Form 4: Freshworks Director Randy Gottfried Receives Annual Equity Grant

Freshworks Inc. Director Randy Gottfried was granted 13,236 Class A Common Stock Restricted Stock Units as part of the company's Non-Employee Director Compensation Policy, scheduled to vest on July 1, 2026.

Summary

• Randy Gottfried, a Director at Freshworks Inc. (FRSH), acquired 13,236 shares of Class A Common Stock on July 1, 2025.
• This acquisition represents an annual grant of Restricted Stock Units (RSUs) under Freshworks' Non-Employee Director Compensation Policy.
• Each RSU signifies a contingent right to receive one share of Freshworks' Class A Common Stock upon settlement.
• The number of RSUs granted was calculated by dividing the applicable equity value by the average closing price of Freshworks common stock over the 30 consecutive trading days immediately preceding July 1, 2025, rounded down to the nearest whole share.
• The shares are scheduled to vest in full on July 1, 2026.
• An accelerated vesting condition applies: if the director is not re-elected at Freshworks' next annual meeting of stockholders, the shares will be deemed fully vested on that annual meeting date.
• Following this transaction, Randy Gottfried directly beneficially owns 53,920 shares of Class A Common Stock.
• A Power of Attorney, executed by Randy Gottfried on October 22, 2024, authorizes individuals including Pamela Sergeeff to execute SEC Forms 3, 4, and 5 on his behalf for Section 16 compliance.

Sentiment

Score: 7

Explanation: The filing reports a routine equity grant to a director, which is a positive sign of standard corporate governance and director compensation practices, aligning interests with shareholders. It does not contain any negative or unexpected information.

Positives

• The grant of Restricted Stock Units (RSUs) aligns the director's financial interests with those of shareholders, as the value of the compensation is tied to the company's stock performance and continued service.
• The inclusion of equity compensation for non-employee directors is a standard and effective practice for attracting and retaining experienced board members, fostering long-term commitment to the company's success.

Risks

• The full realization of the RSU award's value is contingent on the director's continued service until the vesting date of July 1, 2026, or earlier re-election outcome, introducing a forfeiture risk if conditions are not met.

Future Outlook

The granted Restricted Stock Units are scheduled to vest fully on July 1, 2026. However, an accelerated vesting condition exists where the shares will vest fully on the date of the next annual meeting of stockholders if the director is not re-elected to the board.

Management Comments

• The filing was signed by Pamela Sergeeff, Attorney-in-Fact, indicating the use of a Power of Attorney for Section 16 filings, which is a common practice for corporate insiders.

Industry Context

The grant of Restricted Stock Units to non-employee directors is a widely adopted practice across the technology industry and broader corporate landscape. This method of compensation is designed to align the interests of board members with the long-term performance and shareholder value creation of the company.

Comparison to Industry Standards

• Granting equity compensation, specifically Restricted Stock Units (RSUs), to non-employee directors is a standard practice among publicly traded software and technology companies, comparable to compensation structures at firms like Salesforce, HubSpot, or Atlassian.
• The vesting schedule, which includes a one-year cliff or accelerated vesting upon non-re-election, is typical for annual director equity grants, serving to ensure director retention and alignment with company performance.
• The method of calculating the number of RSUs based on the average closing price over a preceding 30-day trading period is a common and transparent approach used to determine the number of units for a fixed dollar value equity grant.

Corporate Governance

Stakeholder Impact

• Shareholders: The RSU grant aligns the director's interests with shareholders, potentially fostering long-term value creation. This grant also represents a standard form of dilution upon vesting, which is a common cost associated with director compensation.
• Employees: No direct impact on employees is mentioned in this filing.
• Customers: No direct impact on customers is mentioned in this filing.
• Suppliers: No direct impact on suppliers is mentioned in this filing.
• Creditors: No direct impact on creditors is mentioned in this filing.

Next Steps

• The granted RSUs are expected to vest on July 1, 2026.
• The director's re-election status at the next annual meeting of stockholders will determine if accelerated vesting occurs.

Key Dates

Keywords

Freshworks Inc., FRSH, Randy Gottfried, Director, SEC Form 4, Restricted Stock Units, RSU, Equity Compensation, Insider Transaction, Corporate Governance, Non-Employee Director Compensation Policy