10-K/A

Large Accelerated Filer

Accelerated Filer

Non-accelerated
Filer

Smaller reporting company

Emerging growth company

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM

10-K/A

Amendment No. 1

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2021

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from

Commission file number

1-6651

Zendesk, Inc.

(Exact name of registrant as specified in its charter)


Delaware		26-4411091
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

989 Market Street San Francisco, California		94103
(Address of principal executive offices)		(Zip Code)

(415) 418-7506

(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	ZEN	New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of

Regulation S-T

(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a

non-accelerated

filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in

Rule 12b-2

of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐

Indicate by check mark whether the registrant is a shell company (as defined in

Rule 12b-2

of the Act). Yes ☐ No ☒

Auditor Firm: Ernst & Young LLP

Auditor Firm ID: 42

Auditor Firm Location: San Jose, California

The aggregate market value of common stock held by

non-affiliates

of the Registrant, computed by reference to the price at which the common stock was last sold on June 30, 2021, the last business day of the Registrant’s most recently completed second fiscal quarter, as reported on the New York Stock Exchange, was approximately $12.4 billion. Shares of common stock held by each executive officer, director and holder of 5% or more of the outstanding common stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status does not reflect a determination that such persons are affiliates of the Registrant for any other purpose.

The number of shares of the Registrant’s Common Stock outstanding as of April 18, 2022 was 122,380,593.

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EXPLANATORY NOTE

Zendesk, Inc. (“Zendesk”, the “Company”, the “Registrant” or “our”) is filing this Amendment No. 1 to Form

10-K

on Form

10-K/A

(this “Amendment”) to amend our Annual Report on Form

10-K

for the fiscal year ended December 31, 2021 (the “Original Filing”), filed with the Securities and Exchange Commission (the “SEC”) on February 15, 2022. The purpose of this Amendment is solely to disclose the information required in Part III (Items 10, 11, 12, 13 and 14) of the Original Filing, which information was previously omitted from the Original Filing in reliance on General Instruction G(3) to Form

10-K,

which permits the information in the above referenced items to be incorporated in the Form

10-K

by reference from our definitive proxy statement if such statement is filed no later than 120 days after our fiscal

year-end.

We are filing this Amendment No. 1 to include Part III information in our Form

10-K

because we will not file a definitive proxy statement containing such information within 120 days after the end of the fiscal year covered by the Original Filing. In addition, this Amendment deletes the reference on the cover of the Original Filing to the incorporation by reference of portions of our proxy statement into Part III of the Original Filing.

In accordance with Rule

12b-15

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), Items 10 through 14 of Part III of the Original Filing are hereby deleted and restated in their entirety as set forth in the following Part III below. In addition, pursuant to Rule

12b-15

under the Exchange Act, the Company is including Item 15 of Part IV of this Amendment, solely to file the certifications required under Section 302 of the Sarbanes-Oxley Act of 2002. Because no financial statements have been included in this Amendment and this Amendment does not contain or amend any disclosure with respect to Items 307 and 308 of Regulation

S-K,

paragraphs 3, 4, and 5 of the certifications have been omitted. We are also not including the certifications under Section 906 of Sarbanes-Oxley Act of 2002 as no financial statements are being filed with this Amendment No. 1. Except as described above, this Amendment does not amend any other information set forth in the Original Filing, and we have not updated disclosures included therein to reflect any subsequent events. This Amendment should be read in conjunction with the Original Filing and with our filings with the SEC subsequent to the Original Filing.

FORWARD LOOKING STATEMENTS

This Amendment contains forward-looking statements within the meaning of federal securities laws, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “might,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Amendment primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, operating results, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and elsewhere in this Amendment. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Amendment. We cannot assure you that the results, events, and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events, or circumstances could differ materially from those described in the forward-looking statements.

The forward-looking statements made in this Amendment relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Amendment to reflect events or circumstances after the date of this Amendment or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.

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TABLE OF CONTENTS


PART III		1

Item 10.	Directors, Executive Officers and Corporate Governance	1
Item 11.	Executive Compensation	11
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	44
Item 13.	Certain Relationships and Related Transactions, and Director Independence	46
Item 14.	Principal Accountant Fees and Services	48

PART IV		50

Item 15.	Exhibits and Financial Statement Schedules	50
Item 16.	Form 10-K Summary	53

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PART III

TEM

10.

IRECTORS

, E

XECUTIVE

FFICERS

AND

ORPORATE

OVERNANCE

BOARD OF DIRECTORS

Board of Directors

Director
Since

Committee
Membership

Name and Principal Occupation

Age

(1)

Independent

NCG

CARL BASS

Lead Independent Director

Former President and Chief Executive Officer
of Autodesk, Inc.

2016

Yes

•

MICHAEL FRANDSEN

Executive Director, Products at Workday, Inc.

2017

Yes

•

BRANDON GAYLE

Chief Operating Officer of San Antonio Spurs LLC d/b/a Spurs Sports & Entertainment

2021

Yes

•

THOMAS SZKUTAK

Former Senior Vice President and Chief Financial
Officer of Amazon.com, Inc.

2019

Yes

•

ARCHANA AGRAWAL

Chief Marketing Officer of Formagrid, Inc. d/b/a Airtable

2020

Yes

•

MICHAEL CURTIS

(2)

Interim Chief Engineering Officer

2019

STEVE JOHNSON

Vice President of Design of Netflix, Inc.

2021

Yes

•

HILARIE KOPLOW-MCADAMS

Venture Partner of New Enterprise Associates

2017

Yes

•

MIKKEL SVANE

Founder, Chair of the Board and Chief Executive Officer of Zendesk, Inc.

2007

MICHELLE WILSON

Former Senior Vice President, General Counsel,
and Secretary of Amazon.com, Inc.

2014

Yes

•


AC - Audit Committee CC - Compensation Committee NCG - Nominating and Corporate Governance Committee		• Member		• Chair

(1)	As of March 21, 2022.

(2)

During fiscal year 2021, Michael J. Curtis was a member of the Compensation Committee and was an independent director during that time. On January 20, 2022, Mr. Curtis resigned as a member of the Compensation Committee. He assumed the role of Interim Chief Engineering Officer at the Company on January 24, 2022.

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Overview of director experience and qualifications

Our director nominees have a variety of experiences, qualifications, attributes and skills, which our Board believes are important because of their particular relevance to our business and strategy. While all of these were considered by the Board, the following matrix does not encompass all experience, qualifications, attributes or skills of our directors.

Mikkel
Svane

Carl
Bass

Thomas
Szkutak

Michael
Curtis

Hilarie
Koplow-
McAdams

Michelle
Wilson

Michael
Frandsen

Archana
Agrawal

Steve
Johnson

Brandon
Gayle

Other Public Company Director Experience

•

Leadership and Experience in B2B Company

•

Leadership and Experience in B2C Company

•

Audit Committee Financial Expert

•

Deep Product-Related Expertise

•

Operational Risk and Compliance Experience

•

Leadership in

Go-to-Market

strategy

•

Business Ethics

•

Leadership Experience in Regulatory Matters

•

Leadership Experience in >$500B Market Cap Companies

•

Experience with International Operations

•

Diversity, including gender and/or race

•

Executive Level Leadership

•

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Biographical information on directors

Directors with a three-year term ending at the 2022 annual meeting:


Age: 64 Director Since: February 2016 Board Committees: Compensation		CARL BASS LEAD INDEPENDENT DIRECTOR Former President and Chief Executive Officer of Autodesk, Inc. Experience: President and Chief Executive Officer of Autodesk, Inc., a software company, from May 2006 to February 2017. Interim Chief Financial Officer of Autodesk, Inc. from August 2014 to November 2014. Other Directorships: Served on the Board of Directors of Autodesk, Inc. from January 2006 to June 2018. Served on the Board of Directors of HP Inc., a provider of software and technology, from November 2015 to September 2017. Other Leadership Expertise and Service: Holds a B.A. in Mathematics from Cornell University. Mr. Bass was selected to serve on our Board because of his extensive experience as an executive in the technology industry.


Age: 60 Director Since: November 2017 Board Committees: Audit		MICHAEL FRANDSEN INDEPENDENT DIRECTOR Executive Director, Products of Workday, Inc. Experience: Products team leader of Workday, Inc., a software company, since July 2012. Executive Director, Products at Workday, Inc. since January 2018. Workday, Inc.’s Executive Vice President of Products, Support and Delivery from March 2015 to October 2017, and Senior Vice President of Products from July 2012 to February 2015. Other Directorships: Served on the Board of Directors of Advent Software, Inc., a software company, from May 2013 until it was acquired by SS&C Technologies, Inc. in July 2015. Other Leadership Expertise and Service: Holds a B.S. in Finance and Information Systems from the University of Colorado at Boulder. Mr. Frandsen was selected to serve on our Board because of his extensive experience as a product executive in the technology industry.


Age: 41 Director Since: March 2021 Board Committees: Audit		BRANDON GAYLE INDEPENDENT DIRECTOR Chief Operating Officer of San Antonio Spurs LLC d/b/a Spurs Sports & Entertainment. Experience: Executive Vice President, Revenue, Brand & Communications of San Antonio Spurs LLC d/b/a Spurs Sports & Entertainment from October 2019 to October 2021 Vice President of Engineering of Spurs Sports & Entertainment, a sports and entertainment company, since October 2019. Director of Global Sports Partnership and Solutions of Facebook, Inc., a social networking service, from March 2018 to October 2019. Head of Global Sports Partnerships for Instagram at Facebook, Inc., from November 2015 to March 2018. Other Leadership Expertise and Service: Holds a M.B.A. from Harvard Business School and a B.A. in Economics from Harvard College. Mr. Gayle was selected to serve on our Board because of his leadership in community marketing and prior experience as an executive leading partnership solutions in the technology industry.

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Age: 61 Director Since: January 2019 Board Committees: Audit Nominating and Corporate Governance		THOMAS SZKUTAK INDEPENDENT DIRECTOR Former Senior Vice President and Chief Financial Officer of Amazon.com, Inc. Experience: • Senior Vice President and Chief Financial Officer of Amazon.com, Inc., a technology company focused on e-commerce, cloud computing, digital streaming, and artificial intelligence, from October 2002 to June 2015. • Serves as an advisor and operating partner of Advent International, a global private equity firm, since August 2017. Other Directorships: • Serves on the Board of Directors of Intuit Inc., a software company, since January 2018. • Served on the Board of Directors of athenahealth, Inc., a healthcare technology company, from June 2016 to February 2019. Other Leadership Expertise and Service: • Holds a B.S. in Business Administration from Boston University. • Mr. Szkutak was selected to serve on our Board because of his financial, accounting, and operational expertise from prior experience as a chief financial officer for a public technology company.

Directors with a three-year term ending at the 2023 annual meeting:


		MICHAEL CURTIS Former Vice President of Engineering of Airbnb, Inc. Experience: • Vice President of Engineering of Airbnb, Inc., an online marketplace and hospitality company, from February 2013 to March 2019. Other Leadership Expertise and Service: • Serves as an advisor to Peloton Interactive, Inc., an interactive fitness platform, since June 2020. • Mr. Curtis was selected to serve on our Board because of his prior experience as a product executive in the technology industry.
Age: 43 Director Since: April 2019 Board Committees: Compensation*


		STEVE JOHNSON INDEPENDENT DIRECTOR Vice President of Design of Netflix, Inc. Experience: • Vice President of Design of Netflix, Inc., an online streaming entertainment service, since July 2016. • Vice President of Design for LinkedIn Corporation, an online professional network, from June 2009 to July 2016. Other Leadership Expertise and Service: Mr. Johnson was selected to serve on our Board because of his experience as a product design executive in the technology industry.
Age: 51 Director Since: March 2021 Board Committees: Compensation

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		MIKKEL SVANE Co-founder and Chief Executive Officer of Zendesk, Inc. Experience: • Co-founded Zendesk and has served as our Chief Executive Officer since August 2007. • Appointed Chair of our Board in January 2014. • Prior to founding Zendesk, founded and served as the Chief Executive Officer of Caput A/S, a software company, and served as a technology consultant. Other Directorships: • Serves as a member of the Board of Directors of Stitch Fix, Inc., an online personal styling service, since October 2018. Other Leadership Expertise and Service: • Holds an A.P. in Marketing Management from Arhus Kobmandsskole. • Mr. Svane was selected to serve on our Board because of his operational and historical expertise gained from serving as our Chief Executive Officer. • As one of our founders and the longest serving member of our Board, we also value his deep understanding of our business as it has evolved over time. Directors with a three-year term ending at the 2024 annual meeting:
Age: 51 Director Since: August 2007


		ARCHANA AGRAWAL INDEPENDENT DIRECTOR Chief Marketing Officer of Formagrid, Inc. d/b/a Airtable Experience: Chief Marketing Officer of Airtable, a low-code app development platform, since March 2020. Served as the Head of Enterprise and Cloud Marketing at Atlassian, an enterprise software company, from May 2016 to March 2020. Served in various roles at Atlassian Corporation Plc, a software business, from December 2013 to March 2020. Other Directorships: Serves as a member of the Board of Directors of MongoDB, Inc., a general purpose database platform, since August 2019. Other Leadership Expertise and Service: Holds a M.B.A. from Harvard Business School and a M.S. in Computer Science from the University of Illinois at Urbana-Champaign. Ms. Agrawal was selected to serve on our Board because of her prior executive experience and her experience advising technology companies.
Age: 44 Director Since: July 2020 Board Committees: Nominating and Corporate Governance

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		HILARIE KOPLOW-MCADAMS INDEPENDENT DIRECTOR Venture Partner of New Enterprise Associates Experience: Venture Partner of New Enterprise Associates, a venture capital firm, since December 2017. President of New Relic, Inc., a digital intelligence company, from October 2015 until April 2017 and, prior to that, served as New Relic’s Chief Revenue Officer from December 2013 to September 2015. Other Directorships: Served as a member of the Board of Directors of Tableau Software, Inc., a software company, from December 2016 until it was acquired by Salesforce.com, Inc. in August 2019. Other Leadership Expertise and Service: Holds a B.A. in Sociology from Mills College and a M.A. in Public Policy from the University of Chicago. Ms. Koplow-McAdams was selected to serve on our Board because of her extensive experience as an executive in sales, marketing, customer success, and business development for various companies in the technology industry.
Age: 58 Director Since: September 2017 Board Committees: Compensation


		MICHELLE WILSON INDEPENDENT DIRECTOR Former Senior Vice President, General Counsel, and Secretary of Amazon.com, Inc. Experience: Senior Vice President, General Counsel, and Secretary of Amazon.com, Inc., a technology company focused on e-commerce, cloud computing, digital streaming, and artificial intelligence, from July 2003 to September 2012. Other Directorships: Serves as a member of the Board of Directors of Okta, Inc., a software company, since October 2015. Served as a member of the Board of Directors of Pinterest, Inc., a software company, from May 2016 to May 2021. Other Leadership Expertise and Service: Holds a B.A. in Business from the University of Washington and a J.D. from the University of Chicago. Ms. Wilson was selected to serve on our Board because of her significant experience as an executive in the technology industry.
Age: 59 Director Since: January 2014 Board Committees: Audit Nominating and Corporate Governance

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The Board’s role and responsibilities

Our Board has deep and relevant industry experience paired with strong leadership in governance, compliance, and executive-level leadership. We are committed to the highest levels of independence and oversight in our Board with a diverse set of views and philosophies.

Board’s role in risk oversight

Our Board’s role in overseeing the management of our risks is conducted primarily through committees of our Board, as disclosed in the descriptions of each of the committees below and in the charters of each of the committees. Our full Board (or the appropriate Board committee in the case of risks that are under the purview of a particular committee) discusses with management our major risk exposures, their potential impact on our Company, and the steps we take to manage them. When a Board committee is responsible for evaluating and overseeing the management of a particular risk or risks, the chair of the relevant committee reports on the discussion to the full Board during the committee reports portion of the next Board meeting. This enables our Board and its committees to coordinate the risk oversight role, particularly with respect to risk interrelationships.

BOARD

•

On a consistent basis, our Board reviews risks facing our Company and mitigation measures for those risks.

•

Our Board reviews an enterprise risk assessment annually, along with management updates on managing those identified risks through its respective committees.



AUDIT COMMITTEE • Oversees our enterprise risk assessment process, facilitated by our head of internal audit • Oversees risks related to financial reporting, internal controls, legal, privacy and compliance matters, and fraud • Oversees cybersecurity risk, including quarterly updates from our Chief Information Security Officer	COMPENSATION COMMITTEE • Oversees Company risks and policies related to compensation, recruiting and retention of our executive officers • Oversees risks related to our broader Company compensation philosophy • Receives updates and oversees risks related to the regulatory environment for compensation	NOMINATING AND CORPORATE GOVERNANCE COMMITTEE • Oversees Board and committee composition, including new director recruiting • Oversees corporate governance policies and practices • Oversees annual evaluation of the Board and its committees • Oversees our policies, programs and public disclosure related to environmental, social and governance (“ESG”) matters.

MANAGEMENT

•

Manages implementation and execution of mitigation measures related to risks identified through our enterprise risk assessment

•

Manages and oversees risks related to financial reporting and internal controls during regular management disclosure committee meetings

•

Maintains robust internal and external audit processes supported by a strong legal function

Delinquent Section 16A Reports

Under the securities laws of the United States, the Company’s directors, executive officers and any persons holding more than 10% of the Company’s common stock are required to report their ownership of common stock and any changes in that ownership, on a timely basis, to the SEC. Directors, executive officers and beneficial owners of more than 10% of the common stock are also required to furnish the Company with copies of all Section 16(a) reports that they file with the SEC. Based on material provided to the Company, all such reports were filed on a timely basis in 2021, except for the following: (i) one late Form 4 required to be filed by Brandon Gayle, for purposes of reporting the vesting of restricted stock units into common stock, was inadvertently filed one day late on May 5, 2021 and (ii) Form 4s required to be filed by each of Archana Agrawal, Carl Bass, Michael Curtis, Michael Frandsen, Brandon Gayle, Steve Johnson, Hilarie Koplow-McAdams, Thomas Szkutak and Michelle Wilson, for purposes of reporting the grant of restricted stock units were inadvertently filed several days late on June 3, 2021.

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Role in corporate responsibility and corporate citizenship and our code of business conduct and ethics

Our Board has adopted a code of business conduct and ethics (the “Code of Conduct”), which we regularly assess. Our Code of Conduct includes our anti-corruption and anti-bribery policies that apply to all of our employees, officers, and directors, including our Chief Executive Officer, Chief Financial Officer, and other executive and senior financial officers. Additionally, our Code of Conduct prohibits retaliation against anyone who reports suspected misconduct or assists with an investigation or audit in good faith. A copy of our Code of Conduct is available on our website at https://investor.zendesk.com and may also be obtained without charge by contacting our Secretary at Zendesk, Inc., 989 Market Street, San Francisco, CA 94103. We intend to disclose any amendments to our Code of Conduct, or waivers of its requirements, on our website or in filings under the Exchange Act as required by the applicable rules and NYSE requirements. During the fiscal year ending December 31, 2021, or fiscal year 2021, no waivers from any provision of our Code of Conduct were granted to our executive officers and directors.

•

Anonymous hotline.

We provide the ability through a platform and hotline for our employees to anonymously submit complaints regarding accounting, internal accounting control or auditing matters, potential violations of the federal securities laws, or potential violations of anti-corruption laws. Such complaints are treated in a confidential manner through a process provided in our Audit Committee Complaint Procedures, also available on our website at https://investor.zendesk.com.

•

Labor standards and human rights.

We support the elimination of modern slavery and human trafficking as set forth in the United Nations Declaration of Human Rights and are committed to holding ourselves to high standards of legal and ethical business conduct. Our Human Rights Policy further highlights our commitments to promoting, respecting, and advancing human rights. Our Code of Conduct prohibits any unlawful or unethical activity by all of our directors, officers, employees, and consultants. We extend our expectations to our suppliers, requiring them to uphold human rights and labor standards as described in our Supplier Code of Conduct. A copy of our Human Rights Policy is available on our website at https://investor.zendesk.com.

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Chair: Thomas Szkutak Members: Michael Frandsen Michelle Wilson Brandon Gayle		AUDIT COMMITTEE Our Audit Committee consists of Ms. Wilson and Messrs. Frandsen, Szkutak, and Gayle with Mr. Szkutak serving as Chair. The composition of our Audit Committee meets the requirements for independence under the listing standards of the NYSE and SEC rules and regulations. Each member of our Audit Committee meets the financial literacy requirements of the listing standards of the NYSE. Mr. Szkutak is an Audit Committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended (the “Securities Act”). Our Audit Committee, among other things: • selects a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; • helps to ensure the independence and performance of the independent registered public accounting firm; • discusses the scope and results of the audit with the independent registered public accounting firm, and reviews, with management and the independent registered public accounting firm, our interim and year-end operating results; • oversees the adequacy of internal controls; • develops procedures for employees to submit concerns anonymously about questionable accounting or audit matters; • reviews and oversees legal process and regulatory compliance matters; • reviews our policies on risk assessment and risk management; • regularly reviews risk assessments from management with respect to cybersecurity, including the adequacy and effectiveness of the Company’s internal controls regarding cybersecurity, emerging cybersecurity developments and threats, and the Company’s strategy to mitigate cybersecurity risks; • reviews related party transactions; and • approves all audit and all permissible non-audit services, other than de minimis non-audit services, to be performed by the independent registered public accounting firm. Our Audit Committee operates under a written charter that satisfies the applicable rules of the SEC and the listing standards of the NYSE. Our Audit Committee is responsible for reviewing the Company’s enterprise risk management framework and major risk exposures. In accordance with and pursuant to Section 10A(i)(3) of the Exchange Act, our Board has delegated to Mr. Szkutak the authority to pre-approve any audit and permissible non-audit services to be performed by our independent registered public accounting firm, provided that all such decisions to pre-approve an activity are presented to the full Audit Committee at its first meeting following any such decision. Our Audit Committee held five meetings during fiscal year 2021.

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EXECUTIVE OFFICERS

In addition to Mr. Mikkel Svane, our Founder, Chair of the Board and Chief Executive Officer, who also serves as a director, our executive officers as of April 29, 2022 consisted of the following:


SHELAGH GLASER 58		Chief Financial Officer

Ms. Glaser has served as the Company’s Chief Financial Officer since May 2021. She previously served in senior finance roles at Intel Corporation, a multinational technology company, including serving as its Corporate Vice President and Chief Financial Officer and Chief Operating Officer for the Data Platform Group since July 2019 and serving as its Corporate Vice President and Chief Financial Officer and other senior roles at Client Computing Group from December 2013 to July 2019. Ms. Glaser holds a Bachelor of Arts in Economics from the University of Michigan and a Master’s in Business Administration from Carnegie Mellon University.

NORMAN GENNARO 55		President, Worldwide Sales

Mr. Gennaro has served as our President, Worldwide Sales since November 2019. Mr. Gennaro served as our Senior Vice President, Worldwide Sales from January 2018 to November 2019. From April 2012 to December 2017, Mr. Gennaro served as a Territories Market Segment Leader for North America for Amazon Web Services, an information technology service management company. Prior to that, Mr. Gennaro held senior roles at the Oracle Corporation, a software company, including Vice President from March 2006 to March 2012, and Senior Technical Director from January 2000 to March 2006. Mr. Gennaro holds a Management in Information Systems degree from the University of Notre Dame and M.B.A. from the Notre Dame de Namur University.

ANDREA NIETO 50		Chief People Officer

Ms. Nieto served in senior HR/People roles at Xilinx, Inc., a multinational technology company, including serving as its Senior Vice President and Chief People Officer, as well as Corporate Vice President and Chief of Staff, since May 2013. Prior to her service at Xilinx, Ms. Nieto served in various HR roles at Cisco Systems, Inc., including as Chief of Staff, from December 1998 to May 2013. Ms. Nieto holds a dual Bachelor of Arts in Communication Studies and History from San Jose State University.

ADRIAN McDERMOTT 53		Chief Technology Officer

Mr. McDermott has served as our Chief Technology Officer since April 2021. He previously served as our President of Products from October 2016 until April 2021. Mr. McDermott has served on the board of directors of FireEye, Inc., a security software company, since January 2019. Mr. McDermott served as our Senior Vice President, Product Development from July 2010 until October 2016. Mr. McDermott holds a B.Sc. in computer science from De Montfort University.

JOHN GESCHKE 51		Chief of Staff

Mr. Geschke has served as our Chief of Staff since November 2019 and served as our Chief Legal Officer from May 2017 to January 2021. Mr. Geschke served as our Senior Vice President, Administration from October 2015 to November 2019 and as our General Counsel and Secretary from July 2012 to May 2017. From April 2010 to June 2012, Mr. Geschke served as General Counsel of Norwest Ventures Partners, a venture capital firm. Mr. Geschke holds an A.B. from Princeton University with a concentration in the School of Public and International Affairs and a J.D. from Stanford University.

JEFFREY TITTERTON 49		Chief Operating Officer

Mr. Titterton has served as our Chief Operating Officer since April 2021. He previously served as our Chief Marketing Officer from October 2018 until April 2021 and our Senior Vice President, Marketing from May 2017 to October 2018. From January 2017 to May 2017, Mr. Titterton served as the Head of Global Campaign and Engagement Marketing for Adobe Inc., a software company, and as Head of Engagement Marketing, Creative Cloud, from August 2013 to January 2017. Prior to that, Mr. Titterton served as the Chief Marketing Officer for 99designs, a graphic design marketplace, from August 2011 to August 2013. Mr. Titterton holds a B.A. in English with a concentration in economics from Cornell University.

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ALEX CONSTANTINOPLE 52		Chief Marketing Officer

Ms. Constantinople has served as our Chief Marketing Officer since May 2021. Prior to that, Ms. Constantinople served in senior management roles at Outcast, an integrated marketing agency specializing in digital, communications, and branding, including serving as its Chief Executive Officer from May 2011 to March 2021. Ms. Constantinople holds a Bachelor of Arts in English from Denison University.

MICHAEL CURTIS 43		Interim Chief Engineering Officer

Michael Curtis has served as our interim Chief Engineering Officer since January 2022. Previously, Mr. Curtis served as the vice president of engineering of Airbnb, Inc., an online marketplace and hospitality service company, from February 2013 to March 2019. Mr. Curtis served as a director of engineering of Facebook, Inc., a social media company, from August 2011 to February 2013. Mr. Curtis currently serves as a Trustee on the board of Harvey Mudd College.

TEM

11.

XECUTIVE

OMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Our Compensation Discussion and Analysis describes our executive compensation program and the decisions for fiscal year 2021, regarding the compensation for:


MIKKEL SVANE	SHELAGH GLASER	ALEX CONSTANTINOPLE
Chief Executive Officer and Chairman of the Board	Chief Financial Officer	Chief Marketing Officer


ADRIAN McDERMOTT	NORMAN GENNARO	ELENA GOMEZ	MARC CABI
Chief Technology Officer	President, Worldwide Sales	Former Chief Financial Officer	Former Interim Chief Financial Officer

We refer to these executive officers collectively in this Compensation Discussion and Analysis and the accompanying compensation tables as the “Named Executive Officers,” or “NEOs.”

We believe the compensation program for our Named Executive Officers in fiscal year 2021 was instrumental in helping us to achieve strong performance in fiscal year 2021, including 30% year-over-year growth in revenue for the full fiscal year 2021 period in the face of continuing economic disruption caused by the unprecedented global pandemic. Our long-term incentive equity mix and our choice of metrics in our short-term incentives link pay with operational performance and long-term stockholder value while striking a responsible balance between risk and reward.

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Continuing to support our employees’ wellbeing through unprecedented times Amid the extraordinary environment resulting from the pandemic, management focused the company’s resources and: • Embraced a digital first working-environment and flexibility, while supporting the health and safety of our employees and their families • Evolved our leave programs to support our employees and the unexpected time needed to focus on themselves and their families. Program expansion included emergency time off, pregnancy loss leave and vaccination time off • Expanded benefit programs to support expansion of our workforce into new countries		We surpassed $1.3B in revenue and created significant momentum going into 2022 As we mentioned in our letter to stockholders filed on February 10, 2022, we had a strong finish to 2021, which exceeded our expectation at the start of 2021. Strength was driven by our continuing success in expanding our enterprise customer base and the introduction of Zendesk Suite, both leading to larger deals and longer contract terms. We continue helping brands around the world reimagine their customer experience engagement as they adapt to a digital-first economy. Our best-in-class customer experience solutions are helping them scale and we intend to continue the momentum in 2022 building a strong foundation for our growth long term.

Compensation Highlights

For fiscal year 2021, on average, approximately 91% of the total compensation between our Named Executive Officers (excluding the CEO, as defined below) was

at-risk

compensation and approximately 6% was fixed salary. For our CEO,

at-risk

compensation represented 94% of total compensation, fixed salary represented 6%, and our CEO pay ratio was 54:1. We define

at-risk

compensation as consisting of our short-term performance-based incentive bonus and long-term equity incentives. The majority of all Named Executive Officers’ total compensation was delivered in the form of equity awards — stock options and time-based restricted stock units — with values that are generally contingent on stock price.

The performance-based bonus plan for our NEOs and executive employees provides cash awards on an annual basis depending on Zendesk’s performance. The awards are directly linked to the achievement of annual financial objectives established by the Compensation Committee shortly after the beginning of the new fiscal year. In keeping with our

pay-for-performance

compensation philosophy, eligible employees in good standing (who are not otherwise subject to another variable compensation plan) are also rewarded with an annual bonus that is funded based on the same key financial objectives. The Compensation Committee is provided an opportunity to review and comment on the broad-based performance bonus plan.

Our fiscal year 2021 key financial metrics for measuring Zendesk’s success are Revenue Growth Rate,

Non-GAAP

Operating Margin and, in the case of Mr. Gennaro only, Net Bookings.

The Compensation Committee believes that these metrics establish appropriate short-term performance conditions that will drive our future growth and profitability as well as offer market-competitive incentive opportunities to our NEOs.

About this Compensation Discussion and Analysis

This Compensation Discussion and Analysis provides an overview of our executive compensation philosophy, the overall objectives of our executive compensation program, and each element of compensation that we provide. In addition, we explain how and why the Compensation Committee arrived at the specific compensation policies and decisions involving our Named Executive Officers during fiscal year 2021.

This Compensation Discussion and Analysis contains forward-looking statements that are based on our current plans, considerations, expectations, and determinations regarding future compensation plans and arrangements. The actual compensation plans and arrangements that we adopt may differ materially from currently anticipated plans and arrangements as summarized in this Compensation Discussion and Analysis.

Executive overview

Our approach to compensation

At the core of our Company-wide compensation philosophy, we aim to provide compensation that is both externally competitive to the outside market and internally equitable in order to attract, motivate, and retain highly skilled and talented employees. In addition to salary and other types of compensation, we believe that providing long-term incentives in the form of equity awards broadly to our employee base enables our employees to take a long-term outlook with respect to our business and become tangible stakeholders in the successful achievement of our goals.

We value crafting and maintaining an executive compensation program that is benchmarked with peers and integrated with Company metrics that are of high importance to our investors. Our philosophy underlying our executive compensation is to increase our position to market for each compensation component relative to its alignment with our stockholders’ interests, resulting in a program that is skewed towards components that share the risk with our stakeholders and reward our employees for performance.

1	See the disclosure under “Target objectives under the bonus plan” below for further details regarding these key financial metrics.

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EXECUTIVE COMPENSATION PHILOSOPHY – COMPENSATION COMPONENTS

Our compensation philosophy is to provide an executive compensation program that rewards our management team for meeting our long-term business strategy, while rewarding the individual contributions of the team members.

The principal objectives of our executive compensation programs are as follows:


Attract, Motivate and Retain	Pay For Performance	Reward Actual Achievement
Offer a total compensation program that adapts to changing economic, regulatory, and organizational conditions, and takes into consideration the compensation practices of peer companies based on an objective set of criteria	Provide a significant portion of compensation through variable, performance-based components that are at-risk and based on satisfaction of designated objectives	Increase incentives to achieve key strategic performance measures and compensate for achievement of Zendesk’s financial and operating goals


Align Executive Interests with our Stockholders		Promote Teamwork and Individual Contribution
Align the interests of our executives with our stockholders by tying a significant portion of their total compensation to Zendesk’s overall financial and operating performance and the creation of long-term stockholder value		Reward teamwork and individual contribution through recognition programs

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FISCAL YEAR 2020 AT-RISK COMPENSATION


Base Pay	Performance-based Incentives	Stock Option & Stock Awards
Fixed-cash compensation Foundation of compensation package, providing appropriate level of financial certainty	Subject to attainment of objectives related to Company financial and operational measures for the year Payout is “at risk” based on Company performance Committee discretion to adjust based on each officer’s individual performance or other conditions	Further alignment to stockholder interests Value tied direction to stock price performance, motivating for sustained stock price appreciation Multi-year vesting, provides retention incentive

“Other NEO” percentages as shown above are calculated by taking a simple average of each Named Executive Officer’s compensation, other than the Chief Executive Officer.

We target a significant portion of our executive compensation to be delivered through

“at-risk”

compensation components. Our Amended and Restated Executive Incentive Bonus Plan (the “Bonus Plan”) for our executives is primarily based on

non-GAAP

operating margin and revenue results, and has a high minimum threshold for any bonus payout. A significant portion of the equity package for our executives is stock options, which are granted at fair market value of the stock price at the time of grant, resulting in equity value being directly tied both to stock price and to the broader market’s evaluation of the performance of our business. Because we target a similar economic value between restricted stock units and options, our option compensation calculation results in a greater number of shares granted to each executive as compared to restricted stock units. We believe this approach strongly incentivizes long-term alignment with our stock price.

We evaluate our compensation philosophy and compensation programs as circumstances require, and at a minimum, we review our executive compensation annually. As part of this review process, we apply our values and the objectives outlined above, while also considering whether our proposed compensation arrangements ensure that we remain competitive for talent, that we meet our retention objectives, and that our compensation costs are reasonable.

2021 advisory vote on compensation

We submitted a

non-binding

proposal to our stockholders at the 2021 Annual Meeting of Stockholders. This proposal consisted of a

non-binding

advisory vote to approve the compensation of the Named Executive Officers as disclosed in the proxy statement for the 2021 Annual Meeting of Stockholders.

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Approximately 91% of the votes cast were in favor of the

non-binding

advisory vote to approve the compensation of the Named Executive Officers at the 2021 Annual Meeting of Stockholders. The Compensation Committee believes this indicates that our stockholders strongly support the philosophy, strategy, and objectives of our executive compensation programs. After considering this result and following our annual review of our executive compensation philosophy, the Compensation Committee decided to retain our overall approach to executive compensation. The Compensation Committee intends to continue to monitor stockholder concerns, including the results of the annual

non-binding

advisory vote to approve the compensation of the Named Executive Officers, in making future decisions affecting the compensation of the Named Executive Officers.

Executive compensation best practices



WHAT WE DO		WHAT WE DON’T DO
• Closely monitored pay-for-performance philosophy in establishing program design and targeted pay levels for executive officers • Independent compensation consultant is hired by and reports to the Compensation Committee • Annual report by the independent compensation consultant to the Compensation Committee on Chief Executive Officer pay and performance alignment • Solicit an annual advisory vote on executive compensation • Stock ownership guidelines for executive officers • Maintain a clawback policy on incentive awards • Double trigger change-in-control provisions in all executive officer compensation arrangements • General policy of four-year vesting on equity awards other than the one-year cliff vesting for new hire grants • Performance-based equity awards based on revenue and stockholder return (beginning fiscal year 2022)		• No single-trigger acceleration for Chief Executive Officer or other executive officers following a change in control • Employees and directors may not hedge or engage in short sales of our stock • No repricing underwater stock options

Design and structure of 2021 executive compensation

Executive compensation program elements

The section below describes the elements of fiscal year 2021 compensation for our executive officers, including NEOs. The key elements and how they relate to our compensation philosophy are summarized in the table below.


Element	How this Relates to our Philosophy	Purpose

Base Salary	• Provide fixed compensation to attract and retain key executives

Short-term Performance-Based Incentive Bonus	• Establish appropriate short-term performance conditions that will drive our future growth and profitability • Reward achievement of short-term performance metrics • Bonus payout tied to Zendesk performance consistent with FY21 financial plan • Offer market competitive incentive opportunities

Restricted Stock Units	• Promote retention of our executives through 4 year service vesting period • Align the interests of executives with those of shareholders by issuing equity awards, the value of which is correlated to our stock price

Stock Options	• Motivate performance and stock price growth by sharing the company’s profits with our executives • Align the executives’ interests for stock price growth and profitability with our shareholders interests

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Employee Stock Purchase Plan		• Motivate performance through company’s ownership • Align the interests of our broad employee base with the Zendesk’s long-term objectives

Welfare, Change in Control and Other Employee Benefits		• Retain and encourage our senior leaders (including NEOs) to remain focused on our business and the interests of our stockholders during periods of strategic change • Ease transition due to unexpected employment termination

Retirement Benefits		• Retain and encourage our employees, including executives, to remain focused on our business for the long term

Legend


		- Attract, Motivate, Retain				- Align Interests with Shareholders
		- Pay-for-Performance				- Reward Achievement

In determining the amount of base salary, performance-based incentives, long-term equity incentives, and benefits awarded to each Named Executive Officer, the Compensation Committee does not apply any rigorous percentage of any one element in relation to the overall compensation package. Rather, the Compensation Committee looks at the overall compensation package and the relative amount of each element on an individual basis for each Named Executive Officer to determine whether such amounts and mix of components further the basic principles and objectives of our overall compensation program.

Base salary

We provide a base salary as a fixed source of compensation for each of our Named Executive Officers, allowing them a degree of certainty relative to the significant portion of their compensation that is

at-risk

compensation — performance-based incentives and equity awards with values that are generally contingent on stock price appreciation. Our Compensation Committee recognizes the importance of base salaries as an element of compensation that helps to attract and retain highly qualified executive talent.

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Generally, the initial base salaries of our executive officers are established through

arm’s-length

negotiation at the time the individual executive officer is hired, taking into account his or her qualifications, experience, and comparable market data. Thereafter, our Compensation Committee generally reviews, and adjusts as deemed necessary, base salaries for each of our Named Executive Officers annually.

In completing its annual review and adjustment, our Compensation Committee targets paying each of our Named Executive Officers base salaries that are conservative compared to our peer group, if such information is available, or conservative compared to salaries found in the survey data that it utilizes for similar positions. Additionally, in setting base salary levels, our Compensation Committee may consider a range of factors, including:

•

the individual’s anticipated responsibilities and experience, and cash compensation for similarly situated executives at our peer group companies;

•

our Compensation Committee members’ experience and knowledge in compensating similarly situated individuals at other companies;

•

the value of the individual’s existing equity awards and our cash needs; and

•

a general sense of internal pay equity among our executive officers as well as

non-executive

officer employees.

Consistent with prior years, our Compensation Committee reviewed the base salaries of our Named Executive Officers. The Compensation Committee determined not to increase the base salaries for our incumbent Named Executive Officers in February 2021. In making a determination as to whether increases to the base salaries for each of our Named Executive Officers were appropriate, the Compensation Committee took into account the Company’s decision not to increase

non-executive

officer salaries in 2021, as well as the competitive market for management within our industry and geographic area and the expanded obligations of our Named Executive Officers due to our growing operations. The base salaries of our Named Executive Officers prior to and following the compensation evaluation approved by the Compensation Committee in February 2021 were as follows:


Named Executive Officer	Annual Base Salary Prior to and Following 2021 Evaluation ($)*
Mikkel Svane		500,000
Shelagh Glaser		475,000	*
Alex Constantinople		400,000	*
Adrian McDermott		420,000
Norman Gennaro		400,000
Elena Gomez		450,000	*
Marc Cabi		340,000	*

Ms. Glaser’s employment with the Company commenced May 28, 2021 and Ms. Constantinople’s employment with the company commenced May 10, 2021; and the amounts set forth above reflect their starting base salaries. Ms. Gomez ended employment with the Company May 5, 2021. On April 27, 2021, the Company’s Board appointed Marc Cabi as the Deputy Chief Financial Officer and, effective May 5, 2021, interim principal financial officer of the Company, and the amount set forth above reflects his salary when he commenced this position. Mr. Cabi’s appointment to interim principal financial officer occurred after the Compensation Committee’s evaluation of annual base salaries. Upon Ms. Glaser’s commencement of employment on May 28, 2021, Ms. Glaser replaced Mr. Cabi as principal financial officer of the Company, and Mr. Cabi continued to be the Company’s Deputy Chief Financial Officer. Mr. Cabi ended his employment with the Company on November 8, 2021. Because Ms. Glaser, Ms. Constantinople, Ms. Gomez, and Mr. Cabi’s base salaries were prorated to their start date, and, if applicable, end date, the salary paid to each, as reflected in our Summary Compensation Table, may differ from the amount set forth above.

Sign-on

bonus for Ms. Glaser and Ms. Constantinople

We provide

sign-on

bonuses when necessary and appropriate to advance the Company’s and stockholders’ interests, including to attract top executive-level talent from other companies.

Sign-on

bonuses are an effective means of offsetting the compensation opportunities an executive forfeits when he or she leaves a former employer to join the Company.

Ms. Glaser received a

one-time

sign-on

bonus in connection with her hiring as our Chief Financial Officer, equal to $500,000. Ms. Glaser’s

sign-on

bonus was paid upon commencement of her employment with the Company and will be earned in installments over her first two years of employment: half of Ms. Glaser’s

sign-on

bonus will be deemed earned as of May 2022 and the second half will be deemed earned on a pro rata monthly basis until she has completed two years of employment with the Company as of May 2023.

Ms. Constantinople also received a

one-time

sign-on

bonus in connection with her hiring as our Chief Marketing Officer, equal to $500,000. Ms. Constantinople’s

sign-on

bonus was paid upon commencement of her employment with the Company and will be earned in installments over her first two years of employment: half of Ms. Constantinople’s

sign-on

bonus will be deemed earned as of May 2022 and the second half will be deemed earned on a pro rata monthly basis until she has completed two years of employment with the Company as of May 2023.

Performance-based incentives

We adopted the Bonus Plan to provide for performance-based incentive payments upon the attainment of target objectives related to Company financial and operational measures, Company objectives, individual performance objectives, or a combination thereof, in each case as set by the Compensation Committee. The Compensation Committee took into account market data, relative levels of responsibility across the Company, tenure, and other relevant factors in order to set the target performance-based incentive for each Named Executive Officer. The target performance-based incentive for the Named Executive Officers as compared to their base salaries was as follows:

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TARGET PERFORMANCE-BASED INCENTIVES

SEC Form 10-K/A filed by Zendesk Inc. (Amendment)