8-KLeadership ChangesExhibits & Filings

ADOBE INC. 8-K Report, Executive Changes (Jan 26, 2023)

Filed January 26, 2023For Securities:ADBE

Summary

Adobe Inc. (ADBE) has filed an 8-K report detailing its executive compensation programs for 2023. The company has approved a 2023 Performance Share Program and a 2023 Executive Annual Incentive Plan, both designed to align executive interests with stockholder value and drive company performance. The Performance Share Program involves awards based on a relative total stockholder return goal over three years and a Net New Sales goal measured annually. The Executive Annual Incentive Plan ties cash bonuses to the achievement of GAAP revenue and non-GAAP EPS targets, with potential for up to 200% of base salary for most executives.

Key Highlights

  • 1Adobe has implemented a 2023 Performance Share Program with awards tied to a 3-year Total Stockholder Return (TSR) goal compared to the NASDAQ 100, and a 3-year Net New Sales goal (measured annually).
  • 2Performance Share awards can range from 0% to 200% of the target award, with independent achievement metrics for TSR and Net New Sales.
  • 3The TSR Goal has specific hurdles: no payout if Adobe's TSR ranks below the 25th percentile of NASDAQ 100 companies, and the award is capped at 100% of target if Adobe's absolute TSR is negative.
  • 4Net New Sales goals focus on annualized recurring revenue (ARR) in Digital Media and subscription revenue growth in Digital Experience, with adjustments for mergers, acquisitions, and currency fluctuations.
  • 5Awards under the Performance Share Program vest in a single installment on January 24, 2026, or later, contingent on continued employment.
  • 6The 2023 Executive Annual Incentive Plan offers cash bonuses based on achieving at least 90% of the fiscal year 2023 GAAP revenue and non-GAAP EPS targets.
  • 7Executive bonuses under the Annual Incentive Plan can reach up to 200% of a participant's target award (based on base salary and target bonus percentage), with potential for a Corporate Performance Result up to 155% and an Individual Performance Result up to 150%.

Frequently Asked Questions

The 2023 Performance Share Program uses two key metrics: a relative Total Stockholder Return (TSR) goal measured against the NASDAQ 100 over three years (2023-2025), and a Net New Sales goal (measured annually over fiscal years 2023-2025) focused on net new annualized recurring revenue (ARR) in Digital Media and subscription revenue growth in Digital Experience.

Yes, for the TSR Goal, no shares will be earned if Adobe's TSR performance ranks below the 25th percentile of NASDAQ 100 companies. Additionally, the TSR award is capped at 100% of target if Adobe experiences negative absolute TSR over the performance period. Awards for both goals can range from 0% to 200% of the target number of shares.

Bonuses under the 2023 Executive Annual Incentive Plan are determined based on the achievement of corporate performance and individual performance. A minimum threshold of 90% of the fiscal year 2023 GAAP revenue target and 90% of the non-GAAP EPS target must be met. The actual award is calculated using a formula that incorporates a Corporate Performance Result (0-155%) and an Individual Performance Result (0-150%) multiplied by the Target Award ($), which is based on base salary and target bonus percentage.

Earned Performance Shares under the 2023 Program will vest in a single installment on the later of January 24, 2026, or the final certification date at the end of all performance periods, provided the participant is still employed by Adobe.