Summary
Snowflake Inc. (SNOW) announced on July 16, 2026, a significant performance-based restricted stock unit (PSU) award granted to CEO Sridhar Ramaswamy. This award, totaling 1,000,000 shares, is structured to incentivize and retain Ramaswamy by aligning his compensation with substantial long-term stockholder value creation. The award is contingent upon the satisfaction of both service-based requirements and escalating stock price milestones, designed to collectively aim for an increase of up to $100 billion in market capitalization.
Key Highlights
- 1CEO Sridhar Ramaswamy granted 1,000,000 PSUs under the 2020 Equity Incentive Plan.
- 2The award is performance-based, with vesting contingent on both service and stock price milestones.
- 3Stock price targets are set across five tranches, ranging from $324 to $531 per share.
- 4The ultimate goal of these stock price targets is to achieve a potential $100 billion increase in stockholder value.
- 5Service-based vesting for the PSUs is staggered, with deadlines in September 2029 and September 2030.
- 6Earned shares are subject to a one-year delivery deferral post-vesting, with exceptions for Change in Control events.
- 7Provisions for forfeiture and recoupment exist in cases of Misconduct or Accounting Restatements, aligning with clawback policies.
Frequently Asked Questions
The primary purpose of the performance-based restricted stock unit (PSU) award is to retain and incentivize CEO Sridhar Ramaswamy, recognizing his critical role, AI expertise, and leadership in driving Snowflake's strategic direction, especially within a competitive talent market. The award is designed to strongly align his compensation with significant long-term stockholder value creation.
The PSUs will vest only after both a service-based requirement and a stock price requirement are met. The service-based requirement mandates Mr. Ramaswamy's continued service as CEO through specific dates in September 2029 and September 2030. The stock price requirement is divided into five tranches, each with a specific target stock price that must be met or exceeded over a 90-day average closing price period.
The stock price targets are set at $324 (Tranche 1), $375 (Tranche 2), $427 (Tranche 3), $479 (Tranche 4), and $531 (Tranche 5). Cumulatively, achieving these targets is designed to contribute up to $100 billion in additional stockholder value on a fully-diluted basis, indicating a substantial growth expectation for Snowflake.
The treatment of the PSUs upon termination depends on the circumstances. If terminated involuntarily, by death, or disability before a Change in Control, unvested PSUs have a 45-day window to meet stock price requirements. If terminated for other reasons, unvested PSUs are forfeited. In the event of a Change in Control, the award may be accelerated or settled based on the consideration received by stockholders.