Yext Inc

This proposal requests a non-binding, advisory shareholder vote to approve the compensation of the Company’s named executive officers as disclosed in the proxy statement (the “say-on-pay” vote). Management seeks this advisory approval to obtain shareholder feedback on executive pay design and to validate that its pay-for-performance framework, mix of cash and equity, and use of performance-based awards align with shareholder interests. The proposal is not binding, but the Board and compensation committee state they will review and consider voting outcomes when setting future pay practices. Key contextual points include the Company’s emphasis on variable compensation (cash incentives tied to revenue and Adjusted EBITDA and performance-based RSUs/PSUs linked to ARR, Rule of 40 and rTSR), the compensation committee’s use of an independent consultant (Compensia), and the Company’s prior strong shareholder support (≈98% approval in 2025). Management argues the design balances retention, long-term alignment, and pay-for-performance while avoiding practices it describes as poor governance (e.g., no golden parachute tax gross-ups, limited single-trigger acceleration). Critics of typical say-on-pay proposals often point to misalignment between realized pay and performance or the opacity of performance targets; here, the filing discloses specific performance metrics and formulas (e.g., revenue and Adjusted EBITDA weightings for annual bonuses, ARR and Rule of 40 and rTSR for PSUs). Because the vote is advisory, its primary function is stewardship signaling: a strong adverse vote would likely trigger engagement and potential redesign of compensation elements, while strong support reinforces management’s current approach. For an analyst evaluating this item, important considerations include the degree of realized CEO pay versus targeted awards, the use and vesting of performance-based awards, historical shareholder support levels, and how the compensation committee calibrates metrics to operational levers under management control.

This management proposal seeks shareholder approval to amend, restate and extend the Company’s 2016 Equity Incentive Plan (the “Restated Plan”) so Yext can continue granting equity-based compensation after the Existing Plan’s scheduled expiration (Dec 19, 2026). Management argues approval is necessary to preserve the Company’s ability to attract, retain and motivate employees and to avoid increasing cash compensation in lieu of equity. The Restated Plan would provide a new initial share reserve of 4,500,000 shares plus forfeitures from the prior plan up to a capped amount, eliminate the automatic annual “evergreen” share increase, prohibit exchange programs and reduce certain dividend rights on unvested awards, and expressly subject awards to the Company’s clawback policy. The Board considered historical burn rates, recent large retention “Fiscal 27 Refresh” grants and forecasted grant practices (≈4.5M gross grants over two years, netting to ~0.5M after projected forfeitures) when setting the reserve; it also disclosed current overhang (≈20.4%) and the dilutive impact of the new reserve (~+4.5%). Governance-oriented changes (non-employee director limits, no tax gross-ups, clawback language) are emphasized to reduce perceived governance risk while enabling performance-based incentive design via PSUs and price-hurdle awards. For analysts, the primary trade-offs are (i) dilution and overhang versus the retention and performance-alignment benefits of the plan, (ii) the removal of the evergreen provision (which limits automatic future dilution), and (iii) the significant use of performance-based awards and price hurdles to align pay with shareholder return. The Board unanimously recommends the proposal because it believes failure to approve would impair recruiting and retention and harm long-term shareholder value, but investors should weigh the disclosed historical burn rate, recent large refresh grants, and the plan’s overhang when assessing dilution risk.