Executive Stock Ownership Guidelines
The Board of Directors of Teradata Corporation believes that it is important for senior management’s interests to be aligned with those of stockholders and the company’s long-term success. To that end, Teradata’s revised stock ownership guidelines, effective as of November 2019, encourage our Executives (Section 16 executive officers and executive vice presidents) to have an equity interest in the company at a level sufficient to assure Teradata’s stockholders of their commitment to value creation while satisfying the Executives’ need for portfolio diversification. To the extent that the Executives have not already achieved this ownership level, they are generally expected to increase their ownership position as set forth in the guidelines.
Under Teradata’s stock ownership guidelines, the Executives are expected to own and hold a minimum number of shares of Teradata stock based upon a multiple of each Executive’s salary. Each Executive is expected to own and hold a number of shares of Teradata common stock with a value not less than the product of (i) the Executive’s annual base salary, multiplied by (ii) the multiple specified for the Executive’s role in the table below:
|Base Salary Multiple
|President and Chief Executive Officer
|Executive Vice President
Each Executive has five years from the date of his or her initial appointment to an Executive role, and three years from his or her initial appointment into a more senior role, to attain the applicable minimum stock ownership requirement. During this five-year period, if an Executive has not satisfied the applicable minimum stock ownership requirement, the Executive will be required to retain 50% of his or her net shares. If at the end of five years and thereafter, an Executive has not satisfied the applicable minimum stock ownership requirement, the Executive will be required to retain 100% of his or her net shares until Teradata determines that the applicable minimum stock ownership requirement has been achieved.
For this purpose, in determining whether an Executive has met the minimum share requirement, Teradata includes service-based restricted stock and restricted share units, stock acquired through the Company’s employee stock purchase plan and investments in Teradata stock through the Company’s 401(k) savings plan.
The Compensation and People Committee of the Teradata Board of Directors will periodically review and adjust, as appropriate the minimum ownership requirement levels based on the price of Teradata’s common stock, competitive practice, and such other factors as it deems appropriate.
These guidelines are in addition to those for Teradata’s non-employee directors set forth in the Teradata Corporation Board of Directors Corporate Governance Guidelines.