8-K: Five9 CFO Barry Zwarenstein Announces Retirement; Bryan Lee Appointed Interim CFO

Five9's CFO, Barry Zwarenstein, will retire effective March 31, 2025, with Bryan Lee appointed as interim CFO starting April 1, 2025.

Summary

• Five9, Inc. announced the retirement of Chief Financial Officer Barry Zwarenstein, effective March 31, 2025.
• Bryan Lee, the current Executive Vice President of Finance, has been appointed as Interim Chief Financial Officer and Interim Principal Financial Officer, effective April 1, 2025.
• Zwarenstein will assist with the transition until June 30, 2025, and then continue as a consultant through September 30, 2025.
• Lee's annual base salary will be $456,000, and he will be eligible for an annual bonus with a target of 60% of his base salary, prorated for his time as Interim CFO.
• Lee will also receive a restricted stock unit (RSU) award with a dollar value of $2 million, vesting quarterly starting December 3, 2025.
• Zwarenstein entered into an Employment Transition Agreement with the company, outlining his transition and consulting roles.
• During the transition period, Zwarenstein will be paid an hourly rate of $250 and will be eligible for a pro-rated portion of his 2025 annual bonus for the period before April 1, 2025.
• Zwarenstein will also receive subsidized COBRA benefits during the consulting period.

Sentiment

Score: 7

Explanation: The sentiment is neutral to positive. The announcement is well-managed, with a clear transition plan and positive comments from management. The appointment of an internal candidate as interim CFO suggests stability.

Positives

• Bryan Lee's appointment provides continuity and internal expertise during the CFO search.
• Zwarenstein's extended transition and consulting roles ensure a smooth handover of responsibilities.
• Lee's compensation package, including the RSU award, incentivizes his performance as Interim CFO.
• The transition agreement with Zwarenstein includes confidentiality and assignment of inventions clauses, protecting the company's interests.

Risks

• The transition period could present challenges if the handover is not effectively managed.
• The search for a permanent CFO could be lengthy and disruptive.
• There is a risk that Bryan Lee may not be selected as the permanent CFO, leading to further transition.
• Zwarenstein's consulting role is subject to a non-compete agreement, which could limit his future opportunities.

Future Outlook

Five9 is conducting a formal search process for a permanent CFO, with Bryan Lee being an internal candidate.

Management Comments

• Mike Burkland, Chairman and CEO of Five9, thanked Barry Zwarenstein for his leadership and contributions.
• Burkland expressed confidence in Bryan Lee's ability to excel in the interim CFO role.
• Barry Zwarenstein thanked the Five9 team and expressed confidence in a smooth transition with Bryan Lee.

Industry Context

Executive transitions are common in the tech industry, and Five9's approach of appointing an interim CFO while conducting a formal search is a standard practice to ensure stability.

Comparison to Industry Standards

• Comparable companies like Zoom, RingCentral, and Twilio often provide similar compensation packages for interim executive roles, including base salary, bonus potential, and equity awards.
• The use of transition agreements and consulting periods is also a common practice to ensure a smooth handover of responsibilities and maintain institutional knowledge.
• The vesting schedule for Bryan Lee's RSU award is fairly standard, with quarterly vesting over a multi-year period.

Management Changes

Stakeholder Impact

• Shareholders may react to the CFO transition, but the well-managed plan should minimize any negative impact.
• Employees will experience a change in leadership in the finance department.
• Customers and partners are unlikely to be directly affected by the CFO transition.

Next Steps

• Five9 will conduct a formal search process for a permanent CFO.
• Bryan Lee will serve as Interim CFO while the search is underway.
• Barry Zwarenstein will assist with the transition and provide consulting services.

Key Dates

Keywords

CFO, retirement, appointment, transition, Bryan Lee, Barry Zwarenstein, Five9, financial officer