pega-20260424

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

____________________

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PEGASYSTEMS INC.

(Name of Registrant as Specified in its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)


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Dear Shareholder:

We cordially invite you to attend our 2026 Annual Meeting of Shareholders (the “Annual Meeting”) on Tuesday, June 16, 2026, at 225 Wyman Street, Ste 300, Waltham, Massachusetts. The Annual Meeting will commence at 10:00 a.m. Eastern Daylight Time.

At the Annual Meeting, you are being asked to consider and vote on the matters listed in the Notice of 2026 Annual Meeting of Shareholders that follows this letter. Please vote your shares by submitting your proxy in the manner described in the proxy statement so that your shares can be voted at the Annual Meeting in accordance with your instructions. Even if you plan to attend the Annual Meeting, we urge you to vote your shares prior to the meeting. You can revoke your proxy at any time before the Annual Meeting or vote your shares during the Annual Meeting by following the procedures described in the accompanying proxy statement.

We thank you for your continued support of Pega.

Sincerely,


Alan Trefler
Chairman and Chief Executive Officer
May 1, 2026

PEGASYSTEMS INC.

225 Wyman Street, Ste 300

Waltham, MA 02451

NOTICE OF 2026 ANNUAL MEETING OF SHAREHOLDERS

To be held on June 16, 2026

To our Shareholders:

The 2026 Annual Meeting of Shareholders of Pegasystems Inc. will be held at 225 Wyman Street, Ste 300, Waltham, Massachusetts, on Tuesday, June 16, 2026 beginning at 10:00 a.m. Eastern Daylight Time.

At the meeting, shareholders will consider and vote on the following matters:

1.To elect to our Board of Directors the eight nominees named in the proxy statement, each for a one-year term.

2.To approve, by a non-binding advisory vote, the compensation of our named executive officers.

3.To ratify the selection by the Audit Committee of our Board of Directors of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2026.

Shareholders of record at the close of business on April 17, 2026 are entitled to vote at the meeting. Whether you plan to attend the meeting or not, please vote your shares by submitting your proxy over the Internet, or by telephone, or by completing, signing, dating, and returning a proxy card, each in the manner described in the proxy statement. For specific instructions on how to vote your shares, please refer to the “Information About the Annual Meeting and Voting” section of the attached proxy statement. Your prompt response is requested to ensure your shares are represented at the meeting. You can revoke your proxy and change your vote at any time before the polls close at the meeting by following the procedures described in the accompanying proxy statement.

By Order of the Board of Directors,

/s/Benjamin Y. Ostapuk


Benjamin Y. Ostapuk
Chief Legal Officer and Secretary
April 24, 2026

TABLE OF CONTENTS


						Page Number
PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS						5
PROPOSAL 1 – ELECTION OF DIRECTORS						6
Director Qualifications						6
Nominees for Election for a Term of One Year Expiring in 2026						7
DIRECTOR COMPENSATION						10
INFORMATION ABOUT OUR EXECUTIVE OFFICERS						10
PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION						12
COMPENSATION DISCUSSION AND ANALYSIS						13
Executive Summary						13
Objectives of Compensation Programs						15
Elements of Compensation						16
Severance, Retention, and Change in Control Benefits						18
Potential Payments Upon Termination or Change in Control						18
Compensation Practices Risk Assessment						19
CEO Pay Ratio						19
Equity Compensation Plan Information						20
EXECUTIVE COMPENSATION						21
Summary Compensation Table						21
Grants of Plan-Based Awards						22
Outstanding Equity Awards at Fiscal Year End						23
Option Exercises and Stock Vested Table						25
PAY VERSUS PERFORMANCE						25
PROPOSAL 3 – RATIFICATION OF THE SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM						29
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES						29
Audit Committee Pre-Approval Policy and Procedures						29
CORPORATE GOVERNANCE						30
General						30
Determination of Independence						31
Board Leadership Structure and Risk Oversight						31
Director Candidates						31
Communications from Shareholders and Other Interested Parties to the Board						32
Board Meetings						32
Board Committees						32
Insider Trading Policy and Procedures						33
Corporate Responsibility and Sustainability						34
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS						35
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION						36
DELINQUENT SECTION 16(a) REPORTS						36
COMMITTEE REPORTS						36
Report of the Compensation Committee						36
Report of the Audit Committee						36
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT						37
INFORMATION ABOUT THE ANNUAL MEETING AND VOTING						38

PEGASYSTEMS INC.

225 Wyman Street, Ste 300

Waltham, MA 02451

PROXY STATEMENT FOR ANNUAL MEETING OF SHAREHOLDERS

To be held on June 16, 2026

This proxy statement contains information about the 2026 Annual Meeting of Shareholders of Pegasystems Inc. The Annual Meeting will be held on Tuesday, June 16, 2026, beginning at 10:00 a.m., Eastern Daylight Time at 225 Wyman Street, Ste 300, Waltham, MA 02451. Unless the context otherwise requires, references in this proxy statement to “Pegasystems,” the “Company,” “we,” “us,” or “our” refer to Pegasystems Inc.

We are furnishing this proxy statement in connection with the solicitation of proxies by our Board of Directors for use at the Annual Meeting and at any adjournment of that meeting. We first provided access to our proxy materials at www.envisionreports.com/PEGA on or about May 1, 2026.

Pursuant to Rule 14a-16 under the Securities Exchange Act of 1934, as amended, or the Exchange Act, our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, or Annual Report, as filed with the Securities and Exchange Commission, or SEC, is being made available to shareholders on our website, www.pega.com, and at the following URL: www.envisionreports.com/PEGA.

You may obtain a copy of our Annual Report without charge upon written request to:

Pegasystems Inc.
225 Wyman Street, Ste 300
Waltham, MA 02451-1293
Attention: Benjamin Y. Ostapuk

Chief Legal Officer and Secretary

The Annual Report does not constitute any part of this proxy statement. Certain documents referenced in this proxy statement are available on our website at www.pega.com. Information contained on our website is not included as part of, nor incorporated by reference into, this proxy statement.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Shareholders to be held on June 16, 2026.

This proxy statement and our Annual Report are available for viewing, printing, and downloading at

www.envisionreports.com/PEGA.

PROPOSAL 1 – ELECTION OF DIRECTORS

Our Board of Directors has nominated Rohit Ghai, Peter Gyenes, Richard Jones, Christopher Lafond, Dianne Ledingham, Sharon Rowlands, Alan Trefler, and Larry Weber for election to the Board of Directors.

The persons named in the proxy card as proxies will vote to elect each of the nominees, unless you vote against the election of one or more nominees or abstain from voting on the election of one or more nominees, in each case, by affirmatively marking the proxy card to that effect (or through Internet or telephonic voting). Each of our nominees has indicated their willingness to serve, if elected. However, if any of the nominees shall become unable or unwilling to serve, the proxies, unless authority has been withheld as to such nominee, may be voted for the election of a substitute nominee designated by our Board of Directors, or the Board of Directors may reduce the number of directors. Proxies may not be voted for more than eight persons.

There are no family relationships among any of our executive officers or directors, with the exception of Alan Trefler, our Chairman and Chief Executive Officer, whose brother, Leon Trefler, is our Chief of Clients and Markets. Unless otherwise noted, we refer to Alan Trefler as Mr. Trefler and Leon Trefler as Leon Trefler in this proxy statement.

The Board of Directors recommends that you vote FOR the election of the nominees as directors.

DIRECTOR QUALIFICATIONS

Board Qualifications and Experience

We aim to create and maintain a Board with a breadth of skills and attributes that is aligned with our current and anticipated strategic needs. Our candidates, as more fully described below, have experience in, among other areas: leadership, technology, international operations and growth, and sales and marketing.

NOMINEES FOR ELECTION FOR A TERM OF ONE YEAR EXPIRING IN 2027

Rohit Ghai, age 56

•Director since January 2025

•Qualifications and Relevant Experience:

◦More than two decades of leadership experience in the enterprise software industry, delivering profitable growth for large global organizations, including publicly traded companies in highly regulated markets

◦Expertise in operational and digital transformation, including SaaS, mergers and acquisitions, and go-to-market optimization

◦Combines deep cybersecurity expertise with executive-level leadership in AI-driven enterprise transformation

•Career Highlights:

◦Chief Executive Officer and member of the Board of Directors of Barracuda Networks, Inc., a leading cybersecurity company providing protection against complex threats for businesses of all sizes (September 2025 – present)

◦Chief Executive Officer and member of the Board of RSA, a leading global cybersecurity company in enterprise identity security solutions (December 2016 – September 2025)

◦Previously held product development and leadership roles at Dell/EMC, and was general manager and vice president of engineering for the storage & availability management group at Symantec

•Other Board Experience:

◦D-Wave Quantum Inc., a publicly traded quantum computing company (October 2024 – present)

◦MHC Automation, an AP automation and customer communications management company (January 2021 – present)

◦Everbridge, Inc., a formerly publicly traded company that focuses on critical event management and organizational resilience (January 2023 - July 2024)

•Education:

◦Master’s degree in computer science from the University of South Carolina

◦Bachelor’s degree in computer science from the Indian Institute of Technology (ITT)

Peter Gyenes, age 80

•Director since March 2009

•Qualifications and Relevant Experience:

◦Four decades of leadership experience in global technical, sales, marketing, and general management positions within the software and computer systems industries

◦Proven ability to bridge strategy with operational excellence

◦Experience with mergers and acquisitions

◦An active investor and board member focusing on technology market opportunities

•Career Highlights:

◦Chairman and Chief Executive Officer of Ascential Software, as well as of its predecessor companies VMark Software, Ardent Software and Informix, and led its growth into the data integration market leader, from 1996 until it was acquired by IBM in 2005

◦Previous experience as President and Chief Executive Officer of Racal InterLan, Inc. and executive positions at Data General Corporation, Encore Computer Corporation, and Prime Computer, Inc.

◦Trustee Emeritus of the Massachusetts Technology Leadership Council

•Other Board Experience:

◦Syncro, a leader in the managed service provider industry (Chairman from January 2025 – present)

◦RealPage, Inc., a formerly publicly traded leading global provider of software and data analytics to the real estate industry (January 2010 - April 2021)

◦Sophos plc, a global security software company (Chairman May 2006 - March 2020)

◦Information Builders, Inc., a leader in business intelligence, analytics, and data management solutions (November 2017 - December 2020)

•Education and Awards:

◦B.A. in mathematics and M.B.A. from Columbia University

◦Awarded the 2005 New England Region Ernst & Young Entrepreneur of the Year award in Software

Richard Jones, age 74

•Director since November 2000, Vice Chairman from September 2002 – July 2007

•Qualifications and Relevant Experience:

◦Two decades of executive management

◦Financial expertise and business acumen

◦Experience as Pegasystems’ President and Chief Operating Officer

•Career Highlights:

◦Joined Pegasystems in October 1999, serving as President and Chief Operating Officer until September 2002, part-time employee from July 2002 – July 2007

◦Previous experience in the financial services industry including Chief Asset Management Executive and member of the Operating Committee at Barnett Banks, Inc., Chief Executive Officer of Fleet Investment Services, Executive Vice President of Fidelity Investments, and principal with the consulting firm of Booz, Allen & Hamilton

•Other Board Experience:

◦Resonantia, Inc. (September 2022 – present)

◦KaliVir Immunotherapeutics, Inc. (formerly Western Oncolytics Ltd.), a private company developing novel therapies for cancer (July 2014 – present)

◦Chairman of Jones Boys Ventures, a retailer (June 1995 – present)

•Education:

◦Undergraduate degree from Duke University, with majors in both economics and management science

◦M.B.A. from the Wharton School of the University of Pennsylvania

Christopher Lafond, age 60

•Director since April 2019

•Qualifications and Relevant Experience:

◦More than two decades of executive leadership experience working with large, publicly traded, multinational companies, developing and executing long range corporate initiatives while ensuring focus on the business models and strategic objectives that maximize value creation

◦Extensive leadership experience and financial expertise

◦Cybersecurity experience centered on executive oversight of secure content collaboration, data protection, and enterprise risk governance

◦Executive leadership in deploying AI-enabled software

•Career Highlights:

◦Chief Executive Officer and member of the board of Insurity, Inc., a property and casualty insurance technology and services provider (August 2019 - January 2025), and Chief Financial Officer (November 2017 – August 2019)

◦Member of the Small Business Advisory Committee of the Financial Accounting Standards Board (FASB) (March 2019 – December 2023)

◦Previous experience as executive vice president and chief financial officer of Intralinks, a global leader in secure content collaboration software-as-a-service (SaaS) solutions, and different leadership positions at Gartner, Inc.

•Other Board Experience:

◦Sunstar Insurance Group, a financial holding company that seeks to acquire majority equity ownership positions in independent insurance agencies (July 2025 – present)

◦SHARE Cancer Support, a national, peer-led 501(c)(3) nonprofit organization focusing on support and education with respect to breast and gynecologic cancer (April 2025 – present)

•Education:

◦B.A. in Economics from the University of Connecticut

◦M.B.A. from the Columbia University Graduate School of Business

Dianne Ledingham, age 63

•Director since September 2016

•Qualifications and Relevant Experience:

◦One of Bain & Company’s most prominent leaders in commercial and sales excellence with experience across a range of industries and particular depth in technology and software

◦Founding global leader for Sales and Channel Effectiveness within Bain’s Customer Strategy and Marketing practice, leading that group for eight years

•Career Highlights:

◦35-plus years at Bain & Company, Inc., currently as an Advisory Partner in Bain & Company’s Boston office and a leader in Bain’s Customer Strategy & Marketing practice and the firm’s Telecom, Media and Technology practice

◦Previously served on each of Bain’s governance committees including serving on Bain’s Board of Directors, Bain’s Global Compensation and Promotion Committee (including as elected Chair), and Bain’s Global Nominating Committee (including as elected Chair)

◦Harvard Business Fellow at the Harvard Business School (July 2024 – present)

•Other Board Experience:

◦Edgio, Inc., a formerly publicly traded company (September 2022 – present)

◦City Year Boston, a 501(c)(3) nonprofit organization focusing on improved outcomes for students in under-resourced schools and the cultivation of the next generation of leaders (2009 – present)

◦Ventures for Hope, an umbrella organization that helps resource nonprofits creating job opportunities in economically disadvantaged communities (2014 – present)

•Education:

◦Undergraduate degree in electrical engineering with honors from Brown University

◦M.B.A. with distinction from Harvard Business School

Sharon Rowlands, age 67

•Director since April 2016

•Qualifications and Relevant Experience:

◦More than 20 years' experience leading complex, multi-billion-dollar business services and software companies serving small- and medium-sized companies, financial markets, and enterprise customers

◦Executive and board-level expertise in cybersecurity

◦Focus on AI strategy and oversight

•Career Highlights:

◦Chief Executive Officer (January 2019 – present) and President (2019 – 2021) of Newfold Digital, Inc. (formerly Web.com), a leading web and commerce technology company

◦President of USA Today Network Marketing Solutions at Gannett Co. (2017 – 2019)

◦Prior Chief Executive Officer positions include ReachLocal, Penton Media, Altegrity, and Thomson Financial

•Other Board Experience:

◦Constant Contact, a digital email and marketing platform (February 2021 – present)

◦Sonihull, a company that provides ultrasonic anti-fouling solutions (as an advisor on the board March 2020 – 2024)

◦Everbridge, Inc., a formerly publicly traded company that focuses on critical event management and organizational resilience (January 2019 – July 2024)

◦The Glimpse Group, Inc., a publicly traded diversified Immersive Technology platform company providing enterprise-focused Immersive Technology, Spatial Computing and Artificial Intelligence driven software and services (October 2017 – December 2023)

•Education:

◦B.A. in History from the University of Newcastle, Newcastle-Upon-Tyne

◦Postgraduate Certificate in Education from Goldsmiths, University of London

Alan Trefler, age 70

•Founder of Pegasystems and Chief Executive Officer and Chairman of the Board of Directors since Pegasystems was organized in 1983

•Qualifications and Relevant Experience:

◦Extensive experience in the software industry

◦Guided Pegasystems from its founding to its position as a global leader in AI-powered enterprise solutions

◦Numerous accolades for his contributions to technology and business

◦Author of best-selling book, “Build for Change”

•Education:

◦B.A. in economics and computer science from Dartmouth College

Larry Weber, age 70

•Director since August 2012

•Qualifications and Relevant Experience:

◦Extensive experience in the global marketing and public relations industry

◦Over the past 40 years, helped both global and emerging organizations become powerhouse brands

◦Thought leadership and commercialization perspective on AI’s societal and business impact

•Career Highlights:

◦Executive Officer and Chairman of the Board of Racepoint Global, Inc., a digital marketing services ecosystem of marketing service companies organized to help chief marketing officers in their roles as builders of communities and content aggregators, since he founded the company in September 2004

◦Co-founded the Massachusetts Innovation & Technology Exchange (MITX) in 1996, one of the largest interactive advocacy organizations in the world, and serves as its Chairman of the Board

◦Authored seven books on business, technology, and marketing

•Education:

◦B.A. in English from Denison University, Ohio

◦M.F.A. in Writing and Literature from Antioch College, Oxford

DIRECTOR COMPENSATION

Our non-employee directors are paid an annual cash retainer of $50,000 and receive an annual equity grant valued at $250,000 (the “Annual Equity Grant”). The Annual Equity Grant is granted in the form of fifty percent common stock and fifty percent stock options, which are both fully vested when granted.

Additionally, we pay an annual cash retainer to non-employee directors serving on committees:

•$27,000 to the Audit Committee Chair

•$15,000 to each Audit Committee member other than the Chair

•$20,000 to the Compensation Committee Chair

•$10,000 to each Compensation Committee member other than the Chair

•$12,500 to the Nominating and Corporate Governance Committee Chair

•$12,500 to the Risk Subcommittee Chair

•$7,500 to each Risk Subcommittee member other than the Chair

Directors do not receive compensation for service as non-Chair members of the Nominating and Corporate Governance Committee.

In addition to the above, we also offer to reimburse non-employee directors for expenses incurred in attending Board, committee, or other Company meetings. Alan Trefler is our only director who is also an employee. He receives no compensation for his service as a director.

Non-Employee Director Compensation

The following table provides the total compensation earned by each non-employee director in 2025:


	Fees Earned or Paid in Cash		Stock Awards (1)		Option Awards (1)(2)		Total
Rohit Ghai(3)	$	98,459	$	177,490	$	177,439	$	453,388
Peter Gyenes	$	65,000	$	125,015	$	125,015	$	315,030
Richard Jones	$	60,000	$	125,015	$	125,015	$	310,030
Christopher Lafond	$	84,500	$	125,015	$	125,015	$	334,530
Dianne Ledingham	$	60,000	$	125,015	$	125,015	$	310,030
Sharon Rowlands	$	70,000	$	125,015	$	125,015	$	320,030
Larry Weber	$	95,000	$	125,015	$	125,015	$	345,030

(1) These amounts reflect the dollar amount of the aggregate grant date fair value of awards granted in 2025, in accordance with Financial Accounting Standards Board Accounting Standards Codification (“FASB ASC”) Topic 718.

(2) In addition, at December 31, 2025, each of our non-employee directors other than Mr. Ghai held outstanding stock options to purchase an aggregate of 55,304 shares of our common stock, and Mr. Ghai held outstanding stock options to purchase an aggregate of 7,350 shares of our common stock.

(3) Mr. Ghai received a pro-rated cash retainer and pro-rated annual equity grant in January 2025 when he joined the Board and also received the full-year 2025 annual retainer and equity grant paid to the all non-employee directors.

INFORMATION ABOUT OUR EXECUTIVE OFFICERS

Alan Trefler, our Chief Executive Officer, is also a director, and you can find information about Mr. Trefler in the section above entitled Nominees for Electi o n for a Term of One Year Expiring in 2027.

Kenneth Stillwell, age 55, joined Pegasystems in July 2016 as Senior Vice President, Chief Financial Officer, and Chief Administrative Officer and in April 2021 was promoted to Chief Operating Officer in addition to his role as Chief Financial Officer. Mr. Stillwell previously served as Senior Vice President and Chief Financial Officer of Dynatrace, a leader in digital performance management solutions; Executive Vice President and Chief Financial Officer of SOVOS, a financial compliance SaaS provider; and Division CFO of PTC, a publicly traded software provider. Mr. Stillwell holds a B.S. in business/economics from the University of Pittsburgh and an M.S. in accounting and finance from the University of South Carolina. Mr. Stillwell is a Certified Public Accountant.

Kerim Akgonul, age 55, joined Pegasystems in 1992 and has held various positions, including Senior Vice President of Engineering from 2014 to 2021 and Chief Product Officer from April 2021 to the present. Mr. Akgonul’s professional background encompasses over thirty years of software development and managerial experience during his tenure at the Company. Mr. Akgonul holds a B.S. in mathematics and computer science from Indiana University of Pennsylvania.

John Higgins, age 52, joined Pegasystems in February 2021 as Head of Global Consulting and Client Success and was named Chief of Client & Partner Success in March 2022. Mr. Higgins joined Pegasystems from Salesforce, where he held various positions from July 2012 to September 2020, including leading International Services for EMEA, APAC and LATAM. Mr. Higgins holds a B.A. in Economics from University College Dublin.

Efstathios Kouninis, age 64, joined Pegasystems in April 2008 as Vice President of Finance, has served as Chief Accounting Officer since May 2008 and Treasurer since January 2014, and was promoted to Senior Vice President of Finance in April 2024 in addition to his roles as Chief Accounting Officer and Treasurer. Prior to Pegasystems, Mr. Kouninis served as Chief Financial Officer and Treasurer of Tasker Products Corporation, a publicly traded manufacturer of antimicrobial chemicals, and on the Staff of the Division of Corporation Finance of the Securities and Exchange Commission. Mr. Kouninis holds a B.S. from the University of Massachusetts, a Post Baccalaureate in accounting, and an M.S. in taxation from Bentley College.

Leon Trefler, age 65, joined Pegasystems in April 1998 as an Account Executive for Strategic Business Development. Since then, he has held various senior sales management positions across the Company and in Channel Sales, including Senior Vice President of Sales from January 2010 to July 2014, Senior Vice President of Global Customer Success for the Americas from July 2014 to April 2021, Senior Vice President of Global Customer Success from April 2021 to February 2022, and Chief of Clients and Markets from February 2022 to the present. In 2002, he launched the commercialization of PegaRULES Process Commander, the predecessor to the Pega Platform. Mr. Trefler holds a B.A. degree from Dartmouth College.

Alan Trefler and Leon Trefler are brothers. There are no other family relationships among any of our executive officers or directors.

PROPOSAL 2 – ADVISORY VOTE ON EXECUTIVE COMPENSATION

At the Annual Meeting, pursuant to the requirements of Section 14A of the Exchange Act, we are asking our shareholders to approve the compensation of our named executive officers, as described in the Compensation Discussion and Analysis section, executive compensation tables, and accompanying narrative disclosures below. This is an advisory vote, meaning that this proposal is not binding on us, but our Compensation Committee takes shareholder feedback into account when designing our executive compensation program. Therefore, we are asking our shareholders to vote on the following resolution at the Annual Meeting:

“RESOLVED, that the shareholders of the Company approve, by a non-binding advisory vote, the compensation of the Company’s named executive officers, as described in this proxy statement, including in the ‘Compensation Discussion and Analysis,’ compensation tables, and narrative discussion included therein.”

At our annual meeting in 2025, our shareholders approved our executive compensation programs with 98% of the votes cast, and our compensation program continues to be modeled on the same principles that received the strong support of our shareholders last year.

The last time our shareholders voted on the frequency of the advisory vote to approve our executive compensation was at our annual meeting in 2023, and at that meeting a majority of our shareholders voted to hold the advisory vote on an annual basis. Therefore, we intend to put forth at each annual general meeting of shareholders an advisory vote on the compensation of our named executive officers for the immediately preceding fiscal year.

The Board of Directors recommends that you vote FOR the approval of the compensation of our named executive officers, as described in this proxy statement.

COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE SUMMARY

Pegasystems delivered strong financial results for the fiscal year ended December 31, 2025, exceeding the Company’s published top- and bottom-line guidance and Rule of 40. The Company’s 2025 financial results also exceeded its internal performance targets set forth in its compensation plans, which focused on the year-over-year growth of Annual Contract Value and on Rule of 40 principles. Our executive compensation is designed to reward superior performance by our executives and align the interests of our executives with our shareholders and with the achievement of our short- and long-term corporate goals. Our compensation program ties significant variable compensation, such as annual bonus opportunities and performance stock options, with our achievement of our corporate goals, and in light of Pegasystems’ strong financial performance and over-achievement of internal performance targets for 2025, our executives received above-target compensation.

Annual Contract Value

Annual Contract Value (“ACV”) represents the annualized value of our active contracts as of the measurement date. Each contract’s total value is divided by its duration in years to calculate ACV.


(Dollars in thousands)	December 31, 2024		December 31, 2025		Change				Constant Currency Change
Pega Cloud	$	652,443	$	866,612	$	214,169	33	%	28	%
Maintenance	291,807		288,873		(2,934)		(1)	%	(4)	%
Subscription services	944,250		1,155,485		211,235		22	%	18	%
Subscription license	427,268		452,902		25,634		6	%	4	%
	$	1,371,518	$	1,608,387	$	236,869	17	%	14	%

Reconciliation of ACV and constant currency ACV


(in millions, except percentages)	December 31, 2024		December 31, 2025		1-Year Change
ACV	$	1,372	$	1,608	17	%
Impact of changes in foreign exchange rates	—		(46)
Constant currency ACV	$	1,372	$	1,562	14	%

Note: Constant currency ACV is calculated by applying the December 31, 2024 foreign exchange rates to all periods shown.

Rule of 40

For 2025, Pegasystems’ Rule of 40 calculation exceeded 40. Rule of 40 is calculated by adding the Company’s ACV growth and free cash flow margin. Free cash flow margin is defined as non-GAAP free cash flow, as defined below, expressed as a percentage of total revenue for the applicable year (for purposes of the performance-based stock options described below) or as a percentage of ACV at the end of the applicable year (for purposes of our Corporate Incentive Compensation Plan).


(Dollars in thousands)	2024		2025
Cash provided by operating activities	$	345,926	$	505,227	46	%
Investment in property and equipment	(7,712)		(14,504)
Free cash flow (1)	$	338,214	$	490,723	45	%

Supplemental information (2)
Litigation settlement, net of recoveries	$	32,403	$	—
Legal fees	16,197		35,484
Restructuring	5,252		2,056
Interest paid on convertible senior notes	3,810		1,754
Income taxes, net of refunds	82,317		21,630
	$	139,979	$	60,924

(1) Our non-GAAP free cash flow is defined as cash provided by operating activities less investment in property and equipment. Investment in property and equipment fluctuates in amount and frequency and is significantly affected by the timing and size of investments in our facilities and equipment. We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings. This information is not a substitute for financial measures prepared under U.S. GAAP.

(2) The supplemental information discloses items that affect our cash flows and are considered by management not to be representative of our core business operations and ongoing operational performance.

•Litigation settlement, net of recoveries: Cost to settle litigation, net of insurance recoveries, arising from proceedings outside the ordinary course of business. See "Note 20. Commitments And Contingencies" in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026 for further information.

•Legal fees: Legal and related fees arising from proceedings outside the ordinary course of business.

•Restructuring: Restructuring fluctuates in amount and frequency and is significantly affected by the timing and size of our restructuring activities.

•Interest paid on convertible senior notes: In February 2020, we issued convertible senior notes (the “Notes”), due March 1, 2025, in a private placement. The Notes accrued interest at an annual rate of 0.75%, paid semi-annually in arrears on March 1 and September 1. The outstanding Notes were repaid in their entirety at maturity.

•Income taxes, net of refunds: Direct income taxes paid net of refunds received.

The Compensation Discussion and Analysis and Executive Compensation sections of this proxy statement describe the material elements of our compensation programs for our named executive officers, comprising our principal executive officer, our principal financial officer, and the three executive officers who were our next most highly compensated executive officers during 2025:

•Alan Trefler, our Chairman of the Board of Directors and Chief Executive Officer (principal executive officer)

•Kenneth Stillwell, our Chief Operating Officer and Chief Financial Officer (principal financial officer)

•Kerim Akgonul, our Chief Product Officer

•John Higgins, our Chief of Client & Partner Success

•Leon Trefler, our Chief of Clients and Markets

OBJECTIVES OF COMPENSATION PROGRAMS

The Compensation Committee of our Board of Directors determines the compensation of our executive officers and oversees the compensation programs offered to our executives and employees. Although our Compensation Committee makes the final decisions about executive compensation, it also takes into account the views of our Chief Executive Officer, who makes initial recommendations with respect to the compensation of executive officers other than himself. Other employees of Company also participate in the preparation of materials presented to or requested by our Compensation Committee for use and consideration at its meetings.

The Compensation Committee did not engage an outside compensation consultant in 2025.

Compensation Philosophy

The objective of our executive compensation program is to align executive compensation with the achievement of our strategic and financial goals. The program focuses on long-term indicators of the underlying success of our business, rather than on ancillary indicators such as our stock price or earnings per share that may be influenced by other factors and may not necessarily demonstrate the underlying success of our business. Our compensation philosophy is built upon external competitiveness, principles of internal equity with respect to each executive’s role relative to others within the Company, recognition of performance against short and long-term goals, and the sharing of success. Therefore, our compensation program is primarily focused on internal and external benchmarking, and the level of attainment of target goals, most of which are shared goals relating to our overall performance.

Our compensation program is designed to reward superior performance by our executive officers. In measuring the contribution of the executive officers to Pegasystems, the Compensation Committee considers their performance relative to the applicable unit goals such as license signings, profit margins, additional financial metrics, and other specific objectives set by management. While compensation surveys are useful guides for comparative purposes, the Compensation Committee believes that a successful compensation program also requires the application of judgment and subjective determinations of individual and company performance. Therefore, the Compensation Committee applies its judgment when reconciling the program’s objectives with the realities of retaining valued employees.

Competitive Compensation Program

In making compensation decisions, management and the Compensation Committee consider the competitiveness of our executive officers’ compensation by comparing each element of compensation against compensation data from a peer group of the business-to-business software companies listed below, which the Compensation Committee believes compete with us for executive talent and that have similar present or projected revenue, are in a comparable industry, and/or are within our geographic market. The Compensation Committee also considers data from published compensation surveys including the Radford McLagan Compensation Database. In general, the Compensation Committee targets total compensation of our executive officers at above the median as compared to our peer group companies and compensation surveys. We used the companies listed below as our peer group for reviewing and evaluating our 2025 executive compensation program:


Atlassian Corporation			Okta, Inc.
Dynatrace, Inc.			PTC Inc.
Fair Isaac Corporation			Twilio, Inc.
Guidewire Software, Inc.			Veeva Systems Inc.
MongoDB, Inc.

ELEMENTS OF COMPENSATION

The elements of compensation for our executive officers are listed below. The other perquisites consist of health and retirement benefits, such as disability, health, dental and life insurance, and a match by Pegasystems of 401(k) defined contribution plan contributions for our named executive officers, with the exception of Mr. Higgins who received company contributions and cash allowances in connection with our UK defined contribution plan, and long-term care insurance premiums.

Objective

Fixed/Variable

Base Salary

Attract and retain highly qualified leaders with market-competitive compensation structure.

Fixed

Bonus – Corporate Incentive Compensation Plan

Link pay with our performance. Reward achievement of our financial and strategic goals.

Variable

Additional Cash Incentives

Link pay with individual, business unit and/or corporate performance. Reward achievement of specific goals.

Variable

Equity Awards (Stock Options, Performance-Based Stock Options, and Restricted Stock Units)

Link pay with our long-term performance. Reward stock price appreciation, promote long-term retention and permit executives to accumulate equity ownership.

Variable

Other Perquisites

Retain talent by providing financial protection and security.

Fixed

Base Salary

Cash compensation in the form of base salary is intended to reflect an executive’s knowledge, skills, and level of responsibility, as well as the economic and business conditions affecting Pegasystems. In determining the salary of each executive officer, the Compensation Committee reviews compensation for comparable positions in our peer group companies or published compensation surveys. As discussed above, the Compensation Committee’s approach is that the compensation of our executive officers should be targeted above the median compensation for similarly situated executives in comparable companies; however, the comparatively low base salary of our Chief Executive Officer reflects his status as a significant shareholder whose personal wealth is tied directly to sustained increases in our value.

The Compensation Committee increased Mr. Akgonul’s base salary in 2025 to maintain his compensation above the median but did not increase the salary of any other executive officer because their compensation was already within the target range. Because the base salaries of some of our executive officers changed mid-year in 2024, their base salaries as reported in the Summary Compensation Table below in this proxy statement are lower for 2024 than for 2025 even though there was no increase in 2025.

Bonus – Corporate Incentive Compensation Plan (CICP)

Annual cash bonuses under our Corporate Incentive Compensation Plan, or CICP, for executive officers are intended to reward executive officers for the achievement of our financial and strategic goals. In 2025, the CICP performance goals were divided into two categories. The first category, in the aggregate weighted at 75% of total achievement, was corporate financial goals related to progress against our Rule of 40 targets, calculated as the sum of ACV growth and free cash flow margin, with full achievement at 39% or greater. The second category was key operational initiatives related to strategy and organizational effectiveness established by our senior management and approved by the Board of Directors as part of our annual strategic planning, with the strategic initiatives in the aggregate weighted at 25% of total achievement. Together, these two categories make up a single performance target under the CICP, or the Corporate Performance Target. The target bonus levels established for our executive officers represent management’s and the Compensation Committee’s assessment of a very high level of achievement of specific goals. Where target bonus levels relate to financial goals that are also the subject of our published financial guidance, these goals are generally established at levels that represent over-performance in relation to the guidance that we publish at the beginning of each calendar year.

The percentage achievement of the Corporate Performance Target, or the Funding Percentage, determines the extent to which the CICP is funded. The CICP is funded with an amount equal to the aggregate target cash bonus amount multiplied by the Funding Percentage, except that if the Funding Percentage is less than 70% (“threshold funding”) then the CICP is not funded at all and no CICP bonuses are paid. For 2025, Pegasystems exceeded the Corporate Performance Target, resulting in a Funding Percentage of 120%.

Once the Funding Percentage is determined and the pool of funds for CICP bonuses is established, the actual bonus payment for each executive officer is subject to adjustment to reflect each individual’s level of contribution to our strategic goals, as determined by the Compensation Committee. The Chief Executive Officer assesses each other executive officer’s contribution to the overall operational plan and to such executive officer’s specific functional unit, and the Compensation Committee has the discretion to modify individual payout amounts to reflect an individual’s performance. For 2025, based on each executive officer’s contributions and individual performance and in light of the Company’s over-performance of the Corporate Performance Target, the Compensation Committee approved the payment of CICP bonuses to our named executive officers as follows, expressed as percentages of their target CICP bonus:

•Chief Executive Officer: 120% of target CICP bonus

•Chief Operating Officer and Chief Financial Officer: 127% of target CICP bonus

•Other named executive officers: 122% of target CICP bonus

Additional Cash Incentives

Additional cash incentives have historically been available to several executives other than our Chief Executive Officer based on the achievement of specific individual, business unit, and/or corporate performance goals established by our Chief Executive Officer. In 2025, Mr. Higgins and Leon Trefler were eligible to earn sales incentive commissions related to Global ACV Bookings. Because Pegasystems overachieved the 2025 goals for Global ACV Bookings, and Mr. Higgins and Leon Trefler received sales commissions representing 121% and 128%, respectively, of each executive’s target commissions.

Equity Awards

The Compensation Committee generally utilizes time-based stock options, performance-based stock options, and restricted stock units, or RSUs, to align the long-term interests of executives and shareholders and, in the case of performance-based stock options, incentivize the achievement of certain financial goals. All of our equity awards are granted under our 2004 Long-Term Incentive Plan, as amended and restated, or the “2004 Long-Term Incentive Plan.”

Performance-Based Stock Options - 2024

In March 2024, the Compensation Committee granted our named executive officers, other than our Chief Executive Officer, and certain other employees stock options with vesting conditioned on the Company’s achievement of ACV growth and Rule of 40 targets in fiscal years 2024 and 2025 (2024 PSOs). The 2024 PSOs vested over two years based on the Company’s achievement of financial performance targets: (1) 25% on the first anniversary of the grant date based on the achievement of financial performance goals for the year ended December 31, 2024, and (2) 75% on the second anniversary of the grant date based on the achievement of financial performance goals for the year ended December 31, 2025 subject to adjustment for the actual level of achievement. For the year ended December 31, 2024, the Company achieved the performance metrics at a 100% level, and 25% of the shares originally subject to the 2024 PSOs vested on March 4, 2025. For the year ended December 31, 2025, the Company over-achieved the performance metrics at a 160% level, and an additional 120% of the shares originally subject to the 2024 PSOs vested on March 4, 2026. The chart below shows the performance metrics and achievement scale for the 2025 tranche of the 2024 PSOs. For the year ended December 31, 2025, Pegasystems’ ACV growth was 14% on a constant currency basis, and the Company’s financial results exceeded the Rule of 40.


2024 PSOs: FY 2025 Achievement Scale
ACV Growth (constant currency)		Rule of 40
		39+		38
10	%	80	%	60	%
11	%	100	%	80	%
12	%	120	%	100	%
13	%	140	%	120	%
14	%	160	%	140	%
15	%	180	%	160	%

Performance-Based Stock Options - 2025

In March 2025, the Compensation Committee granted our named executive officers, other than our Chief Executive Officer, and certain other employees stock options with vesting conditioned on the Company’s achievement of ACV growth and Rule of 40 targets in fiscal years 2026 and 2027 (2025 PSOs). To help continue the Company’s momentum and reward executives for a strong fiscal year 2024 and to enhance the retention value of performance options, the Compensation Committee designed the 2025 PSOs with a longer performance period and vesting schedule than the 2024 PSOs. 50% of the shares originally subject to the 2025 PSOs are eligible to vest quarterly over two years beginning on the second anniversary of the grant date based on the achievement of financial performance goals for the year ending December 31, 2026, and 50% of the shares originally subject to the 2025 PSOs are eligible to vest quarterly over two years beginning on the third anniversary of the grant date based on the achievement of financial performance goals for the year ending December 31, 2027, in each case subject to adjustment for the actual level of achievement. Any shares subject to 2025 PSOs not earned for the applicable performance period are forfeited.

CICP RSUs

Executive officers and other employees may elect to receive 50% of their target incentive compensation under the CICP in the form of RSUs instead of cash. As an added incentive, the number of RSUs receivable by executive officers and other employees upon such election is determined by dividing 50% of their target incentive compensation by an amount equal to 85% of the closing price of our common stock on the date of grant.

If elected pursuant to the CICP, the RSUs are granted in March and vest 100% on the first anniversary of the date of grant if the Funding Percentage is at least 70%, as described in the CICP - Bonus section above, and the executive or employee is employed by the Company and in good standing with satisfactory performance as of the vesting date. If these conditions are not met, the RSUs do not vest, and the award expires. Because the Funding Percentage for the 2025 CICP exceeded the 70% target, the CICP RSUs granted in March 2025 vested 100% in March 2026.

RSUs and Stock Options with Time-Based Vesting

In addition to the performance-based stock options and CICP RSUs described above, we also grant stock options with time-based vesting to all of our executive officers and RSUs with time-based vesting to our executive officers other than our Chief Executive Officer. We believe these time-based equity awards are an important retention tool, as the equity awards vest over a multiple-year period only if the executive continues to be employed by us on each vest date. The Compensation Committee grants stock options to incentivize and reward executives if the Company’s stock price increases over the exercise price of the options, while mitigating retention risk with RSUs, which have value even if the Company’s stock price declines. RSUs also help mitigate shareholder dilution, as an RSU award can provide equivalent value to the executive as a stock option but through the issuance of fewer shares.

In 2025, the Compensation Committee granted a stock option with time-based vesting to our Chief Executive Officer and a mix of stock options and RSUs with time-based vesting to our other named executive officers. These stock options and RSU awards vest over four years based on continued employment.

Equity Award Granting Practices

Newly hired employees typically receive an initial equity award of either time-based RSUs or a combination of time-based RSUs and options upon joining Pegasystems, and the Company’s practice is to grant these awards on the first business day of the first or second month following the employee’s start date. The Compensation Committee also makes periodic grants of time-based stock options and RSUs as well as grants of performance options to executive officers and certain employees, typically at the Compensation Committee’s regularly scheduled March meeting.

We do not consider material nonpublic information or its release dates when determining the timing or terms of stock option grants, and we do not time the disclosure of material nonpublic information to affect the value of executive compensation. The exercise price of a newly granted option is the closing price of our common stock on the Nasdaq on the date of grant or, if the grant date falls on a non-trading day, the closing price of our common stock on the Nasdaq on the last trading day preceding the date of grant.

Other Perquisites

In addition to the elements of compensation discussed above, we offer the executive officers contributions towards medical, dental, vision, life, accidental death and dismemberment, disability, and long-term insurance premiums. We do not offer deferred compensation of any kind, nor do we offer retirement benefits, other than a 401(k) defined contribution plan, and contributions and cash allowances related to a defined contribution pension plan in the UK. We typically match, on a quarterly basis, 50% of contributions made by executive officers and other employees to the 401(k) plan, up to 6% of the executive officer’s or employee’s base salary. We contribute 5% of the executive officer’s or employee’s base salary to the UK pension plan, as part of the total 9% contribution, which also includes 4% from the employee’s pre-tax salary.

SEVERANCE, RETENTION, AND CHANGE IN CONTROL BENEFITS

We have entered into employment offer letters with Messrs. Stillwell and Higgins containing provisions for additional compensation upon termination of employment under certain circumstances. The agreement with Mr. Stillwell provides that, in the event his employment is terminated by us without cause, he will receive a severance payment equal to six months of then-current base salary, plus an additional month for each year of service with a maximum of 12 months’ total severance. In addition, in the event of a sale of Pegasystems and termination of his employment, all of Mr. Stillwell’s unvested stock options and RSUs would be subject to immediate full acceleration of vesting. Mr. Higgins’ agreement provides that, in the event of a sale of Pegasystems and termination of Mr. Higgins’ employment, all unvested stock options and RSUs granted as part of his new hire equity award would be subject to immediate full acceleration of vesting.

Our primary rationale for these benefits is that we believe it is standard in our industry to provide a reasonable severance payment to certain high ranking executive officers in the event that they are terminated without cause, and that the absence of such arrangements might jeopardize our chances of hiring and retaining such executives. We limit such post-termination compensation arrangements to situations in which such executive officers are actually terminated, rather than those in which there is a mere change of control.

POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE IN CONTROL

The following quantifies the potential payments and benefits to Messrs. Stillwell and Higgins upon termination of employment or a change in control, assuming such event occurred on December 31, 2025. These numbers do not reflect the actual amounts that may be paid to such persons, which would only be known at the time that they become eligible for payment and would only be payable if the specified event occurs. Under the terms of the employment offer letters described above:

•If Mr. Stillwell had been terminated without cause on December 31, 2025, he would have received a severance payment of $550,000.

•In addition, if, on December 31, 2025, Mr. Stillwell had been terminated following a sale of Pegasystems, the value of his accelerated RSUs would have been $8,181,162, and the value of his accelerated stock options would have been $13,221,202, excluding out-of-the-money options.

•If, on December 31, 2025, Mr. Higgins had been terminated following a sale of Pegasystems, the value of his accelerated RSUs would have been $220,128, and the value of his accelerated stock options would have been $0, as all of the options subject to acceleration were out-of-the-money.

The value of accelerated unvested options as of December 31, 2025 is calculated by taking the difference between the closing price of our common stock on NASDAQ Global Select Market on the last trading day of the fiscal year ($59.72 on December 31, 2025) and the option exercise price and multiplying it by the number of shares subject to accelerated options. For RSUs, the value represents the closing price of our common stock on the last trading day of the fiscal year, multiplied by the number of accelerated units.

DEDUCTIBILITY OF EXECUTIVE COMPENSATION

Section 162(m) of the Internal Revenue Code of 1986, as amended, generally imposes limitations on the deductibility for corporate federal income tax purposes of compensation over $1,000,000 paid to certain executive officers and other individuals. As a result, we expect that compensation awarded to our U.S.-based named executive officers will not be deductible to the extent it exceeds $1,000,000. The Compensation Committee will continue to award compensation to our executive officers as it deems appropriate, even though it may not be fully deductible for purposes of Section 162(m). Accordingly, compensation attributable to our Executive Incentive Plan, additional cash incentives, equity awards, or severance may not be fully deductible for the purposes of Section 162(m).

COMPENSATION PRACTICES RISK ASSESSMENT

We conduct an annual risk assessment of our compensation programs for executive officers and all other employees. Our Finance, Legal, People, Internal Audit, Sales, and Compliance functions reviewed our compensation programs, practices and policies, referred to as the Compensation Programs. Management reviewed and discussed the findings of this review with the Compensation Committee, and with our Disclosure Committee, including representatives from our Finance, Legal, Communications, Compliance, and People functions. Based upon this assessment, we have concluded that our Compensation Programs are balanced and do not, by design, motivate excessive risk taking by management and other employees.

CEO PAY RATIO

We are providing the following information about the relationship between the annual total compensation of our employees and the annual total compensation of our Chief Executive Officer. For 2025, our last completed fiscal year:

•The annual total compensation of our median employee, calculated in accordance with SEC rules was $113,833;

•The annual total compensation of our Chief Executive Officer, as reported in the Summary Compensation Table of this proxy statement, was $8,332,032; and

•The ratio of the annual total compensation of our Chief Executive Officer to the median employee was approximately 73 to 1.

As permitted by SEC rules, we elected to use the same median employee in 2025 for comparison purposes as we used in 2023. In 2023, the median employee was identified using the following methodology:

•We selected December 1, 2023, which is within the last three months of 2023, as the date upon which we would identify the median employee.

•In determining the employee population to be used to calculate the compensation of the median employee, we included employees in all countries.

•We compared the annual base salary, target bonus, sales commissions, and additional cash incentive compensation for the employee population for the 2023 calendar year. This is referred to as On-Target Earnings.

•Based on the On-Target Earnings of each employee, we identified the Median Cohort, of approximately 547 employees consisting of the median employee and the employees 5% above and 5% below the median On-Target Earnings.

•We examined the applicable payroll data of actual cash earnings for each employee in the Median Cohort, including base salary, bonus, sales commissions, additional cash incentive compensation and car allowance paid in calendar year 2023 and we identified the employee who earned the median cash earnings within the Median Cohort. That employee is our median employee.

•A U.S. dollar exchange rate as of a date in December 2023 was applied to compensation reported in a foreign currency.

EQUITY COMPENSATION PLAN INFORMATION

The following table provides certain information with respect to our equity compensation plans in effect as of December 31, 2025:


(in thousands, except per share amounts)	(a) Number of Shares of Common Stock to be Issued Upon Exercise of Outstanding Stock Options and Vesting of RSUs(2) (3)	(b) Weighted-average Exercise price per Share of Outstanding Stock Options(4)		(c) Number of Shares of Common Stock Remaining Available for Future Issuance (excluding those in column (a))(5)
Equity compensation plans approved by shareholders(1)	30,030	$	33.14	21,706

(1) We currently maintain two equity compensation plans: the 2004 Long-Term Incentive Plan and the 2006 Employee Stock Purchase Plan as amended (“2006 ESPP”). In addition to the issuance of stock options, the 2004 Long-Term Incentive Plan allows for the issuance of stock purchase rights and other stock-based awards, including RSUs. Our shareholders previously approved each of these plans and all amendments that were subject to shareholder approval. See “16. Stock-Based Compensation” in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 for additional information.

(2) The number of shares of common stock issued upon exercise of vested stock options and vesting of RSUs will be less than the 30.0 million shown above because equity grants to our executive officers subject to Section 16 of the Exchange Act use the “net settlement” feature for stock options and RSUs. This feature enables the Company to withhold shares to cover the cost to exercise stock options and, if applicable, to cover taxes due (in the case of stock options and RSUs) based on the fair value of the shares at the exercise date (in the case of stock options) or vesting date (in the case of RSUs), instead of selling all the shares on the open market to satisfy these obligations. The settlement of exercised stock options and vested RSUs on a net share basis for our executive officers will result in fewer shares issued by the Company. In addition, the above indicated number of shares to be issued upon exercise of outstanding stock options and vesting of RSUs does not include 1.8 million shares reserved for issuance in the event of maximum achievement in connection with the 2024 and 2025 performance-based option awards. The number of shares of common stock remaining available for issuance have been reduced by the 1.8 million shares reserved in the event of maximum achievement in connection with the 2024 and 2025 performance-based option awards.

(3) During 2025, the Company issued 8.6 million shares of common stock upon exercise of vested stock options and vesting of RSUs.

(4) The weighted-average exercise price does not consider the shares issuable upon vesting of outstanding RSUs, which have no exercise price.

(5) Includes approximately 1.6 million shares remaining available for issuance as of December 31, 2025 under the 2006 ESPP.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The following table sets forth information required under applicable SEC rules about the compensation for 2025, 2024, and 2023 of our named executive officers:


	Year	Salary		Bonus			Stock Awards(1)			Option Awards(2)		Non-Equity Incentive Plan Compensation(3)		All Other Compensation(4)			Total
Alan Trefler Chairman and Chief Executive Officer	2025	$	600,000	$	—		$	—		$	7,001,532	$	720,000		$	10,500		$	8,332,032
	2024	$	571,731	$	—		$	—		$	6,499,454	$	600,319		$	10,350		$	7,681,854
	2023	$	495,000	$	—		$	—		$	4,550,006	$	495,000		$	9,900		$	5,549,906
Kenneth Stillwell Chief Operating Officer and Chief Financial Officer	2025	$	550,000	$	—		$	2,258,459	(5)	$	3,206,202	$	330,343		$	10,500		$	6,355,504
	2024	$	544,615	$	—		$	2,396,175	(5)	$	2,805,817	$	247,721		$	10,350		$	6,004,678
	2023	$	530,000	$	—		$	2,181,866	(5)	$	1,539,691	$	185,500		$	9,900		$	4,446,957
Rifat Kerim Akgonul Chief Product Officer	2025	$	491,262	$	—		$	1,206,236	(5)	$	2,096,390	$	234,760		$	10,500		$	4,039,148
	2024	$	463,154	$	—		$	1,247,858	(5)	$	1,648,857	$	203,901		$	10,350		$	3,574,120
	2023	$	450,000	$	—		$	1,015,747	(5)	$	908,114	$	135,000		$	9,900		$	2,518,761
John Gerard Higgins Chief of Client and Partner Success(6)	2025	$	520,841	$	293,540	(7)	$	1,143,530	(5)	$	2,096,390	$	170,103		$	12,386		$	4,236,791
	2024	$	480,381	$	255,030	(7)	$	1,227,342	(5)	$	1,771,831	$	133,598		$	22,648		$	3,890,830
	2023	$	472,372	$	156,522	(7)	$	988,164	(5)	$	1,002,264	$	118,093		$	—		$	2,737,415
Leon Trefler Chief of Clients and Markets	2025	$	415,000	$	523,629	(7)	$	1,000,059		$	2,096,390	$	252,467		$	10,500		$	4,298,045
	2024	$	410,962	$	485,764	(7)	$	1,088,941		$	1,771,831	$	215,755		$	10,350		$	3,983,603
	2023	$	400,000	$	324,198	(7)	$	999,621		$	1,059,451	$	200,000		$	9,900		$	2,993,170

(1) These amounts reflect the dollar amount of the aggregate grant date fair value of RSU awards granted in each of the fiscal years shown in accordance with FASB ASC Topic 718. The calculation of the fair value of RSU awards is set forth in "16. Stock-Based Compensation" in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026.

(2) These amounts reflect the dollar amount of the aggregate grant date fair value of stock option awards granted in each of the fiscal years shown in accordance with FASB ASC Topic 718. The assumptions used to calculate the value of option awards are set forth in “16. Stock-Based Compensation” in Item 8 of our Annual Report filed on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026. With respect to the performance-based options included in these amounts, the values were determined based on the expected performance at the time of grant. If the maximum level of performance is assumed for the performance-based options granted in 2025, the value of those performance based options would be $2,411,484 instead of $1,205,742 for Mr. Stillwell; $2,192,290 instead of $1,096,145 for Mr. Akgonul, Mr. Higgins, and for Leon Trefler. Alan Trefler did not receive performance based options in 2025.

(3) Represents cash bonuses earned under the CICP in the year shown and paid in the following year.

(4) Represents our 401(k) match for all named executive officers, with the exception of Mr. Higgins, during the years shown. For Mr. Higgins, these amounts represent company contributions and cash allowances in connection with our UK defined contribution pension plan.

(5) These amounts include the named executive officer’s election to receive 50% of his target incentive compensation under the CICP in the year shown in the form of RSUs instead of cash.

(6) Mr. Higgins’ salary, bonus, non-equity incentive plan compensation and all other compensation was converted from British Pounds to USD using the exchange rate as of December 31st of each applicable year.

(7) Represents additional cash incentives for sales commissions earned during the years shown.

GRANTS OF PLAN-BASED AWARDS

The following table sets forth certain information with respect to the plan-based awards granted during or for the fiscal year ended December 31, 2025 to each of the named executive officers:


		Estimated Future Payouts Under											All Other Stock Awards: Number of Shares of Stock or Units	All Other Option Awards: Number of Securities Underlying Options	Exercise or Base Price of Option Awards		Grant Date Fair Value of Stock and Option Awards(2)
		Non-Equity Incentive Plan Awards(1)							Equity Incentive Plan Awards
	Grant Date	Threshold		Target			Maximum (3)		Threshold	Target		Maximum
Alan Trefler		$	420,000	$	600,000.00		$	—
	3/4/2025													450,018	$	38.82	$	7,001,532
Kenneth Stillwell		$	173,250	$	247,500	(4)	$	—
	3/4/2025								6,668	6,668	(4)	6,668					$	258,418
	3/4/2025												51,694				$	2,000,041
	3/4/2025													128,578	$	38.82	$	2,000,460
	3/4/2025								35,359	70,718	(5)	141,436			$	38.82	$	1,205,742
Rifat Kerim Akgonul		$	128,956	$	184,223	(4)	$	—
	3/4/2025								5,320	5,320	(4)	5,320					$	206,177
	3/4/2025												25,848				$	1,000,059
	3/4/2025													64,290	$	38.82	$	1,000,245
	3/4/2025								32,145	64,290	(5)	128,580			$	38.82	$	1,096,145
John Gerard Higgins (6)		$	91,147	$	130,210	(4)	$	—
	3/4/2025								3,702	3,702	(4)	3,702					$	143,471
	3/4/2025												25,848				$	1,000,059
	3/4/2025													64,290	$	38.82	$	1,000,245
	3/4/2025								32,145	64,290	(5)	128,580			$	38.82	$	1,096,145
Leon Trefler		$	145,250	$	207,500		$	—
	3/4/2025												25,848				$	1,000,059
	3/4/2025													64,290	$	38.82	$	1,000,245
	3/4/2025								32,145	64,290	(5)	128,580			$	38.82	$	1,096,145

(1) All awards were made pursuant to our 2025 CICP.

(2) Reflects the dollar amount of the grant date fair value for the option and RSU awards, in accordance with FASB ASC Topic 718. The assumptions used in determining the grant date fair values calculations are set forth in “16. Stock-Based Compensation” in Item 8 of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 10, 2026.

(3) There is no maximum payout amount, as additional incentives can be earned for performance above targets, as determined by the Board of Directors in its discretion.

(4) Reflects the named executive officer’s election to receive 50% of his target incentive compensation under the 2025 CICP in the form of RSUs instead of cash. The RSUs granted were determined by dividing 50% of the employee's annual Target Incentive Opportunity by 85% of the closing price of our stock on the date of grant, less the present value of expected dividends during the vesting period. The 15% discount to the closing price, which is used to calculate the number of RSUs granted, provides an additional incentive to employees to acquire our stock. If the performance conditions described in the CICP - Bonus section of Compensation Discussion and Analysis are achieved, then the RSU award vests 100% on the first anniversary of the grant date. If these conditions are not met, the RSUs do not vest, and the award expires.

(5) Reflects performance stock options that vest as to 50% of the shares subject to the options quarterly over two years beginning on the second anniversary of the grant date based on the achievement of certain performance targets for the year ending December 31, 2026 and as to the remaining 50% of the shares subject to the options quarterly over two years beginning on the third anniversary of the grant date based on the achievement of certain performance targets for the year ending December 31, 2027. The maximum achievement of the performance targets is 200%.

(6) Mr. Higgins’ Non-Equity Incentive Plan Awards are converted from British Pounds to USD using the exchange rate as of December 31, 2025.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table sets forth certain information with respect to the value of outstanding equity awards at December 31, 2025, previously granted to the named executive officers.

Option Awards

Stock Awards

Number of Securities

Underlying Unexercised Options

Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options

Option
Exercise Price

Option

Expiration Date(1)

Number of Shares or

Units of Stock

That Have Not Vested

Market Value of Shares or

Units of Stock

That Have Not Vested(2)

Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested

Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested(2)

Exercisable

Unexercisable

Alan Trefler

265,818

—

32.18

3/6/2029

220,850

SEC Form DEF 14A filed by Pegasystems Inc.