What is the primary purpose of this equity award for the CEO?

The primary purpose is to ensure CEO KR Sridhar's retention, recognize his contributions, and incentivize outperformance of key financial and stock price goals over the next five years. This award replaces his annual equity grants during this period.

How are the Performance Stock Units (PSUs) structured and what are the key performance indicators?

The PSUs are divided into two types: Revenue/Gross Margin PSUs and Stock Price PSUs. The Revenue/Gross Margin PSUs vest based on achieving compound annual growth rate targets for revenue (60% weighting) and gross margin (40% weighting) for fiscal years 2022 through 2025. The Stock Price PSUs vest if the company's average stock price over a 30-day period reaches specific multiples of the stock price on the grant date.

What happens to the equity award if the CEO's employment is terminated or if there is a change in control of the company?

Vesting provisions vary based on the circumstances. In case of termination without cause, death, or disability, there are provisions for accelerated vesting of RSUs and continued eligibility for PSUs for a specified period. In the event of a change in control, RSUs vest immediately, and PSUs can vest based on the acquisition price, using specified hurdles and linear interpolation for both Revenue/Gross Margin and Stock Price PSUs.

Are there any restrictions on the CEO after the equity vests?

Yes, the CEO will be required to hold shares issued upon vesting of the PSUs for at least two years, excluding an amount necessary to cover taxes. Additionally, both the PSUs and the shares issued upon their vesting are subject to the Company's clawback policy.

BE 8-K: Leadership Changes

Summary

Bloom Energy Corporation (BE) announced on May 14, 2021, a significant one-time equity award to its CEO, KR Sridhar, designed to incentivize retention and align his compensation with long-term company performance. This award, comprising 400,000 Restricted Stock Units (RSUs) and 1,600,000 Performance Stock Units (PSUs), replaces his annual equity grants for the next five years. The structure of the award, particularly the PSUs, is directly tied to achieving specific revenue and gross margin growth targets, as well as substantial increases in the company's stock price.

Key Highlights

1CEO KR Sridhar received a one-time equity award replacing annual grants for five years, designed for retention and performance incentive.
2The award includes 400,000 RSUs vesting over five years and 1,600,000 PSUs tied to performance metrics.
3Performance Stock Units (PSUs) are split into two categories: Revenue/Gross Margin PSUs and Stock Price PSUs.
4Revenue/Gross Margin PSUs vest based on compound annual growth rate targets for revenue and gross margin from fiscal years 2022-2025, with potential for up to triple the target number of units.
5Stock Price PSUs are tied to achieving progressive stock price hurdles, requiring the average closing price to reach multiples of the grant date's trailing average price.
6Vesting of the award is contingent on continued service in a key executive role, with specific provisions for accelerated vesting or forfeiture under various termination scenarios and change-in-control events.
7CEO Sridhar is subject to a two-year holding period for shares received from PSUs and a clawback policy.

Bloom Energy Corp 8-K Report, Executive Changes (May 14, 2021)

Summary

Key Highlights

Frequently Asked Questions