Form 4: Rapid7 CFO Rafeal Brown Receives RSU Grant

Rapid7's Chief Financial Officer, Rafeal E. Brown, was granted 466,999 restricted stock units as part of his compensation package.

Summary

• Rapid7, Inc. (RPD) Chief Financial Officer, Rafeal E. Brown, was granted 466,999 restricted stock units (RSUs).
• The grant was made on December 1, 2025, under the Issuer's 2015 Equity Incentive Plan, as amended.
• Each restricted stock unit represents a contingent right to receive one share of Rapid7 common stock.
• The RSUs vest over three years, with 33% vesting on December 15, 2026, and 8.33% vesting on the 15th day of each calendar quarter thereafter, contingent on continued service.

Sentiment

Score: 7

Explanation: The grant of a significant number of restricted stock units to the Chief Financial Officer is a positive for executive retention and aligns management's interests with long-term shareholder value. It is a standard compensation practice and does not indicate any immediate operational or financial issues.

Positives

• The grant of 466,999 restricted stock units to the Chief Financial Officer aligns his interests with long-term shareholder value.
• The multi-year vesting schedule incentivizes the CFO's continued service and commitment to Rapid7.

Risks

• The vesting of restricted stock units is contingent upon the Reporting Person's continued service with the Issuer, posing a risk of forfeiture if employment ceases.

Future Outlook

The vesting schedule for the restricted stock units extends over three years, with the first significant portion vesting in December 2026 and subsequent quarterly vesting, indicating an expectation of the Chief Financial Officer's continued long-term service to the company.

Management Comments

• This security represents restricted stock units granted under the Issuer's 2015 Equity Incentive Plan, as amended, to the Reporting Person in connection with his appointment as Chief Financial Officer of the Issuer.
• The restricted stock unit grant vests over three years with 33% of the shares underlying the restricted stock unit grant vesting on December 15, 2026, and 8.33% of the shares underlying the restricted stock unit grant vesting on the 15th day of each calendar quarter thereafter, subject to the Reporting Person's continued service with the Issuer.

Industry Context

The grant of restricted stock units is a common form of executive compensation in the technology and cybersecurity sectors, used to attract, retain, and incentivize key leadership by aligning their financial interests with the long-term performance of the company's stock. Rapid7, as a cybersecurity company, utilizes this standard practice to compensate its Chief Financial Officer.

Comparison to Industry Standards

• The use of restricted stock units (RSUs) as a significant component of executive compensation is a standard practice across the technology and software industry, including companies comparable to Rapid7 such as CrowdStrike, Zscaler, and Palo Alto Networks.
• Multi-year vesting schedules, typically 3-4 years, are also standard, designed to promote long-term retention and performance alignment, similar to grants observed at companies like Okta or Fortinet.
• The grant size of 466,999 units, while substantial, is within the expected range for a Chief Financial Officer at a publicly traded company of Rapid7's market capitalization, reflecting competitive compensation practices for senior executives in high-demand sectors.

Management Changes

Corporate Governance

Stakeholder Impact

• Shareholders: Potential future dilution upon vesting and conversion of RSUs into common stock. Alignment of CFO's interests with long-term shareholder value.
• Employees: May signal stability in executive leadership.
• Management: Provides significant long-term incentive and compensation for the Chief Financial Officer.

Next Steps

• Continued service of Rafeal E. Brown as Chief Financial Officer.
• Vesting of 33% of RSUs on December 15, 2026.
• Subsequent quarterly vesting of 8.33% of RSUs on the 15th day of each calendar quarter thereafter.

Key Dates

Keywords

Rapid7, RPD, Rafeal Brown, Chief Financial Officer, CFO, Restricted Stock Units, RSU, Equity Incentive Plan, Insider Transaction, Executive Compensation, SEC Form 4, Cybersecurity, Software