ServiceNow's board approves $127 million in retention awards as it cuts jobs
CEO Bill McDermott's award has a target value of $50 million. The board says the grants are meant to keep leaders "during an exceptionally competitive period for enterprise technology talent."
ServiceNow's board approved retention stock awards for its senior executives with a combined target value of about $127 million on October 26. That was two days before the company reported third-quarter results and three days before its shares fell about 27%.
According to ServiceNow's quarterly filing, the compensation committee unanimously approved restricted stock unit awards for "certain senior executive leaders." Chairman and CEO Bill McDermott's target value is $50 million. Amit Zavery, president, chief product officer and COO, is $25 million, and Paul Fipps, president of global customer operations, $22.5 million. CFO Gina Mastantuono's is $17.75 million, and Jacqueline Canney, chief people and AI enablement officer, $11.3 million. Each of the company's named executive officers for fiscal 2025 who remains employed is a recipient.
The awards vest 25% on Dec. 31, 2027, 35% on Dec. 31, 2028 and 40% on Dec. 31, 2029, provided the executive is still employed. Unvested awards are forfeited when an executive leaves, except in cases of death, disability or a qualifying termination after a change in control.
The filing says the grants "reflect the Board's desire to retain and incentivize our current senior leadership team during an exceptionally competitive period for enterprise technology talent." They are designed "to sustain leadership continuity" and to maintain "a strong succession plan," as the company navigates "significant industry transitions driven by AI innovation and heightened competition for top enterprise technology talent."
The disclosure sits in the same filing that shows ServiceNow's workforce overhaul. The company recorded $167 million in severance costs in the first nine months of 2026, more than triple the $53 million of a year earlier, and says it is "streamlining certain functions" through AI-driven efficiencies. It is also cutting jobs again in the UK, the US and India. Stock-based compensation was $633 million in the third quarter, 15.5% of revenue, by the company's non-GAAP reconciliation.
ServiceNow's shares are down more than 30% this year and have fallen 35% between Oct. 23 and Nov. 5. They dropped after the company guided fourth-quarter cRPO growth of 18.5% in constant currency, down from 21% in the third quarter. The size of the awards in dollars is fixed by their target value, but the filing does not say how the number of units was set or at what share price.
