Teradata Corp

This advisory (non-binding) proposal asks stockholders to approve the compensation of Teradata’s named executive officers as disclosed in the Compensation Discussion and Analysis and related tables and narrative. Management seeks this non-binding endorsement to validate its pay-for-performance program that heavily weights long-term equity and ties incentives to metrics the Board considers central to Teradata’s strategic transformation: Total ARR growth, Public Cloud ARR growth, Non-GAAP operating margin, free cash flow, and the Rule of 40. In 2025 the company rebalanced long-term incentive mix to 50% performance-based RSUs and 50% service-based RSUs and linked annual incentives to ARR growth and profitability measures; these design choices were informed by investor engagement and independent compensation consultant benchmarking. The Board points to prior investor support (83% vote in 2025) and specific governance safeguards—stock ownership guidelines, clawback policy, limits on director awards, and third‑party consultant oversight—to justify that the program aligns management and stockholder interests while mitigating excessive risk-taking. Because the vote is advisory, it does not change compensation agreements but provides important feedback that the Compensation and People Committee will consider when setting future pay policies. The Board recommends a FOR vote, citing the program’s linkage to long-term profitable growth, retention of key talent during a transformation to cloud and AI offerings, and the multi-year performance metrics that reduce the incentive to game short-term results. Investors should weigh that the proposal is non-binding, that much pay is equity-based and therefore sensitive to stock price movements, and that the Committee retains discretion (including individual modifiers) when certifying payouts. Overall, a FOR vote signals stockholder support for management’s compensation framework and the Board’s governance approach to aligning pay with Teradata’s strategic objectives.

This proposal asks stockholders to approve an amendment and restatement of Teradata’s 2023 Stock Incentive Plan to add 6.3 million shares to the plan reserve. Management’s rationale is operational: recent grant activity, new-hire inducement awards, and stock-price volatility have reduced the available share pool and, without an increase, the company expects it will not be able to grant its routine annual equity awards (including long‑term incentive grants and director awards) beyond 2026. The proxy discloses governance features intended to limit dilution and protect stockholders, including prohibitions on liberal share recycling, no discounted option grants, a $500,000 annual limit on non-employee director compensation, double-trigger change-in-control vesting, clawback provisions, and caps on repricing without stockholder approval. Teradata reports a fully diluted overhang of approximately 11.23% before the requested increase and estimates that the proposed increase would raise fully diluted overhang to about 16.18%—management argues this is within industry norms. The filing also shows a 2025 burn rate of 6.24% (three‑year average 4.45%), reflecting heavy grant activity including large new-hire awards; the Committee consulted its independent compensation consultant in sizing the request. The Board recommends approval on the basis that additional share capacity is required to attract and retain talent critical to executing Teradata’s cloud and AI strategy and to maintain market‑competitive pay structures; it warns that without approval the company might need to increase cash compensation, which could be costly and less aligned with shareholder interests. Investors should weigh the dilution and overhang implications against the company’s stated need to preserve equity-based incentives tied to long-term performance metrics and retention during an active transformation. Finally, the plan retains customary protections and adjustment mechanisms and the Board commits to filing an S‑8 and providing ongoing disclosures regarding usage and dilution.