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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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 Rule 14a-12
F5, 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 the appropriate box):
No fee required
 
 
 
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
 
 
 
 
(1)
Title of each class of securities to which transaction applies:
 
 
 
 
(2)
Aggregate number of securities to which transaction applies:
 
 
 
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
 
 
 
 
(4)
Proposed maximum aggregate value of transaction:
 
 
 
 
(5)
Total fee paid:
 
 
 
Fee paid previously with preliminary materials.
 
 
 
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
 
 
 
(1)
Amount previously paid:
 
 
 
 
(2)
Form, Schedule or Registration Statement No.:
 
 
 
 
(3)
Filing party:
 
 
 
 
(4)
Date Filed:
 
 
 

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Notice of Fiscal Year 2022 Annual
Shareholders Meeting
MEETING DETAILS

Time and Date
March 9, 2023 at 11:00 a.m. Pacific Time
 

Virtual Meeting Location
This year is a virtual meeting at www.virtualshareholdermeeting.com/FFIV2023
 

Record Date
January 4, 2023. Only shareholders of record at the close of business on the record date are entitled to notice of and to vote at the Annual Meeting.
Items of Business
1
To elect 11 directors nominated by the Board of Directors of the Company to hold office until the Annual Meeting of Shareholders for fiscal year 2023;
2
To approve the F5, Inc. Incentive Plan as amended and restated to increase the number of shares of common stock issuable by an additional 4,500,000 shares;
3
To approve the F5, Inc. Employee Stock Purchase Plan as amended and restated to increase the number of shares of common stock issuable by an additional 2,000,000 shares;
4
To ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023;
5
To approve, on an advisory basis, the compensation of our named executive officers;
6
To approve, on an advisory basis, the frequency of the advisory vote on compensation of our named executive officers; and
7
To transact such other business as may properly come before the meeting and any adjournments or postponements thereof.
 
By Order of the Board of Directors,
 

 
SCOT F. ROGERS
Secretary
 
Seattle, Washington
January 25, 2023

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Notice of Fiscal Year 2022 Annual
Shareholders Meeting
 
Your Vote Is Important!
Whether or not you attend the Annual Meeting, it is important that your shares be represented and voted at the meeting. Therefore, please promptly vote and submit your proxy by phone, over the Internet, or by signing, dating, and returning the accompanying proxy card in the enclosed, prepaid, return envelope or otherwise completing the appropriate voting instruction form. If you decide to attend the Annual Meeting and wish to vote virtually at the meeting, please see “Questions and Answers About the Annual Meeting and These Proxy Materials” below.

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Notice of Fiscal Year 2022 Annual
Shareholders Meeting
Important Notice Regarding the Availability of Proxy Materials for
the Company’s Annual Meeting of Shareholders on March 9, 2023.
The F5, Inc. Proxy Statement and 2022 Annual Report to Shareholders are available online at www.proxyvote.com and on our website at www.f5.com under the “Company — Investor Relations — Financials” section.
Please do not return the enclosed paper ballot if you are voting over the Internet or by telephone.
WAYS TO VOTE

Vote by Internet
www.proxyvote.com — 24 hours a day/7 days a week
 

Vote by Telephone
1-800-690-6903 via touch-tone — 24 hours a day/7 days a week
 

Vote Online During the Meeting
See “Questions and Answers About the Annual Meeting and These Proxy Materials — How do I vote? — Voting “Virtually” at the Annual Meeting below.
Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time on March 8, 2023. Have your proxy card or notice in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.
Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time on March 8, 2023. Have your proxy card or notice in hand when you call and then follow the instructions.
Your cooperation is appreciated since a majority of the shares of Common Stock entitled to vote must be represented at the virtual Annual Meeting, either in person or by proxy, to constitute a quorum for the conduct of business.
Please note that brokers may not vote your shares on the election of directors; on the proposal to approve the Incentive Plan as amended and restated; on the proposal to approve the Employee Stock Purchase Plan as amended and restated; on the advisory vote on executive compensation; and on the frequency of the advisory vote on executive compensation; in the absence of your specific instructions as to how to vote. Please vote your proxy or provide your specific instructions to your broker so your vote can be counted.

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Proxy Statement Fiscal Year 2022 Annual
Meeting of Shareholders
F5, Inc. (“F5” or the “Company”) is furnishing this Proxy Statement and the enclosed proxy in connection with the solicitation of proxies by the Board of Directors of the Company (the Board of Directors or the Board) for use at the Annual Meeting of Shareholders to be held on
March 9, 2023, at 11:00 a.m., Pacific Time, in a virtual format through a live webcast at www.virtualshareholdermeeting.com/FFIV2023, and at any adjournments or postponements thereof (the Annual Meeting). As used herein, “we,” “us,” “our,” “F5” or the “Company” refers to F5, Inc., a Washington corporation. Proxy materials are being made available and mailed to shareholders on or about January 25, 2023. The Company’s principal executive offices are located at 801 Fifth Avenue, Seattle, Washington 98104. The Company’s telephone number at that location is 206-272-5555.

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Proxy Summary
This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement carefully before voting.
ANNUAL MEETING OF
SHAREHOLDERS

Time and Date
March 9, 2023 at 11:00 a.m. Pacific Time
 

Virtual Meeting Location
This year is a virtual meeting at www.virtualshareholdermeeting.com/FFIV2023
 

Record Date
January 4, 2023
 

Mailing Date
Approximately January 25, 2023
 

Voting
Shareholders as of the record date are entitled to vote. Each share of Company common stock is entitled to one vote for each director nominee and one vote for each of the proposals.
Meeting Agenda
• Election of the 11 directors listed in this Proxy Statement and on the proxy card
To approve the F5, Inc. Incentive Plan as amended and restated to increase the number of shares of common stock issuable by an additional 4,500,000 shares
To approve the F5, Inc. Employee Stock Purchase Plan as amended and restated to increase the number of shares of common stock issuable by an additional 2,000,000 shares
Ratification of PricewaterhouseCoopers LLP (PWC) as our independent registered public accounting firm for fiscal year 2023
Advisory vote on compensation of our named executive officers
Advisory vote on the frequency of the advisory vote on compensation of our named executive officers
Transact other business that may properly come before the meeting, or any adjournment or postponement
Fiscal Year 2022 Proxy Statement
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Proxy Summary
 
Proposal
Board Vote
Recommendation
Page References
for More Detail
Voting Matters
and Vote
Recommendation
1
To elect 11 directors nominated by the Board to hold office until the Annual Meeting of Shareholders for fiscal year 2023
FOR
(each nominee)
pp. 66
2
To approve the F5, Inc. Incentive Plan as amended and restated to increase the number of shares of common stock issuable by an additional 4,500,000
FOR
pp. 67
3
To approve the F5, Inc. Employee Stock Purchase Plan as amended and restated to increase the number of shares of common stock issuable by an additional 2,000,000 shares
FOR
pp. 76
4
To ratify the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023
FOR
pp. 80
5
Advisory vote to approve the compensation of our named executive officers
FOR
pp. 81
6
Advisory vote to approve the frequency of the advisory vote on compensation of our named executive officers.
FOR ONE YEAR
pp. 84
Board & Governance
Highlights
Independent Board Chair
10 of 11 Board Nominees are Independent
7 of 11 Board Nominees Identify as Diverse
 
Declassified Board — All Directors Elected Annually
Share Ownership Guidelines for Executives & Directors
Clawback Policy for Named Executive Officers
 
One-year Post-vesting Holding Period for Executive Equity Awards Beginning with Grants Awarded in Fiscal Year 2022
Majority Voting
for All Directors
Third-party Led Board Self-Assessment Process
 
Independent Directors Meet Without Management Present
Prohibition on Hedging, Pledging and Short Sale of Company Stock
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Fiscal Year 2022 Proxy Statement

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Proxy Summary
Fiscal Year 2022
Performance Highlights
Annual
revenue
$2.7
BILLION
4% over fiscal year 2021
Cash flow
from operations
$443
MILLION
GAAP net
income
$322
MILLION
Cash returned to shareholders
through share repurchases
$500
MILLION
Awards and
Company
Recognition
Forbes The Culture 50 Champions: F5 CEO François Locoh-Donou
Puget Sound Business Journal Power 100: F5 CEO François Locoh-Donou
Eight company employees were included in CRN’s 2022 Women of the Channel
 
Certified via Great Place to Work: F5 U.S. and India
F5 named in the Top 10 in the Computer Services sector for America’s Most JUST Companies, by JUST Capital
2022 Bestie Award, Benevity Corporate Goodness Awards: F5
 
 
 
Fiscal Year 2022 Proxy Statement
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Proxy Summary
Compensation
Policies and
Practices Linked
to Shareholder
Value Creation and
RISK Mitigation
Pay for
performance
We emphasize pay for performance and align executive compensation with the Company’s business objectives and performance, and the creation of long-term shareholder value.  
Threshold
performance
metrics
Incentive-based compensation is at risk and payable only if certain threshold performance metrics are achieved.
No excise tax
gross-ups
The Company does not provide “golden parachute” excise tax gross-ups upon a change in control of the Company.
Benefit plans
The Company offers its executive officers only modest perquisites that are supported by a business interest and are consistent with broad-based benefit plans available to other employees.
Stock ownership
guidelines
Directors and Company executives are subject to stock ownership requirements that encourage alignment with the interests of shareholders.
Clawback policy
Incentive compensation for each of the named executive officers (NEOs) may be subject to recoupment in the event the Company restates its reported financial results.  
No hedging or
pledging of stock
Executive officers are prohibited from entering into hedging or pledging transactions or trading in puts, calls or other derivatives of the Company’s Common Stock or otherwise engaging in short sales of Common Stock of the Company.  
No re-pricing
of options
Under the terms of the equity plan, the re-pricing of underwater options is prohibited absent shareholder approval.
Double-trigger
change of control
agreements
The Company’s change of control agreements with its executives contain a “double trigger” feature.
Post-vesting
holding
requirement
Beginning with awards granted in fiscal year 2022, Company executives must retain for at least one year the net shares received on the vesting of Restricted Stock Units, which aligns executives’ long-term incentives with the interests of shareholders. 
Annual
advisory
vote
Annual advisory vote on executive compensation provides shareholders with a direct opportunity to express their opinion regarding the Company’s executive pay practices.
Capped incentive compensation
Executive incentive compensation is capped avoiding excessive risk-tasking and limiting to a reasonable level the amount of total performance-based compensation paid.
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Fiscal Year 2022 Proxy Statement

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Proxy Summary
Director Nominees
The following table provides summary information about each director nominee. Each director named below is a continuing director and all directors are elected annually by a majority of votes cast.
 
 
 
 
 
 
 
Committees
Name
Age
Director
Since
Occupation
Independent
Diverse(1)
Other
Public
Boards
Audit &
Risk
Oversight
Talent and
Compensation
Nominating
and ESG
Marianne N. Budnik
54
October 2022
Director, Cerence, Inc., and Chief Marketing Officer, Talon Cyber Security
X
Elizabeth L. Buse
61
September 2020
Director, U.S. Bancorp; Retired Chief Executive Officer, Monitise, Plc.
X
Michael L. Dreyer
59
October 2012
Director, Coherent Corp. (formerly II-VI Inc.); Retired Chief Operations Officer, Silicon Valley Bank
X
Alan J. Higginson
75
May 1996
Chairman of the Board, F5; Former Chairman, Hubspan, Inc.
Peter S. Klein
60
March 2015
Director, Denali Therapeutics; Director, Sarcos Technology and Robotics Corp; Director, Accolade; Retired Chief Financial Officer, Microsoft
X
François Locoh-Donou
51
April 2017
President and Chief Executive Officer, F5; Director, Capital One
X
Nikhil Mehta
45
January 2019
Chief Executive Officer, Gainsight, Inc., Director, Lead Edge Growth Opportunities, Ltd.
X
Michael F. Montoya
51
June 2021
Chief Information Security Officer, Equinix
Marie E. Myers
54
January 2019
Chief Financial Officer, HP, Inc.; Director, KLA Corp.
X
James M. Phillips
56
January 2022
Strategic Director, Madrona Venture Group
Sripada Shivananda
50
April 2020
Executive Vice President and Chief Technology Officer, PayPal Holdings, Inc.
 
= Chair
= Member
= Financial Expert
1.
Directors included in the diverse designation represent individuals whose race, ethnicity, gender, or LGBTQ+ self-identification contribute to Board heterogeneity and expand the Board’s understanding of the needs and viewpoints of our customers, partners, employees, investors, and other stakeholders, and meet the definition of “diverse director” under the Nasdaq Listing Rules.
Fiscal Year 2022 Proxy Statement
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Proxy Summary
BOARD SKILLs AND DIVERSITY
MATRIX


Three of our 11 Director nominees are women, four of our 11 Director nominees are ethnically diverse with one identifying as Black, two identifying as Asian and one identifying as Hispanic/Latino(a). No Directors identify as LGBTQ+. One director identifies as a military veteran.
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Fiscal Year 2022 Proxy Statement

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Proxy Summary
Total number of directors: 11
 
 
 




(1)
Represents Director nominees with financial fluency. The Board of Directors has determined that Mr. Klein and Ms. Myers are “audit committee financial experts” as defined in Item 407 of Regulation S-K.
Fiscal Year 2022 Proxy Statement
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Questions and Answers About the Annual Meeting and These Proxy
Materials
Why am I receiving these materials?
You are receiving these materials because you are a shareholder of the Company as of the close of business on January 4, 2023 (the “Record Date”) and are entitled to receive notice of the Annual Meeting and to vote on matters that will be presented at the meeting. This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote, and information about voting procedures.
How does the Board of Directors recommend that I vote?
The Board of Directors recommends that you vote:
• FOR the election of Marianne N. Budnik, Elizabeth L. Buse, Michael L. Dreyer, Alan J. Higginson, Peter S. Klein, François Locoh-Donou, Nikhil Mehta, Michael F. Montoya, Marie E. Myers, James M. Phillips and Sripada Shivananda as directors to hold office until the Annual Meeting of Shareholders for fiscal year 2023;
• FOR the approval of the F5, Inc. Incentive Plan as amended and restated to increase the number of shares
of common stock issuable by an additional 4,500,000 shares;
• FOR the approval of the F5, Inc. Employee Stock Purchase Plan as amended and restated to increase the number of shares of common stock issuable by an additional 2,000,000 shares;
• FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023;
• FOR the approval, on an advisory basis, of the compensation of our named executive officers; and
• FOR one year, the approval, on an advisory basis, of the frequency of the advisory vote on compensation of our named executive officers.
Will there be any other items of business on the agenda?
The Company is not aware, as of the date of this Proxy Statement, of any matters to be voted upon at the Annual Meeting other than those stated in this Proxy Statement and the accompanying Notice of Annual Meeting of Shareholders. If any other items of business or other matters are properly brought before the Annual Meeting, your proxy gives discretionary authority to the persons named on the proxy card with respect to those items of business or other matters. The persons named on the proxy card intend to vote the proxy in accordance with their best judgment.
Who is entitled to vote at the Annual Meeting?
Only holders of our common stock, no par value (the “Common Stock”), at the close of business on the Record Date may vote at the Annual Meeting. We refer to the holders of Common Stock as “shareholders” throughout this Proxy Statement. Each shareholder is entitled to one vote for each share of Common Stock held as of the Record Date.
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Fiscal Year 2022 Proxy Statement

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Questions and Answers About the Annual Meeting and These Proxy
Materials
What constitutes a quorum, and why is a quorum required?
We need a quorum of shares of Common Stock eligible to vote to conduct business at our Annual Meeting. A quorum exists when at least a majority of the outstanding shares entitled to vote at the close of business on the Record Date are represented at the virtual Annual Meeting either in person or by proxy. As of the close of business on the Record Date, we had 60,117,626 shares of Common Stock outstanding and entitled to vote at the virtual Annual Meeting, meaning that 30,058,814 shares of Common Stock must be represented in person or by proxy to have a quorum. Abstentions and broker non-votes (as described below) will also count towards the quorum requirement. Your shares will be counted toward the number needed for a quorum if you: (i) submit a valid proxy card or voting instruction form, (ii) give proper instructions over the telephone or on the Internet, or (iii) in the case of a shareholder of record, virtually attend the Annual Meeting.
What is the difference between holding shares as a shareholder of record and as a beneficial owner?
Shareholder of Record. You are a shareholder of record if at the close of business on the Record Date your shares were registered directly in your name with American Stock Transfer,
our transfer agent.
Beneficial Owner. You are a beneficial owner if at the close of business on the Record Date your shares were held by a brokerage firm or other nominee and not in your name. Being a beneficial owner means that, like many of our shareholders, your shares are held in “street name.” As the beneficial owner, you have the right to direct your broker or nominee how to vote your shares by following the voting instructions your broker or nominee provides. If you wish to vote the shares you own beneficially at the virtual meeting, you should follow the voting instructions or other information you received from your broker or other nominee and the instructions on the website at www.virtualshareholdermeeting.com/FFIV2023. If you do not provide your broker or nominee with instructions on how to vote your shares or a legal proxy, your broker or nominee will be able to vote your shares with respect to some, but not all, of the proposals. Please see “What will happen if I do not vote my shares?” and “What if I do submit my proxy but do not specify how my shares are to be voted?” for additional information.
How do I vote?
Shareholders of Record. If you are a shareholder of record, there are several ways for you to vote your shares:
 
• Voting by Mail. You may submit your vote by completing, signing and dating each proxy card received and returning it in the prepaid envelope. Sign your name exactly as it appears on the proxy card. Proxy cards submitted by mail must be received no later than March 8, 2023 to be voted at the Annual Meeting. If you vote by telephone or on the Internet, please do not return your proxy card unless you wish to change your vote.
 
• Voting by Telephone. You may vote by telephone by using the toll-free number listed on your proxy card.
 
• Voting on the Internet. You may vote on the Internet by using the voting portal found at www.proxyvote.com. As with telephone voting, you can confirm that your instructions have been properly recorded. Voting via the Internet is a valid proxy voting method under the laws of
the State of Washington (our state of incorporation).
 
• Voting “Virtually” at the Annual Meeting. You may vote your shares at the Annual Meeting by following the instructions on the website at www.virtualshareholdermeeting.com/FFIV2023. Even if you plan to attend the Annual Meeting, we recommend that you also submit your proxy card or voting instructions or vote by telephone or via the Internet by the applicable deadline so that your vote will be counted if you do not vote at the virtual Annual Meeting.
 
Beneficial Owners. You may vote by the method explained on the voting instructions or other information you receive from the broker or nominee.
Fiscal Year 2022 Proxy Statement
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Questions and Answers About the Annual Meeting and These Proxy
Materials
Can I revoke or change my vote after I submit my proxy?
Yes. You may revoke or change your vote after submitting your proxy by one of the following procedures:
• Delivering a proxy revocation or another proxy bearing a later date to the Secretary of the Company at 801 Fifth Avenue, Seattle, Washington 98104 up until 11:59 p.m. Eastern Time the day before the Annual Meeting;
• If you have voted by Internet or telephone and still have your control number, you may change your vote via Internet or telephone up until 11:59 p.m. Eastern Time the day before the Annual Meeting;
• Attending the Annual Meeting and voting virtually. If you are a beneficial owner, you should follow the voting instructions or other information you received from your broker or other nominee and the instructions on the website at www.virtualshareholdermeeting.com/FFIV2023.
 
Please note that attendance alone at the Annual Meeting will not revoke a proxy; you must actually vote at the virtual Annual Meeting.
What will happen if I do not vote my shares?
Shareholders of Record. If you are the shareholder of record of your shares and you do not vote by mail, by telephone, via the Internet or virtually at the Annual Meeting, your shares will
not be voted at the Annual Meeting.
Beneficial Owners. If you are the beneficial owner of your shares, your broker or nominee may vote your shares only on those proposals on which it has discretion to vote. Under applicable stock exchange rules, your broker or nominee does not have discretion to vote your shares on non-routine matters, which include Proposals 1, 2, 3, 5, and 6. However, your broker or nominee does have discretion to vote your shares on routine matters such as Proposal 4.
What if I do submit my proxy but do not specify how my shares are to be voted?
If you are a shareholder of record and you submit a proxy, but you do not provide voting instructions, your shares will be voted:
• FOR the election of Marianne N. Budnik, Elizabeth L. Buse, Michael L. Dreyer, Alan J. Higginson, Peter S. Klein, François Locoh-Donou, Nikhil Mehta, Michael F. Montoya, Marie E. Myers, James M. Phillips and Sripada Shivananda as directors to hold office until the Annual Meeting of Shareholders for fiscal year 2023;
• FOR the approval of the F5, Inc. Incentive Plan as amended and restated to increase the number of shares
of common stock issuable by an additional 4,500,000 shares;
 
• FOR the approval of the F5, Inc. Employee Stock Purchase Plan as amended and restated to increase the number of shares of common stock issuable by an additional 2,000,000 shares;
 
• FOR the ratification of the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023;
 
• FOR the approval, on an advisory basis, of the compensation of our named executive officers; and
 
• FOR one year, the approval, on an advisory basis, of the frequency of the advisory vote on compensation of our named executive officers.
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Fiscal Year 2022 Proxy Statement

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Questions and Answers About the Annual Meeting and These Proxy
Materials
What is the effect of an abstention or a “broker non-vote”?
Brokers or other nominees who hold shares of Common Stock for a beneficial owner have the discretion to vote on routine proposals when they have not received voting instructions from the beneficial owner at least ten days prior to the Annual Meeting. A “broker non-vote” occurs when a broker or other nominee does not receive voting instructions from the beneficial owner and does not have the discretion to direct the voting of the shares. If you abstain from voting on a proposal, or if a broker or nominee indicates it does not have discretionary authority to vote on a proposal, the shares will be counted for the purpose of determining if a quorum is present but will not be included in the vote totals with respect to the proposal. Furthermore, any abstention or broker non-vote will have no effect on the proposals to be considered at the Annual Meeting since these actions do not represent votes cast by shareholders.
What is the vote
required for each
proposal?
Proposal
Vote Required*
Broker Discretionary
Voting Allowed
1
Election of 11 directors nominated by the Board to hold office until the Annual Meeting of Shareholders for fiscal year 2023 and until his or her successor is elected and qualified
Majority of
Votes Cast
No
2
Approval of the F5, Inc. Incentive Plan as amended and restated to increase the number of shares of common stock issuable by an additional 4,500,000 shares
Majority of
Votes Cast
No
3
Approval of the F5, Inc. Employee Stock Purchase Plan as amended and restated to increase the number of shares of common stock issuable by an additional 2,000,000 shares
Majority of
Votes Cast
No
 
4
Ratification of the selection of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for fiscal year 2023
Majority of
Votes Cast
Yes
5
Advisory vote to approve the compensation of our named executive officers
Majority of
Votes Cast
No
 
6
Advisory vote on frequency of advisory vote on the compensation of our named executive officers
Plurality of
Votes Cast
No
*
Under Washington law and the Company’s Fourth Amended and Restated Articles of Incorporation (the “Articles”) and Eighth Amended and Restated Bylaws (the “Bylaws”), if a quorum exists at the meeting, a nominee for director in an uncontested election will be elected by the vote of the majority of votes cast. A majority of votes cast means that the number of shares cast “FOR” a director’s election exceeds the number of votes cast “AGAINST” that director. If a director nominee who is an incumbent does not receive the requisite votes, that director’s term will end on the earliest of (i) the date on which the Board appoints an individual to fill the office held by that director; (ii) 90 days after the date on which an inspector determines the voting results as to that director; or (iii) the date of the director’s resignation. With respect to Proposals 2, 3, 4, and 5, a majority of votes cast means that the number of votes cast “FOR” the matter exceeds the number of votes cast “AGAINST” the respective matter.
With respect to Proposal 1, you may vote FOR the nominee, AGAINST the nominee, or you may vote ABSTAIN as to the nominee. The nominee will be elected if he or she receives more FOR votes than AGAINST votes. Proxies may not be voted for more than 11 directors and shareholders may not cumulate votes in the election of directors.
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Questions and Answers About the Annual Meeting and These Proxy
Materials
With respect to Proposals 2, 3, 4, and 5, you may vote FOR, AGAINST or ABSTAIN as to each proposal.
With respect to Proposal 6, you may vote for the frequency by choosing the option of one year, two years, or three years or abstain from voting when you vote in response to the proposal.
Why are we holding a virtual Annual Meeting?
We believe that it is best to hold a virtual only Annual Meeting this year given the ongoing concerns associated with the spread of COVID-19 and other respiratory viruses. In addition, a virtual meeting provides broad and convenient access to and enables participation by our shareholders in a cost-reducing and environmentally friendly way. The virtual Annual Meeting will allow our shareholders to ask questions and to vote.
How can I attend and participate in the Annual Meeting?
The Annual Meeting will be a completely virtual meeting of shareholders conducted exclusively via live audio webcast. You will be able to attend the Annual Meeting by visiting www.virtualshareholdermeeting.com/FFIV2023. To participate in the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability, proxy card, or voting instruction form. The Annual Meeting will begin promptly at 11:00 a.m. Pacific Time on March 9, 2023. We encourage you to access the virtual meeting website prior to the start time. Online check-in will begin at 10:45 a.m. Pacific Time, and you should allow ample time to ensure your ability to access the meeting.
We will hold our question-and-answer session with management immediately following the conclusion of the business to be conducted at the Annual Meeting.
You may submit a question at any time during the meeting by visiting www.virtualshareholdermeeting.com/ FFIV2023. The Chair of the meeting has broad authority to conduct the Annual Meeting in an orderly manner, including establishing rules of conduct. A copy of the rules of conduct will be available online at the Annual Meeting.
CAN SHAREHOLDERS ASK QUESTIONS AT THE VIRTUAL ANNUAL MEETING?
Yes. We have designed the format of the virtual Annual Meeting to ensure that our shareholders are afforded the same rights and opportunities to participate as they would have at an in-person meeting. After the voting results are announced at the Annual Meeting, we will hold a Q&A session during which we intend to answer questions submitted during the meeting that are pertinent to the Company, as time permits, and in accordance with our Rules of Conduct for Annual Meeting of the Shareholders. During the Annual Meeting, you can view our Rules of Conduct and submit any questions at virtualshareholdermeeting.com/FFIV2023.
What if I have technical difficulties or trouble accessing the virtual meeting website during the check-in time or during the Annual Meeting?
Technicians will be available to assist you if you experience technical difficulties accessing the virtual meeting website. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the Basic Call Center Support numbers located on the login page for assistance.
What happens if the Annual Meeting is adjourned or postponed?
Your proxy will still be effective and will be voted at the rescheduled Annual Meeting. You will still be able to change or revoke your proxy until it is voted.
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Questions and Answers About the Annual Meeting and These Proxy
Materials
Who is making this proxy solicitation and paying for the costs of this proxy solicitation?
The Board of Directors of the Company is soliciting the proxies accompanying this Proxy Statement. The Company will pay all of the costs of this proxy solicitation. However, you will need to obtain your own Internet access if you choose to access the proxy materials and/or vote over the Internet. In addition to mail solicitation, officers, directors, and employees of the Company may solicit proxies personally or by telephone, without receiving additional compensation. The Company has retained Alliance Advisors to assist with the solicitation of proxies in connection with the Annual Meeting. The Company will pay Alliance Advisors customary fees, which are expected to be $8,000 plus expenses. The Company, if requested, will pay brokers, banks, and other fiduciaries that hold shares of Common Stock for beneficial owners for their reasonable out-of-pocket expenses of forwarding these materials to shareholders.
How can I find the results of the Annual Meeting?
We intend to announce preliminary voting results at the Annual Meeting and publish final results on a Form 8-K within four business days of the Annual Meeting. The Form 8-K will be available on our website at www.f5.com under the “Company — Investor Relations — Financials — SEC Filings” section.
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Corporate Governance
The Company’s relationship with its shareholders is an important part of the Company’s success and the Company believes it is important to engage with its shareholders and to obtain their perspectives. The Company’s management team believes that this approach to engaging openly with the Company’s shareholders on topics such as executive compensation, and Environmental, Social and Governance (ESG) issues drives increased corporate accountability, improves decision making, and ultimately creates long-term value. The Company is committed to:
 

Accountability
Driving and supporting strong corporate governance and Board practices to ensure oversight, accountability, and good decision making.
 

Transparency
Maintaining transparency on a range of financial, executive compensation, and governance issues to build trust and foster two-way dialogue that supports the Company’s business success.
 

Engagement
Proactively engaging with shareholders in conversations on a variety of topics to identify emerging trends and issues to inform the Company’s thinking and approach.
Environmental, Social, and Governance (ESG) Topics
At F5, we care deeply not just about what we do, but how we do it. Our guiding principle to “do the right thing” applies to our employees, officers, Board of Directors, and our subsidiaries and controlled affiliates across the globe and is set forth in F5’s Code of Business Conduct and Ethics - available at www.f5.com under the “Company — Investor Relations — ESG — Governance Documents” section.
 
Most importantly, our principle to “do the right thing” is expressed every day at F5 in what we call BeF5 (culture behaviors) and LeadF5 (leadership principles).


This approach is reflected in our commitment to Environmental, Social, and Governance (ESG) – extending from the environmental sustainability of our products and operations to the well-being of our employees and our communities.
Since F5 formed the ESG team in fiscal year 2021, the Company has built a sound foundation for the program by centralizing the collection, monitoring, and disclosure of material ESG data, programs, and policies across the company.
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Corporate Governance
Oversight of the ESG program is provided by the Nominating and Environmental, Social, and Governance (ESG) Committee of the Board, where ESG strategy, disclosures, and metrics are reviewed each quarter.
F5 published the results of these foundational improvements with additional Sustainability Accounting Standards Board (SASB)-aligned disclosures in its second-annual ESG Report available at f5.com under the “Company — Investor Relations — ESG” section.
Environmental
To chart a clear path toward climate action, F5 announced its commitment to reduce our absolute scope 1 and 2 emissions 50% by 2030 from a 2021 baseline year. Taking immediate action on our target, F5 made its first-ever purchase of renewable energy certificates in fiscal year 2022.
By the close of fiscal year 2023, F5 expects to complete its Scope 3 emissions inventory across our value chain in order to issue our complete science-based target for validation by the Science Based Target Initiative (SBTi).
SOCIAL
Employees
As of September 30, 2022, we had 7,089 employees – over 99% of whom were fulltime employees. Our employees are in 46 countries, with 50% of employees in the United States. We continue to provide flexible working opportunities so employees can choose whether to work in an office, remotely, or a blend of the two.
We have experienced no work stoppages in fiscal year 2022 and none of our employees in the United States are represented by a labor union. We believe that our employee relations are in good standing, as evidenced by our bi-annual employee engagement survey results. As of June 2022, our employees reported high satisfaction on several key questions:
95% of employees favorably rate “F5 has demonstrated that employee well-being and health is a priority during the coronavirus outbreak.”
91% of employees favorably rate “I am proud to work for F5.”
91% of employees favorably rate “At F5, employees are treated equally and fairly regardless of their background.”
90% of employees favorably rate “F5 has a great culture.”
84% of employees favorably rate “I feel a sense of belonging at F5.”
Growth and development
Ongoing growth and development of our entire workforce is supported across multiple learning organizations within F5’s HR, Engineering, Technology Services, Sales, and Legal teams.
Development is prioritized during our quarterly “Learning Days” when employees dedicate time to explore new ideas and through our year-round, customized leadership coaching, mentorship, and sponsorship programs accessible to employees at all levels of experience within the Company.
Our employees also have access to both internally developed and third-party learning resources to improve their technical and professional knowledge, better understand our business and products, strengthen management and leadership, as well as maintain our high standards of business integrity and resilience through mandatory and robust cybersecurity and compliance training.
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Compensation and Benefits
F5 offers a competitive Total Rewards package intended to attract, retain, and motivate our employees. Our package includes market-competitive pay, incentive plans, restricted stock unit grants (RSUs), an employee stock purchase plan, retirement plans, healthcare, paid time off, and family leave.
We continue to evaluate and enhance our programs to support the diverse needs of our employees’ overall health and wellbeing. In fiscal year 2022, this included the worldwide renewal of our quarterly “Wellness Weekends,” a paid subscription to a meditation app, and mental health awareness training for all managers and our executive leadership team.
We also made a number of enhancements to ensure equitable employee benefits in the United States in fiscal year 2022. We added Juneteenth as a company holiday, expanded our healthcare travel reimbursement to assist our employees with access to certain covered medical procedures that may be unavailable in their state of residence, increased our fertility and adoption assistance benefits, and removed out-of-network penalties for therapy visits on our medical plans to open up greater access to diverse therapists.
Diversity and Inclusion
F5 believes our differences – when embraced with humility and respect – drive smarter decisions, increased innovation, stronger performance, and a culture where everyone can be themselves and reach their full potential.
Outlined in our strategic framework called “IDEA,” Inclusion, Diversity, Equity and Allyship requires focus and engagement at all levels of the organization and to be embedded into our ways of working.
To increase inclusion at F5, we foster communities through our Employee Inclusion Groups (“EIGs”) – F5 Ability, F5 Appreciates Blackness, F5 Connects Women, F5 Latinx e Hispanos Unidos, F5 Military Veterans, F5 Multicultural and F5 Pride – bringing people together across F5 and around the world. All seven EIGs are led by employees, with a dedicated annual budget and executive sponsor. F5’s EIG leaders partner with the Company’s Diversity & Inclusion team to cultivate personal and professional growth amongst their members. Our EIG leaders’ efforts to build a thriving community of diverse individuals at F5 are recognized through quarterly bonuses.
Our diversity as a company is advanced by the steady increase in our transparency on the actions we take to build a culture of belonging and representation. F5’s progress during fiscal year 2022 is detailed in the second annual F5 Diversity and Inclusion Report available at f5.com under Company — Diversity & Inclusion and in the results of the diverse representation and employee inclusion score metrics for the Company’s executives’ short-term cash incentive program included in the section below entitled 2022 Cash Incentive Award.
To increase equity in opportunities across F5, we hosted our biennial development conference focused on leadership development and targeting our Black and Latino(a) communities within F5. This year’s conference tripled the number of attendees and had a satisfaction rating of 4.6 out of 5. Replays of several of the conference’s speakers are available for public viewing on F5’s YouTube channel.
Allyship is critical to the sustainability of our diversity and inclusion program at F5. We hosted an allyship track at our development conference and launched micro-trainings across our workforce and around the world. Each month, content is made available to the allyship community to deepen their understanding of experiences different from their own and gain new skills to help speak up and be an active participant in creating a more diverse and inclusive F5.
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Corporate Governance
Global Good
F5 Global Good represents the Company’s commitment to community development, in alignment with our employee engagement and diversity and inclusion goals. Together, F5 and its employees donated over $4.6 million to over 3,000 non-profits worldwide in fiscal year 2022.
We are proud that employees direct the entirety of Global Good’s donations, through both the Company matching program and grant selection committees. In fiscal year 2022, more than half of all worldwide employees participated in Global Good programs and volunteered over 7,200 hours in their communities. In addition, F5 employees directed 97% of all Global Good grant funding in fiscal year 2022 to non-profit organizations serving majority Black, Indigenous, People of Color (BIPOC) and underserved communities.
Global Good’s alignment to employee engagement and diversity and inclusion goals earned F5 a 2022 award for our “best-in-class approach and overall impact” by Benevity.
Governance
Below we describe F5’s corporate governance policies and practices that foster effective Board oversight in service of the long-term interests of our shareholders, explain the process for selecting director candidates, and present the 2023 nominees for election to our Board.
Board Leadership
The Company currently separates the roles of Chief Executive Officer and Chairman of the Board. Mr. Locoh-Donou, the President and Chief Executive Officer, is responsible for setting the strategic direction of the Company and for the day-to-day leadership and performance of the Company. Mr. Higginson, the Chairman of the Board, sets the agenda for and presides at Board meetings and coordinates the Board’s communications, with input from Mr. Locoh-Donou and the Company’s senior management team. The Board believes this current structure balances the need for the President and Chief Executive Officer to run the Company on a day-to-day basis with the benefit provided to the Company by Mr. Higginson’s perspective as an independent member of the Board. If the role of Chair were filled by a director who did not qualify as an independent director, the Board would designate a lead independent director.
Committees of the Board
The Board of Directors has standing Audit & Risk Oversight, Talent and Compensation, and Nominating and Environmental, Social and Governance (ESG) Committees (collectively, the “Standing Committees”). Each of the Standing Committees has a charter, copies of which are available on our website at www.f5.com under the “Company — Investor Relations — ESG — Governance Documents” section.
Audit & Risk Oversight Committee
In 2021, F5 formally updated the Audit Committee charter to reflect a broadening of its purview to include oversight of our policies and strategies relating to enterprise risk management and to retitle the Audit Committee the Audit & Risk Oversight Committee (the “Audit Committee”). As described more fully in the Audit & Risk Oversight Committee charter, the functions of the Audit Committee include selecting, evaluating and, if necessary, replacing the Company’s independent registered public accounting firm; reviewing and approving the planned scope, proposed fee arrangements, and results of the annual audit; approving any proposed non-audit services to be provided by the independent registered public accounting firm; overseeing the adequacy of accounting and financial controls; reviewing the independence of the independent registered public accounting firm; overseeing the Company’s financial reporting process; overseeing the Company’s compliance with applicable law; and overseeing, monitoring, and coordinating with regard to the Company’s risk management, including those relating to enterprise risk management (ERM) and cybersecurity. To support the Company’s increased focus on cybersecurity and enterprise resilience, a sub-group of the Audit Committee meets at a minimum quarterly with
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Corporate Governance
management, including the Company’s Chief Information Security Officer, Chief Information Officer, Chief Privacy Officer, EVP of Global Services, and the Company’s General Counsel to receive updates on the Company’s cybersecurity posture and operational resilience programs and to provide guidance and oversight on those efforts.
 
The current Audit Committee members are Messrs. Klein (chair), Dreyer, Montoya, and Shivananda and Mses. Budnik and Myers. The Board of Directors has determined that Mr. Klein and Ms. Myers are “audit committee financial experts” as defined in Item 407 of Regulation S-K. Each current member of the Audit Committee is, and each member of the Audit Committee during fiscal year 2022 was, an independent director as defined by the Nasdaq Listing Rules.
Talent and Compensation Committee
In 2020 (as further revised in 2021), F5 formally updated the Compensation Committee charter to reflect a broadening of its purview beyond executive compensation to include oversight of our policies and strategies relating to talent management and development and to rename the Compensation Committee the “Talent and Compensation Committee” (the “Compensation Committee”). During fiscal 2022, the Compensation Committee reviewed and discussed executive succession planning and talent development. The Compensation Committee conducts an annual review to determine whether the Company’s executive compensation program is meeting the goals and objectives set by the Board of Directors. The Compensation Committee recommends for approval by the Board of Directors the compensation for the Chief Executive Officer and directors, including salaries, incentive compensation levels, and stock awards, and reviews and approves compensation proposals made by the Chief Executive Officer for the other executive officers. The Compensation Committee may form and delegate authority to subcommittees and may delegate authority to one or more designated members of the Compensation Committee or of the Board of Directors or to Company officers to perform certain of its duties on its behalf. In fiscal year 2022, the Compensation Committee retained an outside independent compensation consultant, Mercer, to advise the Compensation Committee on executive compensation issues. Mercer provided the Compensation Committee peer and survey group cash and equity compensation data, including base salary, total cash, long-term incentive, and total direct compensation data. Mercer also provided the Compensation Committee with an overview of compensation trends, review of our Compensation Discussion and Analysis, consultation on the makeup of our peer group, and input into ad hoc compensation-related matters over the course of the year. For additional information about the Compensation Committee and the information provided by Mercer to the Compensation Committee, see the description of the Compensation Committee’s activities in the “Executive Compensation — Compensation Discussion and Analysis” section. During fiscal year 2022, Mercer affiliates provided the Company services with respect to general compensation data and benefit administration. The Company has reviewed the services provided by Mercer and its affiliates and has approved the provision of such services. The Company does not believe that such non-compensation services impair Mercer’s ability to provide independent advice to the Compensation Committee or otherwise present a conflict of interest. The aggregate fees paid to Mercer for executive compensation services to the Compensation Committee during fiscal year 2022 were $361,580 and the aggregate fees paid to Mercer and its affiliates for services to the Company with respect to benefit administration during fiscal year 2022 were $229,698.
 
The current Compensation Committee members are Mses. Buse (chair) and Budnik and Messrs. Higginson, Mehta, and Phillips. Each current member of the Compensation Committee is, and each member of the Compensation Committee during fiscal year 2022 was, an independent director as defined by the Nasdaq Listing Rules.
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Corporate Governance
Nominating and Environmental, Social, and Governance (ESG) Committee
In fiscal year 2022, shareholder feedback influenced our decision to expand the scope of responsibility and charter of our Nominating and Governance Committee to create our Nominating and Environmental, Social, and Governance Committee. F5 formally updated the Nominating and Governance Committee charter to reflect a broadening of its purview to include oversight of and strategic guidance relating to the Company’s social and environmental initiatives and to rename the committee the “Nominating and Environmental, Social, and Governance Committee” (the “Nominating and ESG Committee”). As set forth in the Nominating and ESG Committee Charter, the functions of the Nominating and ESG Committee are to identify new potential Board members, recommend Board nominees, evaluate the Board’s performance, and provide oversight of corporate governance and ethical conduct, as well as oversee the Company’s environmental and social policies, risks, and initiatives.
 
The current Nominating and ESG Committee members are Messrs. Dreyer (chair), Higginson, Mehta, Montoya, Phillips, and Shivananda and Ms. Buse. Each current member of the Nominating and ESG Committee is, and each member of the Nominating and ESG committee during fiscal year 2022 was, an independent director as defined by the Nasdaq Listing Rules.
Risk Oversight
Assessing and managing risk is the responsibility of the Company’s senior management team. The Board of Directors takes an active role in overseeing the Company’s risk management efforts, coordinating closely with management and the Board’s committees in these efforts. The Audit Committee reviews and monitors the status of the Company’s enterprise risk management posture and processes and the emerging risks for the Company. The Audit Committee reviews and consults at each of its regular quarterly Audit Committee meetings with the Company’s senior management team and the Company’s Vice President of Internal Audit on strategic and operational opportunities, challenges, and risks faced by the Company. As appropriate, the Audit Committee discusses and coordinates regarding certain risks or risk-related matters with the full Board or applicable Board committees. The Company has implemented an enterprise risk management program in consultation with Gartner. Pursuant to this program, the Company performs an annual enterprise risk assessment to identify key strategic, operating, legal and compliance, and financial risks, evaluate the significance of those risks, formulate a risk profile which identified relevant risk levels and management control efforts, and develop action plans to address these key risks. The Company’s senior management team regularly reviews and evaluates these key risks and the effectiveness of the Company’s risk management programs, and reports back to the Audit Committee and the full Board of Directors on a regular basis during the course of the year. In addition, the Audit Committee oversees the Company’s financial and cybersecurity risk exposures, financial reporting, internal controls, and internal information systems, including receiving regular updates from the Company’s Chief Information Security Officer on cyber risks the Company faces. To support the Company’s increased focus on cybersecurity and enterprise resilience, a sub-group of the Audit Committee meets at a minimum quarterly with management, including the Company’s Chief Information Security Officer, Chief Information Officer, Chief Privacy Officer, EVP of Global Services, and the Company’s General Counsel to receive updates on the Company’s cybersecurity posture and operational resilience programs and to provide guidance and oversight on those efforts.
In conjunction with the Company’s enterprise risk assessment, management identifies potential cyber risks associated with the Company’s business, and discusses those risks and risk mitigation efforts as part of its enterprise risk assessment review with the Audit Committee and the full Board. As part of its risk-related responsibilities, the entire Audit Committee receives periodic updates from the Company’s Chief Information Security Officer and Chief Information Officer on cybersecurity related topics, including cyber threats to the Company and the status of the Company’s cybersecurity posture and risk mitigation efforts.
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Corporate Governance
The Compensation Committee oversees the Company’s executive compensation programs, monitors the administration of the Company’s various equity compensation plans, and conducts compensation-related risk assessments.
The Nominating and ESG Committee oversees risks related to the Company’s overall corporate governance profile and ratings; board and committee composition and structure; director independence; and environmental, including climate, social and other governance-related risks.
Each Board committee presents regular reports to the full Board of Directors, including on risk-related matters in its applicable areas of oversight. The Board’s role in risk oversight has not had any effect on the Board’s leadership structure.
Compensation Committee Interlocks and Insider Participation
The following directors served as members of the Compensation Committee during some or all of fiscal year 2022: Mses. Bergeron (chair) and Buse and Messrs. Higginson, Mehta, and Phillips. None of these persons has at any time been an officer or employee of the Company. During fiscal year 2022, none of the Company’s executive officers served as a member of the board of directors or compensation committee of any entity that has had one or more executive officers that served as a member of the Company’s Board of Directors or Compensation Committee.
Related Person Transactions Policy and Procedures
As set forth in the written charter of the Audit Committee of the Board of Directors, any related person transaction involving a Company director or executive officer must be reviewed and approved by the Audit Committee. Any member of the Audit Committee who is a related person with respect to a transaction under review may not participate in the deliberations or vote on the approval or ratification of the transaction. Related persons include any director or executive officer, certain shareholders and any of their “immediate family members” (as defined by SEC regulations). To identify any related person transaction, the Company requires each director and executive officer to complete a questionnaire each year requiring disclosure of any prior or proposed transaction with the Company in which the director, executive officer, or any immediate family member might have an interest. Each director and executive officer is directed to notify the Company’s Executive Vice President and General Counsel of any such transaction that arises during the year, and the Company’s Chief Financial Officer reports to the Audit Committee on a quarterly basis regarding any potential related person transaction. In addition, the Board of Directors determines on an annual basis which directors meet the definition of independent director under the Nasdaq Listing Rules and reviews any director relationship that would potentially interfere with his or her exercise of independent judgment in carrying out the responsibilities of a director. A copy of the Company’s “Policy and Procedures for Approving Related-Person Transactions” is available on our website at www.f5.com under the “Company — Investor Relations — ESG — Governance Documents” section.
Certain Relationships and Related Person Transactions
The Company’s Articles limit the liability of the Company’s directors for monetary damages arising from their conduct as directors, except to the extent otherwise required by the Articles and the Washington Business Corporation Act. The Articles also provide that the Company may indemnify its directors and officers to the fullest extent permitted by Washington law, including in circumstances in which indemnification is otherwise discretionary under Washington law. The Company has entered into indemnification agreements with the Company’s directors and certain officers for the indemnification of, and advancement of expenses to, these persons to the fullest extent permitted by law. The Company also intends to enter into these agreements with the Company’s future directors and certain future officers.
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Corporate Governance
Derivatives Trading and Hedging Policy
The Company considers it improper and inappropriate for any employee, officer, or director of the Company to engage in short-term or speculative transactions in the Company’s securities. It therefore is the Company’s policy that directors, officers, and other employees, and their family members, may not engage in any of the following transactions:
Short Sales. Short sales of the Company’s securities.
Publicly Traded Options. Buying or selling Company options including puts, calls, or other derivative securities.
Hedging Transactions. Hedging transactions, including but not limited to zero-cost collars and forward sale contracts.
Margin Accounts and Pledges. Holding Company securities in margin accounts and/or pledging Company securities as collateral. The Company may on occasion provide limited exceptions to this prohibition such as where someone other than an executive officer or director wishes to pledge Company securities as collateral for a loan (not including margin debt) and clearly demonstrates the financial capacity to repay the loan without resort to the pledged securities.
This policy is set forth in the Company’s “Insider Trading Policy,” which may be found under the “Company — Investor Relations — ESG — Governance Documents” section of our website, www.f5.com.
Code of Ethics for Senior Financial Officers
We have adopted a Code of Ethics for Senior Financial Officers that applies to certain of our senior officers, including our Chief Executive Officer and Chief Financial Officer. The Code of Ethics for Senior Financial Officers is posted under the “Company — Investor Relations — ESG — Governance Documents” section of the Company’s website, www.f5.com. A copy of the Code of Ethics may be obtained without charge by written request to the Company’s Corporate Secretary. We also have a separate Code of Conduct that applies to all of the Company’s employees, which may also be found under the “Company — Investor Relations — ESG — Governance Documents” section of our website.
Meetings of the Board of Directors and Standing Committees; Attendance at Annual Meeting
The Company’s Board of Directors met or acted by unanimous written consent 8 times during fiscal year 2022. The outside directors met 2 times during fiscal year 2022, with no members of management present. The Audit Committee met 5 times and the Compensation Committee met 9 times. During fiscal year 2022, the Nominating and ESG Committee met 6 times. Each member of the Board of Directors attended 75% or more of the aggregate of the Board of Directors meetings and the meetings of the committees on which the director served during fiscal year 2022. All directors are also expected to attend the Company’s Annual Meetings of shareholders. All directors attended the Company’s Annual Meeting of Shareholders for fiscal year 2021 except Mr. Mehta.
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Board of Directors
The Board of Directors of the Company currently consists of twelve (12) directors. Ms. Bergeron will not stand for re-election to the Board. The Board of Directors has nominated the following eleven (11) directors for election to the Board of Directors at the Annual Meeting:
Name
Director
Since
Marianne N. Budnik
October 2022
Elizabeth L. Buse
September 2020
Michael L. Dreyer
October 2012
Alan J. Higginson
May 1996
Peter S. Klein
March 2015
François Locoh-Donou
April 2017
Nikhil Mehta
January 2019
Michael F. Montoya
June 2021
Marie E. Myers
January 2019
James M. Phillips
January 2022
Sripada Shivananda
April 2020
All directors or their respective successors will stand for election on an annual basis. The nominees have consented to serve as directors of the Company if elected. If a nominee declines to serve or becomes unavailable for any reason, or if a vacancy occurs before the election (although we know of no reason to anticipate that this will occur), the proxies may be voted for a substitute nominee as the Company may designate.
Director
Independence
The Nasdaq Listing Rules require that a majority of the Company’s directors be “independent,” as defined by Nasdaq Listing Rule 5605(a)(2) and determined by the Board of Directors. The Board of Directors consults with the Company’s legal counsel to ensure that the Board of Directors’ determinations are consistent with all relevant securities and other laws and regulations regarding the definition of “independent.” After a review of relevant transactions or relationships between each director, or any of his or her family members, and the Company, its senior management and its independent registered public accounting firm, the Board of Directors determined that the following directors and nominees were independent: Sandra E. Bergeron, Marianne N. Budnik, Elizabeth L. Buse, Michael L. Dreyer, Alan J. Higginson, Peter S. Klein, Nikhil Mehta, Michael F. Montoya, Marie E. Myers, James M. Phillips and Sripada Shivananda. François Locoh-Donou is not considered independent because he is the Company’s President and Chief Executive Officer.
Stock Ownership Guidelines for Directors
In October 2010, the Board of Directors adopted stock ownership guidelines for the Company’s directors and executive officers. Directors are required to own shares of Common Stock equal in value to five times the directors’ annual cash retainer. Directors are required to achieve this ownership level within three years of joining the Board. Shares of Common Stock that count toward satisfaction of the guidelines include shares purchased on the open market, shares obtained through stock option exercises, shares obtained through grants of Restricted Stock Units (RSUs), and shares beneficially owned in a trust, by a spouse and/or minor children. Shares owned by directors are valued at the greater of (i) the price at the time of acquisition/purchase or (ii) the current market value.
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Board of Directors
Nominees and Continuing
Directors
The following individuals have been nominated for election to the Board of Directors or will continue to serve on the Board of Directors after the Annual Meeting:

François
Locoh-Donou
Age: 51

Director Since: 4/2017
François Locoh-Donou has served as our President, Chief Executive Officer, and a director since April 2017. Prior to joining us, Mr. Locoh-Donou served as Chief Operating Officer at Ciena, a network strategy and technology company, from November 2015 to January 2017 and as Senior Vice President, Global Products Group, from August 2011 to November 2015. Mr. Locoh-Donou serves as a director of Capital One Financial Corporation, a publicly held bank holding company specializing in credit cards, auto loans, banking, and savings accounts, and is also the Co-Founder and Chairman of Cajou Espoir, a social enterprise focused on cashew-processing that employs several hundred people in rural Togo, 80 percent of whom are women. Mr. Locoh-Donou holds an engineering degree from École Centrale de Marseille and a Masters in Sciences from Télécom ParisTech in France, and an M.B.A. from the Stanford Graduate School of Business.

 Mr. Locoh-Donou brings nearly two decades of enterprise technology experience building a wide range of products, teams, and operations around the world. He has held numerous successive leadership positions prior to joining the Company, including Vice President and General Manager, EMEA; Vice President, International Sales; and Vice President, Marketing. He brings multidisciplinary and multinational experience, ranging from product development to operations to sales. He is the sole member of management on the Board of Directors and serves a critical role in the communication between the Board of Directors and the Company’s senior management team.

Alan J.
Higginson
Age: 75

Director Since: 5/1996
Alan J. Higginson has served as Chair of the Board since April 2004 (with the exception of the period of July 1, 2015 to December 13, 2015 when he served as our Lead Independent Director), and as one of our directors since May 1996. Mr. Higginson served as Chairman of Hubspan, Inc., an e-business infrastructure provider, from September 2009 to March 2012. He served as President and Chief Executive Officer of Hubspan from August 2001 to September 2007. From November 1995 to November 1998, Mr. Higginson served as President of Atrieva Corporation, a provider of advanced data backup and retrieval technology.
Mr. Higginson also served as a director of Pivot3, Inc., a privately held company that develops and markets automated hyperconverged infrastructure solutions, from December 2011 to February 2020. Mr. Higginson also served as a director of adeptCloud Inc., a privately held company that provides cloud-based collaboration services, and Clarity Health Services, a privately held company that provides web-based health care coordination services. Mr. Higginson holds a B.S. in Commerce and an M.B.A. from Santa Clara University.

 Mr. Higginson has over 30 years of experience as a senior executive in a wide range of both public and private software and other technology companies. His experience includes leading worldwide sales organizations and the management of international joint ventures and distribution channels. He has also been active in a number of software and technology industry associations, and as an advisor to early-stage technology companies. Mr. Higginson joined our Board of Directors shortly after the Company was founded. His deep understanding of the Company’s historical and current business strategies, objectives and technologies and provides an important and insightful perspective for our Board of Directors, as well as our senior management.
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Board of Directors

Marianne N.
Budnik
Age: 54

Director Since: 10/2022
Marianne N. Budnik has served as one of our directors since October 2022. Ms. Budnik currently serves as Chief Marketing Officer for Talon Cyber Security, a privately held provider of cybersecurity solutions for the distributed workforce. She also serves on the board of Cerence, Inc., a publicly traded provider of artificial intelligence powered assistants for connected autonomous vehicles. From December 2020 through March 2022, Ms. Budnik served as Chief Marketing Officer for CrowdStrike Holdings, Inc., a publicly traded cybersecurity technology company. Prior to that time, Ms. Budnik served as Chief Marketing Officer for CyberArk Software, Ltd., a publicly traded information security technology company, from May 2017 through December 2020. Her previous experience includes leadership roles with SimpliVity, Acme Packet, CA Technologies, and EMC Corporation. Ms. Budnik holds an M.B.A. from Boston University and a B.S. from Babson College.

 Ms. Budnik’s extensive experience as a Chief Marketing Officer in the cybersecurity industry brings a valuable perspective on best practices and solutions. Ms. Budnik’s cybersecurity expertise combined with her extensive experience in marketing makes her well qualified to serve on our Board of Directors.


Elizabeth L.
Buse
Age: 61

Director Since: 9/2020
Elizabeth L. Buse has served as one of our directors since September 2020. Ms. Buse served as Co-Chief Executive Officer and Chief Executive Officer of Monitise, PLC, a publicly traded financial services technology company, from June 2014 through October 2015. Prior to that time, Ms. Buse served as Executive Vice President of Global Services with Visa, Inc., a publicly traded leading global payments technology company. Ms. Buse held various other senior leadership positions at Visa during her 16-year tenure there, including Group President for Asia-Pacific, Central Europe, Middle East, and Africa. Ms. Buse has served on the Board of Directors of U.S. Bancorp, a publicly traded bank holding company, since June 2018. She also served on the Board of Directors of eNett International, a privately held payment services company specializing in B2B international payment solutions, from March 2016 until June 2019, and Travelport Worldwide Limited, a publicly traded travel technology company, from September 2014 until June 2019. Ms. Buse holds a B.A. in Spanish Linguistics from UCLA and an M.B.A. from University of California – Berkeley, Haas School of Business.

 Ms. Buse has extensive experience in the financial services industry. She brings to our Board of Directors insights regarding the financial services industry globally and provides a valuable perspective on best practices and solutions. Ms. Buse’s financial services and technology expertise combined with her background as a Chief Executive Officer in the financial services industry makes her well qualified to serve on our Board of Directors.
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Board of Directors

Michael L.
Dreyer
Age: 59

Director Since: 10/2012
Michael L. Dreyer has served as one of our directors since October 2012. Mr. Dreyer retired in 2019 as Chief Operations Officer for Silicon Valley Bank, a high-tech commercial bank, and prior to that served as Chief Operating Officer at Monitise, a technology leader in mobile banking. Before joining Monitise, he was the Chief Information Officer at Visa Inc. from July 2005 to March 2014, where he was responsible for the company’s systems and technology platforms. Before the formation of Visa Inc., he was Chief Information Officer of Inovant, where he oversaw the development and management of Visa’s global systems technology. Previously, Mr. Dreyer held executive positions at VISA USA as Senior Vice President of processing and emerging products, and Senior Vice President of commercial solutions. He also held senior positions at American Express, Prime Financial, Inc., Federal Deposit Insurance Corporation, Downey Savings, Bank of America, and the Fairmont Hotel Management Company. From October 2018 to August 2022, Mr. Dreyer served as a Director of Deep Labs, Inc., a private company specializing in artificial intelligence and machine learning. Mr. Dreyer currently serves as a Director of Coherent Corporation (formerly II-VI Incorporated), a publicly held company that supplies engineered materials, optoelectronic components and optical systems solutions that acquired Finisar in 2019 (previous board). Mr. Dreyer received an M.B.A. and a B.S. in psychology from Washington State University.

 Mr. Dreyer has extensive experience as an information technology executive. He brings to our Board of Directors valuable insights regarding data center operations and the role of our technology in the data center, as well as an understanding of data traffic management technologies, data security, and other networking technology trends. Mr. Dreyer’s information technology and data management expertise combined with his background as a senior executive in the financial industry make him well qualified to serve on our Board of Directors.


Peter S. Klein
Age: 60

Director Since: 3/2015
Peter S. Klein has served as one of our directors since March 2015. Mr. Klein has 25 years of experience as a senior finance executive. He served as Chief Financial Officer of WME, a global leader in sports and entertainment marketing, from January 2014 until June 2014. Prior to that, he served as Chief Financial Officer of Microsoft Corporation from November 2009 until May 2013. Mr. Klein spent over 11 years at Microsoft, including roles as Chief Financial Officer of Server and Tools and Chief Financial Officer of Microsoft Business Division. From 1990 until 2002, Mr. Klein held senior finance roles with McCaw Cellular Communications, Orca Bay Capital, Asta Networks and Homegrocer.com. He currently serves on the Board of Directors of Denali Therapeutics, a publicly traded biotechnology company, Accolade, a publicly traded health care technology and services company, Sarcos Technology and Robotics Corp., a publicly traded robotics and microelectromechanical company, and Joshua Green Corporation, a privately held investment company. He previously served on the Board of Directors of Apptio Inc., a publicly traded software company, from October 2013 through January 2019. Mr. Klein holds a B.A. from Yale University and an M.B.A. from the University of Washington.

 Mr. Klein’s extensive experience as a finance executive in a variety of technology companies, including experience as the Chief Financial Officer of the world’s largest software company, and experience managing the finance function for significant enterprises with diverse operating models, bring important and valuable perspectives to our Board of Directors. His experience as a public company chief financial officer qualifies him as an “audit committee financial expert” as defined in Item 407 of Regulation S-K.
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Nikhil Mehta
Age: 45

Director Since: 1/2019
Nikhil Mehta has served as one of our directors since January 2019. Mr. Mehta has been the Chief Executive Officer of Gainsight, Inc., a leading Customer Success Software-as-a-Service (“SaaS”) platform provider since February 2013. Prior to joining Gainsight, he served as Chief Executive Officer of LiveOffice, which was acquired by Symantec in January 2012. Before joining LiveOffice, Mr. Mehta served in several product management and engineering leadership roles at Symantec. Mr. Mehta has served on the Board of Directors of Lead Edge Growth Opportunities, Ltd., a publicly traded blank check company focused on technology businesses, since March 2021. Mr. Mehta holds a B.A. in biochemistry from Harvard University and an M.S. in computer science from Harvard Graduate School of Arts and Sciences.

 Mr. Mehta has extensive experience as an executive at leading SaaS companies. His insights regarding SaaS and related technology combined with his background serving as a Chief Executive Officer make him well qualified to serve on our Board of Directors.


Michael F.
Montoya
Age: 51

Director Since: 6/2021
Michael F. Montoya joined the Board in June 2021. Mr. Montoya has served as the Chief Information Security Officer of Equinix, Inc., a global interconnection and data center company, since October 2019. Prior to joining Equinix, he served as Senior Vice President and Chief Information Security Officer of Digital Realty Trust, Inc. from September 2018 through September 2019. Before joining Digital Realty Trust, Inc., Mr. Montoya served as Chief Security Advisor for Microsoft Singapore from August 2016 through September 2018, where he was responsible for the Asia region and incident response, security services, and security revenue. Prior to Microsoft, Mr. Montoya served as Vice President, Cloud Security for FireEye Singapore, responsible for Asia services and global cloud security operations. Mr. Montoya has served on the Board of Directors of Temasek Holdings Ltd., a private investment company, since August 2022. Mr. Montoya holds a B.A. in economics from The University of New Mexico.

 Mr. Montoya’s extensive experience as an information security executive provides a valuable perspective on best practices and solutions. His insights regarding cybersecurity combined with his background serving as a Chief Information Security Officer make him well qualified to serve on our Board of Directors.

Marie E. Myers
Age: 54

Director Since: 1/2019
Marie E. Myers has served as one of our directors since January 2019. Ms. Myers has served as the Chief Financial Officer with HP, Inc., a multinational technology company, since February 2021, where she previously served as Chief Transformation Officer from January 2020 through February 2021. Prior to that, Ms. Myers served as the Chief Financial Officer of UiPath, Inc., a robotic process automation company, from January 2019 through December 2019. Before joining UiPath, Ms. Myers served as HP’s Global Controller from November 2015 to December 2018, and HP’s Vice President of Finance for the Personal Systems Group, Americas between May 2012 and October 2015. She currently serves on the Board of Directors for KLA Corp., a publicly traded capital equipment company specializing in process control and yield management systems. Ms. Myers holds a Bachelor of Arts degree and a Bachelor of Economics degree from University of Queensland and a Master’s in Business Administration with a focus in marketing and finance from the University of St. Thomas.

 Ms. Myers’ extensive experience as a finance executive for a multinational technology company, particularly in technology and financial operations functions, brings an important and valuable perspective to our Board of Directors. Her experience as a public company finance executive qualifies her as an “audit committee financial expert” as defined in Item 407 of Regulation S-K.
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Board of Directors

James M.
Phillips
Age: 56

Director Since: 1/2022
James M. Phillips has served as one of our directors since January 2022. Mr. Phillips currently serves as Strategic Director of Madrona Venture Group, a venture capital firm focused on the technology startup space. From February 2020 through April 2022, Mr. Phillips served as the President of Microsoft’s Digital Transformation Platform Group, a product development organization, where he previously served as a Corporate Vice President from 2012 to 2020 after joining Microsoft as a strategy advisor to the President of Microsoft’s Cloud and Enterprise division. Prior to joining Microsoft, Mr. Phillips co-founded and served as CEO of multiple software companies as well as holding engineering, product management, corporate development and marketing leadership roles at Intel, VMware, and Synopsys. Mr. Phillips holds a B.S. in mathematics from Louisiana State University and earned his M.B.A. with honors from the University of Chicago Booth School of Business.

 Mr. Phillips’ deep technology expertise and experience leading digital transformation initiatives brings an important and valuable perspective to F5. His insights regarding business applications and services combined with his background in engineering, product management, corporate development, and capital markets make him well qualified to serve on our Board of Directors.

Sripada
Shivananda
Age: 50

Director Since: 4/2020
Sripada Shivananda has served as one of our directors since April 2020. Mr. Shivananda joined PayPal Holdings, Inc., a publicly traded financial technology company and global leader in digital payment technologies, in June 2015 as Vice President, Global Platform and Infrastructure and currently serves as Executive Vice President and Chief Technology Officer as of March 2021. Prior to joining PayPal, he served as Vice President, Global Platform and Infrastructure of eBay, Inc., a publicly traded global ecommerce company, from November 2013 to June 2015, and prior to that he served in other positions during his 14-year tenure with eBay. Mr. Shivananda holds a Bachelor of Technology in mechanical engineering from Jawaharlal Nehru Technology University and a Master of Science in mechanical engineering from Ohio University, Russ College of Engineering.

 Mr. Shivananda’s extensive experience as a technology executive brings insights regarding product, technology, infrastructure, and cybersecurity and provides a valuable perspective on best practices and solutions. Mr. Shivananda’s technology expertise combined with his extensive experience managing the technology for publicly traded technology companies makes him well qualified to serve on our Board of Directors.

There are no family relationships among any of the Company’s directors or executive officers. None of the corporations or other organizations referred to in the biographical information set forth above is a parent, subsidiary, or other affiliate of the Company.
Director Nomination
Criteria for Nomination to the Board of Directors. The Nominating and ESG Committee considers the appropriate balance of experience, skills, and characteristics required of the Board of Directors, and seeks to ensure that at least a majority of the directors are independent under the Nasdaq Listing Rules, that members of the Company’s Audit Committee meet the financial literacy requirements under the Nasdaq Listing Rules and that at least one of them qualifies as an “audit committee financial expert” under the rules of the Securities and Exchange Commission (the SEC). Nominees for director are selected on the basis of, among other things, their depth and breadth of experience, integrity, diversity, ability to work effectively as part of a team, understanding of the Company’s business environment, and willingness to devote adequate time to Board duties.
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In evaluating director candidates, regardless of the source of the nomination, the Nominating and ESG Committee will consider, in accordance with its Charter and the Company’s Corporate Governance Guidelines, the composition of the Board as a whole, the requisite characteristics (including independence, diversity, skills, and experience) of each candidate, and the performance and continued tenure of incumbent Board members. With respect to diversity, we broadly construe diversity to mean not only diversity of race, gender, sexual orientation, and ethnicity, but also diversity of geography, culture, opinions, perspectives, and professional and personal experiences. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law. The Board believes that the backgrounds and qualifications of the directors, considered as a group, should provide a significant composite mix of experience, knowledge, and abilities that will allow the Board to fulfill its responsibilities. The Board therefore considers diversity in identifying nominees for director but does not have a separate policy directed toward diversity.
Process for Identifying and Evaluating Nominees. The process for identifying and evaluating nominees to fill vacancies on the Board of Directors is initiated by conducting an assessment of critical Company and Board needs, based on the present and future strategic objectives of the Company and the specific skills required for the Board as a whole and for each Board Committee. A third-party search firm is generally used by the Nominating and ESG Committee to identify qualified candidates. These candidates are evaluated by the Nominating and ESG Committee by reviewing the critical needs assessment, the candidates’ biographical information and qualifications, and checking the candidates’ references.
Serious candidates meet with all members of the Board and as many of the Company’s executive officers as practical. Using the input from such interviews and the information obtained from and recommendation provided by the Nominating and ESG Committee, the full Board determines whether to appoint or nominate, as the case may be, a candidate to the Board.
The Nominating and ESG Committee will evaluate the skills and experience of existing Board members against the Company’s critical needs assessment in making recommendations for nomination by the full Board of candidates for election by the shareholders. The nominees to the Board of Directors described in this Proxy Statement were approved by the Company’s directors. Ms. Budnik was appointed to the Board on October 7, 2022 and was recommended by a third-party search firm the Nominating and ESG Committee retained at the expense of the Company. The third-party search firm was provided guidance as to the skills, experience, and other characteristics the Nominating and ESG Committee was seeking in potential candidates and was specifically requested to include diverse candidates in the search. The third-party search firm identified a number of potential candidates, including Ms. Budnik, and prepared background materials on these candidates, which were provided to the members of the Nominating and ESG Committee for their review. The third-party search firm interviewed those candidates whom the Nominating and ESG Committee determined merited further consideration and assisted in arranging interviews of selected candidates with members of the Nominating and ESG Committee, other members of the Board of Directors, and certain of the Company’s executive officers. The third-party search firm also completed reference checks on the candidates.
The Nominating and ESG Committee expects that a similar process will be used to evaluate nominees recommended by shareholders.
Shareholder Recommendations and Nominations—Proxy access candidates. The Company’s Bylaws permit a shareholder or group of up to 20 shareholders, owning 3% or more of the Company’s outstanding common stock continuously for at least three years, to nominate and include in the Company’s proxy materials director nominees constituting up to two directors or 20% of the Board, whichever is greater, provided that the shareholder(s) and the nominee(s) satisfy the requirements specified in the Company’s Bylaws. A nominating shareholder is required to provide appropriate written notice of that shareholder’s intent to make the nomination to the Secretary of the Company not less than 120 days nor earlier than 150 days before the first anniversary of the
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Board of Directors
date that the Company sent out its Proxy Statement for the prior year’s Annual Meeting of Shareholders. In order to be considered timely for the 2023 Annual Meeting, appropriate notice of the nomination must be received by the Secretary of the Company on or after August 28, 2023 and on or before September 27, 2023. Nominating shareholders and nominees must satisfy the notice, information, and consent requirements set forth in the Company’s Bylaws.
The Nominating and ESG Committee will consider written proposals from shareholders for nominees for director. Any such nominations should be submitted to the Nominating and ESG Committee c/o the Corporate Secretary and should include the following information: (a) all information relating to such nominee that is required to be disclosed pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (including such person’s written consent to being named in the Proxy Statement as a nominee and to serving as a director if elected); (b) the name(s) and address(es) of the shareholder(s) making the nomination and the number of shares of Common Stock that are owned beneficially and of record by such shareholder(s); (c) appropriate biographical information and a statement as to the qualification of the nominee; and (d) any other applicable information required by the Bylaws of the Company or otherwise reasonably requested by the Company. Such nominations should be submitted in the timeframe regarding nominations described in the Bylaws of the Company and under the caption “Shareholder Proposals for the Annual Meeting for Fiscal Year 2023” below.
Communications with Directors
Shareholders who wish to communicate with our directors may do so by contacting them c/o Corporate Secretary, F5, Inc., 801 Fifth Avenue, Seattle, Washington 98104. As set forth in the Company’s Corporate Governance Guidelines, a copy of which may be found under the “Company — Investor Relations — ESG — Governance Documents” section of our website, www.f5.com, these communications will be forwarded by the Corporate Secretary to a Board member, Board committee or the full Board of Directors, as appropriate.
Compensation of Directors
Prior to each Annual Meeting of Shareholders, the Compensation Committee reviews with its compensation consultant the appropriate level and form of compensation for non-employee directors and makes recommendations to the Board of Directors. In making non-employee director compensation recommendations, the Compensation Committee takes various factors into consideration, including the compensation consultant’s review of the equity award and cash retainer elements of non-employee director compensation in terms of practice and pay level with respect to both the Company and companies comprising the same peer group used by the Compensation Committee in connection with its review of executive compensation, market trends, and the emphasis on equity to support alignment with shareholders. The Compensation Committee did not recommend any changes to non-employee director compensation based on its review and the Board of Directors made no changes to the director compensation level for fiscal year 2022. The Board of Directors approves all equity awards to be granted to non-employee directors on the date of the Annual Meeting of Shareholders as well as the amount of the annual cash retainer, paid in quarterly installments.
The table below summarizes the compensation paid by the Company to non-employee directors for the fiscal year ended September 30, 2022.
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Director Compensation for Fiscal Year 2022
Name(1)
Fees Earned
or Paid in Cash
($)(2)
Stock Awards
($)(3)
Total
($)
Sandra E. Bergeron
97,500
250,037
347,537
Elizabeth L. Buse
92,500
250,037
342,537
Michael L. Dreyer
105,000
250,037
355,037
Alan J. Higginson
185,000
250,037
435,037
Peter S. Klein
100,000
250,037
350,037
Nikhil Mehta
85,000
250,037
335,037
Michael F. Montoya
87,014
250,037
337,051
Marie E. Myers
80,000
250,037
330,037
James M. Phillips
60,583
294,112
354,695
Sripada Shivananda
92,500
250,037
342,537
1.
François Locoh-Donou, the Company’s President and Chief Executive officer, is not included in this table as he is an employee of the Company and thus receives no compensation for his services as a director. In addition, Marianne N. Budnik did not join the Board until after (i.e., on October 7, 2022) the completion of the Company’s fiscal year 2022.
2.
Represents the aggregate annual retainers, Board of Directors chair retainer, committee chair retainers, and member committee fees. Non-employee directors of the Company are currently paid $60,000 annually for their services as members of the Board of Directors. The Chair of the Board of Directors receives an additional $100,000 paid annually. Chairs of the Audit, Compensation, and Nominating and ESG Committees receive an additional $20,000, $12,500, and $12,500, respectively, annually. In addition, the members of the Audit, Compensation, and Nominating and ESG Committees (including the Committee chairs) are paid annual payments of $20,000, $12,500, and $12,500 respectively. Directors receive cash fees in quarterly installments. Mr. Phillips was appointed to the Board of Directors on January 5, 2022, at which time Mr. Phillips also became a member of the Nominating and ESG Committee. Messrs. Montoya and Phillips became members of an additional committee on March 10, 2022. The following table provides a breakdown of fees earned or paid in cash:
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Director Compensation for Fiscal Year 2022
Name
Annual
Retainers
($)
Board and
Committee
Chair Fees
($)
Member
Committee
Fees
($)
Total
($)
Sandra E. Bergeron
60,000
12,500
25,000
97,500
Elizabeth L. Buse
60,000
0
32,500
92,500
Michael L. Dreyer
60,000
12,500
32,500
105,000
Alan J. Higginson
60,000
100,000
25,000
185,000
Peter S. Klein
60,000
20,000
20,000
100,000
Nikhil Mehta
60,000
0
25,000
85,000
Michael F. Montoya
60,000
0
27,014
87,014
Marie E. Myers
60,000
0
20,000
80,000
James M. Phillips
44,333
0
16,250
60,583
Sripada Shivananda
60,000
0
32,500
92,500
3.
This column represents the aggregate grant date fair value of restricted stock units (RSUs) granted to directors in the applicable year computed in accordance with ASC Topic 718 and determined as of the grant date. The amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For additional information, please refer to note 1 in our financial statements, “Summary of Significant Accounting Policies — Stock-based Compensation,” included in our Annual Report to Shareholders on Form 10-K for the year ended September 30, 2022. On March 10, 2022, the Board of Directors approved the recommendations of the Compensation Committee that each non-employee director receive a grant on March 10, 2022 of RSUs representing the right to receive 1,272 shares of Common Stock under the F5, Inc. Incentive Plan (with a grant date fair value of $250,037 in accordance with ASC Topic 718), which will fully vest on March 8, 2023 if the non-employee director continues to serve as a director on that date. On January 21, 2022, the Board of Directors approved the recommendations of the Compensation Committee that Mr. Phillips receive in connection with his appointment to the board a grant on February 1, 2022 of RSUs representing the right to receive 214 shares of Common Stock under the F5, Inc. Incentive Plan (with a grant date fair value of $44,075 in accordance with ASC Topic 718), which fully vested on March 9, 2022. As of September 30, 2022, the 1,272 RSUs awarded to each non-employee director were the only RSUs held by each such director, and they were not yet vested.
Compensation Risk Assessment
The Compensation Committee and Company management have reviewed the Company’s compensation plans and programs and have concluded that none of these plans or programs is reasonably likely to have a material adverse effect on the Company. In making this evaluation, the Compensation Committee reviewed the key elements of each of the Company’s compensation programs and the means by which any potential risks are mitigated, including through various elements in the Company’s enterprise risk management program.
The Company’s compensation programs include a mix of base salary, cash incentive compensation, and long-term equity compensation. We structure our compensation program for executive officers to consist of both fixed and variable components. The fixed (or base salary) component of our compensation programs is designed to provide income independent of our stock price performance so that executive officers will not focus exclusively on stock price performance to the detriment of other important business metrics. The variable (cash bonus and equity) components of our compensation programs are designed to reward both short-term and long-term company performance, which we believe discourages our executive officers from taking actions that focus only on our short-term success and helps align our employees with our shareholders and on our longer-term success.
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Director Compensation for Fiscal Year 2022
We maintain internal controls over the measurement and calculation of financial information, which are designed to prevent this information from being manipulated by any employee, including our executive officers. Our employees, including executive officers, are required to comply with our Code of Conduct, which covers, among other things, accuracy in keeping financial and business records. As discussed more thoroughly below, the Company also has a Clawback Policy to recoup performance compensation in the event the Company restates its reported financial results to correct a material accounting error on an interim or annual financial statement included in a report on Form 10-Q or 10-K due to material noncompliance with a financial reporting requirement.
The Compensation Committee approves the overall annual equity pool based upon annual target levels and approves each equity award at the time of grant. We believe that this helps ensure we grant equity compensation appropriately and in a sustainable manner.
The annual cash incentive compensation for the executive officers includes both revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) targets, as well as targets for Diversity and Inclusion (D&I) metrics. These targets are intended to ensure that the executive officers appropriately manage operating risks, avoid excessive risk-taking, and maintain the Company’s gross margin and operating margin targets while growing our revenue base, as well work to make F5 a diverse and inclusive organization. The revenue and EBITDA targets are also used for setting the pool for cash incentive compensation (MBOs) for all Company employees. In addition, in fiscal year 2018, the Compensation Committee approved additional performance targets for performance-based equity awards for the executive officers and extended the vesting period from quarterly vesting to annual vesting to further differentiate between short-term incentive compensation and longer-term incentive compensation. These changes were intended to provide additional differentiated metrics from the short-term cash incentive program and are focused on factors creating shareholder value over a longer time horizon, thereby generating further incentives for longer-term value creation. The longer-term vesting period also further mitigates excessive risk taking and the addition of a relative total shareholder return metric ties the incentive compensation of the executives directly to shareholder performance. As part of our equity policies, we prohibit hedging and pledging transactions involving our securities so that our executive officers and other employees cannot insulate themselves from the effects of poor stock price performance.
Compensation Committee Report
The Compensation Committee has reviewed and discussed with management the Company’s “Compensation Discussion and Analysis.” Based on this review and discussions, the Compensation Committee recommended to the Board of Directors that the “Compensation Discussion and Analysis” be included in this Proxy Statement and the Company’s Annual Report to Shareholders on Form 10-K for the fiscal year ended September 30, 2022.
Members of the Compensation Committee:
Sandra E. Bergeron, Chair through January 19, 2023
Elizabeth L. Buse, Chair beginning January 20, 2023
Alan J. Higginson
Nikhil Mehta
James M. Phillips
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Executive Compensation
Compensation Discussion and Analysis
Introduction
This Compensation Discussion and Analysis provides information about the compensation program for our named executive officers (NEOs) in fiscal year 2022:
François Locoh-Donou, President and Chief Executive Officer
Frank Pelzer, Executive Vice President and Chief Financial Officer
Tom Fountain, Executive Vice President of Global Services and Chief Strategy Officer
Kara Sprague, Executive Vice President and Chief Product Officer
Chad Whalen, Executive Vice President of Worldwide Sales
Similar to the majority of its peers as well as its customers, the Company is in the midst of a digital transformation. The Company is pursuing a growth strategy with a focus on transforming the business to a software and SaaS driven business supporting new application security and delivery models and enabling the Company to realize its vision for adaptive applications. In setting the compensation for the NEOs for fiscal year 2022, the Talent and Compensation Committee of the Company’s Board of Directors (the “Committee”) adopted policies and targets aligned with the strategic direction of the Company as executive leadership strives to drive the Company to be the leader in multi-cloud application services while building long-term shareholder value.
The ongoing supply chain challenges triggered by the global COVID-19 pandemic continued to have an impact on our results of operations for the fiscal year ended September 30, 2022. Uncertainty associated with the pandemic, the war in the Ukraine, as well as their impacts on the global supply chain could affect our future results. Despite these uncertainties, we maintained the basic structure of our performance metrics for our long-term performance-based equity incentives and short-term cash incentive compensation in fiscal year 2022 with the addition of the D&I metric as mentioned below.
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Executive Compensation
Factors to Consider
 
FISCAL YEAR 2022
Performance Highlights
Annual
revenue
$2.7
BILLION
Cash flow
from operations
$443
MILLION
GAAP
net income
$322
MILLION
Annual revenue
growth
4%
Annual GAAP
software revenue growth
33%
Cash returned to
shareholders through
share repurchases
$500
MILLION
Awards and
Company
Recognition
Forbes The Culture 50 Champions: F5 CEO François Locoh-Donou
Puget Sound Business Journal Power 100: F5 CEO François Locoh-Donou
Eight company employees were included in CRN’s 2022 Women of the Channel
 
Certified via Great Place to Work: F5 U.S. and India
F5 named in the Top 10 in the Computer Services sector for America’s Most JUST Companies, by JUST Capital
2022 Bestie Award, Benevity Corporate Goodness Awards: F5
 
updates to the
compensation program for
fiscal year 2023
The Company surpassed a large milestone in its transformation in fiscal year 2022 with greater than 50% of its product revenues coming from software. In recognition of this significant transformation of its business to be software and SaaS led as well as recognizing investor sentiment regarding the prior inclusion of the software growth metric and renewed focus on profitability in the current macroenvironment, for fiscal year 2023, we replaced the software revenue growth performance metric in our long-term incentive program with an Earnings Per Share (EPS) metric.
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Executive Compensation
updates to the
compensation program for
fiscal year 2022
The Committee with the assistance of its independent compensation consultant continues to monitor and evaluate the Company’s compensation practices for its executive officers and has implemented three significant changes for fiscal year 2022.
As described above in “Corporate Governance - Social - Diversity and Inclusion”, the Company believes our differences—when embraced with humility and respect—drive smarter decisions, increased innovation, stronger performance, and a culture where all employees can be themselves and reach their full potential. To continue to make F5 a more diverse and inclusive place to work, and in alignment with the Company’s commitments to its ESG initiatives, the Committee therefore included quantitative diversity and inclusion metrics as part of its executive officers’ fiscal year 2022 annual cash incentive program. The diversity and inclusion metrics together comprise 10% of the target annual cash incentive program award. The diversity metric corresponds with the Company’s initiative of increasing diverse employee representation of the following communities and is based on driving percentage growth targets in fiscal year 2022 compared to fiscal year 2021 including increasing our Black representation by 26% and Latino(a) representation by 11% in the United States and increasing our female representation by 8% globally. The inclusion metric is based on a belonging engagement survey score.
To reflect a greater emphasis on pay for performance, for fiscal year 2022, we have increased the performance-based portion of our Chief Executive Officer’s target equity award from 50% to 60%. 60% of our Chief Executive Officer’s equity award will be subject to the Company achieving specified performance targets over a three-year period, as explained in more detail below.
Beginning with equity awards granted in fiscal year 2022, executive officers will be required to hold shares earned as a result of equity award vesting (after payment of withholding taxes) for at least one year after vesting even if the executive officers have already met the stock ownership and stock holding guidelines. The Company’s existing stock ownership and stock holding guidelines promote a long-term perspective in managing the business, further align the interests of executive officers and the Company’s shareholders and reduce any incentive for excessive short-term risk taking.
The Committee intends to continue to monitor, evaluate and update the Company’s executive compensation program as appropriate to reflect shareholder feedback and best practices for the Company’s compensation programs for its executive officers.
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Executive Compensation
COMPENSATION
POLICIES AND
PRACTICES LINKED
TO SHAREHOLDER
VALUE CREATION AND
RISK MITIGATION
What We Do
Pay for performance emphasized and executive compensation aligned with F5’s business objectives and performance, and the creation of shareholder value
Incentive-based compensation at risk if threshold performance metrics not achieved
Stock ownership guidelines that encourage alignment with the interests of shareholders
Post-vesting holding requirements expanded to require a minimum of one year hold after vesting of those equity awards granted in fiscal year 2022 and thereafter
Incentive compensation clawbacks
Shareholder engagement and annual advisory vote on executive compensation
Double-trigger change of control agreements
 
What We Don’t Do
No “golden parachute” excise tax gross-ups upon a change in control
No hedging or pledging or otherwise engaging in short sales of Common Stock of the Company
No re-pricing of stock options
No excessive perquisites
No dividends/dividend equivalents paid on equity awards prior to vesting
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Fiscal Year
2022 Corporate
Performance
The Company’s total annual revenue in fiscal year 2022, $2.7 billion, was the highest ever, representing an increase of 4% over fiscal year 2021. Cash flow from operating activities was $443 million and GAAP net income was $322 million. Cash flow from operations declined in fiscal year 2022 primarily due to two factors: (1) pre-payments to partners to secure component inventory and (2) the impacts of multi-year subscriptions where cash collections are spread over time. As supply chain constraints loosen and our software subscription business matures, we anticipate that these impacts to our cash flow will lessen.
The following chart reflects the Company’s revenue, cash flow and net income over the past five years.

The chart below shows the Company’s cumulative total return over the past five years compared to its peer group and the Nasdaq Composite, Nasdaq Computer Index and S&P 500.
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Prepared by Zacks Investment Research, Inc. Used with permission. All rights reserved. Copyright 1980-2023 Index Data: Copyright Standard and Poor’s, Inc. and Copyright NASDAQ OMX, Inc. Used with permission. All rights reserved.
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As discussed with our shareholders, the Company is pursuing a strategy to transform its business to become more software, SaaS and security-led and to expand its product delivery models to enable customers to adapt to market changes and new application architectures. The Company achieved a significant milestone in this transformation in fiscal year 2022, delivering significant growth in its software business and more than 50% of its product revenues via software. Despite these achievements, supply challenges impacted the Company’s overall revenues for the year and contributed to share price volatility. However, even with the supply side impacts to the Company revenues, the Company returned $500 million to shareholders through stock buybacks in fiscal year 2022, while continuing to invest and execute on its growth strategy.
Shareholder
Engagement AND
ANNUAL ADVISORY VOTE
The Company’s relationship with its shareholders is an important part of its success and the Company believes it is important to engage with its shareholders and to obtain their perspectives. The Company’s management team believes that engaging openly with shareholders on topics such as business strategy, executive compensation, and ESG, including the Company’s programs and policies, drives increased corporate accountability, improves decision-making, and ultimately creates long-term value. The Company is committed to:
 

Accountability: Driving and supporting strong corporate governance and Board practices to ensure oversight, accountability, and good decision making.
 

Transparency: Maintaining high levels of transparency on a range of financial, executive compensation, and governance, as well as social and environmental issues to build trust and sustain two-way dialogue that supports the Company’s business success.
 

Engagement: Proactively engaging with shareholders in conversations on a variety of topics to identify emerging trends and issues to inform the Company’s thinking and approach.
The Company’s senior management team, including the President and Chief Executive Officer, Chief Financial Officer, and Vice President of Investor Relations, regularly engages in meaningful dialogue with shareholders and potential shareholders through in-person, video, and teleconference meetings. During fiscal year 2022, F5 engaged with 153 institutional investors including shareholders representing approximately 48% of the Company’s total outstanding shares (based on holdings as set forth in their SEC filings as of September 30, 2022).
In addition to its routine shareholder engagement, the Company engages in proactive outreach to shareholders to discuss and receive input, provide additional information, and address questions about Environmental, Social, and Governance (ESG) topics, including with respect to executive compensation programs. These engagements enable us to better understand our shareholders’ priorities and perspectives and provide us with useful input. For example, items for discussion included recommended weighting between performance and time-based compensation and key metrics for equity compensation.
In recognition of investor sentiment regarding the prior inclusion of the software growth metric and the desire to increase the focus on profitability, we replaced for fiscal year 2023 the software revenue growth performance metric in our long-term incentive program with an Earnings Per Share (EPS) metric.
During fiscal year 2022, the Company engaged with 23 investors regarding ESG topics, including some of our largest shareholders. Collectively these ESG-engaged shareholders represented approximately 20% of the Company’s total outstanding shares as of September 30, 2022. A number of the engagements included F5 Board member representation.
In evaluating the Company’s executive compensation program for fiscal year 2022, the Committee considered the shareholder annual advisory vote on executive compensation for fiscal year 2021, which was approved by over 86% of the votes cast. The Committee carefully considers feedback from shareholders about the Company’s executive compensation, including the results of the
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shareholders’ annual advisory vote on executive compensation. The Committee believes this vote reflects overall support for the executive compensation program. Shareholders are invited to express their views to the Committee, including as described above under the heading “Communications with Directors.”
Executive
Compensation
Program Objectives
and Compensation
Philosophy
The Committee established a compensation program to align executive compensation with the Company’s business objectives, performance, and creation of shareholder value. We design our executive pay program to link compensation to improvements in elements of the Company’s performance associated with the creation of shareholder value. We achieve this objective through a compensation program that:
Provides a competitive total compensation package that enables the Company to attract, motivate, reward, and retain executive officers who contribute to the Company’s success;
Links incentive compensation to the performance of the Company and aligns the interests of executive officers with the long-term interests of shareholders; and
Establishes incentives that relate to the Company’s annual and long-term business strategies and objectives.
The Committee believes that the Company’s executive compensation should also reflect each executive officer’s qualifications, experience, role, and personal performance, as well as the Company’s performance achievements. In setting the fiscal year 2022 incumbent executive compensation, the Committee evaluated market data for both cash compensation and long-term incentive compensation (LTI) in the form of restricted stock units (RSUs) and targeted total direct compensation at or around the market median as adjusted upwards or downwards based on the criteria noted above. We believe the total direct compensation our NEOs received in fiscal year 2022, as set forth in the Summary Compensation Table on page 53, is consistent with and reflects these objectives.
When recruiting new executives, the Committee works closely with its independent compensation consultant to evaluate market practices for total direct compensation, difficulty in recruiting and internal compensation comparisons, and any equity or other compensation value that the executive would be forfeiting by leaving their prior employer as well as relocation and other costs.
Elements of Our
Fiscal Year
2022 Compensation
The three primary components of our fiscal year 2022 executive compensation program are:
(i)  base salary (Salary),
(ii)  incentive compensation in the form of cash bonuses (Bonus), and
(iii) long-term incentive compensation composed of equity compensation that is both performance-based and time-based (LTI).
How Each Element
Fits Into our
Overall Compensation
Objectives and
Affects Other Elements
of Compensation
Consistent with our philosophy that a significant amount of the executive officers’ compensation should be directly linked to the performance of the Company and align the interests of executive officers with the long-term interests of shareholders, a majority of the CEO’s compensation is based on the Company achieving certain performance and financial targets.
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With changes to the executive team over the past few years, including some executives who are new in their roles, the Committee adopted a zoned-based approach for determining an incumbent executive’s pay positioning. Each incumbent executive’s pay position is analyzed within a market range and is based on the incumbent’s sustained performance within the organization and experience outside of the organization. The following table illustrates this pay positioning philosophy:
 

For fiscal year 2022 the Committee evaluated target total direct compensation for each NEO against benchmarks at the 25th, 50th and 75th percentiles with a goal to set target total direct cash compensation for the NEOs (base salary plus the target bonus) and total direct compensation (cash and equity compensation) at or near the 50th percentile range relative to the Company’s peer group. Except for Mr. Locoh-Donou, each NEO’s total direct compensation was below the 50th percentile. With Mr. Locoh-Donou’s performance and success in driving the company’s transformation, the Committee set his total direct compensation between the 50th and 75th percentile. The charts below reflect the relative values of the various elements of NEO compensation for fiscal year 2022:
 

“Other NEO Compensation” is an average of the NEOs other than the CEO. Base salary, bonus, and LTI are at target. Please refer to the “Cash Incentive Compensation” and “Fiscal Year 2022 Equity Awards” sections below for information on the values.
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The following chart reflects the percentage of CEO compensation for fiscal year 2022 that was performance-based compensation:
 

Base Salary
Base salary is the fixed element of employees’ annual cash compensation. Executive officers’ base salaries are set at levels that reflect the following:
The executive’s specific job responsibilities, experience, qualifications, job performance, and potential contributions;
Market data from the Radford salary survey covering technology companies in comparable areas (Survey Companies); and
Compensation paid to comparable executives as set forth in proxy statements for the Peer Group Companies developed by an outside independent compensation consultant (See “Factors Considered by The Committee in Establishing Executive Compensation — Market Analysis”).
The Committee reviews and may adjust base salaries annually and may also adjust salaries from time to time in recognition of individual performance, promotions, and marketplace competitiveness. The Committee generally sets NEO base salaries at or near the 50th percentile range of base compensation for comparable executive officers in Peer Group Companies with variations based on tenure and scope of responsibility.
 
Fiscal Year 2021
Base Salary ($)
New Fiscal Year 2022
Base Salary ($)
% of Base
Salary Increase
François Locoh-Donou
$875,000
$925,000
5.7%
Frank Pelzer
$510,000
$540,000
5.9%
Tom Fountain
$546,000
$560,000
2.6%
Kara Sprague
$490,000
$500,000
2.0%
Chad Whalen
$450,000
$480,000
6.7%
Cash Incentive Compensation
The Committee believes that incentives based on attaining or exceeding established financial and operational targets properly align the interests of our executive officers with the interests of our shareholders. All of our executive officers participate in our annual cash incentive program, with each NEO assigned a target bonus amount expressed as a percentage of the NEO’s base salary. The Committee, and in the case of the NEOs other than the President and CEO in consultation with our President and CEO, determines the target bonus percentages based on its assessment of the
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impact each position has on the Company’s performance and compensation data from the Peer Group Companies and Survey Companies (where peer proxy data is not available). For fiscal year 2022, target awards ranged from 90% to 130% of NEO base salaries, as set forth in the table below.
 
Base Salary
Annual Rate ($)
Incentive Plan
Target as a % of
Base Salary
Incentive Plan
Maximum as a % of
Base Salary
Actual as % of
Target (1)
Actual ($)
François Locoh-Donou
$925,000
130%
260%
88.9%
$1,069,162
Frank Pelzer
$540,000
90%
180%
88.9%
$432,110
Tom Fountain
$560,000
100%
200%
88.9%
$497,905
Kara Sprague
$500,000
90%
180%
88.9%
$400,102
Chad Whalen
$480,000
100%
200%
88.9%
$426,776
1.
Rounded to nearest tenth of a percent.
Fiscal Year 2022 Performance Metrics
In alignment with the Company’s commitments to its ESG initiatives, and to continue to make F5 a more diverse and inclusive place to work, the Committee added quantitative diversity and inclusion (“D&I”) metrics to its executive officers’ fiscal year 2022 annual cash incentive program. As described above in “Corporate Governance - Social - Diversity and Inclusion”, the Company believes our differences—when embraced with humility and respect—drive smarter decisions, increased innovation, stronger performance, and a culture where everyone can be themselves and reach their full potential.
The updated metrics for the annual cash incentive program were 60% based on the Company achieving target revenue for the fiscal year, 30% based on the Company achieving target EBITDA for the fiscal year, and 10% based on the Company achieving target growth in D&I representation. The formula is more heavily weighted toward revenue growth based on the Company’s belief that revenue growth is a key driver of shareholder return. The focus on revenue growth balanced by the EBITDA and D&I targets ensures that the Company appropriately manages operating risks, avoids excessive risk-taking, and maintains its gross margin and operating margin targets while building a company culture of belonging and representation. The Company believes these targets appropriately reflect and address the interests of our shareholders and promote the Company’s business strategies and objectives. Accordingly, the Committee approved these targets as metrics for the cash annual incentive program.
The Committee determines each target and will not pay cash incentive bonuses with respect to the revenue and EBITDA performance goals unless at least 80% of the applicable target goal is achieved. Payment with respect to the revenue and EBITDA performance goals are linear above 80% of the applicable target goal and subject to a 200% cap. Each revenue and EBITDA goal is evaluated individually and to earn more than 100%, the aggregate results for both revenue and EBITDA performance goals must equal or exceed 100% of the applicable target goal.
The D&I performance goal is weighted in four equal parts consisting of growth of global female employees, growth of U.S. Black employees, growth of U.S. Hispanic/Latino(a) employees (“Diversity Goals”) and a favorable global belonging score (“Inclusion Goal”) returned in the most recent employee survey results. The attainment for the Diversity Goals is straight-line for growth over the baseline and subject to the 200% cap. The Inclusion Goal is subject to a 70% achievement threshold and paid linear above the applicable target and subject to the 200% cap at a 90% achievement level.
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For example, if 90% of the revenue goal, 85% of the EBITDA goal and 80% of the D&I goal are achieved, the annual cash incentive bonus is paid out at 87.5%. If 90% of the revenue goal, 150% of the EBITDA goal and 110% of the D&I goal are achieved the annual cash incentive bonus with respect to the aggregate of the revenue and EBITDA performance goals are capped at 100% and the annual cash incentive bonus is paid out at 110%. If 100% of the revenue goal, 120% of the EBITDA goal and 110% of the D&I goal are achieved, the annual cash incentive bonus is paid out at 107% since both revenue and EBITDA goals were achieved at 100% or more.
 
Weight
Performance Formula Examples
% of Revenue Target Achieved
60%
90
90
100
70
70
% of EBITDA Target Achieved
30%
85
150
120
90
75
% of Diversity and Inclusion Target Achieved
10%
80
110
110
65
65
Total % Achieved
87.5
​110.0
107.0
33.5
6.5
For fiscal year 2022, the annual revenue target was $2,839.1 million and the annual EBITDA target was $634.2 million. (The EBITDA target was adjusted downward from $660.0 million to reflect extraordinary charges associated with the acquisition of Threat Stack, restructuring, and certain facility exit costs which are non-recurring and which the Company believes are not reflective of the overall performance.)
The diversity metric was based on driving percentage growth targets in fiscal year 2022 compared to fiscal year 2021, including increasing our Black representation by 26% (+0.7% target growth) and Latino(a) representation by 11% (+0.5% target growth) in the United States and increasing our female representation by 8% (+2% target growth) globally (“Diversity Goals”). Percentage growth for the Diversity Goals is determined without regard to any acquisitions or similar transactions during the fiscal year. The inclusion metric was based on an 80% target global belonging engagement survey favorability score.
These metrics were set at a level that the Committee believes would require solid execution by the executive team, and, if achieved, will contribute to growing shareholder value.
In fiscal year 2022, the Company achieved 95% of the annual revenue target, 81% of the annual EBITDA target, and 76.3% of the D&I target and, as a result, the executive officers earned 88.9% of their total target cash incentive bonus. The Committee believes that the cash incentive bonuses paid to the executive officers for performance in fiscal year 2022 were merited due to the Company’s strong operating results summarized above, which were achieved in a rapidly evolving market throughout fiscal year 2022 and despite continued supply challenges that had an impact on both top-line and bottom-line growth.
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Executive Compensation
2022 Cash Incentive Award
Performance measure
Weighting
Threshold
Target
Maximum
Actual
Actual as a
% of Target(1)
Revenue
60%
$2,271.3M
$2,839.1M
$5,678.2M
$2,695.8M
95%
EBITDA
30%
$507.4M
$634.2M
$1,268.4M
$514.0M
81%
Diversity and Inclusion
10%