Form 4: Cognizant Executive Surya Gummadi Reports Stock Unit Grants and Vesting

EVP and President, Americas, Surya Gummadi, reports grants of restricted stock units (RSUs) and performance stock units (PSUs) as well as the vesting of PSUs based on performance criteria being met.

Summary

• On February 28, 2024, Surya Gummadi, EVP and President, Americas at Cognizant Technology Solutions Corp, was granted 14,016 restricted stock units (RSUs) and 7,645 RSUs under the company's 2023 Incentive Award Plan.
• The 14,016 RSUs will vest in twelve successive quarterly installments starting June 1, 2024, and fully vesting on March 1, 2027.
• The 7,645 RSUs will vest in a staggered quarterly installment schedule, also beginning June 1, 2024, and fully vesting on March 1, 2027.
• Additionally, 2,194 and 2,910 performance stock units (PSUs) were vested on February 28, 2024, as the Compensation and Human Capital Committee determined that approximately 91.4% of the related performance criteria had been satisfied.
• These PSUs, originally granted on February 23, 2021, and May 17, 2021, respectively, will settle in Class A Common Stock on March 15, 2024, contingent on Gummadi's continued service.

Sentiment

Score: 7

Explanation: The document reflects standard executive compensation practices and positive performance indicators, leading to a moderately positive sentiment.

Positives

• The vesting of PSUs indicates that performance criteria were largely met, suggesting positive performance within the company.
• The grant of RSUs serves as an incentive for continued service and contribution by the executive.

Risks

• The vesting of PSUs is contingent on the executive's continued service, creating a potential risk if the executive were to leave the company before March 15, 2024.

Future Outlook

The document outlines the vesting schedule for the granted RSUs and the settlement date for the vested PSUs, contingent on continued service. This provides a clear timeline for future equity compensation events for the reporting person.

Industry Context

Executive compensation through stock grants and performance-based units is a common practice in the technology industry to align executive interests with shareholder value and incentivize performance. This filing reflects Cognizant's ongoing use of these tools.

Comparison to Industry Standards

• Companies like Accenture, Infosys, and Tata Consultancy Services also utilize stock-based compensation for their executives.
• The vesting schedules and performance criteria associated with these grants are generally aligned with industry norms, aiming to retain talent and drive company performance.
• The specific details of the vesting schedules and performance metrics vary from company to company, reflecting their unique strategic goals and compensation philosophies.

Stakeholder Impact

• Shareholders may view the vesting of PSUs as a positive sign, indicating that performance targets are being met.
• Employees may see the executive's compensation package as a reflection of the company's commitment to rewarding performance.

Next Steps

• Settlement of vested PSUs in Class A Common Stock on March 15, 2024.
• Quarterly vesting of RSUs beginning on June 1, 2024.

Key Dates