DEF 14A 1 lntnx2022_def14a.htm NUTANIX, INC. - DEF 14A NUTANIX, INC. - 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

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

NUTANIX, INC.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement if Other Than the 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.

Vision

We make hybrid multicloud simple and free customers
to focus on achieving their business outcomes

Mission

Delight customers with an open hybrid multicloud
platform with rich data services to run and manage
any application, anywhere

MESSAGE FROM THE CEO

Dear Stockholders,

Fiscal year 2022 (FY22) was pivotal for us. It provided an important data point in demonstrating the long-term benefits of our subscription business model transition.

Our thoughtful investment and the hard work Nutanix employees have put in over the last couple of years is paying off. In FY22, we achieved 27% year-over-year growth in Annual Contract Value (ACV) billings, >90% Gross Retention Rate (GRR), significant improvement in operating margin, and finally, full-year positive Free Cash Flow for the first time since 2018. These metrics are all signs of a healthy subscription business tracking well towards our long-term financial targets for generating stockholder value.

We also brought in world class talent, continued delivering on our hybrid multicloud roadmap, streamlined our go-to-market engine, nurtured strategic partnerships, and above all continued to delight our customers in a turbulent macroeconomic environment.

Strategic Vision

In today’s IT landscape, every organization has a cloud mandate and is in different stages of this journey. Companies have a growing number of applications (750 million new apps by 2026⁽¹⁾). These applications run everywhere and generate and consume massive amounts of data – in data centers, at edge sites, and in multiple public clouds, with each of these typically being bespoke environments with their own individual set of management, security and operational tooling. And to boot, there is a scarcity of talent to make this all work. It isn’t an exaggeration to say that most companies are struggling with how to implement, manage and secure this hybrid cloud world.

Nutanix is focused on simplifying this world by hiding the underlying cloud complexities for our customers, freeing them to focus on their business. We are delighting customers with a simple, open, hybrid multicloud software platform with rich data services to build, run, and manage any application. With this platform, companies going digital can modernize their data centers, adopt a cloud operating model for their applications and data, seamlessly extend their environments from their premises into the public cloud, and manage all their data for both existing and modern new applications.

This value proposition is resonating with our customers across the world and they are now looking at us as a strategic partner for their digital transformation, well beyond our roots as a pioneer of hyperconverged infrastructure.

Delivering on Product Strategy

The first step in realizing our vision was to simplify our product portfolio. Nutanix had 15+ product offerings, each individually taken to market with unique pricing and metering. We have now streamlined the portfolio into four key solution areas – cloud infrastructure, cloud management, unified storage, and database services. We also simplified how we price these offerings. As a result, we are beginning to see shorter deal cycles, improved value retention, and customers adopting more of our portfolio. Some of our largest deals in the second half of FY22 were on this new simplified packaging of our portfolio – an early indication of the traction our new offerings are making in the market.

2022 PROXY STATEMENT 01

Second, we are continuing to invest and expand our product leadership across our entire portfolio. With every release, our cloud platform has delivered higher performance, increased resiliency and scale for the most mission-critical workloads, enabling us to broaden our adoption across new and existing customers. We have also extended this goodness from the private cloud to the public cloud through our Nutanix Cloud Clusters (NC2) platform. This offering initially supported Amazon Web Services (AWS) and now includes support for Microsoft Azure starting the first quarter of FY23.

Finally, our product and engineering teams continue to innovate in delivering a rich set of data services to help companies build applications once and run them anywhere. Nutanix Database Service (NDB) is the first such offering and has been adopted by some of the largest companies in the world.

Streamlined Go-To-Market Engine

In FY22, we focused on boosting the productivity of our sales organization, building and scaling our renewals engine, and optimizing our overall go-to-market cost structure to be more in line with our industry peers.

We continued to see increased productivity from our sales teams, driven by simplified pricing and packaging, continued investment in training and enablement, maturing of previously hired reps, and improved leverage from our partners. In parallel, we successfully built a cost-effective renewals engine that executed well even as our renewals business grew significantly. Our GRR continues to be within our target of 90% or greater. In FY23, we will focus on further scaling our renewals engine as renewals continue to grow as a percentage of our overall business.

Our focus on productivity, growth in our renewals business, and expense management and efficiency helped reduce our sales and marketing costs as a percentage of revenue from 89% in FY20 to 62% in FY22, and we expect this trend to continue in FY23.

Profitable Growth: True-North for Nutanix

In FY22, we laid the foundation for the continued evolution of Nutanix toward becoming a profitable, growing cloud subscription software company. In FY23, we plan to continue to build on this foundation, delivering both top-line growth and increasing cash flows, with a combination of an increasing share of efficient renewals, new business growth, and diligent expense management, while continuing to delight customers with our industry-leading hybrid multicloud platform.

Thank you for your continued trust and faith in us.

Rajiv Ramaswami

President and Chief Executive Officer

(1)

IDC, 750 Million New Logical Applications: More Background, doc #US48441921, Dec 2021.

(2)

Certain information contained herein, including projections, may relate to or be based on studies, publications, surveys and other data obtained from third-party sources and our own internal estimates and research. While we believe these third-party studies, publications, surveys and other data are reliable as of the date hereof, they have not been independently verified, and we make no representation as to the adequacy, fairness, accuracy, or completeness of any information obtained from third-party sources.

2022 PROXY STATEMENT 02

Cautionary Note Regarding Forward-Looking Statements. This letter and the accompanying proxy statement contain forward-looking statements, which statements involve substantial risks and uncertainties. Other than statements of historical fact, all statements contained in this proxy statement, including statements regarding our future results of operations and financial position, our business strategy and plans and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “potentially,” “estimate,” “continue,” “anticipate,” “plan,” “intend,” “could,” “would,” “expect,” or words or expressions of similar substance or the negative thereof, that convey uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements included in this letter and the accompanying proxy statement include statements regarding (i) the benefits of our subscription business model transition, (ii) tracking towards our long-term financial targets, (iii) the growing number of applications, (iv) shorter deal cycles, (v) improved value retention, (vi) customer adoption of more of our portfolio, (vii) our new offerings' market traction, (viii) increased productivity from our sales teams, (ix) our Gross Retention Rate, (x) further scaling our renewals engine, (xi) the continued reduction in our sales and marketing costs as a percentage of revenue, and (xii) Nutanix becoming a profitable, growing cloud subscription software company, delivering both top-line growth and increasing cash flows. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives and financial needs in light of the information currently available to us. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in our Annual Report on Form 10-K for the fiscal year ended July 31, 2022 filed with the Securities and Exchange Commission on September 21, 2022. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for us to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained or implied in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and trends discussed in this proxy statement may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events.

2022 PROXY STATEMENT 03

NOTICE OF 2022 ANNUAL MEETING OF STOCKHOLDERS

To Be Held Virtually on
Friday, December 9, 2022

at 9:00 a.m., Pacific Time


REVIEW THE PROXY STATEMENT AND VOTE IN ONE OF FOUR WAYS:

	Internet Visit the website listed on your proxy card

	Telephone Call the telephone number on your proxy card

	Mail Sign, date, and return your proxy card in the enclosed envelope

	Vote during the Meeting Vote online during the Annual Meeting

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders Meeting to be Held on December 9, 2022: This Notice, the Proxy Statement and the Annual Report are available at www.proxyvote.com.

To the Stockholders of Nutanix, Inc.:

On behalf of our Board of Directors, it is our pleasure to invite you to attend the 2022 annual meeting of stockholders (including any adjournment or postponement thereof, the “Annual Meeting”) of Nutanix, Inc. The Annual Meeting will be held virtually via live webcast at www.virtualshareholdermeeting.com/NTNX2022 on Friday, December 9, 2022 at 9:00 a.m., Pacific Time.

We are holding the Annual Meeting for the following purposes:

Proposals		Board vote recommendation		For further details
1.	Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Declassify the Board of Directors and Provide for the Annual Election of Directors		FOR	Page 22
2.	Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Eliminate Supermajority Voting Requirements		FOR	Page 23
3.	Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Eliminate Inoperative Provisions and Update Certain Other Miscellaneous Provisions		FOR	Page 24
4.	Election of Three Class III Directors Named in the Proxy Statement		FOR	Page 26
5.	Ratification of Selection of Deloitte & Touche LLP as Independent Registered Public Accounting Firm for Fiscal Year 2023		FOR	Page 34
6.	Advisory Vote to Approve the Compensation of our Named Executive Officers		FOR	Page 37
7.	Approval of Amendment and Restatement of Amended and Restated 2016 Employee Stock Purchase Plan		FOR	Page 64

2022 PROXY STATEMENT 04

We are also holding the Annual Meeting 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 October 11, 2022. Only stockholders of record of our Class A common stock at the close of business on the record date may vote at the Annual Meeting.

On or about October 24 , 2022, we mailed to our stockholders a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy statement and annual report. This notice provides instructions on how to vote via the Internet or by telephone and includes instructions on how to receive a paper copy of our proxy materials by mail. The accompanying proxy statement and our annual report can be accessed directly at the following Internet address: www.proxyvote.com. You will be asked to enter the sixteen-digit control number located on your notice or proxy card.

In the event of a technical malfunction or other situation that the meeting chair determines may affect the ability of the Annual Meeting to satisfy the requirements for a meeting of stockholders to be held by means of remote communication under applicable Delaware corporate law, or that otherwise makes it advisable to adjourn the Annual Meeting, the chair or secretary of the Annual Meeting will convene the meeting at 12:00 p.m. Pacific Time on the date specified above and at our address specified above solely for the purpose of adjourning the meeting to reconvene at a date, time and physical or virtual location announced by the meeting chair. Under either of the foregoing circumstances, we will post information regarding the announcement on our investor relations website at http://ir.nutanix.com.

By Order of the Board of Directors,

Rajiv Ramaswami

President and Chief Executive Officer

San Jose, California

October 24 , 2022

You are cordially invited to attend the virtual Annual Meeting. YOUR VOTE IS IMPORTANT. Whether or not you expect to attend the Annual Meeting, you are urged to vote and submit your proxy by following the voting procedures described in the proxy card. Even if you have voted by proxy, you may still vote during the Annual Meeting. If your shares are held of record by a broker, bank or other agent and you wish to vote during the Annual Meeting, you must follow the instructions from your broker, bank or other agent.

2022 PROXY STATEMENT 05

Table of Contents

PROXY STATEMENT	07

PROXY VOTING ROADMAP	08

CORPORATE GOVERNANCE	15
Board of Directors and Its Committees	15
Environmental, Social, and Governance	20
Nominations Process and Director Qualifications	20
Proposal 1: Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Declassify the Board of Directors and Provide for the Annual Election of Directors	22
Proposal 2: Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Eliminate Supermajority Voting Requirements	23
Proposal 3: Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Eliminate Inoperative Provisions and Update Certain Other Miscellaneous Provisions	24
Proposal 4: Election of Directors	26
Director Compensation	31
Certain Relationships and Related Party Transactions	33

AUDIT COMMITTEE MATTERS	34
Proposal 5: Ratification of Selection of Independent Registered Public Accounting Firm	34
Report of the Audit Committee	35

EXECUTIVE OFFICERS	36

EXECUTIVE COMPENSATION	37
Proposal 6: Advisory Vote to Approve the Compensation of Our Named Executive Officers	37
Compensation Discussion and Analysis	37
Executive Compensation Tables	54
Employment Arrangements	58
CEO Pay Ratio	62
Equity Compensation Plan Information	63

ADDITIONAL PROPOSALS	64
Proposal 7: Approval of Amendment and Restatement of Amended and Restated 2016 Employee Stock Purchase Plan	64

STOCK OWNERSHIP INFORMATION	70
Security Ownership of Certain Beneficial Owners and Management	70

OTHER MATTERS	72

QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING	73
APPENDIX A – Key Performance Measures and Non-GAAP Financial Measures	A-1
APPENDIX B – Proposed Amended & Restated Certificate of Incorporation	B-1
APPENDIX C – Proposed Amended & Restated 2016 Employee Stock Purchase Plan	C-1


Time and Date	Virtual Meeting Site	Record Date
9:00 a.m. Pacific Time Friday, December 9, 2022	www.virtualshareholdermeeting.com/NTNX2022	October 11, 2022

Name	Age	Audit Committee	Compensation Committee	Nominating and Corporate Governance Committee	Security and Privacy Committee	Independent?	Director Since
David Humphrey	45						2020
Rajiv Ramaswami President and CEO	56						2020
Gayle Sheppard	69						2022

Board Composition		• 7 out of our 8 directors are independent. • 2 out of 8 directors are women.
Average Tenure		• Average tenure of our Board is 3.1 years.
Independent Chair of our Board		• We have an independent Chair of our Board.
Independent Board Committees		• We have an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee, each of which is composed entirely of independent directors. • In March 2022, our Board established the Security and Privacy Committee, which is composed entirely of independent directors, to assist our Board in its oversight of our management of technology and information security risks and compliance with data protection and privacy laws.
Single Voting Class; One Share, One Vote		• In January 2022, we eliminated our dual-class stock structure resulting in a single class of common stock with equal voting rights. • Each share of our Class A common stock is entitled to one vote.
Majority Voting Standard; Irrevocable Offer to Resign		• In October 2022, we introduced majority voting in uncontested director elections. • Directors tender an irrevocable offer to resign if they do not receive majority vote and our Board will accept such offer to resign absent a compelling reason.

Annual Board and Committee Self-Assessments		• Our Board and its committees conduct annual self-assessments.
No “Poison Pill”		• We do not have a stockholder rights plan, or “poison pill,” in place.
Annual Auditor Ratification		• Stockholders have the opportunity to ratify the Audit Committee’s selection of our independent registered public accounting firm annually.
Executive Sessions		• Directors regularly hold executive sessions without management present.
Stock Ownership Guidelines		• Directors are subject to stock ownership guidelines.

	Fiscal Year Ended July 31,
	2021 ($)	2022 ($)
Audit fees⁽¹⁾	3,511,013	3,574,000
Audit-related fees⁽²⁾	210,000	—
Tax fees⁽³⁾	600,018	548,816
TOTAL FEES	4,321,031	4,122,816

(1)	Consists of fees billed for professional services rendered in connection with the audit of our consolidated financial statements, including audited financial statements presented in our Annual Report on Form 10-K, review of the interim consolidated financial statements included in our quarterly reports and services normally provided in connection with regulatory filings.
(2)	Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.”
(3)	Consists of fees billed for professional services for tax compliance, tax advice and tax planning. These services include assistance regarding federal, state and international tax compliance.

Board Diversity Matrix (As of September 30, 2022)
Total Number of Directors			8
	Female	Male		Non-Binary	Did Not Disclose Gender
Part I: Gender Identity
Directors	2	6		0	0
Part II: Demographic Background
African American or Black	0	0		0	0
Alaskan Native or Native American	0	0		0	0
Asian	0	1		0	0
Hispanic or Latinx	0	0		0	0
Native Hawaiian or Pacific Islander	0	0		0	0
White	2	5		0	0
Two or More Races or Ethnicities	0	0		0	0
LGBTQ+			0
Did Not Disclose Demographic Background			0

•	Class I directors: Steven J. Gomo and Max de Groen, whose terms will expire at the annual meeting of stockholders to be held after the end of the fiscal year ending July 31, 2023;
•	Class II directors: Craig Conway, Virginia Gambale, and Brian Stevens, whose terms will expire at the annual meeting of stockholders to be held after the end of the fiscal year ending July 31, 2024; and
•	Class III directors: David Humphrey, Rajiv Ramaswami, and Gayle Sheppard, whose terms will expire at the Annual Meeting, unless re-elected.

PROXY STATEMENT

PROXY VOTING ROADMAP

CORPORATE GOVERNANCE

Board of Directors and its Committees

Environmental, Social, and Governance

Nominations Process and Director Qualifications

Proposal 1: Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation To Declassify the Board of Directors and Provide For the Annual Election of Directors

Proposal 2: Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Eliminate Supermajority Voting Requirements

Proposal 3: Approval of Amendment and Restatement of Amended and Restated Certificate of Incorporation to Eliminate Inoperative Provisions and Update Certain Other Miscellaneous Provisions

Proposal 4: Election of Directors

SEC Form DEF 14A filed by Nutanix Inc.