proposal?
•Proposal 1: The three nominees for Class II directors that receive the highest number of FOR votes will be elected. Only votes “For” will affect the outcome.
•Proposal 2: The ratification of the selection of our independent registered public accounting firm must receive FOR votes from the holders of a majority in voting power of the shares present at the meeting or represented by proxy and entitled to vote on the proposal.
•Proposal 3: The advisory approval of the compensation of our named executive officers must receive FOR votes from the holders of a majority in voting power of the shares present at the meeting or represented by proxy and entitled to vote on the proposal.
•Proposal 4: The number of years that receives the highest number of votes will be the recommended frequency of future advisory votes on the compensation of our named executive officers.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
What are “broker non-votes”?
As discussed above, when a beneficial owner of shares held in “street name” does not give instructions to the broker or nominee holding the shares as to how to vote on matters deemed by the NYSE to be “non-routine,” the broker or nominee cannot vote the shares. These unvoted shares are counted as “broker non-votes.”
How are broker non-votes and abstentions treated?
If your shares of common stock are held by a broker on your behalf, and you do not instruct the broker as to how to vote these shares on Proposal 2, the broker may exercise its discretion to vote for or against that proposal in the absence of your instruction. With respect to Proposals 1, 3 and 4, the broker may not exercise discretion to vote on those proposals. Such event would constitute a “broker non-vote,” and these shares will not be counted as having been voted on the applicable proposal. However, broker non-votes will be considered present and entitled to vote at the meeting and will be counted in determining whether or not a quorum is present. Please instruct your broker so your vote can be counted.
If stockholders abstain from voting, the applicable shares of common stock will be considered present and entitled to vote at the meeting and will be counted in determining whether or not a quorum is present. With respect to Proposals 1 and 4, abstentions are not considered WITHHOLD votes or votes cast FOR a nominee’s election and will have no effect in determining whether a nominee for director has received sufficient votes. With respect to Proposal 2 and 3, abstentions are considered in determining the number of votes required to obtain the necessary majority vote for the proposal and will have the same effect as voting against the proposal.
Who counts the votes?
We have engaged Broadridge Financial Solutions as our independent agent to tabulate stockholder votes. If you are a stockholder of record and you choose to vote over the internet (either prior to or during the meeting) or by telephone, Broadridge will access and tabulate your vote electronically, and if you choose to sign and mail your proxy card, your executed proxy card is returned directly to Broadridge for tabulation. As noted above, if you hold your shares through a broker, your broker (or its agent for tabulating votes of shares held in street name, as applicable) returns one proxy card to Broadridge on behalf of all its clients.
Who is paying for this proxy solicitation?
We will pay for the cost of soliciting proxies. Please be aware that you must bear any costs associated with your internet access. In addition to these proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid additional compensation for soliciting proxies. We may reimburse brokers, banks and other agents for the cost of forwarding proxy materials to beneficial owners.
What does it mean if I receive more than one Notice?
If you receive more than one Notice, your shares may be registered in more than one name or in different accounts. Please follow the instructions on the Notices to ensure that all your shares are voted.
When are stockholder proposals due for next year’s annual meeting?
To be considered for inclusion in next year’s proxy materials, your proposal must be submitted in writing by January 5, 2024, to our Secretary at 650 Castro Street, Suite 400, Mountain View, California 94041; provided that if the date of next year’s meeting is earlier than May 13, 2024 or later than July 13, 2024, the deadline will be a reasonable time before we begin to print and send our proxy materials for next year’s meeting. If you wish to nominate a director or submit a proposal that you do not desire to be included in next year’s proxy materials, you must do so between February 14, 2024 and March 15, 2024; provided that if the date of that annual meeting of stockholders is earlier than May 13, 2024 or later than July 13, 2024, you must give the required notice not earlier than the 120th day prior to the meeting date and not later than the 90th day prior to the meeting date or, if later, the 10th day following the day on which public disclosure of that meeting date is first made. You are also advised to review our amended and restated bylaws, which contain additional requirements about advance notice of stockholder proposals and director nominations.
What is the quorum requirement?
A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if stockholders holding at least a majority of the aggregate voting power of the shares of common stock entitled to vote at the meeting are present at the meeting or represented by proxy.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote during the meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, the holders of a majority of the aggregate voting power of shares present at the meeting or represented by proxy may adjourn the meeting to another date.
How can I find out the results of the voting at the annual meeting?
We expect that preliminary voting results will be announced during the meeting. In addition, final voting results will be published in a current report on Form 8-K that we expect to file within four business days after the meeting.
What does it mean if multiple members of my household are stockholders but we only received one Notice or full set of proxy materials in the mail?
The SEC has adopted rules that permit companies and intermediaries, such as brokers, to satisfy the delivery requirements for notices and proxy materials with respect to two or more stockholders sharing the same address by delivering a single Notice or set of proxy materials addressed to those stockholders. In accordance with a prior notice sent to certain brokers, banks, dealers or other agents, we are sending only one Notice or full set of proxy materials to those addresses with multiple stockholders unless we received contrary instructions from any stockholder at that address.
This practice, known as “householding,” allows us to satisfy the requirements for delivering Notices or proxy materials with respect to two or more stockholders sharing the same address by delivering a single copy of these documents. Householding helps to reduce our printing and postage costs, reduces the amount of mail you receive and helps to preserve the environment. If you currently receive multiple copies of the Notice or proxy materials at your address and would like to request “householding” of your communications, please contact your broker. Once you have elected “householding” of your communications, “householding” will continue until you are notified otherwise or until you revoke your consent by notifying your broker.
To make a change regarding the format of your proxy materials (electronically or in print), or to request receipt of a separate set of documents to a household, contact us through our website at investor.purestorage.com, or by mail at 650 Castro Street, Suite 400, Mountain View, California 94041.
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING
Our board of directors knows of no other matters that will be presented for consideration at the annual meeting. If any other matters are properly brought before the meeting, it is the intention of the persons named in the associated proxy to vote on such matters in accordance with their best judgment.
By Order of the Board of Directors
NICOLE ARMSTRONG
Chief Legal Officer and Corporate Secretary
Mountain View, California
May 5, 2023
We have filed our Annual Report on Form 10-K for the fiscal year ended February 5, 2023 with the SEC. It is available free of charge at the SEC’s web site at www.sec.gov. Stockholders can also access this proxy statement and our Annual Report on Form 10-K at investor.purestorage.com, or a copy of our Annual Report on Form 10-K for the fiscal year ended February 5, 2023 is available without charge upon written request to ir@purestorage.com or to our Secretary at 650 Castro Street, Suite 400, Mountain View, California 94041.