Zscaler, Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Zscaler, Inc. on October 5, 2018. The filing discloses changes to executive compensation, specifically the approval of new equity awards for the Chief Executive Officer and Chief Financial Officer under the Fiscal Year 2018 Equity Incentive Plan.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. This report focuses exclusively on executive compensation arrangements and does not contain financial performance data.
Material Changes and Executive Compensation
On October 5, 2018, the Compensation Committee approved the following long-term equity awards:
- Jagtar Chaudhry (CEO): Received performance-based restricted stock units (PSUs) for fiscal years 2019 through 2022. No RSUs were granted.
- 2019 Performance Period: 150,000 Target PSUs
- 2020 Performance Period: 150,000 Target PSUs
- 2021 Performance Period: 150,000 Target PSUs
- 2022 Performance Period: 150,000 Target PSUs
- Remo Canessa (CFO): Received a mix of RSUs and PSUs.
- RSUs: 56,250 units
- 2019 Performance Period: 28,125 Target PSUs
- 2020 Performance Period: 28,125 Target PSUs
Vesting and Performance Terms:
- CEO PSUs: Vest annually based on performance metrics determined by the Compensation Committee. For 2019, awards scale from 0% to 150% of target. Future metrics (2020-2022) are to be determined later.
- CFO Awards: RSUs and PSUs vest over approximately six years on a delayed schedule (starting 2 years and 3 months post-grant). PSUs for 2019 scale from 0% to 150% of target.
- Change in Control: In the event of a change in control, uncompleted performance periods for PSUs are deemed met at 100% achievement. Under the Severance Policy, the CEO is eligible for 100% vesting of unvested shares if terminated without cause or resigns for good reason within 12 months of a change in control.
Guidance, Outlook, and Risks
The filing does not provide financial guidance, outlook, or general risk factors. The primary contingency noted is the dependency of award vesting on the executives' continued service and the achievement of specific performance metrics, which for future years remain undetermined at the time of filing.
Investor Verification Checklist
- Verify the specific performance metrics and targets for fiscal years 2020, 2021, and 2022, which are to be determined by the Compensation Committee in the future.
- Review the full text of the Severance Policy (Exhibit 10.7 to the S-1 Registration Statement) to understand the specific definitions of "cause," "good reason," and "change in control."
- Confirm the exact vesting schedule dates for the CFO's delayed RSUs and PSUs based on the grant date.
- Examine the Form of Performance-Based Restricted Stock Unit Award Agreement (Exhibit 10.1) for detailed terms regarding deferral and settlement.