PagerDuty, Inc. 8-K

What Happened

• PagerDuty, Inc. announced on May 11, 2026 that John DiLullo (age 59) was appointed Chief Executive Officer effective that date. Jennifer Tejada, CEO since 2016, will cease serving as CEO on May 11, 2026 and will serve as Executive Chair through a transition period, then remain a non‑employee board member through the Company’s 2027 annual meeting of stockholders.

Key Details

• Compensation: Mr. DiLullo’s base salary is $600,000 and his target annual bonus is $600,000 (FY2027 bonus to be prorated and no less than $300,000).
• Equity package: one‑time awards with an aggregate target value of $19,000,000 comprised of (a) $7M time‑based RSUs vesting over 4 years; (b) $7M performance RSAs tied to multi‑year metrics (including relative total shareholder return for year one); and (c) two market‑based RSU grants (each $2.5M target) payable if the 60‑day average stock price reaches $10.00 or $13.00, with 4‑year time vesting after grant.
• Sign-on and severance: $300,000 sign‑on bonus (repayable pro rata if terminated for cause or without good reason within 12 months). If terminated without cause or for good reason (generally outside change‑in‑control window), severance equals 1.0×(salary + target bonus) plus 50% accelerated vesting of time‑based awards and up to 12 months of subsidized health benefits. If termination occurs within 3 months before or 24 months after a change in control, severance equals 1.5×(salary + target bonus), 100% accelerated vesting of time‑based awards, cash treatment of certain unvested performance and market‑based awards (subject to thresholds), and up to 18 months of subsidized health benefits. Payments are subject to release and 280G tax cut‑back provisions.
• Board role and timing: Mr. DiLullo was appointed as a Class III director with a term expiring at the 2028 annual meeting. Ms. Tejada will serve as Executive Chair through the Transition Date, then as a non‑employee director through the 2027 annual meeting; remaining unvested equity held by Ms. Tejada will vest in full at the 2027 annual meeting (or earlier qualifying termination).
• Disclosure: The company issued a press release (Exhibit 99.1) the same day and reaffirmed its Q1 and full fiscal 2027 outlook previously provided on March 12, 2026.

Why It Matters

• Leadership change: A new CEO after a decade under Ms. Tejada is a material governance event that can affect strategy, execution and investor confidence. The staged transition (Executive Chair then board member) is intended to provide continuity.
• Compensation and incentives: The sizable $19M equity package, performance features and market‑price thresholds align the new CEO’s pay with multi‑year operational and stock‑price goals, but could increase future stock‑based compensation expense and potential dilution if awards vest.
• Risk/benefit considerations: Severance, sign‑on and tax‑cutback provisions are standard but notable for investors tracking potential post‑change‑in‑control payouts. The company’s reaffirmed guidance reduces immediate uncertainty about near‑term financial outlook.