Freshworks CEO Girish Mathrubootham won't get performance award of 60 lakh shares. Here's why

Software-as-a-service firm Freshworks has changed equity incentives for CEO Girish Mathrubootham. His multi-year incentive tied to stock price targets was changed with a new $19 million long-term award, "reflecting a strategic shift to maintain leadership motivation and shareholder value", the firm said in an SEC filing.

The CEO PRSU, a performance-based restricted stock unit, is a set of incentives to reward the chief executive for aligning business objectives with long-term stakeholder value creation. In 2021, the company’s board granted the award worth 60 lakh shares to Mathrubootham. 

The board noted that the stock price hurdles were too far ahead of the current stock price for the CEO PRSU award to have the retention value expected at the time the award was granted, as a result of macroeconomic conditions that are “entirely outside the control of the company’s leadership”. 

“... In determining to cancel Mathrubootham’s CEO PRSU award and grant him an annual long-term equity incentive award in 2024, the Board and the Committee considered the fact that the long-term equity incentive program is an investment the Company has asked of its stockholders. However, the Board and the Committee also considered the fact that, as a result of macroeconomic conditions that are entirely outside the control of the company’s leadership team, the stock price hurdles were too far ahead of the current stock price for the CEO PRSU award to have the retention value expected at the time the award was granted,” the filing said. 

Freshworks brought down its loss to $28 million for the fourth quarter ended December 2024 as against a net loss of $55 million in the same period last year. Revenue rose 20 per cent to $160 million ($133 million).

For the full year of 2023, the company reported a reduced net loss of $137 million as against $232 million in the corresponding year. Revenue increased 20 per cent to $596 million ($497 million).