Freshworks’ board of directors has canceled the performance award of six million stock units allotted to founder and CEO Girish Mathurbootham in 2022, according to a US SEC filing. The Nasdaq-listed company cited changes in performance targets due to tough macroeconomic conditions for the cancellation of the CEO’s performance award.
“As a result of macroeconomic conditions that are entirely outside of the company’s control, the stock price hurdles were too far ahead of the current stock price for the CEO PRSU (Performance-based Restrictive Stock Units) award to have the retention value expected at the time the award was granted,” the filing showed on February 16. However, Mathrubootham will be entitled to a new annual long-term equity incentive award with a fair value of $19 million.
The cancelation came after Freshworks’ total stock-based compensation expense for 2023 was at $212 million. In 2021, the company had launched its initial public offering (IPO). Its board had granted a multi-year performance-based restricted stock unit award to Mathrubootham for 6 million stock units, with the CEO performance award having a total fair value of $131 million.
For the fourth quarter, Freshworks posted strong revenue on a surge in demand for its AI-powered customer support and IT services products. The San Mateo, California-based company posted Q4 revenue at $160.1 million.
Freshworks, which counts Nucor, S&P Global, and Bridgestone as its clients, offers an IT service management product called Freshservice, which assists businesses with employee onboarding and management. Freshworks, which competes with larger rivals such as Salesforce and Zendesk, expects 2024 revenue between $703.5 million and $711.5 million.
For the fourth quarter, Freshworks posted strong revenue on a surge in demand for its AI-powered customer support and IT services products. The San Mateo, California-based company posted Q4 revenue at $160.1 million.
Freshworks, which counts Nucor, S&P Global, and Bridgestone as its clients, offers an IT service management product called Freshservice, which assists businesses with employee onboarding and management. Freshworks, which competes with larger rivals such as Salesforce and Zendesk, expects 2024 revenue between $703.5 million and $711.5 million.
The cancelation of the CEO’s performance award signifies the impact of macroeconomic conditions on the company’s financial performance and its efforts to align its leadership incentives with the market realities.
