DEF 14A

DEF 14A 1 d307861ddef14a.htm DEF 14A DEF 14A

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. )

Filed by the Registrant ☒

Filed by a Party other than the Registrant ☐

Check the appropriate box:


☐		Preliminary Proxy Statement

☐		Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

☒		Definitive Proxy Statement

☐		Definitive Additional Materials

☐		Soliciting Material Under §240.14a-12

ARISTA NETWORKS, INC.

(Name of Registrant as Specified In Its Charter)

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

Payment of Filing Fee (Check all boxes that apply):


☒		No fee required.

☐		Fee paid previously with preliminary materials.

☐		Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11.

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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held at 11:00 a.m. Pacific Time on Tuesday, May 31, 2022

Dear Stockholders of Arista Networks, Inc.:

The 2022 annual meeting of stockholders of Arista Networks, Inc. (the “Company”), a Delaware corporation, and any postponements, adjournments or continuations thereof (the “Annual Meeting”), will be held on Tuesday, May 31, 2022 at 11:00 a.m. Pacific Time. Due to the COVID-19 pandemic and related public health concerns, the Annual Meeting will be conducted in a virtual format to provide a safe experience for our stockholders and employees. You will be able to attend the Annual Meeting online and submit your questions during the meeting at www.virtualshareholdermeeting.com/ANET2022. To access the virtual meeting, you will need to enter the control number included in your Notice of Internet Availability of Proxy Materials (the “Notice”), on your proxy card or on the instructions that accompanied your proxy materials.

Our board of directors has fixed the close of business on April 6, 2022 as the record date for the Annual Meeting. Only stockholders of record on April 6, 2022 are entitled to notice of and to vote at the Annual Meeting. Further information regarding voting rights and the matters to be voted upon is presented in the accompanying proxy statement. If you plan on attending this year’s annual meeting as a stockholder, you must follow the instructions set forth on page 61 of the accompanying proxy statement.

On or about April 20, 2022, we expect to mail to our stockholders the Notice, which provides instructions on how to access our proxy statement for the Annual Meeting and our annual report to stockholders, how to vote online or by telephone, and how to receive a paper copy of the proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at the following Internet address: www.proxyvote.com. All you have to do is enter the control number located on your proxy card.

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We appreciate your continued support of Arista Networks, Inc. and look forward to either greeting you virtually at the Annual Meeting or receiving your proxy.

By order of the Board of Directors,

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JAYSHREE ULLAL

Chief Executive Officer, President and Director

Santa Clara, California

April 20, 2022

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TABLE OF CONTENTS


2022 PROXY STATEMENT SUMMARY			1

OUR COMMITMENT TO THE ENVIRONMENT SOCIAL RESPONSIBILITY AND GOVERNANCE			4

BOARD OF DIRECTORS AND CORPORATE GOVERNANCE			11
Nominees for Director			15
Continuing Directors			16
Key Elements of Board Independence at Arista			19
Director Commitments			19
Board Leadership Structure			19
Lead Independent Director			20
Board Evaluation Process			20
Board Meetings and Committees			21
Compensation Committee Interlocks and Insider Participation			24
Considerations in Evaluating Director Nominees			24
Stockholder Recommendations for Nominations to the Board of Directors			24
Stockholder Outreach			25
Communications with the Board of Directors			25
Risk Management			25
Executive Talent Management and Succession Planning			27
Director Compensation			27

PROPOSAL NO. 1 ELECTION OF DIRECTORS			29
Nominees			29
Vote Required			29

PROPOSAL NO. 2 ADVISORY VOTE ON EXECUTIVE COMPENSATION			30
Vote Required			30


PROPOSAL NO. 3 ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES ON NAMED EXECUTIVE OFFICER COMPENSATION			31
Vote Required			31

PROPOSAL NO. 4 RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM			32
Fees Paid to the Independent Registered Public Accounting Firm			32
Auditor Independence			32
Audit Committee Policy on Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm			33
Vote Required			33

REPORT OF THE AUDIT COMMITTEE			34

EXECUTIVE OFFICERS			35

EXECUTIVE COMPENSATION			37
Compensation Discussion and Analysis			37
Overview			38
Effect of Most Recent Stockholder Advisory Vote on Executive Compensation			39
Executive Compensation Philosophy and Objectives			39
Executive Compensation Program Components			42
Executive Officer Employment Arrangements			47
Fiscal 2021 Summary Compensation Table			48
Outstanding Equity Awards at 2021 Fiscal Year-End			49
Fiscal 2021 Grants of Plan-Based Awards			52
Fiscal 2021 Option Exercises and Stock Vested			53
Pension Benefits			53
Nonqualified Deferred Compensation			53
Potential Payments Upon Termination or Change in Control			53
Risk Assessment and Compensation Practices			54

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Other Compensation Policies			54
Tax and Accounting Considerations			55
CEO Pay Ratio			55
Compensation Committee Report			56
Equity Compensation Plan Information			57

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT			58

RELATED PERSON TRANSACTIONS			60
Other Transactions			60
Policies and Procedures for Related Party Transactions			60


QUESTIONS AND ANSWERS			61

OTHER MATTERS			64
Householding			64
Stockholder Proposals			64
Availability of Bylaws			65
Fiscal Year 2021 Annual Report and SEC Filings			65

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2022 PROXY STATEMENT SUMMARY

This proxy statement and the enclosed form of proxy are furnished in connection with the solicitation of proxies by our board of directors for use at the 2022 annual meeting of stockholders of Arista Networks, Inc. (the “Company” or “Arista”), a Delaware corporation, and any postponements, adjournments or continuations thereof (the “Annual Meeting”). This summary highlights information contained in this proxy statement. We encourage you to read the entire proxy statement for more information prior to voting.

Annual Meeting

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Proposals and Board Recommendations


1 Page 29						Proposal for your Vote: Elect two Class II directors to serve until the 2025 annual meeting of stockholders Board Voting Recommendation: FOR the election of Charles Giancarlo and Daniel Scheinman

2 Page 30						Proposal for your Vote: Advisory vote to approve named executive officer compensation Board Voting Recommendation: FOR

3 Page 31						Proposal for your Vote: Advisory vote on the frequency of future advisory votes on named executive officer compensation Board Voting Recommendation: FOR a frequency of every “ONE YEAR”

4 Page 32						Proposal for your Vote: Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm Board Voting Recommendation: FOR

Director Nominees



Name and Occupation	Age	Director Since	Independent	Committees

Charles Giancarlo Chief Executive Officer and Chairman of the Board of Directors of Pure Storage, Inc.	64	2013		Compensation Nominating and Corporate Governance

Daniel Scheinman Lead Independent Director	59	2011		Compensation Nominating and Corporate Governance

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2022 Proxy Statement Summary

2021 Business Highlights

REVENUE

^$2.95B

GAAP GROSS MARGIN

63.8^%

CUSTOMERS:

• Over 8,000 customers

Board of Directors Snapshot

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2022 Proxy Statement Summary

Corporate Governance Highlights

We are committed to having sound corporate governance principles that we believe serve the best interest of all our stockholders. Some highlights of our corporate governance practices are listed below. In addition, we regularly evaluate our practices against prevailing best practices and emerging and evolving topics identified through stockholder outreach, current literature and corporate governance organizations.

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Executive Compensation Highlights

Annual review of our executive compensation program

Performance-based equity for CEO and other senior officers

Independent compensation consultant

Stock Ownership Guidelines for CEO

Clawback Policy for executive officers

No executive-only retirement programs

No excise tax gross-ups

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OUR COMMITMENT TO THE ENVIRONMENT,

SOCIAL RESPONSIBILITY AND GOVERNANCE

Arista is committed to transparency, engagement and consistent communication of our Environmental, Social & Governance (“ESG”) strategies and programs. While our core competency is designing, manufacturing and delivering leading software driven cloud networking solutions, Arista is dedicated to delivering a superior client experience, increasing shareholder value, serving our communities and creating a workplace where talent can thrive. We believe that sustainability and business growth are closely linked and delivering products that are sustainable truly enables our customers’ success. To maximize our efforts, we focus our sustainability program around environmental, social and governance programs, including:

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ESG Oversight

In 2021 and 2022, Arista continued to evolve our ESG strategy. Our executive leadership team and Board recognized the importance of these responsibilities, and our internal committee is tasked with driving additional progress in initiatives that promote sustainability, diversity, inclusion, equity and further transparency. Our sustainable governance structure begins at the very top. The core values of Arista reflect what is truly important to us as an organization. Arista was founded on the principle of doing things the “Arista Way,” which is to drive for customer success in every aspect of what we do. We build and deliver innovative, high-quality products and services through commitment, innovation and uncompromising focus on customer needs. This includes a commitment to designing, manufacturing and delivering leading software driven cloud networking solutions in an environmentally and socially sustainable manner.


THE ARISTA WAY

1	Drive for customer success in every aspect: support, quality, innovation and experience	6	Maintain the highest level of integrity in conduct

2	Do the right thing be it for products, quality, customers and daily interactions	7	Discuss, debate but quickly align to priorities

3	Challenge status quo, question traditional habits and be cost-effective	8	Treat your peers, vendors, customers with respect and develop a win-win partnership

4	Develop alternative ways of achieving disruptive innovation in every function, preserving quality	9	Mentor individuals and develop teams for overall success, not personal, success
5	Develop agile and mobile teams that can respond to priorities (as opposed to fixed or top-down organizations)	10	Cultivate Arista pride but never ego or arrogance in our culture

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Our Commitment to The Environment, Social Responsibility and Governance

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ENVIRONMENT

Arista is committed to responsible ESG practices that include climate change resilience, conservation of natural resources, pollution prevention and reduction of waste. We are committed to creating environmental awareness with our employees and other partners and to engage them to reduce their footprint, manage waste properly and encourage reuse or recycling.

We recognize the need to comply with applicable environmental standards and an increasing number of applicable environmental laws and regulations. We are committed to making the necessary investments to ensure compliance. We are continuously researching innovative ways to boost efficiency in our offices, such as utilizing high-efficiency electrical equipment including LED and motion-detector lighting, solar panels and high-efficiency HVAC units.

We have implemented an Environmental Management System (EMS) that lays out our objectives for achieving pollution prevention, environmental protection and monitoring, and continual improvements in the environmental performance of our operations. Backed by our Environmental Policy, the EMS provides a framework for monitoring of progress, internal employee training to embed sustainability into our business, external stakeholder engagement, and setting measurable targets to drive performance.

In 2021, Arista amended its Audit Committee charter to provide that the Audit Committee has responsibility for reviewing and discussing with management Arista’s policies and practices relating to environmental and social responsibility matters.

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In addition, Arista created a Sustainability Committee that sets the direction and strategy on sustainability matters and oversees execution of sustainability initiatives including:

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LEED Gold Certification & Efficient Offices: When we select our office space, we ensure that we have an office that not only meets our needs, but also aids us in reducing our impact to the environment. Our Santa Clara headquarters and our San Francisco office are both LEED Gold certified. The certification, awarded by the U.S. Green Building Council, is based on the properties’ use of sustainable materials, water and energy efficiency, indoor environmental quality, location and transportation, and overall innovation. We also consider energy efficient real estate for our international operations and, accordingly, moved our Bangalore operations to a facility that was built according to LEED Gold Level rating benchmarks.

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We are committed to integrating sustainability in every aspect of our products’ life cycles, from the materials that make up our products, all the way to the end of life of the product, while meeting our customers’ requirements. For example, we implement Design for Environment principles in our development process with the goal of minimizing the overall adverse environmental impact of our products, with a focus on the reduction of material diversity and weight, selection of more environmentally friendly materials, ease of disassembly and recycling, energy efficiency, design for longevity and upgradeability, and design for efficient packaging.

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Our Commitment to The Environment, Social Responsibility and Governance

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Each new generation of our products demonstrates improved network capacity, and energy efficiency, which reduces overall greenhouse gas emissions and power consumption for our customers. In addition, our new products use power supplies that are rated 80-Plus Platinum or better, which helps reduce the total product power consumption and heat generated from the power supplies.

We believe that our focus on innovation, with the objective of reducing costs and improving sustainability of our operations, provides a strategic benefit through the ability to fund, develop and implement new technologies and quickly respond to changes in customer requirements and industry demands. We continue to look for opportunities to minimize our environmental impact and to support public and private organizations that advance sustainability initiatives by driving toward a more digital work environment, encouraging remote work practices and making investments to reduce waste at all of our office locations.

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SOCIAL RESPONSIBILITY

A great experience starts with a great team. We are focused on growing our team of employees and aiding in their professional development. We believe that our ongoing success depends upon a skilled, satisfied and valued workforce. As such, Arista provides opportunities for employees to gain the skills and knowledge they need to advance and fulfill personal career goals. In 2021, we began implementing Human Capital Management (HCM) reporting and practices to establish a foundation to enable leaders to better hire talent and manage teams, including setting goals, performance evaluations, succession planning, and learning and development.

We also offer competitive compensation and benefits packages that reflect the needs of our workforce. In the U.S., we offer:

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Medical, dental and vision benefits for employee, spouse and dependents

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Flexible spending accounts for both healthcare and dependent care

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Health savings accounts and health reimbursement accounts

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Wellness program with incentives for participants who meet certain criteria

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Life-, short- and long-term disability insurance

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Flexible time off for full and part-time associates

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Paid maternity and parental leave

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401(k) retirement savings program with company matching contributions

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Day care and caregiver assistance

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Employee Assistance Program, including behavioral health and emotional support assistance

In addition to base salary and benefits, Arista’s employees participate in incentive plans that support our organizational philosophy of allowing employees to share in our performance and success. Our executive compensation program is designed to attract, retain, and reward performance and align incentives with achievement of the Arista’s strategic plan and both short- and long-term operating objectives. In accordance with our compensation philosophy established by the Compensation Committee Charter and the board, we believe our executive pay is well aligned with performance, creating a positive relationship between our operational performance and shareholder returns.

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SEC Form DEF 14A filed by Arista Networks Inc.