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DEF 14A 1 tenable-2021proxy.htm DEF 14A Document

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

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Tenable Holdings, Inc.

(Name of Registrant as Specified In Its Charter)

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6100 Merriweather Drive, 12th Floor

Columbia, Maryland 21044

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held On May 25, 2021

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of TENABLE HOLDINGS, INC., a Delaware corporation (the "Company"). The Annual Meeting will be held on Tuesday, May 25, 2021 at 1:00 p.m. Eastern Time and will be a virtual stockholder meeting through which you can listen to the meeting, submit questions and vote online. The meeting can be accessed by visiting https://www.proxydocs.com/TENB and entering your control number which is included in the proxy materials mailed to you. The meeting will be held for the following purposes:

1. To elect the Board of Directors’ nominees, Arthur W. Coviello, Jr., Kimberly L. Hammonds and Jerry M. Kennelly, to the Board of Directors to hold office until the 2024 Annual Meeting of Stockholders.

2. To ratify the selection by the Audit Committee of the Board of Directors of Ernst & Young LLP as the independent registered public accounting firm of the Company for the year ending December 31, 2021.

3. To approve, on a non-binding advisory basis, the compensation of the Company's Named Executive Officers as disclosed in this proxy statement.

4. To conduct any other business properly brought before the meeting.

These items of business are more fully described in the Proxy Statement accompanying this Notice.

The record date for the Annual Meeting is March 31, 2021. Only stockholders of record at the close of business on that date may vote at the Annual Meeting or any adjournment thereof.

By Order of the Board of Directors,

Stephen A. Riddick
General Counsel and Corporate Secretary

Columbia, MD
April 13, 2021


You are cordially invited to attend the virtual annual meeting. Whether or not you expect to attend the meeting, please vote over the telephone or the Internet as instructed in these materials as promptly as possible in order to ensure your representation at the meeting. Even if you have voted by proxy, you may still vote online if you attend the virtual annual meeting. Please note, however, that if your shares are held of record by a broker, bank or other nominee and you wish to vote at the meeting, you must obtain a proxy issued in your name from that record holder.


CONTENTS
			Page
QUESTIONS AND ANSWERS ABOUT THESE PROXY MATERIALS AND VOTING			4
PROPOSAL 1 ELECTION OF DIRECTORS			11
Information Regarding the Board of Directors and Corporate Governance			15
Independence of the Board of Directors			15
Role of the Board in Risk Oversight			16
Meetings of the Board of Directors			16
Information Regarding Committees of the Board of Directors			17
Audit Committee			17
Compensation Committee			18
Nominating and Corporate Governance Committee			21
Stockholder Communications with the Board of Directors			22
Code of Ethics			23
PROPOSAL 2 RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUN TING FIRM			24
Fees and Services			24
Pre-Approval Policies and Procedures			24
PROPOSAL 3 ADVISORY VOTE TO APPROVE THE NAMED EXECUTIVE OFFICER COMPENSATION			26
Corporate Social Responsibility			27
Executive Officers			29
Security Ownership of Certain Beneficial Owners and Management			30
Delinquent Section 16(a) Reports			32
Executive Compensation			34
Executive Summary			34
Executive Compensation Philosophy and Objectives			38
Compensation-Setting Process			39
Compensation Elements			44
Employment Arrangements			52
Post-Employment Compensation			53
Other Compensation Policies			53
T ax and Accounting Considerations			54
Summary Compensation Table			55
Grants of Plan-Based Awards			55
Outstanding Equity Awards			56
Options Exercised and Stock Vested			57
Employment Agreements with Our Named Executive Officers			58
Potential Payments Upon Termination or Change in Control			59
CEO Pay Ratio			60
Director Compensation			62
Securities Authorized for Issuance Under Equity Compensation Plans			64
Transactions With Related Persons and Indemnification			65
Related-Person Transactions Policy and Procedures			65
Certain Related Person Transactions			65
Indemnification			66
Householding of Proxy Materials			67
Other Matters			68
Appendix: Reconciliation of Non-GAAP Measures			69


Internet proxy voting will be provided to allow you to vote your shares online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.


	Year Ended December 31,
(in thousands)	2020		2019
Audit Fees(1)	$	1,491	$	1,876

All Other Fees(2)	56		5
Total Fees	$	1,547	$	1,881


	Beneficial Ownership(1)
Beneficial Owner	Number of Shares	Percent of Total
5% or greater stockholders:
Entities affiliated with Insight Partners(2)	10,100,312	9.6%
FMR LLC(3)	9,460,162	9.0
The Vanguard Group(4)	6,196,709	5.9
Select Equity Group, L.P.(5)	5,323,628	5.0
BlackRock, Inc.(6)	5,258,684	5.0

Named executive officers and directors:
Amit Yoran(7)	3,825,622	3.5
Stephen A. Vintz(8)	698,011	*
Stephen A. Riddick(9)	44,985	*
John C. Huffard, Jr.(10)	3,766,096	3.6
Arthur W. Coviello, Jr.(11)	148,410	*
Kimberly L. Hammonds	—	*
Jerry M. Kennelly(12)	55,486	*
Ping Li(13)	421,996	*
A. Brooke Seawell(14)	202,500	*
Richard M. Wells(15)	36,225	*
Linda K. Zecher	—	*
All current executive officers and directors as a group (11 persons)(16)	9,199,331	8.4%


Name						Position
Amit Yoran						Chief Executive Officer and Chairman of the Board of Directors
Stephen A. Vintz						Chief Financial Officer
Stephen A. Riddick						General Counsel and Corporate Secretary


Blackline	Hubspot	Qualys
Box	New Relic	Rapid7
Carbon Black	Okta	Sailpoint Technologies
Cloudera	Paycom Software	Secureworks
Coupa Software	Paylocity	Varonis Systems
FireEye	Proofpoint	Zendesk
Forescout Technologies


Element	Type and Form of Element	Objective	Key Features
Base Salary	Fixed/Cash	Designed to attract and retain highly talented executives by providing financial stability and security for performing job responsibilities through a fixed amount that is market competitive and rewards performance	Generally reviewed annually at beginning of year and determined based on various factors, including company and individual performance, retention objectives, a competitive market analysis, and recommendations of CEO
Cash Bonuses	Variable/Cash	Designed to motivate and reward executives with financial incentives for achieving or exceeding rigorous quarterly and annual financial objectives related to our key business imperatives	• Target bonus amounts generally reviewed annually at beginning of year and determined based on various factors, including company and individual performance, a competitive market analysis, and recommendations of CEO • Bonus payments earned determined after each quarter and full-year • Bonus payments are generally dependent upon achievement of pre-established corporate financial objectives selected by our Compensation Committee from our annual operating plan reviewed by our Board of Directors


Long Term Incentive Compensation	Variable/ Equity awards in the form of RSU awards that may be settled for shares of our common stock	Designed to motivate and reward executives for successful long-term performance, align interests of executives and stockholders by motivating them to create sustainable long-term stockholder value, and encourage continued employment of executives over the long-term	• Annual award opportunities generally reviewed and determined annually at beginning of year or as appropriate during year for new hires, promotions, or other special circumstances • Individual awards determined based on various factors, including company and individual performance, retention value of outstanding equity holdings, and competitive market analysis • Historically granted RSU awards or stock options with four-year vesting requirements, although the Compensation Committee has discretion to grant other equity vehicles and use different vesting requirements or performance conditions
Other Compensation	Retirement and health and welfare benefits offered to all employees on the same terms	Employee benefits that promote employee savings and health and welfare, which assists in attracting and retaining our executives and employees	Indirect compensation element consisting of programs such as medical, vision, dental, life and disability insurance, as well as the 401(k) Plan with a company matching contribution and an ESPP, and other plans and programs made available to all eligible employees


Named Executive Officer	2019 Base Salary		2020 Base Salary		Percentage Adjustment
Mr. Yoran	$	400,000	$	450,000	12.5	%
Mr. Vintz	350,000		375,000		7.1	%
Mr. Riddick	320,000		330,000		3.1	%


Named Executive Officer	2020 Target Cash Bonus Opportunity
Mr. Yoran	$	450,000
Mr. Vintz	325,000
Mr. Riddick	165,000


(in thousands)	Target Performance Level
Revenue	$	453,145
Free Cash Flow(1)	24,901
Bookings	( 2 )


Named Executive Officer	Performance Period	Target Quarterly/Annual Bonus		Aggregate Weighted Average Achievement/ Payment Percentage		Actual Quarterly/Annual Bonus
Mr. Yoran	First Quarter	$	90,000	60.0	%	$	54,000	(1)
	Second Quarter	90,000		93.0	%	83,700		(2)
	Third Quarter	90,000		98.5	%	93,593		(3)
	Fourth Quarter	90,000		98.5	%	88,643		(6)
	Full Year	90,000		98.6	%	89,072		(7)
	Total 2020	$	450,000			$	409,008

Mr. Vintz	First Quarter	$	65,000	60.0	%	$	39,000	(1)
	Second Quarter	65,000		93.0	%	60,450		(2)
	Third Quarter	65,000		98.5	%	67,595		(4)
	Fourth Quarter	65,000		98.5	%	64,020		(6)
	Full Year	65,000		98.6	%	64,329		(8)
	Total 2020	$	325,000			$	295,394

Mr. Riddick	First Quarter	$	33,000	60.0	%	$	19,800	(1)
	Second Quarter	33,000		93.0	%	30,690		(2)
	Third Quarter	33,000		98.5	%	34,317		(5)
	Fourth Quarter	33,000		98.5	%	32,503		(6)
	Full Year	33,000		98.6	%	32,659		(9)
	Total 2020	$	165,000			$	149,969


Named Executive Officer	Restricted Stock Unit Award (shares)	Restricted Stock Unit Award (grant date fair value)
Mr. Yoran	232,804	$	6,600,000
Mr. Vintz	141,093	4,000,000
Mr. Riddick	63,492	1,800,000


Name and Principal Position	Year	Salary		Stock Awards(1)		Option Awards(1)		Non-Equity Incentive Plan Compensation(2)		All Other Compensation(4)		Total
Amit Yoran(3) Chief Executive Officer and Chairman	2020	$	441,667	$	6,599,993	$	—	$	409,008	$	300	$	7,450,968
	2019	400,000		6,199,989		—		423,780		—		7,023,769
	2018	400,000		—		4,123,067		339,760		—		4,862,827
Stephen A. Vintz Chief Financial Officer	2020	370,833		3,999,987		—		295,394		11,742		4,677,956
	2019	350,000		3,999,988		—		238,376		11,200		4,599,564
	2018	343,000		—		3,086,405		233,623		3,649		3,666,677
Stephen A. Riddick General Counsel and Corporate Secretary	2020	328,333		1,799,998		$	—	$	149,969	11,717		2,290,017
	2019	320,000		1,399,974		—		158,918		11,200		1,890,092
	2018	285,000		—		846,703		158,820		11,000		1,301,523


	Option Awards(1)							Stock Awards(1)
Name	Grant Date	Number of Securities Underlying Unexercised Options (#) Exercisable	Number of Securities Underlying Unexercised Options (#) Unexercisable		Option Exercise Price(2)		Option Expiration Date	Number of Shares of Stock That Have Not Vested (#)		Market Value of Shares of Stock That Have Not Vested(3)
Amit Yoran	1/18/2017	2,397,053	177,471	(4)	$	4.25	1/18/2027
	1/18/2017	—	—					98,918	(4)	$	5,169,455
	6/21/2018	70,704	494,953	(5)	16.21		6/21/2028
	2/20/2019	—	—					119,191	(6)	6,228,922
	2/19/2020	—	—					232,804	(10)	12,166,337
Stephen A. Vintz	12/16/2014(7)	505,500	—		2.36		12/16/2024
	6/30/2016	105,000	—		4.15		6/30/2026
	6/21/2018	211,716	211,718	(8)	16.21		6/21/2028
	2/20/2019	—	—					76,897	(6)	4,018,637
	2/19/2020	—	—					141,093	(10)	7,373,520
Stephen A. Riddick	6/26/2017	118,750	56,250	(9)	5.96		6/26/2027
	6/21/2018	4,840	101,642	(5)	16.21		6/21/2028
	2/20/2019	—	—					26,915	(6)	1,406,578
	2/19/2020	—	—					63,492	(10)	3,318,092


	Estimated Future Payouts Under Non-Equity Incentive Plan Awards
Name	Grant Date	Threshold ($)		Target ($)		Maximum ($)		All Other Stock Awards: Number of Shares of Stock or Units (#)(1)	Grant Date Fair Value of Stock Awards ($)
Amit Yoran	(2)	$	—	$	450,000	$	—
	2/19/2020							232,804	$	6,599,993
Stephen A. Vintz	(2)	—		325,000		—
	2/19/2020							141,093	3,999,987
Stephen A. Riddick	(2)	—		165,000		—
	2/19/2020							63,492	1,799,998


	Option Awards			Stock Awards
Name	Number of Shares Acquired on Exercise (#)	Value Realized on Exercise ($)(1)		Number of Shares Acquired on Vesting (#)	Value Realized on Vesting ($)(2)
Amit Yoran	265,000	$	8,015,049	488,373	$	14,109,600
Stephen A. Vintz	—	—		59,808	1,830,296
Stephen A. Riddick	184,680	5,031,962		20,931	640,546


	Death/Disability				Non-CIC Termination				CIC Termination
Name	Cash Severance(1)		Equity Severance(2)		Cash Severance(3)		Equity Severance(2)		Cash Severance(4)		Equity Severance(2)
Amit Yoran	$	831,414	$	25,856,174	$	831,414	$	16,238,825	$	1,731,414	$	49,928,152
Stephen A. Vintz	16,137		7,373,520		485,072		1,908,090		810,072		19,024,591
Stephen A. Riddick	9,228		3,318,092		386,918		1,825,634		551,918		10,993,239


Name(1)	Fees Earned or Paid in Cash		Stock Awards(2)(3)		Total
Arthur W. Coviello, Jr.	$	47,500	$	199,976	$	247,476
Kimberly L. Hammonds	44,000		199,976		243,976
John C. Huffard, Jr.	30,000		199,976		229,976
Jerry M. Kennelly	42,000		199,976		241,976
Ping Li(4)	—		—		—
A. Brooke Seawell	50,000		199,976		249,976
Richard M. Wells(4)	—		—		—
Linda Zecher	40,000		199,976		239,976


Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a)	Weighted Average Exercise Price of Outstanding Options, Warrants and Rights (b)(1)		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a))(c)(2)
Equity compensation plans approved by stockholders	14,252,427	$	8.94	22,876,007
Equity compensation plans not approved by stockholders	—	—		—
Total	14,252,427	$	8.94	22,876,007


	Year Ended December 31,
(dollars in thousands)	2020		2019
Loss from operations	$	(36,433)	$	(90,799)
Stock-based compensation	59,573		43,443
Acquisition-related expenses	339		3,970
Amortization of acquired intangible assets	2,314		620
Non-GAAP income (loss) from operations	$	25,793	$	(42,766)


	Year Ended December 31,
(in thousands, except for per share amounts)	2020		2019
Net loss	$	(42,731)	$	(99,013)
Stock-based compensation	59,573		43,443
Tax impact of stock-based compensation(1)	1,299		(95)
Acquisition-related expenses	339		3,970
Tax impact of acquisition(2)	—		10,582
Amortization of acquired intangible assets(3)	2,314		620
Non-GAAP net income (loss)	$	20,794	$	(40,493)

Net loss per share, diluted	$	(0.42)	$	(1.03)
Stock-based compensation	0.59		0.45
Tax impact of stock-based compensation(1)	0.01		—
Acquisition-related expenses	—		0.04
Tax impact of acquisition(2)	—		0.11
Amortization of acquired intangible assets(3)	0.02		0.01
Adjustment to diluted earnings per share(4)	(0.01)		—
Non-GAAP earnings (loss) per share, diluted	$	0.19	$	(0.42)

Weighted-average shares used to compute GAAP net loss per share, diluted	101,009		96,014

Weighted-average shares used to compute non-GAAP earnings (loss) per share, diluted(5)	109,962		96,014

SEC Form DEF 14A filed by Tenable Holdings, Inc.