10-K/APeriod: FY2013

ServiceNow, Inc. Annual Report (Amendment), Year Ended Dec 31, 2013

Filed April 25, 2014For Securities:NOW

Summary

This filing is an amendment to ServiceNow, Inc.'s (NOW) 2013 Annual Report. It primarily focuses on corporate governance, director information, and executive compensation details for the fiscal year ending December 31, 2013. Key information includes details on board composition, director qualifications, nomination processes, and the compensation structure for Named Executive Officers (NEOs). It also touches upon recent corporate governance changes such as the adoption of stock ownership guidelines and a compensation recovery policy in 2014, and notes the departure of a director from the board, which was not due to any disagreement. For investors, the compensation details reveal a structure heavily reliant on equity-based awards (stock options and RSUs) alongside base salaries and performance-based cash bonuses. The report details the rationale behind the compensation philosophy, aiming to attract, retain, and motivate executives while aligning their interests with stockholders. Significant equity grants were made in 2013, with vesting schedules designed for long-term retention. Severance and change-in-control provisions are also outlined, indicating potential payouts to executives under specific circumstances.

Financial Statements
Beta
Revenue$424.65M
Cost of Revenue$155.26M
Gross Profit$269.39M
R&D Expenses$78.68M
Operating Expenses$335.66M
Operating Income-$66.27M
Interest Expense$3.50M
Net Income-$73.71M
EPS (Basic)$-0.11
EPS (Diluted)$-0.11
Shares Outstanding (Basic)677.08M
Shares Outstanding (Diluted)677.08M

Key Highlights

  • 1Frank Slootman, CEO, had his employment agreement extended by three years.
  • 2Charles E. Noell, III, a Board Director, will not stand for re-election at the 2014 Annual Meeting.
  • 3The company's nominating and corporate governance committee has a process for considering stockholder recommendations for director candidates.
  • 4The Board of Directors comprises nine individuals with diverse backgrounds in business, finance, and technology.
  • 5For 2013, Named Executive Officers (NEOs) received base salaries, quarterly cash bonuses (averaging 120% of target), and significant equity awards (stock options and RSUs).
  • 6In 2014, the company introduced performance-based RSUs and adopted stock ownership guidelines for directors and executives.
  • 7Detailed information on executive compensation elements, including stock option and RSU grants, vesting schedules, and severance packages, is provided.

Frequently Asked Questions

This filing is an amendment to ServiceNow, Inc.'s 2013 Annual Report (10-K). Its main purpose is to provide updated information regarding corporate governance, director biographies, and detailed executive compensation for the fiscal year 2013, as well as some actions taken in early 2014.

The executive compensation program consists of base salary, performance-based cash bonuses (paid quarterly in 2013), and equity compensation in the form of stock options and Restricted Stock Units (RSUs). Equity awards are designed with time-based vesting to encourage long-term retention and align executive interests with stockholders.

Yes, employment agreements for most Named Executive Officers include provisions for severance payments and benefits in the event of termination of employment without cause or resignation for good reason. Additionally, in the event of a change in control, outstanding and unvested equity awards for most NEOs would immediately vest.

The company emphasizes a diverse board with a variety of skills and perspectives. Director nominees are evaluated based on experience, integrity, skills, and industry knowledge. Non-employee directors receive a mix of cash retainers and equity awards (stock options and RSUs), with additional compensation for committee chairs. Since 2014, stock ownership guidelines are also in place for directors.