The board of directors at Freshworks, a company traded on Nasdaq specializing in Software-as-a-Service, has decided to revoke the CEO Performance Award of six million stock units previously awarded to its founder and CEO, Girish Mathrubootham, in 2022. This decision came about due to the revision of performance targets, attributed to challenging macroeconomic conditions.
According to statements made in SEC filings on February 16, the economic environment, beyond the company leadership’s control, has led to a situation where the stock price goals set for the CEO’s Performance-based Restrictive Stock Units (PRSU) award were unattainable, rendering the award ineffective as a retention tool.
Despite this setback, Mathrubootham will receive a new annual long-term equity incentive award valued at $19 million for 2024.
The decision to cancel the original PRSU award and replace it with a new equity incentive was influenced by the board and committee’s recognition of the long-term equity incentive program as a commitment made by the company to its shareholders.
Originally, at the time of Freshworks’ Initial Public Offering in 2021, Mathrubootham was granted a multi-year, performance-based restricted stock unit award (CEO PRSU award) for 6 million shares. This award depended on meeting specific time- and performance-related criteria. Additionally, he received 3 million restricted stock units designed to vest over a period of four years, which he retains.
