UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule
14a-101)

INFORMATION REQUIRED IN

PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

Filed by the Registrant x
Filed by a Party other than the Registrant ¨

Check the appropriate box:

¨Preliminary Proxy Statement
¨
Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
xDefinitive Proxy Statement
¨Definitive Additional Materials
¨
Soliciting Material under §240.14a-12
§240.14a-12

MicroStrategy Incorporated

(Name of registrant as specified in its charter)

(Name of person(s) filing proxy statement, if other than the registrant)

Payment of Filing Fee (Check the appropriate box)all boxes that apply):

xNo fee required.required
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and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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LOGO


LOGO

(1)

Amount Previously Paid:

LETTER FROM OUR EXECUTIVE CHAIRMAN

 

 

April 12, 2024

  (2)

Form, Schedule or Registration Statement No:

(3)

Filing Party:

(4)

Date Filed:

Dear Fellow Stockholder:


LOGO

April 21, 2016

Dear MicroStrategy Stockholder:

You are cordially invitedOn behalf of the Board of Directors and our entire company, I invite you to ourattend MicroStrategy’s Annual Meeting of Stockholders on Thursday,Wednesday, May 12, 2016, beginning22, 2024, at 10:00 a.m., local time,Eastern Daylight Time. This meeting will be held exclusively via live webcast at www.virtualshareholdermeeting.com/MSTR2024. This means there will not be a physical meeting location, and stockholders will not be able to attend the Annual Meeting in person.

2023 was a transformative year for MicroStrategy as we extended our Bitcoin strategy and positioned ourselves as the world’s first Bitcoin development company. This evolution corresponds with the increasing significance of our Bitcoin strategy to our overall business and reflects our belief that MicroStrategy presents a unique value proposition in the marketplace.

Bitcoin Development Company

In February 2024, we announced that we consider ourselves the world’s first Bitcoin development company. By this we mean we are a publicly-traded operating company committed to the continued development of the Bitcoin network through our activities in the financial markets, advocacy, and technology innovation. As an operating business, we are able to use cashflows as well as proceeds from equity and debt financings to accumulate Bitcoin, which serves as our primary treasury reserve asset. We also develop and provide innovative AI-powered enterprise analytics software that promotes our vision of Intelligence Everywhere, and we are using our software development capabilities to develop Bitcoin applications. We believe that the combination of our operating structure, Bitcoin strategy and focus on technology innovation provides a unique opportunity for value creation.

Since the start of 2023, we managed to acquire more than 80,000 bitcoins using proceeds from equity and debt capital markets activities and excess cash from operations and other sources. This kind of activity, where we are able to raise capital and use excess operating cash to acquire bitcoin, distinguishes us from spot Bitcoin exchange-traded products, and we believe this value creation is part of the reason our stock has outperformed Bitcoin, the S&P 500, Nasdaq, Gold, and most other big technology and enterprise software companies since August 11, 2020 (when MicroStrategy first acquired Bitcoin).

Our Software Business

Turning to our core operating business, which complements our Bitcoin strategy, we have also transformed our software business in 2023 to make substantial progress toward our vision of Intelligence Everywhere. The software business remains our primary revenue and cash flow generator, and our shift towards our cloud offering has resulted in strong growth in our subscription services revenue, driven by both existing customer migrations to the cloud and new customer wins. Our customer renewal rates continue to be among the highest we have ever experienced, and our subscription billings remain strong.

We have over 1,800 employees dedicated to developing and delivering AI-powered business intelligence (BI) software that can run on any cloud platform. In 2023, we released several innovative products that enhanced our portfolio capabilities and user experience, such as MicroStrategy ONE®, MicroStrategy AI, and MicroStrategy Cloud for Azure, AWS, and Google Cloud Platform. Further, our cloud solutions are now available on the marketplaces of all three of these hyperscalers, making it easy for customers to buy and deploy our products. We believe our software business is poised for growth in 2024, as we focus on our key strategic goals of growing cloud, innovating with AI, and increasing profitability.


I couldn’t be more proud of MicroStrategy’s offices, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182. achievements in recent years, and couldn’t be more enthusiastic about the future for MicroStrategy, our partner organizations, our customers and our employees.

Our Board of Directors continues to play a critical role in our success and efforts to find new ways to create value for our stockholders. Our directors provide assistance and guidance in establishing and implementing our corporate strategies as well as independent oversight of our leadership, operations, and risk management, all of which are crucial to successfully navigating the transformative and evolving digital asset landscape. This high level of Board engagement provides a strong foundation for our success and maintaining the trust of our stockholders.

The enclosed noticeaccompanying Notice of annual meeting sets forthAnnual Meeting and Proxy Statement contain information about the proposals that will be presented at the Annual Meeting and on which you are asked to vote. Whether or not you plan to attend the meeting which are describedonline, it is important that your shares be represented and voted at the meeting. I encourage you to read the materials carefully and vote promptly. We thank you for your ongoing confidence in more detail in the enclosed proxy statement. The Board of Directors recommends that you vote “FOR” these proposals.

WeMicroStrategy, and we look forward to seeing you there.your participation at the Annual Meeting.

Very truly yours,

Michael J. Saylor

LOGO

Chairman of the Board & Executive Chairman


LOGO

President & Chief Executive Officer

NOTICE OF 2024 ANNUAL MEETING OF STOCKHOLDERS


Date:

Wednesday, May 22, 2024

LOGO

Time:

10:00 a.m., Eastern Daylight Time (“EDT”)

1850 Towers Crescent Plaza

Place:

Exclusively via live webcast at www.virtualshareholdermeeting.com/MSTR2024

Tysons Corner, Virginia 22182

Record Date:

March 26, 2024. Only stockholders of record at the close of business on the record date are entitled to receive notice of, and to attend and vote at, the Annual Meeting.

A list of registered stockholders as of the close of business on the record date will be available for examination by any stockholder for any purpose germane to the Annual Meeting for a period of at least 10 days prior to the Annual Meeting. The stockholder list will also be available to stockholders of record for examination during the Annual Meeting at www.virtualshareholdermeeting.com/MSTR2024. To inspect the stockholder list before the Annual Meeting, stockholders can email our Investor Relations department at ir@microstrategy.com. You will need the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials.

to be held on Thursday, May 12, 2016

The
Proxy Voting:

Your vote is important. Please vote your shares as soon as possible over the telephone, on the Internet, or by mail by completing, signing, dating, and returning your proxy card or voting instruction form. Submitting your proxy now will not prevent you from voting your shares during the Annual Meeting, as your proxy is revocable at your option. We are requesting your vote as to the matters of business set forth below.

Matters of Stockholders (the “Annual Meeting”) of MicroStrategy Incorporated, a Delaware corporation (the “Company”), will be held at MicroStrategy’s offices, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182, on Thursday, May 12, 2016 at 10:00 a.m., local time, to consider and act upon the following matters:Business:

 

 1.To

elect five (5)six (6) directors for the next year;

 

 2.To approve Amendment No. 3 to the MicroStrategy Incorporated 2013 Stock Incentive Plan to increase the number of shares of class A common stock authorized for issuance under such plan from 1,500,000 to 1,700,000;

3.To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016;2024; and

 

 4.3.To

transact such other business as may properly come before the Annual Meeting or any adjournment thereof.

Stockholders of record at the close of business on March 14, 2016 will be entitled to notice of and to vote at the Annual Meeting or any adjournment thereof.

By Order of the Board of Directors,

W. Ming Shao

Senior Executive Vice President,

General Counsel and Secretary

Tysons Corner, Virginia

April 21, 201612, 2024


TABLE OF CONTENTS

A STOCKHOLDER MAY OBTAIN ADMISSION TO THE MEETING BY IDENTIFYING HIMSELF OR HERSELF AT THE MEETING AS A STOCKHOLDER AS OF THE RECORD DATE. FOR A RECORD OWNER, POSSESSION OF A PROXY CARD WILL BE ADEQUATE IDENTIFICATION. FOR A BENEFICIAL (BUT NOT OF RECORD) OWNER, A COPY OF A BROKER’S STATEMENT SHOWING SHARES HELD FOR HIS OR HER BENEFIT ON MARCH 14, 2016 WILL BE ADEQUATE IDENTIFICATION.

WHETHER OR NOT YOU EXPECT TO ATTEND

INFORMATION REGARDING THE ANNUAL MEETING OF STOCKHOLDERS

1

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on May 22, 2024

1

Stockholders Entitled to Vote

1

Votes Required

1

Attending the Annual Meeting

2

How to Submit Questions

2

How to Vote

2

List of Registered Stockholders

3

The Effect of Not Casting Your Vote

3

Changing Your Vote and Revoking Your Proxy

3

Costs of Solicitation

3

Householding of Proxy Materials

4

Stockholder Proposals

4

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

5

EXECUTIVE OFFICERS OF THE COMPANY

7

PROPOSAL 1—ELECTION OF DIRECTORS

8

Nominees

8

CORPORATE GOVERNANCE AND THE BOARD OF DIRECTORS AND ITS COMMITTEES

12

Related Person Transactions Policy and Related Person Transactions

12

Board of Directors

14

Controlled Company

14

Audit Committee

15

Compensation Committee

15

Investments Committee

16

Board Leadership Structure

16

Oversight of Risk

16

Director Candidates

16

Directors’ Attendance at Annual Meeting of Stockholders

17

Communicating with the Board of Directors

17

Delinquent Section 16(a) Reports

17

Code of Ethics

17

Clawback Policy

18

EXECUTIVE AND DIRECTOR COMPENSATION

19

Compensation Discussion and Analysis

19

Overview

19

General Philosophy and Compensation Objectives: Performance, Alignment, and Retention

19

Implementing Our Objectives

20

Role of the Compensation Committee and CEO / President & CEO

20

Role of the Compensation Consultant

20

Determining Compensation

21

Employment and Severance Agreements

21

Equity Ownership Guidelines

22

Prohibition on Hedging Transactions

22

Elements Used to Achieve 2023 Compensation Objectives

22

Base Salary

22

Cash Bonuses

24

Equity Awards

27

Perquisites and Other Personal Benefits

29

Change-in-control Agreement

31

Compensation Committee Report

31

Executive Officer Compensation

32

Summary Compensation Table

32

Grants of Plan-based Awards for 2023

34

Outstanding Equity Awards at 2023 Fiscal Year-end

35

Option Exercises and Stock Vested in 2023

36

Potential Payments Upon Termination or Change in Control

36

MICROSTRATEGY | 2024 Proxy Statement

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Director Compensation

38

Equity Compensation Plan Information

40

Pay Versus Performance

41

CEO Pay Ratio

45

AUDIT COMMITTEE REPORT

46

PROPOSAL 2—RATIFICATION OF THE SELECTION OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024

47

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES

48

Fees and Services

48

Audit Committee Pre-approval Policies and Procedures

48

OTHER MATTERS

49

iiMICROSTRATEGY | 2024 Proxy Statement


INFORMATION REGARDING THE ANNUAL MEETING PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE IN ORDER TO HELP ENSURE REPRESENTATION OF YOUR SHARES AT THE ANNUAL MEETING. NO POSTAGE NEED BE AFFIXED IF THE PROXY CARD IS MAILED IN THE UNITED STATES.

STOCKHOLDERS


MICROSTRATEGY INCORPORATED

1850 Towers Crescent Plaza

Tysons Corner, Virginia 22182

Proxy Statement for the Annual Meeting of Stockholders

to be held on Thursday, May 12, 2016

ThisThese proxy statement ismaterials are furnished in connection with the solicitation of proxies by the Board of Directors (the “Board”) of MicroStrategy Incorporated (the “Company,” “MicroStrategy,” “we”“we,” or “us”) for use at the Annual Meeting of Stockholders (the “Annual Meeting”) to be held exclusively via live webcast at www.virtualshareholdermeeting.com/MSTR2024 on Thursday,Wednesday, May 22, 2024 at 10:00 a.m., EDT, and at any continuation, postponement or adjournment thereof. This proxy statement summarizes information needed to help you cast an informed vote at the Annual Meeting with respect to the proposals set forth in this proxy statement. We first made available this proxy statement, the Notice of Annual Meeting of Stockholders, and the proxy card on or about April 12, 2016,2024, to all stockholders entitled to vote at MicroStrategy’s offices,the Annual Meeting. We intend to mail the Notice of Internet Availability of Proxy Materials on or about April 12, 2024, to all stockholders of record entitled to vote at the Annual Meeting.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting to be Held on May 22, 2024

Pursuant to rules adopted by the Securities and Exchange Commission (the “SEC”), we have elected to provide access to our proxy materials on the Internet instead of mailing a printed copy of our proxy materials to all of our stockholders. Accordingly, we are sending a separate Notice of Internet Availability of Proxy Materials to our stockholders of record. All stockholders of record will have the ability to access the proxy materials and our annual report for the fiscal year ended December 31, 2023 (the “Annual Report”) on the website referred to in the Notice of Internet Availability of Proxy Materials or request to receive a printed copy of the proxy materials and Annual Report. Instructions on how to access the proxy materials and Annual Report on the Internet or request a printed copy may be found in the Notice of Internet Availability of Proxy Materials.

To request a printed copy of our Annual Report, which we will provide to you free of charge, please write to our Investor Relations Department at 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182, at 10:00 a.m., local time, and at any adjournment thereof. For directionsAttention: Investor Relations.

Stockholders Entitled to the location of the Annual Meeting, please call (703) 848-8600 between the hours of 8:00 a.m. and 5:30 p.m. local time on normal business days, and press “0” after hearing the voice prompt. All executed proxies will be voted in accordance with the stockholders’ instructions on the matters set forth in the accompanying Notice of Annual Meeting of Stockholders, and if no choice is specified, executed proxies will be voted in accordance with the Board of Directors’ recommendations on such matters as set forth in this proxy statement. Any proxy may be revoked by a stockholder at any time before its exercise by delivery of written revocation or a subsequently dated proxy to the Secretary of the Company or by voting in person at the Annual Meeting.Vote

On March 14, 2016, the record date for the determination of stockholders entitled to vote at the Annual Meeting, there were outstanding and entitled to vote an aggregate of 9,367,103 shares ofIf you owned our class A common stock, par value $0.001 per share and an aggregate of 2,035,184 shares of(“Class A Stock”), or our class B common stock, par value $0.001 per share (the class(“Class B Stock” and collectively with Class A common stock and the class B common stock are collectively referred to asStock, the “Common Stock”)., at the close of business on March 26, 2024 (the “record date”), you are entitled to vote at the Annual Meeting. On the record date, there were an aggregate of 15,673,163 shares of our Class A Stock and 1,964,025 shares of our Class B Stock outstanding and entitled to vote. Each share of classClass A common stockStock entitles the record holder thereof to one (1) vote on each of the matters to be voted on at the Annual Meeting, and each share of classClass B common stockStock entitles the record holder thereof to ten (10) votes on each of the matters to be voted on at the Annual Meeting.

Our Annual Report to Stockholders for 2015 is being mailed to stockholders, along with these proxy materials, on or about April 22, 2016. Our Annual Report to Stockholders includes our Annual Report on Form 10-K for 2015 as filed with the Securities and Exchange Commission (the “SEC”), except for any exhibits thereto. We will provide such exhibits to any stockholder upon written request. Please address requests to the Secretary of MicroStrategy, c/o MicroStrategy Incorporated, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182.

Votes Required

The holders of shares of Common Stock representing a majority of the votes of the outstanding shares of stock entitled to be cast at the Annual Meeting shall constitute a quorum for the transaction of business at the Annual Meeting. Shares of Common Stock represented in person or by proxy, (includingincluding shares which abstain or do not vote with respect to one or more of the matters presented for stockholder approval)approval, will be counted for purposes of determining whether a quorum is present at the Annual Meeting. Shares present virtually during the Annual Meeting will be considered shares of Common Stock represented in person at the meeting.

The affirmative vote of a plurality of the votes cast by the holders of Common Stock voting on the matter is required for the election of directors (Proposal 1). The affirmative vote of a majority of the votes cast by the holders of Common Stock voting on the matter is required for the approval of Amendment No. 3 to the MicroStrategy Incorporated 2013 Stock Incentive Plan (Proposal 2)(“Proposal 1”). The affirmative vote of a majority of the votes cast by the holders of Common Stock voting on the matter is required for the ratification of the selection of KPMG LLP (“KPMG”) as our independent registered public accounting firm for the fiscal year ending December 31, 2016 (Proposal 3)2024 (“Proposal 2”).

All executed proxies will be voted in accordance with the stockholders’ instructions on the matters set forth in the accompanying Notice of Annual Meeting, and if no choice is specified, executed proxies will be voted in accordance with the Board’s recommendations on such matters as set forth in this proxy statement.

MICROSTRATEGY | 2024 Proxy Statement

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Attending the Annual Meeting

As in recent years, we have determined to hold the Annual Meeting in virtual format only, with no physical in-person meeting. Stockholders of record as of the record date, or those that hold a valid proxy, may attend the Annual Meeting online at www.virtualshareholdermeeting.com/MSTR2024. You will need the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials. If you are not a stockholder of record but hold shares as a beneficial owner in street name, you may be required to provide proof of beneficial ownership, such as your most recent account statement as of the record date, a copy of the voting instruction form provided by your broker, financial institution, or other nominee, or other similar evidence of ownership. Even if you plan to attend the Annual Meeting, we recommend that you vote your shares in advance, so that your vote will be counted if you later decide not to attend the Annual Meeting.

How to Submit Questions

Stockholders of record as of the record date may submit questions in advance of the Annual Meeting at www.proxyvote.com using the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials. Questions must be received by 5:00 p.m., EDT, on May 21, 2024. Questions will not be accepted during the Annual Meeting. We will try to answer as many stockholder-submitted questions that comply with the meeting rules of conduct as time permits. However, we reserve the right to edit profanity or other inappropriate language and to exclude questions that are not pertinent to Annual Meeting matters or that are otherwise inappropriate. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

How to Vote

You do not need to attend the Annual Meeting to vote your shares. You may vote by proxy over the telephone, on the Internet, or by mail, and your votes will be cast for you at the Annual Meeting. This process is described below.

Stockholder of Record: Shares whichRegistered in Your Name

If you are a stockholder of record, you may (i) vote online during the Annual Meeting or (ii) vote by proxy. Whether or not you plan to attend the Annual Meeting, we urge you to vote by proxy over the telephone, on the Internet, or by mail as instructed below to help ensure your vote is counted. You may still attend the Annual Meeting and vote during the meeting even if you have already voted by proxy; only your last vote before the close of voting will be counted.

During the Meeting:

To vote online during the Annual Meeting, visit www.virtualshareholdermeeting.com/MSTR2024 and vote by Internet as instructed. You will need the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials.

Phone:

To vote by telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. You will be asked to provide the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials. Your vote must be received by 11:59 p.m., EDT, on May 21, 2024, to be counted.

Internet:

To vote on the Internet, go to www.proxyvote.com to complete an electronic proxy card. You will be asked to provide the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials. Your vote must be received by 11:59 p.m., EDT, on May 21, 2024, to be counted.

Proxy Card:

To vote by mail, simply complete, sign, and date the proxy card and return it promptly in the postage-paid envelope provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. To request a printed copy of the proxy card, follow the instructions found in the Notice of Internet Availability of Proxy Materials. If we receive your signed proxy card by May 21, 2024, the designated proxy holders will vote your shares as you direct.

2MICROSTRATEGY | 2024 Proxy Statement


Beneficial Owner: Shares Registered in the Name of Broker, Financial Institution, or Other Nominee

If, as of the close of business on March 26, 2024, the record date, your shares were held not in your name, but rather in an account at a brokerage firm, financial institution, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered to be the stockholder of record for purposes of voting at the Annual Meeting.

As a beneficial owner, you have the right to direct your broker or other agent regarding how to vote the shares in your account. You should have received a proxy card and voting instructions with these proxy materials from that organization rather than from us. Simply complete and mail the proxy card and voting instructions to help ensure that your vote is counted. Alternatively, you may vote over the telephone or on the Internet as instructed by your broker, financial institution, or other nominee, if applicable. To vote online during the Annual Meeting, you must obtain a valid proxy from your broker, financial institution, or other nominee. You will need the 16-digit control number included in your proxy card or the instructions that accompanied your proxy materials. Follow the instructions from your broker, financial institution, or other nominee included with these proxy materials, or contact your broker, financial institution, or other nominee to request a proxy.

List of Registered Stockholders

A list of registered stockholders as of the close of business on the record date will be available for examination by any stockholder for any purpose germane to the Annual Meeting for a period of at least ten (10) days prior to the Annual Meeting. The stockholder list will also be available to stockholders of record for examination during the Annual Meeting at www.virtualshareholdermeeting.com/MSTR2024. To inspect the stockholder list before the Annual Meeting, stockholders can email our Investor Relations department at ir@microstrategy.com. You will need the 16-digit control number included on your Notice of Annual Meeting of Stockholders, proxy card, or the instructions that accompanied your proxy materials.

The Effect of Not Casting Your Vote, Broker Non-votes and Abstentions

Stockholder of Record. If you do not cast your vote, no votes will be cast on your behalf on any of the matters of business at the Annual Meeting. If you withhold authority to vote for any or all nominees for Proposal 1 or abstain from voting on Proposal 2, then your shares will not be counted as votes in favor of such proposed nominee(s) for Proposal 1 or as shares casting votes on Proposal 2 and accordingly will have no effect on the voting on such nominee(s) and such proposal.

Beneficial Owner. Proposal 1 is a “non-discretionary” item. If you withhold authority to a particular matter,vote for any or all nominees for Proposal 1 and your shares are held in “street name” by brokers or nominees who indicate on their proxies that they do not have discretionary authority to vote your shares on such matter, then your shares as to a

1


particular matter, will not be counted as votes in favor of such matter, and will also not be counted as shares voting on such matter.proposed nominee(s) for Proposal 1. Accordingly, abstentionsvotes withheld and “broker non-votes” will have no effect on the voting on Proposal 1. Proposal 2 is a “discretionary” item, and your broker or nominee will be able to vote your shares with respect to Proposal 2, even if you have not given voting instructions to your broker or nominee.

Changing Your Vote and Revoking Your Proxy

Stockholder of Record. You may change your vote at any time prior to the proposals referenced above.taking of the vote at the Annual Meeting by (i) submitting a new vote over the telephone, on the Internet, or by a properly completed proxy card with a later date, (ii) delivering a written revocation or a subsequently dated proxy card to MicroStrategy’s General Counsel at 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182, or (iii) voting online during the Annual Meeting.

Important Notice RegardingBeneficial Owner. You may change your vote at any time prior to the taking of the vote at the Annual Meeting by (i) submitting new voting instructions to your broker or nominee by following the instructions they provided or (ii) if you have obtained a legal proxy from your broker or nominee giving you the right to vote your shares, by attending the Annual Meeting online and voting during the meeting using a valid legal proxy.

Costs of Solicitation

All costs of solicitation of proxies will be borne by us. In addition to solicitations by mail, our directors, officers, and employees, without additional remuneration, may solicit proxies by telephone and personal interviews, and we reserve the

MICROSTRATEGY | 2024 Proxy Statement

3


right to retain outside agencies for the purpose of soliciting proxies. Brokers, custodians, and fiduciaries will be requested to forward proxy soliciting material to the owners of stock held in their names and, as required by law, we will reimburse them for their out-of-pocket expenses in this regard.

Householding of Proxy Materials

The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for Notices of Internet Availability of Proxy Materials or other annual meeting materials with respect to two or more stockholders sharing the same address by delivering a single copy of the Notice of Internet Availability of Proxy Materials or other annual meeting materials addressed to those stockholders. This process, which is commonly referred to as “householding,” is intended to provide extra convenience for stockholders and cost savings for companies.

A number of brokers, financial institutions, and other nominees with account holders who are our stockholders will be householding our proxy materials. Under this practice, a single copy of the Notice of Internet Availability of Proxy Materials or other annual meeting materials will be delivered to multiple stockholders sharing an address, unless contrary instructions have been received from the affected stockholders. Once you have received notice from us (if you are a stockholder of record) or from your broker, financial institution, or other nominee (if you are a beneficial owner) that we or they will be householding communications to your address, householding will continue until you are notified otherwise or until we receive contrary instructions from you or the other stockholder(s) you share an address with. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate Notice of Internet Availability of Proxy Materials or other annual meeting materials or if you currently receive multiple copies and would like to request householding of your communications, please notify us or your broker, financial institution, or other nominee. You can submit your written request to us at MicroStrategy Incorporated, located at 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182, Attention: Investor Relations, or by calling 703-848-8600. We will promptly deliver, upon oral or written request, a separate copy of the Notice of Internet Availability of Proxy Materials or other annual meeting materials to a stockholder at a shared address to which a single copy of the documents was delivered.

Stockholder Proposals

Proposals of stockholders intended to be presented at the 2025 Annual Meeting of Stockholders, including director nominations described below under the caption “Corporate Governance and the Board of Directors and its Committees—Director Candidates,” must be received by us at our principal offices at MicroStrategy Incorporated, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182, Attention: General Counsel, by December 13, 2024 for inclusion in the proxy materials for the 2025 Annual Meeting of Stockholders. MicroStrategy suggests that proponents submit their proposals by a nationally recognized overnight courier service.

If a stockholder wishes to present a proposal before the 2025 Annual Meeting of Stockholders, but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card, such stockholder must also give written notice to the General Counsel of the Company at the address noted above. The General Counsel must receive such notice by February 26, 2025and, if a stockholder fails to provide such timely notice of a proposal to be held on May 12, 2016

The Notice ofpresented at the 2025 Annual Meeting Proxy Statement, andof Stockholders, the proxies designated by the Board will have discretionary authority to vote on any such proposal.

In addition to the above, a stockholder intending to solicit proxies in support of director nominees other than the Company’s nominees in connection with the 2025 Annual Report forMeeting of Stockholders must comply with the fiscal year ended December 31, 2015 are available on our websiteadditional requirements of Rule 14a-19 under the Exchange Act, including sending notice, no later than March 24, 2025, setting forth the information required by Rule 14a-19(b) to the Company athttp://ir.microstrategy.com/financials.cfm.

the address set forth above.

 

4MICROSTRATEGY | 2024 Proxy Statement

2



SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth the beneficial ownership of our Common Stock as of March 31, 2016,26, 2024, unless otherwise indicated, by:

 

each person who is known by us to beneficially own more than 5% of any class of our Common Stock,Stock;

 

each director or nominee for director,director;

 

each of our named executive officers as defined in Item 402(a)(3) of Regulation S-K, and

each of our named executive officers as defined in Item 402(a)(3) of Regulation S-K; and

 

all directors and current executive officers as a group.

Percentages in the table have been calculated based on 9,389,693 shares of class A common stock and 2,035,184 shares of class B common stock outstanding as of March 31, 2016. In accordance with the rules of the SEC, for the purpose of calculating each director’s or officer’s percentage of shares outstanding, any shares of class A common stock subject to outstanding stock options held by such person that are currently exercisable or will become exercisable within 60 days after March 31, 2016 are deemed to be outstanding shares of class A common stock. However, we did not deem these shares outstanding for the purpose of computing the percentage ownership of any other person. Except as otherwise notedindicated below, we believe, based on the information furnished to us, that the persons and entities named in the following table have sole voting and investment power with respect to all shares that they beneficially own, subject to any applicable community property laws. Percentages have been calculated based on 15,673,163 shares of Class A Stock and 1,964,025 shares of Class B Stock outstanding as of March 26, 2024. Any shares of Class A Stock subject to outstanding stock options that are currently exercisable or will become exercisable within 60 days after March 26, 2024, any shares of Class A Stock subject to outstanding restricted stock units (“RSUs”) that will vest within 60 days after March 26, 2024, and any shares of Class A Stock issuable upon conversion of Class B Stock are deemed outstanding for the purpose of calculating such director’s or officer’s percentage ownership, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

Except as otherwise indicated, the address of each beneficial owner named below is in care of MicroStrategy Incorporated, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182.

 

   Number of Shares
Beneficially
Owned(2)
   Percentage
of
Total
Economic
Interest
(2)
   Percentage
of
Total
Voting
Power

(2)
 
   Class A Common
Stock
   Class B Common
Stock
     

Beneficial Owner

  Shares   % of
Class
   Shares   % of
Class
     

Michael J. Saylor (1)(3)

   200,000     2.1     2,011,668     98.8     19.0     67.9  

Phong Q. Le (1)

   —       —       —       —       —       —    

Timothy E. Lang (1)(4)

   12,500     *    ��—       —       *     *  

Jonathan F. Klein

   22,590     *     —       —       *     *  

Paul N. Zolfaghari

   600     *     —       —       *     *  

Douglas K. Thede

   —       —       —       —       —       —    

Robert H. Epstein (1)(5)

   6,250     *     —       —       *     *  

Stephen X. Graham (1)(6)

   12,700     *     —       —       *     *  

Jarrod M. Patten (1)(7)

   17,500     *     —       —       *     *  

Carl J. Rickertsen (1)(8)

   20,500     *     —       —       *     *  

BlackRock, Inc. (9)

   943,781     10.1     —       —       8.3     3.2  

Eminence Capital, LP (10)

   913,865     9.7     —       —       8.0     3.1  

The Vanguard Group, Inc. (11)

   859,232     9.2     —       —       7.5     2.9  

Glenhill Advisors, LLC (12)

   588,493     6.3     —       —       5.2     2.0  

Invesco Ltd. (13)

   522,864     5.6     —       —       4.6     1.8  

All directors and current executive officers as a group (10 persons) (14)

   294,455     3.0     2,011,668     98.8     19.7     68.0  
    Number of Shares and Percent of Class
Owned
(1)
   Beneficial
Ownership of
Class A Stock
(Shares)
(1)
   Beneficial
Ownership
of Class A
Stock (%
of Class)
(1)
  Total
Voting
Power (%)
(1)
 
    Class A Stock   Class B Stock 
Beneficial Owner  Shares   % of
Class
   Shares   % of
Class
 

 

Named Executive Officers and Directors:

              

 

Michael J. Saylor(2)

   143,190    0.9    1,961,668    99.9    2,104,858    11.9   55.8 

 

Phong Q. Le(3)

   110,665    0.7            110,665    0.7   * 

 

Kevin L. Adkisson(4)

   259     *            259      * 

 

Andrew Kang(5)

   5,873     *            5,873      * 

 

W. Ming Shao(6)

   31,703     *            31,703      * 

 

Stephen X. Graham(7)

   22,700     *            22,700      * 

 

Jarrod M. Patten(8)

   32,500     *            32,500      * 

 

Leslie J. Rechan(9)

   15,750     *            15,750      * 

 

Carl J. Rickertsen

                           

 

All Other 5% Stockholders:

              

 

Capital International Investors (10)

   1,558,897    9.9            1,558,897    9.9   4.4 

 

The Vanguard Group, Inc.(11)

   1,553,048    9.9            1,553,048    9.9   4.4 

 

BlackRock, Inc.(12)

   1,023,418    6.5            1,023,418    6.5   2.9 

 

All directors and current executive officers as a group (8 persons)(13)

   362,381    2.3    1,961,668    99.9    2,324,049    12.9   56.1 

 

*

Less than 1.0%.

(1)Each such beneficial owner has an address in care of MicroStrategy Incorporated, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182.
(2)

The inclusion of any shares of Common Stock deemed owned or beneficially owned does not constitute an admission of beneficial ownership of those shares. The number of shares and percentage of total economic interestclass owned is calculated for the Class A Stock by treating any shares of Class A Stock subject to outstanding stock options that are currently exercisable or will become exercisable within 60 days after March 26, 2024, and any shares of Class A Stock subject to outstanding RSUs that will vest within 60 days after March 26, 2024 held by each applicable person as outstanding for the purpose of calculating such applicable person’s ownership and percentage ownership of Class A Stock, but shares subject to such outstanding stock options and RSUs are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The number of shares and percentage of class owned for the Class B Stock reflect only outstanding shares of Class B Stock as there are no outstanding rights to acquire Class B

MICROSTRATEGY | 2024 Proxy Statement

5


Stock and, accordingly, the amounts and percentages of Class B Stock reported as owned are also the amounts and percentages of Class B Stock that are beneficially owned. The number of shares beneficially owned and the beneficial ownership percentage of Class A Stock is calculated on the same basis as the number and percentage of Class A Stock owned, except that the amounts beneficially owned for each applicable person also include any shares of Class A Stock issuable upon conversion of Class B Stock owned by such person, and for the purpose of calculating each applicable person’s beneficial ownership percentage, such shares of Class A Stock issuable upon conversion of Class B Stock are deemed outstanding for purposes of computing the percentage ownership of such person, but are not deemed outstanding for the purpose of computing the percentage ownership of any other person. The percentage of total voting power are eachis calculated by treating the shares of our classClass A common stockStock and classClass B common stockStock together as a single class. Shares of classClass A common stockStock generally have the same rights,

3


including rights to dividends, as shares of classClass B common stock,Stock, except that shares of classClass A common stockStock have one vote per share while shares of classClass B common stockStock have ten votes per share. Each share of classClass B common stockStock is convertible at any time, at the option of the holder, into one share of classClass A common stock.Stock.

(3)(2)

Mr. Saylor’s holdings of Common Stock consist of (i) optionsan option exercisable on or within 60 days after March 31, 201626, 2024 to purchase 200,000105,000 shares of classClass A common stock andStock, (ii) 2,011,6681,961,668 shares of classClass B common stockStock owned by Alcantara LLC, which is wholly owned by Mr. Saylor.Saylor, and (iii) 38,190 shares of Class A Stock held by a charitable foundation for which Mr. Saylor hasserves as the sole voting powertrustee and sole dispositive poweras to which he disclaims beneficial ownership. On September 19, 2023, Mr. Saylor entered into a 10b5-1 trading plan (the “Trading Plan”) with respect to thesethe exercise and sale of Class A Stock underlying his vested stock option. Under the Trading Plan, Mr. Saylor expects to exercise and sell 5,000 Shares underlying the vested stock option on each trading day following March 26, 2024 through April 25, 2024, subject to a minimum price condition, accounting for all remaining shares of class B common stock.underlying the vested stock option.

(4)(3)

Mr. Lang’sLe’s holdings of Common Stock consist of (i) 665 shares of Class A Stock held by Mr. Le directly and (ii) options exercisable on or within 60 days after March 31, 201626, 2024 to purchase 12,500110,000 shares of classClass A common stock.Stock.

(5)(4)

Mr. Epstein’sAdkisson’s holdings of Common Stock consist of 259 shares of Class A Stock held by Mr. Adkisson directly. Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer on July 5, 2023.

(5)

Mr. Kang’s holdings of Common Stock consist of (i) 873 shares of Class A Stock held by Mr. Kang directly, (ii) options exercisable on or within 60 days after March 31, 201626, 2024 to purchase 6,2503,750 shares of classClass A common stock.Stock, and (iii) RSUs that will vest on or within 60 days after March 26, 2024 with respect to 1,250 shares of Class A Stock.

(6)

Mr. Shao’s holdings of Common Stock consist of (i) 453 shares of Class A Stock held by Mr. Shao directly and (ii) options exercisable on or within 60 days after March 26, 2024 to purchase 31,250 shares of Class A Stock.

(7)

Mr. Graham’s holdings of Common Stock consist of (i) 200 shares of classClass A common stockStock held by Mr. Graham directly and (ii) options exercisable on or within 60 days after March 31, 201626, 2024 to purchase 12,50022,500 shares of classClass A common stock.Stock.

(7)(8)

Mr. Patten’s holdings of Common Stock consist of options exercisable on or within 60 days after March 31, 201626, 2024 to purchase 17,50032,500 shares of classClass A common stock.Stock.

(8)(9)

Mr. Rickersten’sRechan’s holdings of Common Stock consist of (i) 3,0002,000 shares of classClass A common stockStock held by Mr. Rickertsen directlyRechan indirectly through a trust, of which Mr. Rechan and his five children are beneficiaries and for which Mr. Rechan and two of his children serve as trustees and (ii) options exercisable on or within 60 days after March 31, 201626, 2024 to purchase 17,50013,750 shares of classClass A common stock.Stock.

(9)(10)Beneficial ownership

The number of shares beneficially owned (and other information in this footnote) is as of March 31, 2016,December 29, 2023, based on a Schedule 13G/A filed on April 8, 2016January 10, 2024, with the SEC by BlackRock, Inc. and BlackRock Fund Advisors. The foregoing entitiesCapital International Investors. Capital International Investors beneficially own 943,781owns 1,558,897 shares of classClass A common stock,Stock and havehas sole voting power with respect to 917,742all of these shares and sole dispositive power with respect to all of these shares. The address of BlackRock, Inc.for Capital International Investors is 55 East 52nd333 South Hope Street, New York, NY 10055.55th Fl, Los Angeles, CA 90071.

(10)(11)Beneficial ownership

The number of shares beneficially owned (and other information in this footnote) is as of March 28, 2024, based on a Schedule 13G/A filed on April 10, 2024, with the SEC by The Vanguard Group, Inc. The Vanguard Group, Inc. beneficially owns 1,553,048 shares of Class A Stock and has sole dispositive power with respect to 1,510,063 of these shares, shared voting power with respect to 27,097 of these shares, and shared dispositive power with respect to 42,985 of these shares. The address for The Vanguard Group, Inc. is 100 Vanguard Boulevard, Malvern, PA 19355.

(12)

The number of shares beneficially owned (and other information in this footnote) is as of December 31, 2015,2023, based on a Schedule 13G/A filed on February 16, 2016January 26, 2024, with the SEC by Eminence Capital, LP, Eminence GP, LLC, and Ricky C. Sandler. The foregoing entities and personBlackRock, Inc. BlackRock, Inc. beneficially own 913,865owns 1,023,418 shares of classClass A common stock. Eminence Capital, LPStock and has sharedsole voting power and shared dispositive power with respect to 910,4901,006,687 of these shares of class A common stock; Eminence GP, LLC has shared voting power and shared dispositive power with respect to 774,094 shares of class A common stock; and Ricky C. Sandler has sole voting power and sole dispositive power with respect to 3,375 shares of class A common stock and shared voting power and shared dispositive power with respect to 910,490 shares of class A common stock.1,023,418 shares. The principal business and principal office address of Eminence Capital, LP and Eminence GP, LLC, and the business address of Ricky C. Sandler,for BlackRock, Inc. is 65 East 55th Street, 25th Floor,50 Hudson Yards, New York, NY 10022.

(11)Beneficial ownership (and other information in this footnote) is as of December 31, 2015, based on a Schedule 13G/A filed on February 10, 2016 with the SEC by The Vanguard Group, Vanguard Fiduciary Trust Company, and Vanguard Investments Australia, Ltd. These entities beneficially own 859,232 shares of class A common stock, for which they have sole voting power with respect to 20,410 shares of class A common stock, shared voting power with respect to 500 shares of class A common stock, shared dispositive power with respect to 20,410 shares of class A common stock, and sole dispositive power with respect to 838,822 shares of class A common stock. The principal business address of The Vanguard Group, Inc. is 100 Vanguard Blvd., Malvern, PA 19355.
10001.

4


(12)Beneficial ownership (and other information in this footnote) is as of December 31, 2015, based on a Schedule 13G/A filed on February 16, 2016 with the SEC by Glenhill Advisors, LLC, Glenn J. Krevlin, Glenhill Capital Advisors, LLC, and Glenhill Capital Management, LLC. The foregoing entities and person beneficially own 588,493 shares of class A common stock. Glenhill Advisors, LLC and Glenn J. Krevlin have sole voting power with respect to 451,057 shares of class A common stock, shared voting power with respect to 137,436 shares of class A common stock, and sole dispositive power with respect to 588,493 shares of class A common stock. Glenhill Capital Advisors, LLC has shared voting power and shared dispositive power with respect to 588,493 shares of class A common stock. Glenhill Capital Management, LLC has shared voting power and shared dispositive power with respect to 451,057 shares of class A common stock. The principal business office address of Glenhill Advisors, LLC, Glenn J. Krevlin, Glenhill Capital Advisors, LLC and Glenhill Capital Management, LLC is 600 Fifth Avenue, 11th Floor, New York, NY 10020.
(13)Amount in table reflects the total number of shares held by Invesco Ltd. and other affiliated investment advisors to certain funds and accounts on March 14, 2016, which information was provided to the Company by Invesco directly. Beneficial ownership information (and other information in this footnote) is based on information provided to the Company by Invesco Ltd., on behalf of itself, Invesco Advisers, Inc., Invesco PowerShares Capital Management LLC, and Invesco Asset Management Limited—England. The foregoing entities beneficially own 522,864 shares of class A common stock and have sole voting power and sole dispositive power with respect to all of these shares. The principal business address of Invesco Ltd. is 1555 Peachtree Street NE, Atlanta, GA 30309.
(14)

Shares of Common Stock held by the directors and current executive officers as a group consist of (i) 3,20542,381 shares of classClass A common stock,Stock, (ii) options to purchase an aggregate of 291,250 shares of class A common stock that are exercisable on or within 60 days after March 31, 2016, and (iii) 2,011,66826, 2024 to purchase an aggregate of 318,750 shares of classClass A Stock, (iii) RSUs that will vest on or within 60 days after March 26, 2024 with respect to 1,250 shares of Class A Stock and (iv) 1,961,668 shares of Class B common stock,Stock, which shares are convertible into the same number of shares of classClass A common stockStock at any time at the option of the holder.

 

6MICROSTRATEGY | 2024 Proxy Statement

5



EXECUTIVE OFFICERS OF THE COMPANY

Our executive officers and their ages and positions as of April 19, 201612, 2024, are as follows:

 

NameAgeTitle

Name

Age

Title

Michael J. Saylor

  5159  Chairman of the Board of Directors, President & Chief Executive OfficerChairman

Phong Q. Le

  3947  President & Chief Executive Officer

Andrew Kang

47Senior Executive Vice President &and Chief Financial Officer

Timothy E. Lang

43Senior Executive Vice President & Chief Technology Officer

David J. Rennyson

46Senior Executive Vice President, Worldwide Sales

Michael S. Tae

40Senior Executive Vice President, Worldwide Services

W. Ming Shao

  4755  Senior Executive Vice President, & General Counsel & Secretary

Set forth below is certain information regarding the professional experience of each of the above-named persons. There are no family relationships among any of our executive officers or directors. For information regarding the professional experience of Messrs. Saylor and Le, see “Proposal 1—Election of Directors” below.

Michael J. Saylor has served as Chief Executive Officer and Chairman of the Board of Directors since founding MicroStrategy in November 1989, and has served as President since January 2016, a position he previously held from November 1989 to November 2000 and from January 2005 to October 2012. Prior to that, Mr. Saylor was employed by E.I. du Pont de Nemours & Company as a venture manager from 1988 to 1989 and by Federal Group, Inc. as a consultant from 1987 to 1988. Mr. Saylor received an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology and Society from the Massachusetts Institute of Technology.

Phong Q. LeAndrew Kang has served as Senior Executive Vice President & Chief Financial Officer since August 2015.May 2022. Prior to joining MicroStrategy, Mr. LeKang served as the chiefExecutive Vice President and Chief Financial Officer of Greensky, Inc. (“Greensky”), a publicly listed financial officertechnology firm specializing in point-of-sale consumer financing from September 2020 until it was acquired by Goldman Sachs in April 2022. Mr. Kang has over 20 years of XO Communications, a privately-held telecommunications company, from August 2014 to August 2015. From March 2010 to August 2014, Mr. Le held senior positions at NII Holdings, a NASDAQ-listed telecommunications company, including vice president ofexperience in accounting, treasury, capital markets, asset liability management, financial planning and analysis, vice president of strategy and business operations, and vice president of strategic finance.investor relations. Prior to that,Greensky, Mr. Le workedKang served as Corporate Treasurer for Santander Holdings USA, the U.S. subsidiary of Banco Santander S.A., from April 2018 to September 2020, where he oversaw liquidity, balance sheet and capital management for the $150 billion bank holding company. Mr. Kang has also served as Corporate Treasurer at Santander Consumer USA and Exeter Finance, and has held leadership positions at HSBC Holdings plc and Capital One Financial Corporation. Mr. Kang also currently serves on the Board of Trustees at The Schenck School, one of the national’s oldest and most highly regarded independent elementary schools for dyslexic students in the consulting practice at Deloitte from 1998 to 2010, where he held various positions, including senior manager.U.S. Mr. Le holdsKang received a B.S.B.A. in Biomedical Engineering from The Johns Hopkins UniversityBiology and an M.B.A.post-baccalaureate certification in Accounting, both from the Sloan SchoolUniversity of Management at the Massachusetts Institute of Technology.Virginia.

Timothy E. LangW. Ming Shaohas served as Senior Executive Vice President, & Chief Technology Officer since November 2014 and previously served as Senior Vice President, Analytics, a position he had held since September 2014. Prior to joining MicroStrategy, Mr. Lang served as the chief product officer for Talemetry Inc., a leading provider of talent generation SaaS solutions, from September 2010 to September 2014, and as vice president, product for SAP SE from January 2008 to September 2010. Prior to that, Mr. Lang held positions at SAP BusinessObjects and Crystal Decisions. Mr. Lang received a B.Soc.Sci. in Information Management from the University of Melbourne.

Dave J. Rennyson has served as Senior Executive Vice President, Worldwide Sales since January 2016, prior to which he was serving as MicroStrategy’s Senior Executive Vice President & Chief Revenue Officer, a position he had held since January 2015. Prior to his return to MicroStrategy, Mr. Rennyson served as executive vice president and general manager, cloud, at Genesys Telecommunications Laboratories, Inc., an omnichannel customer experience and contact center solutions provider, a position he held following the acquisition of Angel.com Incorporated by Genesys in March 2013. Prior to the acquisition, Mr. Rennyson served as president of Angel.com, a MicroStrategy subsidiary, from March 2009 to March 2013, and as vice president sales from 2007 to 2009. Prior to joining Angel.com, Mr. Rennyson served as vice president of sales and vice president of worldwide marketing at Spirent, as the vice president of engineering and construction at Zephion Networks, and in various senior positions at Broadband Office and Verizon. Mr. Rennyson holds a B.A. in Economics and History from James Madison University, a M.S. in Information Technology from the University College London, and an M.B.A. from Duke University.

6


Michael S. Tae has served as Senior Executive Vice President, Worldwide Services since August 2015. Prior to joining MicroStrategy, Mr. Tae served as a director at Millstein & Co., a financial and strategic advisory services company, from May 2012 to August 2015. Prior to that, Mr. Tae held senior positions at the U.S. Department of the Treasury from January 2009 to May 2012 and Merrill Lynch & Co. from May 2004 to January 2009. Previously, Mr. Tae served three years at McKinsey & Co., a management consulting firm. Mr. Tae received a B.A. in Economics and Asian Studies from Williams College and an M.B.A. from Columbia University, and was the recipient of a J. William Fulbright Scholarship.

W. Ming Shao has served as Senior Executive Vice President & General Counsel & Secretary since December 2014 and has previously served in variousother senior positions, including Executive Vice President & General Counsel, Senior Vice President & General Counsel, and Senior Vice President & Deputy General Counsel, since joining MicroStrategy in February 2000. Prior to that, Mr. Shao was a lawyer practicing at the global law firm Hogan & Hartson L.L.P. (now Hogan Lovells US LLP). Mr. Shao received an A.B. in Government from Cornell University and a J.D. from Harvard Law School.

MICROSTRATEGY | 2024 Proxy Statement

7


PROPOSAL 1—ELECTION OF DIRECTORS

 

7


PROPOSAL 1

ELECTION OF DIRECTORS

The Board of Directors proposes the election of the persons listed below as directors of the Company. Each current director of the Company has been nominated for re-election. The persons named in the enclosed proxy card will vote to elect as directors the fivesix nominees named below, unless authority to vote for the election of any or all of the nominees is withheld by marking the proxy to that effect. All of the nominees have indicated their willingness to serve, if elected, but if any should be unable or unwilling to serve, proxies may be voted for a substitute nominee designated by the Board of Directors.Board. Each director will be elected to hold office until the next annual meeting of stockholders (andand until the election and qualification of his successor or his earlier death, resignation, or removal).removal. The Board may elect additional directors in the future in accordance with the Company’s Amended and Restated By-laws.

Nominees

Set forth below, for each nominee, areis his name, and age, positionsposition with the Company, principal occupation and business experience during at least the past five years, the year of commencement of his term as a director of the Company, and the names of other public companies in which he currently holds directorships or has held directorships during at least the past five years, as applicable. We have also presented information below regarding each nominee’s specific experience, qualifications, attributes, and skills that led our Board of Directors to the conclusionconclude that he should serve as a director.

Michael J. Saylor (51) has served as Chief Executive Officer and Chairman of the Board of Directors since founding MicroStrategy in November 1989, and has served as President since January 2016, a position he previously held from November 1989 to November 2000 and from January 2005 to October 2012. Prior to that, Mr. Saylor was employed by E.I. du Pont de Nemours & Company as a venture manager from 1988 to 1989 and by Federal Group, Inc. as a consultant from 1987 to 1988. Mr. Saylor received an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology and Society from the Massachusetts Institute of Technology. We believe that Mr. Saylor is well-suited to serve on our Board of Directors due to his position as our Chief Executive Officer and his more than twenty-five years with the Company, including as its founder. In addition to his leadership expertise, Mr. Saylor is regarded as a technology visionary, and has deep knowledge of the Company’s history, strategy, technology, and culture, as well as unique insight into the Company’s product development, marketing, finance, and operations.

Robert H. Epstein (63) has been a member of the Board of Directors of MicroStrategy since January 2006. From June 2007 until his retirement in mid-2015, Mr. Epstein was the president and chief executive officer of Takeda Lace, Inc., a company that provided consulting services on all aspects of the textile business and engaged in trading and distribution for various Asian textile manufacturing firms. Since his retirement, Mr. Epstein has been acting as an independent investor. From May 2002 to October 2007, Mr. Epstein was president and chief executive officer of Takeda Lace USA, Inc., the U.S. subsidiary of Japan-based textile manufacturer Takeda Lace Co., Ltd. From October 2001 to May 2002, Mr. Epstein pursued various business opportunities, including serving as a consultant for Warnaco Inc., an apparel manufacturer. From June 1978 to October 2001, Mr. Epstein served in various positions at textile manufacturer Liberty Fabrics of New York, Inc., concluding his tenure as division president and chief operating officer. Mr. Epstein received a B.S. in Psychology from Columbia University and did coursework at the Stern School of Business at New York University. We believe that Mr. Epstein is well-suited to serve on our Board of Directors due to his leadership and management experience as a chief executive officer, and his international experience, particularly in the Asia Pacific region.

Stephen X. Graham (63) has been a member of the Board of Directors of MicroStrategy since April 2014. Mr. Graham is currently president of CrossHill Financial Group, Inc., a private merchant bank and advisory firm that he founded in 1988, and has been a general partner of CrossHill Georgetown Capital, L.P. since 2000 and CrossHill Debt II, L.P. since 2004. Prior to that, Mr. Graham was a principal with Kidder, Peabody & Co. and held positions with Merrill Lynch & Co. and Arthur Young & Co. (which later became part of Ernst & Young

Michael J. Saylor

Chairman of the Board &

Executive Chairman

Age: 59

Director since: 1989

Board Committees: None

Mr. Saylor has served as Chairman of the Board and Executive Chairman since August 2022 and previously served as Chairman of the Board and Chief Executive Officer from November 1989, when he founded MicroStrategy, to August 2022. Mr. Saylor also previously served as President from November 1989 to November 2000, from January 2005 to October 2012, and from January 2016 to July 2020. Prior to that, Mr. Saylor was employed by E.I. du Pont de Nemours & Company as a venture manager from 1988 to 1989 and by Federal Group, Inc. as a consultant from 1987 to 1988. Mr. Saylor received an S.B. in Aeronautics and Astronautics and an S.B. in Science, Technology, and Society from the Massachusetts Institute of Technology.

Qualifications: We believe that Mr. Saylor is well-suited to serve on our Board due to his position as our Executive Chairman and his more than 30 years with the Company, including as its founder. In addition to his leadership expertise, Mr. Saylor is regarded as a technology visionary and bitcoin thought leader, and he has deep knowledge of the Company’s history, strategy, technology, and culture, as well as unique insight into the Company’s product development, marketing, finance, and operations.

 

8MICROSTRATEGY | 2024 Proxy Statement

8


LLP). Mr. Graham was a member of the board of directors of TNS, Inc., a former New York Stock Exchange-listed, global data communications and interoperability solutions company, from 2003 until the company’s acquisition by Siris Capital Group, LLC in February 2013. While a member of the board of directors of TNS, Inc., Mr. Graham served as chairman of the audit committee through 2011, and as chairman of the board of directors from 2012 to 2013. Mr. Graham also served as a member of the board of directors of Speedus Corp. from 2009 to 2011. Mr. Graham also previously served as a member of the board of directors of Credit Management Solutions, Inc., a former Nasdaq-listed, credit processing software company, and several private companies. Mr. Graham received a B.S.B.A. from Georgetown University and an M.B.A. from the University of Chicago Booth School of Business. We believe that Mr. Graham is well-suited to serve on our Board of Directors due to his substantial executive experience, and his experience as an outside director and audit committee member, which provides the Board of Directors with important perspectives on financial matters.

Jarrod M. Patten (44) has been a member of the Board of Directors of MicroStrategy since November 2004. Mr. Patten founded RRG, a global real estate consulting and advisory firm, and has served as the firm’s president and chief executive officer since its inception in 1996. RRG is an international consulting firm specializing in the development and implementation of enterprise-wide audit and cost control strategies that heighten operational controls, lower operating costs, increase transparency and extend cost accountability for RRG’s geographically diverse client base. Mr. Patten received a B.S. in Biology and a B.A. in Biological Anthropology and Anatomy from the Trinity College of Arts and Sciences at Duke University. We believe that Mr. Patten is well-suited to serve on our Board of Directors due to his leadership and management expertise as a chief executive officer, his international business, finance, and corporate compliance experience, and his extensive knowledge of cost and operational controls.

Carl J. Rickertsen (56) has been a member of the Board of Directors of MicroStrategy since October 2002. Mr. Rickertsen is currently managing partner of Pine Creek Partners, a private equity investment firm, a position he has held since January 2004. From January 1998 to January 2004, Mr. Rickertsen was chief operating officer and a partner at Thayer Capital Partners, a private equity investment firm. From September 1994 to January 1998, Mr. Rickertsen was a managing partner at Thayer. Mr. Rickertsen was a founding partner of three Thayer investment funds totaling over $1.4 billion and is a published author. Mr. Rickertsen serves as a member of the boards of directors and audit committees of Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc., each of which is a closed-end management investment company, and Berry Plastics Group, Inc., a global manufacturer and marketer of value-added plastic consumer packaging and engineered materials. He also serves on the board of directors of Noranda Aluminum Holding Corporation, an integrated producer of value-added primary aluminum products and rolled aluminum coils. From April 2003 to January 2010, Mr. Rickertsen was a member of the board of directors and audit committee of Convera Corporation, a publicly-traded search-engine software company. From September 2004 to September 2008, Mr. Rickertsen was a member of the board of directors of UAP Holding Corp., a distributor of farm and agricultural products. Mr. Rickertsen received a B.S. from Stanford University and an M.B.A. from Harvard Business School. We believe that Mr. Rickertsen is well-suited to serve on our Board of Directors due to his finance and capital markets experience across various industries and his experience as an outside director of several public companies, which provides the Board of Directors with important perspectives on corporate governance matters.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” EACH OF THE NOMINEES NAMED HEREIN FOR ELECTION AS DIRECTOR.

Phong Le

Chief Executive Officer

Age: 47

Director since: 2022

Board Committees: None

Mr. Le has served as a member of the Board and as President & Chief Executive Officer since August 2022 and previously served as President from May 2022 to August 2022, President & Chief Financial Officer from July 2020 to May 2022, Senior Executive Vice President, Chief Operating Officer & Chief Financial Officer from April 2020 to July 2020, Senior Executive Vice President & Chief Operating Officer from November 2019 to April 2020, Senior Executive Vice President, Chief Operating Officer, Chief Financial Officer & Treasurer from June 2018 to November 2019, and Senior Executive Vice President, Chief Financial Officer & Treasurer from August 2015 to June 2018. Prior to joining MicroStrategy, Mr. Le served as the chief financial officer of XO Communications, a privately-held telecommunications company, from August 2014 to August 2015. From March 2010 to August 2014, Mr. Le held senior positions at NII Holdings, a Nasdaq-listed telecommunications company, including vice president of financial planning and analysis, vice president of strategy and business operations, and vice president of strategic finance. Prior to that, Mr. Le worked in the consulting practice at Deloitte from 1998 to 2010, where he held various positions, including senior manager. Mr. Le holds a B.S. in Biomedical and Chemical Engineering from The Johns Hopkins University and an M.B.A. from the Sloan School of Management at the Massachusetts Institute of Technology.

Qualifications: We believe that Mr. Le is well-suited to serve on our Board due to his position as our Chief Executive Officer, his more than eight years with the Company, and his outside executive experience.

Stephen X. Graham

Independent Director

Age: 71

Director since: 2014

Board Committees: Audit (Chair)

Mr. Graham has been a member of the Board since April 2014. Mr. Graham is currently president of CrossHill Financial Group, Inc., a private merchant bank and advisory firm that he founded in 1988, and was a general partner of both CrossHill Georgetown Capital, L.P. from 2000 through December 2023 and CrossHill Debt II, L.P. from 2004 through December 2023. He has been a manager of CrossHill Georgetown Management, LLC since 2000. Mr. Graham also served as chairman of the board of directors from 2009 until December 2022, and as chief executive officer from 2014 until December 2022, of Meteor Affinity, Inc. (“Meteor”), a marketing and advertising company, which operated the Official NASCAR Members Club and which served as a portfolio company of CrossHill Debt II, L.P. Meteor was voluntarily dissolved on December 15, 2022. Prior to that, Mr. Graham was a principal with Kidder, Peabody & Co. and held positions with Merrill Lynch & Co. and Arthur Young & Co. (which later became part of Ernst & Young LLP). Mr. Graham was a member of the board of directors of TNS, Inc. (“TNS”), a former New York Stock Exchange-listed global data communications and interoperability solutions company, from 2003 until the company’s acquisition by Siris Capital Group, LLC in 2013. While a member of the board of directors of TNS, Inc., Mr. Graham served as chairman of the audit committee from 2003 to 2013 and as chairman of the board of directors from 2012 to 2013. Mr. Graham also served as a member of the board of directors of Speedus Corp. from 2009 to 2011. Mr. Graham also previously served from 1995 to 2001 as a member of the board of directors of Credit Management Solutions, Inc., a former Nasdaq-listed credit processing software company, and several private companies. Mr. Graham received a B.S.B.A. from Georgetown University and an M.B.A. from the University of Chicago Booth School of Business.

Qualifications: We believe that Mr. Graham is well suited to serve on our Board due to his substantial executive experience and his experience as an outside director and audit committee member, which provides the Board with important perspectives on financial matters.

 

MICROSTRATEGY | 2024 Proxy Statement

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Jarrod M. Patten

Independent Director

Age: 52

Director since: 2004

Board Committees: Audit, Compensation

Mr. Patten has been a member of the Board since November 2004. Mr. Patten founded RRG, a global real estate consulting and advisory firm, and has served as the firm’s president and chief executive officer since its inception in 1996. RRG is an international consulting firm specializing in the development and implementation of enterprise-wide audit and cost control strategies that heighten operational controls, lower operating costs, increase transparency, and extend cost accountability for RRG’s geographically diverse client base. In January 2024, Mr. Patten joined the board of directors of Core Scientific, Inc. (“Core Scientific”), a Nasdaq-listed digital asset mining and blockchain infrastructure company, and has since served as the chairman of the board of directors and as a member of the audit committee of the board of directors of Core Scientific. Mr. Patten received a B.S. in Biology and a B.A. in Biological Anthropology and Anatomy from the Trinity College of Arts and Sciences at Duke University.

Qualifications: We believe that Mr. Patten is well-suited to serve on our Board due to his leadership and management expertise as a chief executive officer, his international business, finance, and corporate compliance experience, and his extensive knowledge of cost and operational controls.

Leslie J. Rechan

Independent Director

Age: 62

Director since: 2018

Board Committees: Compensation

Mr. Rechan has been a member of the Board since March 2018. Mr. Rechan founded Rechan Consulting Group LLC, a CXO services firm, and has served as the firm’s chief executive officer since its inception in February 2022. Mr. Rechan has also served as a board advisor since March 2024 at Lorica Cybersecurity, a privately-held developer of privacy enhancing technologies. Mr. Rechan also served as chief growth officer from February 2022 through January 2024 and as a board advisor from January 2017 through January 2024 at JASCI Software, a privately-held next generation warehouse management system company. Mr. Rechan also served as a board advisor and board member at Cognitive Scale, a trusted AI development platform company, from October 2014 through December 2022. Mr. Rechan served as chief operating officer of PROS Holdings, Inc., a publicly-traded cloud software company, from May 2020 to February 2022. From September 2017 to May 2020, Mr. Rechan served as president and chief executive officer and a director of Solace Corp., a privately-held smart data movement solutions company. Prior to that, Mr. Rechan served as president and chief executive officer and a director of Halogen Software, a cloud-based talent management software provider, from May 2015 to May 2017. Previously, he served as general manager from November 2011 to April 2014 and as vice president, sales, solutions, and services from February 2008 to October 2011 of IBM Business Analytics, a software group at IBM Corp. (“IBM”). He also served as chief operating officer of Cognos Inc. from 2006 to 2008. Prior to Cognos, Mr. Rechan worked at Siebel Systems, Inc. (“Siebel Systems”) and then Oracle Corporation (“Oracle”) upon its acquisition of Siebel Systems in 2006. From March 2006 to May 2006, Mr. Rechan served as senior vice president and global general manager, CRM strategy at Oracle. From 2004 to 2006, Mr. Rechan served as senior vice president and general manager of Americas sales of Siebel Systems and served in the same capacity for the global manufacturing and distribution industries business unit of Siebel Systems. Mr. Rechan served as senior vice president and general manager of North American worldwide field operations of Cadence Design Systems Inc. from 2003 to 2004. He served as president and chief operating officer of Onyx Software Corp. from 2001 to 2002. Prior to 2001, Mr. Rechan held several leadership positions at IBM across field sales, systems engineering, services, solutions, development, and general management in North America, Europe, and Asia Pacific. From May 2015 to May 2020, Mr. Rechan served on the board of directors and audit committee of PROS Holdings, Inc. Mr. Rechan received a B.S. in Electrical Engineering and a B.A. in Organizational Behavior from Brown University and an M.A. in Management from Northwestern University.

Qualifications: We believe that Mr. Rechan is well-suited to serve on our Board due to his expertise in corporate strategy and development in the enterprise software sector and his extensive experience in international operations, sales, and services.

10MICROSTRATEGY | 2024 Proxy Statement


Carl J. Rickertsen

Independent Director

Age: 64

Director since: 2002

Board Committees: Compensation (Chair), Audit

Mr. Rickertsen has been a member of the Board since October 2002. Mr. Rickertsen is currently managing partner of Pine Creek Partners LLC and Iris Partners LLC, each a private equity investment firm, positions he has held since January 2004. From January 1998 to January 2004, Mr. Rickertsen was chief operating officer and a partner at Thayer Capital Partners (“Thayer”), a private equity investment firm. From September 1994 to January 1998, Mr. Rickertsen was a managing partner at Thayer. Mr. Rickertsen was a founding partner of three Thayer investment funds totaling over $1.4 billion and is a published author. Mr. Rickertsen served as a member of the boards of directors and audit committees of Apollo Senior Floating Rate Fund Inc. and Apollo Tactical Income Fund Inc., each of which is a closed-end management investment company, from 2011 and 2013, respectively, until 2023. He has also served as a member of the board of directors and audit and compensation committees of Berry Global Inc., a global manufacturer and marketer of value-added plastic consumer packaging and engineered materials, since January 2013. He has also served as a member of the board of directors of Hut 8 Corp. (formerly Hut 8 Mining Corp., prior to a business combination transaction completed in November 2023), a Nasdaq-listed digital asset mining company, since December 2021. From April 2012 to October 2016, Mr. Rickertsen was a member of the board of directors and compensation committee of Noranda Aluminum Holding Corporation, an integrated producer of value-added primary aluminum products and rolled aluminum coils. From April 2003 to January 2010, Mr. Rickertsen was a member of the board of directors and audit committee of Convera Corporation, a publicly-traded search-engine software company. From March 2004 to September 2008, Mr. Rickertsen was a member of the board of directors and compensation committee of UAP Holding Corp., a distributor of farm and agricultural products. Mr. Rickertsen received a B.S. from Stanford University and an M.B.A. from Harvard Business School.

Qualifications: We believe that Mr. Rickertsen is well-suited to serve on our Board due to his finance and capital markets experience across various industries and his experience as an outside director of several public companies, which provides the Board with important perspectives on corporate governance matters.

The Board Recommends a Vote “FOR” Each of the Nominees

Named Herein for Election as Director.

MICROSTRATEGY | 2024 Proxy Statement

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CORPORATE GOVERNANCE AND

THE BOARD OF DIRECTORS AND ITS COMMITTEES

Related Person Transactions Policy and Related Person Transactions

We have adopted a formal written policy and procedure for the review, approval, and ratification of related person transactions, as defined under the rules and regulations promulgated by the Securities Exchange Act of 1934, as amended (the “Securities Exchange“Exchange Act”). The policy covers any transaction in which we were or are to be a participant, and the amount involved exceeds $120,000, and in which any related person had or will have a direct or indirect material interest. For purposes of the policy, a related person is defined to be any of the following: (i) a director, director nominee, or executive officer of the Company since the beginning of the Company’s last fiscal year; (ii) a beneficial owner of more than 5% of any class of the Company’s voting securities; (iii) a member of a foregoing person’s immediate family; and (iv) any entity in which one or more of the foregoing persons, individually or in the aggregate, has or had a greater than 10% ownership interest. The policy generally requires any proposed related person transaction to be reported to our General Counsel and reviewed and approved by the Audit Committee of the Board of Directors of the Company (the “Audit Committee”) prior to effectiveness or consummation of the transaction, whenever practical. If the General Counsel determines that advance approval of a related person transaction is not practical under the circumstances, the Audit Committee must review the transaction and, in its discretion, may ratify the related person transaction at theits next meeting of the Committee.meeting. For transactions arising between meetings of the Audit Committee, the Chair of the Audit Committee can approve the transaction, subject to ratification by the Audit Committee at theits next meeting of the Audit Committee.meeting. If the General Counsel first learns of a related person transaction after such transaction has already taken place, the Audit Committee must review the transaction and, in its discretion, may ratify the related person transaction at its next meeting. Related person transactions involving compensation of executive officers must be reviewed and approved in accordance with the Company’s then existingthen-existing executive compensation policies or procedures as approved by the Board of Directors or an independent committee thereof.

The Audit Committee may approve or ratify a related person transaction only if the Audit Committee determines that, under the circumstances, the transaction is in our best interests. The Audit Committee may impose conditions on the related person transaction as it deems appropriate. In making such determination, the Audit Committee reviews and considers the following, among other factors:

 

the related person’s interest in the related person transaction;

 

the approximate dollar value of the amount involved in the related person transaction;

 

the approximate dollar value of the amount of the related person’s interest in the transaction without regard to the amount of any profit or loss;

 

whether the transaction was undertaken in the ordinary course of business;

 

whether the transaction with the related person is proposed to be, or was, entered into on terms no less favorable to us than terms that could have been reached with an unrelated third party;

 

the purpose of, and the potential benefits to us of, the transaction; and

 

any other information regarding the related person transaction or the related person in the context of the proposed transaction that would be material to investors in light of the circumstances of the particular transaction.

Any related person transaction previously approved by the Audit Committee or otherwise already existing that is ongoing in nature is reviewed by the Audit Committee annually.

In addition to the procedures set forth in the policy, we have multiple processes for reporting conflicts of interests,interest, including related person transactions, to the Audit Committee. Under our Code of Conduct, all

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employees are required to report any transaction, relationship, or other circumstance that constitutes a conflict of interest for such employee to the General Counsel or to the Audit Committee, as appropriate. We also annually distribute questionnaires to our executive officers and members of the Board of Directors requesting certain information regarding, among other things, their immediate family members, employment, and beneficial ownership interests, which information is then reviewed for any conflictsconflict of interest under the Code of Conduct and for any related person transaction under the policy.

D&O Indemnification Arrangements

As previously disclosed, in June 2021, the Company determined not to renew its directors’ and officers’ (“D&O”) liability insurance. The Company determined that the D&O policies considered at that time would have provided insufficient

12MICROSTRATEGY | 2024 Proxy Statement


coverage and would have required substantial premiums to the extent coverage was available due to the novelty of the Company’s bitcoin acquisition strategy. Instead, Mr. Saylor agreed with the Company to personally provide coverage substantially equivalent to such a policy for an initial term of 90 days and subject to successive 90-day extensions at the election of the Company (the “Original Agreement”). Pursuant to the Original Agreement, during the term of the agreement, Mr. Saylor provided, from his personal funds, indemnity coverage to the Company for the benefit of the D&Os of the Company and its subsidiaries in the event such coverage was not indemnifiable by the Company, up to a total of $40 million. During the third and fourth quarters of 2021 and the first quarter of 2022, pursuant to the terms of the Original Agreement, the Company elected to extend the term of the Original Agreement for additional 90-day periods. The Company paid Mr. Saylor a fee of $388,945 for each of the initial and successive 90-day terms.

On June 12, 2022, Mr. Saylor and the Company entered into a renewed indemnification agreement (the “Renewed Agreement”) for an initial term of 90 days, which became effective upon the expiration of the final 90-day extension of the Original Agreement. In return, the Company paid Mr. Saylor a one-time fee of $388,945 for the initial 90-day term (the “Renewal Payment”).

On June 24, 2022, the Company bound D&O liability insurance policies (the “Initial Commercial Policies”) with several third-party carriers for $30 million in coverage. Concurrently, Mr. Saylor and the Company also entered into (i) an indemnification agreement (the “Excess Agreement”) for Mr. Saylor to provide $10 million in excess indemnity coverage payable only after the exhaustion of the Initial Commercial Policies, and (ii) an indemnification agreement (the “2022 Tail Agreement”) for Mr. Saylor to provide $40 million in indemnity coverage for claims made at any time based on actions or omissions occurring prior to the inception date of the Initial Commercial Policies. The Company paid Mr. Saylor $600,000 for a one-year term under the Excess Agreement, and $150,000 for a 90-day term under the 2022 Tail Agreement. At the option of the Company, the Company was permitted to extend the term under the 2022 Tail Agreement for up to a total of twenty-three additional 90-day periods, for $150,000 per additional 90-day term. In connection with the execution of the Initial Commercial Policies and the release of his obligations under the Renewed Agreement, Mr. Saylor refunded the Company $337,086, which was the pro rata portion of the Renewal Payment attributable to the period from the date of the Initial Commercial Policies through the end of the original term of the Renewed Agreement.

On August 30, 2022, the Company bound additional D&O liability insurance policies (the “Excess Commercial Policies”) with third-party carriers for $10 million in excess coverage payable only after the exhaustion of the Initial Commercial Policies. Effective as of the same date, the Company and Mr. Saylor executed an amendment (the “Amendment”) to the Excess Agreement to limit Mr. Saylor’s obligation to provide indemnification under the Excess Agreement to claims made during the term of the Excess Agreement which arise from wrongful acts occurring upon or after the commencement of the Excess Agreement but prior to the effective date of the Amendment. In connection with the Amendment, Mr. Saylor refunded $489,863 to the Company, representing the pro rata portion of the $600,000 originally paid by the Company to Mr. Saylor under the Excess Agreement attributable to the period from the date of the Amendment through the end of the original term of the Excess Agreement. During the third and fourth quarters of 2022 and the first quarter of 2023, pursuant to the terms of the 2022 Tail Agreement, the Company elected to extend the term of the 2022 Tail Agreement for additional 90-day periods and paid Mr. Saylor $150,000 for each such extension.

On June 12, 2023, the Company bound new D&O liability insurance policies (the “2023 Commercial Policies”) with third-party carriers that provide coverage substantially equivalent to the aggregate coverage provided under the Initial Commercial Policies and the Excess Commercial Policies for a policy period running from June 12, 2023 through June 12, 2024, except that the 2023 Commercial Policies also provide coverage for claims made with respect to wrongful acts or omissions occurring prior to the binding of the Initial Commercial Policies subject to exclusions with respect to claims previously noticed to and accepted by an earlier D&O insurer, claims related to acts or omissions giving rise to such claims, and demands, investigations, suits or other proceedings entered against an insured prior to June 24, 2022, as well as future interrelated wrongful acts (collectively, the “Excluded Claims”). 

On June 12, 2023, the Company entered into a new indemnification agreement with Mr. Saylor (the “2023 Tail Agreement”) pursuant to which Mr. Saylor agreed to provide coverage that is similar to the coverage provided under the 2022 Tail Agreement, but only to cover the Excluded Claims for an initial one-year term and for a payment of $157,000. The Company may elect, at its option, to extend the term under the 2023 Tail Agreement for up to a total of four additional one-year periods, for $157,000 per each additional one-year term.

MICROSTRATEGY | 2024 Proxy Statement

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Trent Rechan

In January 2022, the Company extended an employment offer to Trent Rechan, son of director Leslie Rechan, to join the MicroStrategy Management Associate Rotation Program (“MARP”), which is a two-year program pursuant to which recent college graduates gain experience in four six-month rotations with key practice groups at the Company before starting full-time positions at the Company. Trent joined the program in August 2022 with three other MARP participants. From January 1, 2023 to April 5, 2024, Trent received aggregate compensation of $138,846, which included an aggregate base salary of $109,167, quarterly bonuses totaling $9,690, shares purchased pursuant to our 2021 Employee Stock Purchase Plan at an aggregate discount of $14,447, and $5,542 with respect to unused vacation days. Trent also received customary employee benefits. Trent departed from the Company on April 5, 2024.

Except as may be the case with respect to the mattersindemnification arrangements and Trent Rechan’s employment with the Company discussed in the immediately following section,preceding paragraphs and except as may otherwise be disclosed in “Executive and Director Compensation—Executive Officer Compensation” or “Executive and Director Compensation—Director Compensation,” there have been no related person transactions required to be reported pursuant to rules or regulations promulgated by the Securities Exchange Act since the beginning of 2015.

New Executive Officer Compensation Arrangements

Messrs. Rennyson, Tae, and Shao each became an executive officer of MicroStrategy on January 8, 2016. As discussed further in “Executive and Director Compensation—Compensation Discussion and Analysis”, consistent with the Nasdaq Marketplace Rules applicable to controlled companies, certain compensation arrangements for executive officers are determined by the Chief Executive Officer, not the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”). Consequently, certain compensation and other related amounts paid by MicroStrategy to Messrs. Rennyson, Tae, and Shao since January 8, 2016 may constitute related person transactions for reporting purposes under the Securities Exchange Act.

Through March 31, 2016, Mr. Rennyson’s annual base salary was $400,000; effective April 1, 2016, Mr. Rennyson’s annual base salary for 2016 increased to $450,000. Mr. Tae’s annual base salary for 2016 is $500,000. Each of Messrs. Rennyson’s and Tae’s 2016 bonus plans are designed to award the applicable executive officer based on (i) his department’s “contribution margin” (in Mr. Rennyson’s case, over a specified threshold) and (ii) the annualized value of specific types of contracts over a specified threshold. Through March 31, 2016, Mr. Shao’s annual base salary was $451,000; effective April 1, 2016, Mr. Shao’s annual base salary for 2016 increased to $470,000. Mr. Shao’s annual discretionary bonus target is $420,000. Each of Messrs. Rennyson, Tae, and Shao are also generally entitled to the perquisites and personal and other benefits (e.g., 401(k) plan match and life insurance premiums) to which all other executive officers below the CEO level are entitled, including certain tax gross-ups, as further described in “Executive and Director Compensation—Compensation Discussion and Analysis”. Certain of the compensation arrangements described in the preceding sentence are determined by the Compensation Committee, and certain of them are determined by the Chief Executive Officer. From January 8, 2016 through April 19, 2016, each of Messrs. Rennyson’s, Tae’s, and Shao’s use of any such compensation arrangements determined by the Chief Executive Officer have resulted in an aggregate incremental cost to MicroStrategy of less than $10,000 per executive officer.2023.

Board of Directors

Our Board of Directors is currently comprised of Messrs. Saylor, Epstein,Le, Graham, Patten, Rechan, and Rickertsen. TheDuring 2023, the Board met six times and acted by unanimous written consent four times. During 2023, (i) Mr. Saylor attended five of Directors met four times during 2015. During 2015,the six meetings of the Board (the meeting that Mr. Saylor did not attend related to the Company’s indemnification arrangements with Mr. Saylor and Mr. Saylor recused himself from that meeting—see “Related Person Transactions Policy and Related Person Transactions”) and (ii) all other Board members attended all the meetings of the Board of Directors and all meetings of the committees of the Board on which they served at the time of such meetings.Board. The Board of Directors has determined that each of the Company’s non-employee directors is an independent director as defined in Rule 5605(a)(2) of the NASDAQNasdaq Stock Market, Inc. (“Nasdaq”) Marketplace Rules. Neither Mr. Saylor nor Mr. Le is not an independent director under Rule 5605(a)(2) because he isthey are our Executive Chairman and Chief Executive Officer & President.(“CEO”), respectively. Independent directors collectively constituted during 2015,2023, currently constitute, and following the Annual Meeting (if all nominees are elected) will constitute a majority of the Board of Directors.Board.

The independent members of the Board of Directors regularly meet in executive sessionsessions without any employee directorsdirector or other members of management in attendance.

The Company’s certificate of incorporation and by-laws require the Company to indemnify its directors and officers to the fullest extent permitted by Delaware law. As discussed above, in 2021, the Company determined not to renew its directors’ and officers’ liability insurance policy due to the Company’s inability to obtain acceptable terms due to market trends toward higher premiums and the novelty of the Company’s bitcoin acquisition strategy. Instead, Mr. Saylor agreed with the Company to personally provide coverage substantially equivalent to such a policy for up to a one-year period, and the other members of the Board were third-party beneficiaries thereof. As further discussed above, in 2022 and 2023, the Company entered into additional agreements with Mr. Saylor, who continued to personally provide directors’ and officers’ liability coverage. In order to assess the independence of its non-employee directors, the Board considered the indemnification agreements that the Company entered into with Mr. Saylor relating to the indemnification of directors and officers. The Board concluded that because such arrangements are governed by binding agreements with the Company as to which Mr. Saylor does not have unilateral discretion to perform, and because they are intended to replace or supplement, as applicable, an ordinary course insurance policy, those agreements would not impair the independent judgment of the other non-employee members of the Board.

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Controlled Company

We are a controlled company“controlled company” as defined in Rule 5615(c)(1) of the Nasdaq Marketplace Rules because more than 50% of the voting power of the Company is controlled by our Chairman Presidentof the Board & Chief Executive Officer,Chairman, Michael J. Saylor.

Because we qualify as a “controlledcontrolled company, we are not required to have a majority of our Board of Directors be comprised of independent directors. Additionally, our Board of Directors is not required to have an independent compensation or nominating committee or to have the independent directors exercise the nominating function. We are also are not required to have the compensation of our executive officers be determined by a compensation committee of independent directors or a majority of the independent members of our Board of Directors.Board. In addition, we are not required to empower our Compensation

14MICROSTRATEGY | 2024 Proxy Statement


Committee of the Board (the “Compensation Committee”) with the authority to engage the services of any compensation consultants, legal counsel, or other advisors or to have the Compensation Committee assess the independence of compensation consultants, legal counsel, andor other advisors that it engages. In May 2022, the Compensation Committee engaged Willis Towers Watson US LLC (“WTW”) to review and assist the Company in developing a compensation peer group, and to review the Company’s executive and Board compensation to inform the Compensation Committee’s determination of compensation levels for 2023. The Compensation Committee reviewed analyses prepared by WTW in making compensation determinations with respect to the President & CEO’s base salary and cash bonus target for 2023 and changes to compensation of non-employee directors that became effective in 2023. The Compensation Committee also reviewed analysis prepared by WTW in determining the structure and amounts of equity compensation to be paid to all executive officers in 2023. The Company also engaged WTW to advise on equity compensation matters generally in 2022, and on compensation matters generally in 2023. WTW did not provide any other services to us or our affiliates during 2023 and the work of WTW for the Compensation Committee did not result in any conflicts of interest.

In light of our status as a controlled company, our Board of Directors has determined not to establish an independent nominating committee or have its independent directors exercise the nominating function and has elected instead to have the board of directorsBoard be directly responsible for nominating members of the Board of Directors.Board. As mentioned above, the majority of our Board of Directors is currently comprised of independent directors, and our Board of Directors has established a Compensation Committee comprised entirely of independent directors. For more information regarding how we determine our executive compensation in light of our status as a controlled company, please see “Executive and Director Compensation—Compensation Discussion and Analysis” below.

Audit Committee

The Board of Directors has established a standing Audit Committee in accordance with Section 3(a)(58)(A) of the Securities Exchange Act and adopted the Tenth Amended and Restated Charter for the Audit Committee, Charter, which is publicly available on the Corporate Governance section of our website,http://ir.microstrategy.com/corporate-governance.cfmwww.microstrategy.com/en/investor-relations. The Audit Committee reviews our accounting and financial reporting processes, the internal and external audits of our financial statements, and the Boardeffectiveness of Directorsour controls over financial reporting, provides the opportunity for direct contact between our independent registered public accounting firm and the Board, of Directors.and provides information about significant financial matters to the Board.

The Audit Committee is currently comprised of Messrs. Graham (Chairman effective October 23, 2015)(Chair), Patten, (Chairman through October 23, 2015), and Rickertsen. TheDuring 2023, the Audit Committee met fivenine times during 2015.and acted by unanimous written consent four times. Mr. Rickertsen attended eight of the nine meetings of the Audit Committee. All other members attended all the meetings of the Audit Committee.Committee in 2023.

The Board of Directors has determined that each member of the Audit Committee meets the Nasdaq Marketplace RulesRules’ definition of an independent director for audit committee purposes, as well as the independence requirements of Rule 10A-3 under the Securities Exchange Act. The Board of Directors has designated Mr. Graham as an audit committee financial expert, as defined in Item 407(d)(5)(ii) of RegulationS-K. Additional information regarding the Audit Committee and its functions and responsibilities is included in this proxy statement under the caption “Audit Committee Report.”

Compensation Committee

The Board of Directors has established a standing Compensation Committee and adopted a Secondthe Third Amended and Restated Charter for the Compensation Committee, which is publicly available on the Corporate Governance section of our website,http://ir.microstrategy.com/corporate-governance.cfmwww.microstrategy.com/en/investor-relations. The Compensation Committee of the Board of Directors makes determinations regardingdetermines the compensation arrangements of our Chief Executive OfficerChairman and President & President, compensation arrangements that we seek to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”),

12


CEO, equity awards, including awards under the MicroStrategy 2013 StockIncorporated 2023 Equity Incentive Plan (as amended, the “2013(the “2023 Equity Plan”), and arrangements relating to certain perquisites and personal benefits provided to our executive officers, and performs other functions related to compensation matters. The Compensation Committee may delegate any of its responsibilities to (i) a subcommittee comprised of one or more members of the Compensation Committee, (ii) the Board of Directors or (iii) members of management.

The Compensation Committee isIs currently comprised of Messrs. Rickertsen (Chairman)(Chair), Epstein,Patten, and Patten. TheRechan. During 2023, the Compensation Committee held four telephonic meetings during 2015.met two times and acted by unanimous written consent ten times. All members attended all the meetings of the Compensation Committee.Committee in 2023.

The Board of Directors has determined that each member of the Compensation Committee meets the Nasdaq Marketplace RulesRules’ definition of an independent director for compensation committee purposes.purposes, as well as the independence requirements of

MICROSTRATEGY | 2024 Proxy Statement

15


Rule 10C-1 under the Exchange Act. Each member of the Compensation Committee is also a non-employee director, as defined in Rule 16b-3 under the Securities Exchange Act, and an outside director under Section 162(m).Act. Additional information regarding the Compensation Committee and its functions and responsibilities is included in this proxy statement under the captions “Executive and Director Compensation—Compensation Discussion and Analysis” and “Executive and Director Compensation—Compensation Committee Report.”

Investments Committee

The Board has established a standing Investments Committee of the Board (the “Investments Committee”). The Investments Committee has been delegated authority to acquire, dispose of, and manage alternative assets owned by the Company, including bitcoin. Management regularly consults with the Investment Committee regarding the execution of the Company’s bitcoin acquisition strategy.

The Investments Committee is currently comprised of Messrs. Saylor (Chair) and Graham. During 2023, the Investments Committee did not meet, but acted by unanimous written consent ten times.

In August 2022, in connection with his transition to serving as the Company’s Executive Chairman, Mr. Saylor assumed the role of Chair of the Investments Committee, a position in which he provides oversight of the Company’s execution of its bitcoin acquisition strategy.

Board Leadership Structure

Mr. Saylor our President & Chief Executive Officer, is also the Chairman of the Board of Directors.and is our Executive Chairman. Mr. Le is our President & CEO. Our Board of Directors has determined that havingseparating the same individual hold both positionsCEO and Chairman roles, as effected by the August 2022 transition when Mr. Le became our CEO and Mr. Saylor became our Executive Chairman, is appropriate for a controlled company, inas it allows the best interestsCEO to implement our corporate strategies and to lead and manage our day-to-day operations, while enabling the Chairman of MicroStrategythe Board to focus on innovation and our stockholders, and consistent with goodlong-term corporate governance forstrategy, while continuing to provide oversight of the following reasons:

OurCompany’s bitcoin strategy as the Chairman of the Investments Committee. Having served as the Company’s Chief Executive Officer isfor more familiar with ourthan 30 years, Mr. Saylor continues to be extremely knowledgeable about the Company’s business and strategy than an independent, non-employeeand, therefore, we believe it remains appropriate for him to serve as the Chairman would be and is thus better positionedof the Board. In addition, Mr. Saylor’s service as Chairman of the Board allows him to focus our Board of Directors’ agendaprovide strategic input on the keytype and number of issues facing our Company.

A single Chairmanproposed for Board consideration by helping to set and Chief Executive Officer provides strongapprove agendas for meetings and consistent leadership for the Company, without risking overlap or conflicthelping to ensure appropriate discussion of roles.

Oversight of our Company is the responsibility of our Board of Directors as a whole, and this responsibility can be properly discharged without an independent Chairman.
level issues.

We do not have a lead independent director or a presiding director; however,director. However, the independent directors regularly meet in executive sessions of the Board of Directors.Board. In light of our status as a controlled company, we believe that the structure of our Board of Directors structure provides an appropriate balance of management leadership and non-management oversight.

Oversight of Risk

Our Board of Directors oversees our risk management processes directly and through its committees. Our management is responsible for risk management on a day-to-day basis. The role of our Board of Directors and its committees is to oversee the risk management activities of management. They fulfill this duty by discussing with management the policies and practices utilized by management in assessing and managing risks and providing input on those policies and practices. In general, our Board of Directors oversees risk management activities relating to business strategy, capital allocation, organizational structure, cybersecurity, and certain operational risks; ourrisks. Our Audit Committee oversees risk management activities relatedrelating to financial controls and legal and compliance risks; andrisks, our Compensation Committee oversees risk management activities relating to the Company’s compensation policies and practices.practices, and our Investment Committee analyzes and considers investment and financial risks in connection with the execution of our bitcoin strategy. In addition, since risk issues often overlap, committees from time to time can request that the full Board of Directors discuss particular risk issues.

Director Candidates

As noted above, we do not have a standing nominating committee and the functions of evaluating and selecting directors are performed by the Board of Directors as a whole. The Board of Directors will, from time to time, evaluate biographical information and background materialmaterials relating to potential candidates and interview

selected candidates.

 

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13


selected candidates. The Board of Directors does not currently have a charter or written policy with regard to the nomination process. We have not engaged a third party to assist us in identifying and evaluating the individuals nominated for election as directors at the Annual Meeting.

In considering whether to nominate any particular candidate for election to the Board, of Directors, the Board of Directors uses various criteria to evaluate each candidate, including each candidate’s integrity, business acumen, knowledge of our business and industry, experience, diligence, conflicts of interest, and ability to act in the interests of our stockholders. In addition, the Board has adopted a Board Diversity Policy, under which the pool of candidates from which Board nominees are chosen is required to include candidates who are diverse with respect to gender, race, ethnicity and/or membership in a historically underrepresented group, and we are required, in selecting Board nominees, to consider candidates from both corporate positions beyond the executive suite and non-traditional environments, including government, academic, and nonprofit organizations. The Board will assess the effectiveness of Directorsits Board Diversity Policy whenever the Board next considers adding one or more new directors by subjectively considering the extent to which candidates who are diverse with respect to gender, race, ethnicity and/or membership in a historically underrepresented group were identified for consideration in accordance with the Board Diversity Policy. The Board also considers whether a potential nominee would satisfy the Nasdaq Marketplace RulesRules’ definition of an independent director and the SEC’s definition of an audit committee financial expert. The Board of Directors does not set specific minimum qualifications or assign specific weights to particular criteria and no particular criterion is a prerequisite for a prospective nominee. Our Board of Directors does

Due to our status as a controlled company under Nasdaq Marketplace Rules, we do not have a formal policy with respect to diversity, but we believe that the backgrounds and qualifications of our directors, considered as a group, should reflect a diverse set of experience, knowledge, and abilities that will allow the Board of Directors to fulfill its responsibilities, and the Board of Directors takes such diversity into consideration in connection with prospective nominees.

We do not have a formal policy with regard to the consideration of director candidates recommended by our stockholders because of our status as a controlled company under Nasdaq Marketplace Rules.stockholders. Stockholder recommendations relating to director nominees or otherwiseother proposals may be submitted in accordance with the procedures set forth belowabove under “Information Regarding the caption “StockholderAnnual Meeting of Stockholders—Stockholder Proposals.” Any stockholder nominations proposed for consideration should include the nominee’s name and qualifications. Any recommendations received from stockholdersSuch nominations will be evaluated in the same manner that potential nominees recommendedas nominations by members of the Board, of Directors, management, or other parties are evaluated.parties. Stockholders may also send communications to the Board of Directors in accordance with the procedures set forth below under “Corporate Governance and the caption “CommunicatingBoard of Directors and its Committees—Communicating with the Board of Directors.”

DirectorDirectors’ Attendance at Annual Meeting of Stockholders

Although we do not have a policy with regardrespect to directors’ attendance at our Annual Meeting, all directors are encouraged to attend the Annual Meeting. All fivesix members of the current Board, constituting the entire Board at the time of Directors attended the 20152023 Annual Meeting of Stockholders.Stockholders, attended the 2023 Annual Meeting of Stockholders, which was held in virtual format only.

Communicating with the Board of Directors

Stockholders who wish to send communications to the Board of Directors may do so by writing to the SecretaryGeneral Counsel of MicroStrategy, c/o MicroStrategy Incorporated, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182. The mailing envelope must contain a clear notation indicatingclearly indicate that the enclosed letter is a “Stockholder-Board Communication.” All such letters must identify the author as a stockholder and must include the stockholder’s full name, address, and a telephone number. TheIf the letter is intended for a specific Board member, the name of any specific intendedsuch Board recipientmember should be noted in the communication. The SecretaryGeneral Counsel will forward any such correspondence to the intended recipients; however,recipient. However, prior to forwarding any such correspondence,doing so, the SecretaryGeneral Counsel or his designee will review such correspondence and, in his or her discretion, may not forward communications that relate to ordinary business affairs, communications that are primarily commercial in nature or personal grievances, or communications that relate to an improper or irrelevant topic or are otherwise inappropriate for the Board’s or any individual Board of Directors’member’s consideration.

Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports

Section 16(a) of the Securities Exchange Act requires our directors, officers, and holders of more than 10% of our classClass A common stockStock to file with the SEC initial reports of their ownership and changes in ownership of our classClass A common stock and other equity securities on a Form 3 and reports of changes in such ownership on a Form 4 or Form 5. Directors, officers, and holders of 10% of our class A common stock are required by SEC regulations to furnish usStock with copies of all Section 16(a) forms they file. To our knowledge, basedthe SEC. Based solely on aour review of copies of the reports furnished to usfiled during 2023 and written representations made byfrom our directors and officers regarding their filing obligations,that no other reports were required, all Section 16(a) filing requirements were satisfied with respect to 2015.2023.

14


Code of Ethics

The Board, of Directors, through its Audit Committee, has adopted a Code of Ethics that applies to MicroStrategy’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions and such other personnel of MicroStrategy or its majority-owned subsidiaries as may be designated from time to time by the ChairmanChair of the Audit Committee. The Code of Ethics, as amended, is publicly available on the Corporate Governance section of our

MICROSTRATEGY | 2024 Proxy Statement

17


website,http://ir.microstrategy.com/corporate-governance.cfmwww.microstrategy.com/en/investor-relations. We intend to disclose any amendments to the Code of Ethics or any waiver from a provision of the Code of Ethics on the Corporate Governance section of our website,http://ir.microstrategy.com/corporate-governance.cfmwww.microstrategy.com/en/investor-relations.

Clawback Policy

MicroStrategy has adopted a clawback policy in compliance with Nasdaq Listing Rule 5601 and Rule 10D-1 of the Exchange Act effective October 2, 2023. This clawback policy applies to current or former officers of the Company (as defined in Rule 16a-1(f) under the Exchange Act or to the extent Nasdaq Listing Rule 5608 otherwise provides, such officers as provided under Rule 5608) (“Covered Officers”) and requires us, subject to limited exemptions provided by Nasdaq rules, to act to recover incentive-based compensation erroneously received on or after October 2, 2023 by our current or former Covered Officers and within the three fiscal years preceding the date an accounting restatement is determined to be required. For more information, see our Dodd-Frank Compensation Recovery Policy, which is filed as an exhibit to our 2023 Annual Report on Form 10-K.

 

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EXECUTIVE AND DIRECTOR COMPENSATION

Compensation Discussion and Analysis

Overview

The six individuals whoThis section explains our executive compensation philosophy and objectives, how our objectives are identified inimplemented, the Summary Compensation Table on page 31 consistelements of three individuals who are currentour executive compensation program, and the decisions made with respect to 2023 regarding the compensation of each of our executive officers and three individuals who served as executive officers for all or a portion of 2015 but who have since departed the Company. All six of these individuals constitute our “named executive officers” for 2015 as defined in Section 402(a)(3) of Regulation S-K.2023. We refer below to these sixthe following individuals in our Compensation Discussion and Analysis as our “executive officers.” officers”:

Michael J. Saylor

Executive Chairman & Chairman of the Board

Phong Q. Le

President & Chief Executive Officer

W. Ming Shao

Senior Executive Vice President, General Counsel & Secretary

Andrew Kang

Senior Executive Vice President & Chief Financial Officer

All of these individuals and Kevin Adkisson, our former Senior Executive Vice President & Chief Revenue Officer, constitute our “named executive officers” for 2023 (as defined in Item 402(a)(3) of Regulation S-K).

General Philosophy and Compensation Objectives: Performance, Alignment, and Retention

The goal of our compensation program for our executive officers is the same as our goal for operating the Company—to create long-term value for our stockholders. In furtherance of this goal, our executive compensation program is designed to reward, motivate, and provide incentives for exceptional individual performance and effective leadership by theour executive officers, andto reward executive officers for superior financial and operating results of the Company, and to attract, motivate and retain our executive officers. It is also designed to align our executive officers’ interests with those of our stockholders. These objectives serve as the basis for determining the overall compensation of each executive officer, considered in light of Company performance.

Compensation Objectives

PerformanceIt is also designed to attract and Alignment

Each of our currentretain executive officers possesses skills, experience, and qualities that made him a unique and valuable member of the management team in 2015. The compensation arrangements for our executive officers in 2015 were designed to reflect their abilities, responsibilities, management experience, performance, and contribution to the leadership and management of their particular departments and the Company as a whole. We have sought to align the interests of our executive officers with those of our stockholders by evaluating executive officer performance on the basis of key financial metrics that we believe contribute to both short-term and long-term stockholder value. Key elements of our executive compensation program that were designed to achieve these objectives with respect to 2015 included:

a base salary for executive officers other than Mr. Saylor designed to reward overall performance and establish motivation for future performance;

a discretionary annual cash bonus target for Phong Q. Le (our Senior Executive Vice President & Chief Financial Officer) and Timothy E. Lang (our Senior Executive Vice President & Chief Technology Officer) designed to reward performance based on a subjective evaluation of the executive officer’s performance in the context of general economic and industry conditions and Company performance;

long-term incentives in the form of a stock option award granted to each of Messrs. Le and Lang under the MicroStrategy Incorporated 2013 Stock Incentive Plan (as amended, the “2013 Equity Plan”);

a one-time reporting bonus arrangement for Mr. Le in connection with the commencement of his employment with the Company;

a one-time cash bonus for Mr. Lang that was in addition to the annual cash bonus target described above in recognition of his achievement of certain strategic goals; and

an incentive cash bonus arrangement for Jonathan F. Klein (our former President & Chief Legal Officer) and Paul N. Zolfaghari (our former President) that provided a bonus opportunity based on our diluted earnings per share for the fiscal year.

In September 2014, at Mr. Saylor’s request, the Compensation Committee reduced Mr. Saylor’s annual base salary to $1 and eliminated Mr. Saylor’s incentive cash bonus arrangement. The Compensation Committee adopted these changes in connection with the Company’s restructuring efforts and cost reduction initiatives announced in the second half of 2014. At Mr. Saylor’s request, the Compensation Committee again left his annual base salary at $1 and did not establish a cash bonus arrangement for him with respect to 2015.

16


Prior to 2013, we had not granted equity awards in MicroStrategy stock to executive officers since 2003. The last tranches of MicroStrategy stock options granted to our executive officers under our prior stock incentive plans vested in 2008. In order to enhance our ability to attract, retain, and motivate persons who are expected to make important contributions to the Company and to provide such persons with equity ownership opportunities and performance-based incentives that are intended to further align their long-term interests with those of our stockholders, in September 2013, the Board of Directors adopted the 2013 Equity Plan. Eligible participants under the 2013 Equity Plan include employees, officers, directors, consultants, and advisors of the Company. In October 2015, in order to provide the Company with flexibility to issue additional equity incentive awards to key personnel in the future, the Board of Directors adopted an amendment to the Company’s 2013 Equity Plan, subject to stockholder approval, to increase the total number of shares of the Company’s class A common stock authorized for issuance under the 2013 Equity Plan from 1,500,000 to 1,700,000 (“Amendment No. 3”).

In 2015, the Compensation Committee granted stock option awards, as opposed to restricted stock or restricted stock units, to Messrs. Le and Lang and certain other members of senior management because stock option awards provide us with the flexibility to compete effectively for executive talent in a manner that is cost-effective to us, allowing for packages that are more attractive to our executive officers. In addition, unlike restricted stock or restricted stock units, stock options only provide a return to an award recipient if the price of our class A common stock increases. As stock option awards motivate award recipients to increase the long-term price of our class A common stock, they help to align the long-term interests of award recipients with those of our stockholders. We did not grant option awards in 2015 to the other executive officers because they had already received significant equity awards under the 2013 Equity Plan in 2013 or 2014 that were intended to provide an appropriate long-term incentive over future years. We believe that stock option awards, together with our cash bonus arrangements, as applicable, provide appropriate short and long-term incentives to our executive officers to increase stockholder value through their collective efforts in corporate functions, product design, engineering, services, and sales to our customers.

We also provided each of our executive officers with certain perquisites and other benefits in 2015 that the Compensation Committee or CEO, as applicable, believes are reasonable and consistent with the objectives of our executive compensation program. Perquisites comprised a significant portion of Mr. Saylor’s 2015 compensation, principally as a result of security and transportation-related benefits and associated tax gross-up payments that are discussed below.

In determining executive officer compensation for 2015, the Compensation Committee and the CEO considered the stockholder support that the “Say-on-Pay” proposal received at our April 23, 2014 annual meeting of stockholders. Based on such considerations, we determined not to make significant changes to our compensation mix and other compensation policies other than those described above since the “Say-on-Pay” vote. We believe that, with these changes, our compensation programs are effectively designed in light of our objectives and are aligned with the interests of our stockholders.

Retention

Because of their experience and talents, our executive officers are oftenmay be presented with other professional opportunities, including ones at potentially higher compensation levels. We seek to retain executive officerslevels, by providing an overall compensation package that is market competitive over time and provides significant long-term incentives through the grant of awardsequity awards. These objectives serve as the basis for determining the overall compensation of each executive officer, all in the context of general economic and industry conditions and Company performance.

Key elements of our executive compensation program for 2023 that were designed to achieve these objectives included:

a base salary for each of our executive officers, other than Mr. Saylor, designed to help retain them and reward them for overall performance;

a discretionary annual cash bonus target for each of Messrs. Le, Kang, and Shao designed to help retain, reward, and motivate them based on a subjective evaluation of their achievement of strategic, operational, and financial objectives in their areas of responsibility that support our goal of enhancing stockholder value;

a sales management variable compensation plan for Mr. Adkisson designed to help retain, reward, and motivate him to achieve superior performance in his area of responsibility, as measured by the achievement of revenue in excess of costs and specified budget thresholds; and

long-term incentives in the form of (i) stock options granted to each of Messrs. Adkisson and Kang, and (ii) RSUs and Performance Stock Units (“PSUs”) granted to each of Messrs. Le, Adkisson, Kang and Shao, under the 20132023 Equity Plan, designed to provide them with long-term performance-based incentives that are intended to further align their interests with those of our stockholders.

We also provided each of our executive officers with certain perquisites and other benefits in 2023 that the Compensation Committee or Mr. Le, as applicable, believed were reasonable and consistent with the objectives of our executive compensation program. Perquisites comprised the most significant portion of Mr. Saylor’s 2023 compensation, principally as a result of security and transportation-related benefits and associated tax gross-up payments that are discussed below.

In determining executive officer compensation for 2023, the Compensation Committee and Mr. Le, as applicable, considered the stockholder support that the “say-on-pay” proposal received at our May 27, 2020 Annual Meeting of

MICROSTRATEGY | 2024 Proxy Statement

19


Stockholders and at our May 24, 2023 Annual Meeting of Stockholders, as applicable. Based on such consideration, as well as advice received from WTW, the compensation consultant engaged by the Compensation Committee, the Compensation Committee for the first time granted PSUs to executive officers, which arecliff vest after three years subject to the achievement of a vesting periodtotal stockholder return (“TSR”) condition. We believe that our compensation program is effectively designed to implement our objectives and is aligned with the interests of approximately four years.our stockholders.

Implementing Our Objectives

Role of the Compensation Committee and President & CEO

The Compensation Committee has the authority and responsibility to develop, adopt, and implement compensation arrangements for Mr. Saylor, our Executive Chairman and for Mr. Le, our President & CEO. As of August 8, 2022, the CEO. Thedate Mr. Le assumed the role of President & CEO, the Board of Directors has delegated to theMr. Le, in his capacity as President & CEO, the authority and responsibility to develop, adopt, and implement compensation arrangements for all executive officers other than

17


the CEO. The CEO makes compensation determinations regarding other executive officers in periodic consultation with the Compensation Committee, consistent himself and Mr. Saylor. Consistent with the Nasdaq Marketplace Rules applicable to controlled companies, exceptMr. Le has made compensation determinations regarding executive officers other than himself and Mr. Saylor in periodic consultation with respectthe Compensation Committee. However, at all times the Compensation Committee has had the authority and responsibility to determine the grant of equity awards under the 2013 Equity Plan certain otherand the 2023 Equity Plan and, for Messrs. Saylor and Le, cash compensation arrangements, that we seekand arrangements relating to qualify as performance-based compensation under Section 162(m),certain perquisites and certain perquisite compensation, allpersonal benefits.

Role of which arrangements are determined by the Compensation Committee. In 2015, such other arrangements determinedConsultant

The Compensation Committee engaged WTW in May 2022 to review and assist the Company in developing a compensation peer group, and to review the Company’s executive and Board compensation to inform the Compensation Committee’s and Mr. Le’s determinations of compensation levels for 2023. The Compensation Committee reviewed analyses prepared by WTW in making compensation determinations with respect to the President & CEO’s base salary and cash bonus target for 2023, as well as the structure and amounts of equity compensation to be awarded to all executive officers in 2023, and Mr. Le reviewed these analyses in making base salary and cash bonus target determinations for 2023 with respect to Messrs. Kang and Shao. Additionally, the Compensation Committee includedreviewed analyses prepared by WTW in assessing changes to compensation of non-employee directors to be effective in 2023. The Company also engaged WTW to advise on equity compensation matters generally in 2022, and on compensation matters generally in 2023. WTW did not provide any other services to us or our affiliates during 2023 and the incentive cash bonus arrangements establishedwork of WTW for Messrs. Klein and Zolfaghari. Neither the Company nor the Compensation Committee engageddid not result in any conflicts of interest.

In 2022, in consultation with WTW, we developed the below peer group, which informed the Compensation Committee’s and Mr. Le’s review of our executive compensation program for 2023. We selected our peer group of companies based on a third-party compensation consultantcombination of factors, including industry classification and size (including employee count, revenue, and market capitalization). The Compensation Committee expects to helpreview the relevance of the peer group intermittently and determine or provide input regardingif any future modifications are necessary at that time.

•  Teradata Corp.

•  Guidewire Software, Inc.

•  Altair Engineering Inc.

•  SPS Commerce Inc.

•  Pegasystems Inc.

•  Coupa Software Inc.*

•  Progress Software Corp.

•  Everbridge, Inc.

•  Verint Systems Inc.

•  Five9, Inc.

•  EVO Payments, Inc.**

•  DOMO, Inc.

•  New Relic, Inc.

•  Alteryx, Inc.

•  EverCommerce Inc.

•  Enfusion, Inc.

*

Coupa Software Inc. was acquired in February 2023 and is no longer publicly traded.

**

Evo Payments, Inc. was acquired in March 2023 and is no longer publicly traded.

As of June 1, 2022, our market capitalization was at the determination of 2015 compensation38th percentile relative to our peer group, and for the CEO oryear ended December 31, 2021 (the most recently completed fiscal year when this peer group was approved), our revenue was at the other executive officers.38th percentile relative to our peer group.

20MICROSTRATEGY | 2024 Proxy Statement


Determining Compensation

Our executive compensation decisions are primarily based on a review of our performance and a subjective assessment of the executive officer’s performance during the year against strategic, operational, and financial objectives. The Compensation Committee and strategic goals, takingthe President & CEO, as applicable, also take into account the scope of the executive officer’s responsibilities, unique leadership skills and management experience, strengths and abilities in his employment and compensation history with us, overall compensation arrangements and long-term potential to enhance stockholder value, all in the contextrespective area of general economic and industry conditions. Specific factors that may affect compensation decisions for the executive officers include:

key financial metrics such as revenue, operating profit, core operating income, earnings per share, and operating margins; and

strategic and operational objectives such as technological innovation, major product releases, sales and marketing execution, and operational excellence.

We combined the compensation elements for each executive officer in a manner that we believe is consistent with the executive officer’s role and contributions to the Company and serves certain other Company objectives described below. We believe that our 2015 executive compensation program, including stock options under the 2013 Equity Plan granted to executive officers in 2015 and in prior years, promotes long-term value to stockholders by retaining key executive officers and rewarding them, as applicable, for increases in the market price of our class A common stock and for financial and operational results that are expected to contribute to long-term stockholder value.

In September 2014, at Mr. Saylor’s request, the Compensation Committee reduced Mr. Saylor’s annual base salary to $1 and eliminated Mr. Saylor’s incentive cash bonus arrangement. The Compensation Committee adopted these changes in connection with the Company’s restructuring efforts and cost reduction initiatives announced in the second half of 2014. The Compensation Committee considered Mr. Saylor’s compensation arrangements in March 2015 and, at Mr. Saylor’s request, left his annual base salary at $1 and did not establish a cash bonus arrangement for him with respect to 2015. Accordingly, the Compensation Committee did not conduct benchmarking when establishing Mr. Saylor’s compensation for 2015.

For 2015, we adopted incentive cash bonus arrangements for Messrs. Klein and Zolfaghari that were designed to reward performance and responsibilities undertaken based on specific, pre-established Company financial metrics for the fiscal year because we believed that their responsibilities for 2015 could be tied to specific Company-wide performance metrics. We did not utilize formulas with respect to the bonus compensation of other executive officers for 2015 because we believed that more qualitative and subjective evaluations were necessary in determining their appropriate levels of compensation as these executive officers were responsible for, among other things, strategic objectives and operational goals that cannot always be measured by traditional financial metrics. Instead, we adopted discretionary annual cash bonus arrangements for Messrs. Le and Lang for 2015 designed to reward performance on the basis of a subjective evaluation of their individual performance in the context of general economic and industry conditions and Company performance. In addition, Mr. Lang received a one-time cash bonus in 2015 in recognition of his achievement of certain strategic goals. We also adopted a one-time reporting bonus arrangement for Mr. Le in 2015, which was designed to attract Mr. Le to the Company and was determined by the CEO based on the CEO’s subjective evaluation of

18


the scope of Mr. Le’s responsibilities and Mr. Le’s long-term potential to enhance stockholder value. We did not adopt any cash bonus arrangements for Douglas Thede (our former Chief Financial Officer) for 2015 since, in March 2015, he announced his plans to retire from the Company.

In 2015, in connection with grants to various other members of senior management, the Compensation Committee granted a stock option under the 2013 Equity Plan to each of Messrs. Le and Lang to purchase 40,000 shares and 50,000 shares, respectively, of the Company’s class A common stock. These awards (i) vest in equal annual installments over a four-year vesting period unless accelerated upon a change in control event, as defined in the applicable option agreement, or otherwise in accordance with the provisions of the 2013 Equity Plan or the applicable option agreement, (ii) have an exercise price equal to the fair market value of our class A common stock on the date of grant, (iii) expire ten years following the date of grant, and (iv) are subject to the other terms and conditions of the 2013 Equity Plan and applicable option agreement. In granting stock options under the 2013 Equity Plan during 2015, the Compensation Committee, based on recommendations from the CEO, made subjective evaluations of appropriate award amounts to help attract, motivate, and retain the applicable executive officers based on the scope of the executive officer’s responsibilities,responsibility, employment and compensation history with us, overall compensation arrangements, and long-term potential to enhance stockholder value, all in the context of general economic and industry conditions, Company performance, and Company performance.the executive compensation practices of the companies in our peer group. Specific factors that may affect executive compensation decisions include:

From 2010 to 2013,

key financial metrics, such as revenues, bookings, current subscription billings, cost of revenues, operating expenses, operating income, and operating margins, (as each may be adjusted, to the extent applicable, to account for various non-cash items, such as digital asset impairments and share-based compensation expense); and

strategic and operational objectives, such as bitcoin-related initiatives and business strategy, operational, financial, and human capital management initiatives, technological innovation and product release execution, sales execution and performance, customer service, engagement, and consulting initiatives, development and execution of marketing initiatives, and oversight of corporate governance, commercial contracts, legal risk management, and other legal matters.

Each of the Compensation Committee granted percentage-based bonus awards to certain of ourand the President & CEO, as applicable, subjectively combine the compensation elements for each executive officers and other key employees under our Performance Incentive Planofficer in lieu of MicroStrategy stock options. In granting such awards to our executive officers, the Compensation Committee, based on recommendations from the CEO, made subjective evaluations of appropriate award amounts to help motivate and retain the applicable executive officers based on the individual performance of the applicable executive officers in the context of general economic and industry conditions and Company performance in the applicable prior year. These determinations took into account the scope ofa manner that each believes is consistent with the executive officer’s responsibilities, his employmentrole and compensation history with us, overall compensation arrangements, and long-term potential to enhance stockholder value. These awards generally require the award recipient to remain an employee for three years after the applicable performance period and to satisfy other terms and conditions of the Performance Incentive Plan in order to receive a bonus pay-out under the award. The awards granted in 2010 and 2011 were earned prior to 2015 by executive officers who satisfied the terms and conditions of the Performance Incentive Plan. The awards granted to certain executive officers for 2012 and 2013 are described in the table below (the “Performance Incentive Plan Awards Table”). We adopted, and began granting awards under, the 2013 Equity Plan in September 2013 and have now transitioned from the Performance Incentive Plancontributions to the 2013 Equity Plan forCompany. The Compensation Committee and the purpose of providing long-term incentive compensation arrangements for our executive officers. There are currently no awards outstanding under the Performance Incentive Plan pursuant to which any executive officer is eligible to receive any amounts.

   2012   2013 
   Percentage-
Based
Bonus
Award
  Bonus
Amount
Determined
   Percentage-
Based
Bonus
Award
  Bonus
Amount
Determined
 

Jonathan F. Klein*

   0.66 $218,453     0.80 $155,520  

Paul N. Zolfaghari**

   N/A    N/A ��   0.80 $155,520  

Douglas K. Thede***

   0.66 $218,453     0.66 $128,304  
  

 

 

  

 

 

   

 

 

  

 

 

 

Total

   1.32 $436,906     2.26 $439,344  

*The award granted to Mr. Klein for 2012 was earned in December 2015 and paid in January 2016. Mr. Klein’s employment with the Company ended in January 2016 and, accordingly, he became ineligible to receive any amounts with respect to his award for 2013.
**Mr. Zolfaghari’s employment with the Company ended in January 2016 and, accordingly, he became ineligible to receive any amounts with respect to his award for 2013.
***Mr. Thede’s employment with the Company ended in October 2015 and, accordingly, he became ineligible to receive any amounts with respect to his awards for 2012 and 2013.

19


WePresident & CEO incorporate flexibility into our compensation program and the assessment process to respond to and adjust for an evolving and dynamic business environment. We believe the most important indicator of whether our compensation objectives are being met is our ability to motivatethat our executive compensation program promotes long-term value to stockholders by retaining key executive officers and rewarding them for increases in the market price of our Class A Stock and for financial, operational and strategic results that are expected to deliver superior performance andcontribute to achieve our retention goals.long-term stockholder value.

As discussed above, the Compensation Committee did not conduct benchmarking when establishing Mr. Saylor’s compensation for 2015. The Compensation Committee and the President & CEO do not conduct benchmarking in establishing compensationgenerally establish performance-based cash bonus arrangements and generally make determinations regarding adjustments to base salary and cash bonus targets for any of the otherour executive officers but instead establishin the first quarter of each year. Determinations regarding the actual payment of bonuses are generally made in the first quarter following the applicable performance period.

The Compensation Committee and the President & CEO, as applicable, established compensation based on their respective subjective determinations of the scopefactors discussed above as well by reference to peer group benchmarking. In particular, the Compensation Committee reviewed analyses prepared by WTW with respect to (i) the President & CEO’s cash compensation when setting the President & CEO’s base salary and bonus targets for 2023 and (ii) the structure of responsibilities placed on eachequity compensation for executive officer,officers more broadly when making equity grants in June 2023. The Compensation Committee also considered recommendations from the executive officer’s unique leadership skills, management experience,President & CEO in establishing compensation arrangements. Additionally, Mr. Le referred to WTW’s analysis when setting base salary and contributions, while also taking into account the executive officer’s employmentbonus target compensation for Messrs. Kang and compensation history with us, overall compensation arrangements, and his long-term potential to enhance shareholder value, all in the context of general economic and industry conditions and Company performance.Shao. The Compensation Committee and thePresident & CEO dodid not assign relative weights to Company and individual performance in establishing these compensation arrangements, but instead makemade respective subjective determinations after considering such performances collectively.

Employment and Severance Agreements

As a general matter, our executive officers do not have standing employment, severance, or change-of-control agreements. However, Mr. Kang’s offer letter in connection with the commencement of his employment with the Company included a one-time reporting bonus of $100,000, and a severance arrangement in the event that his employment was terminated without cause, as defined in the offer letter, in an amount equal to twelve (12) months of base salary and an additional amount to be determined by the Company not to exceed his annual bonus potential prorated for the time he worked in that year up through his termination date, contingent on signing and not revoking a general release of claims against the Company. Additionally, in connection with his resignation from the Company in July 2023, Mr. Adkisson entered into an agreement with the Company, which provided for a lump-sum cash payment of $100,000.

Our Executive Chairman and President & CEO servesserve at the will of the Board, of Directors and the other executive officers serve at the will of the Board of Directors and the President & CEO. This approach is consistent with our employment and compensation philosophy that relies significantly upon providing performance-based incentives based on performance and aligning the interests of executive officers with those of our stockholders.

MICROSTRATEGY | 2024 Proxy Statement

21


Equity Ownership Guidelines

As of March 31, 2016,26, 2024, Mr. Saylor beneficially owned 200,000was deemed to own 143,190 shares of classClass A common stockStock (in the form of ana fully vested option to purchase 400,000105,000 shares of classClass A common stock, of which 100,000 shares were vested as of March 31, 2016Stock and an additional 100,000 shares are scheduled to vest within 60 days of March 31, 2016) and 2,011,66838,190 shares of classClass A Stock held by a charitable foundation for which Mr. Saylor serves as the sole trustee and as to which Mr. Saylor disclaims beneficial ownership) and 1,961,668 shares of Class B common stock,Stock, collectively representing 67.9%55.8% of the total voting power and 19.0% of the Company and beneficial ownership of 11.9% of our Class A Stock (see footnote (1) to the table set forth above in “Security Ownership of Certain Beneficial Owners and Management” for information about the calculation of total equity interest in the Company.voting power and beneficial ownership of Class A Stock). Given the significant equity stake already held by Mr. Saylor, we do not believe that any equity ownership guidelines would be meaningful.

Deductibility of Executive CompensationProhibition on Hedging Transactions

Section 162(m) generally disallows a tax deductionOur insider trading policy prohibits our directors, officers, and employees (and anyone acting on their behalf) from engaging in transactions that hedge or offset, or are designed to a public company for compensation over $1 million paid to its chief executive officer and its other officers (other than the chief financial officer) whose compensation is required to be disclosed to the company’s stockholders under the Securities Exchange Act for being among the most highly compensated officers. However, qualified performance-based compensation will not be subject to the deduction limit if certain requirements are met. The Compensation Committee and the CEO take into account, to the extent they believe appropriate, the limitations on the deductibility of executive compensation imposed by Section 162(m) in determining compensation levels and practices applicable to our executive officers. The Compensation Committee and CEO believe that there may be circumstances in which our interests are best served by maintaining flexibilityhedge or offset, any decrease in the way compensation is provided, whether or not compensation is fully deductible under Section 162(m).market value of our securities.

Elements Used to Achieve 20152023 Compensation Objectives

The principal elements of our 20152023 compensation program for Mr.each of our named executive officers were the following:

Michael J. Saylor were: a stock option award under the 2013 Equity Plan granted in 2014 and perquisites consisting principally of security and transportation-related benefits and associated tax-gross uptax gross-up payments. The principal elements

Phong Le: a base salary, a discretionary annual cash bonus target, stock option awards granted in 2017, 2018, 2019, 2021 and 2022 and RSUs granted in 2020 under the 2013 Equity Plan, and RSUs and PSUs granted in 2023 under the 2023 Equity Plan.

Kevin Adkisson: a base salary, quarterly cash bonus awards pursuant to his sales management variable compensation plan, stock option awards granted in 2019, 2020, 2021 and 2022 and RSUs granted in 2020 and 2021 under the 2013 Equity Plan, and a stock option award, RSUs and PSUs granted in 2023 under the 2023 Equity Plan. Additionally, in connection with his resignation from the Company in July 2023, Mr. Adkisson entered into an agreement with the Company, which provided for a lump-sum cash payment of our 2015 compensation program for Mr. Le were$100,000.

Andrew Kang: a base salary, a discretionary annual cash bonus target, a stock option award and RSUs granted in 2022 under the 2013 Equity

20


Plan, and a stock option award, RSUs and PSUs granted in 2015, and a one-time reporting bonus in connection with2023 under the commencement of Mr. Le’s employment with the Company, as further described below. The principal elements of our 2015 compensation program for Mr. Lang were2023 Equity Plan.

Wei-Ming Shao: a base salary, a discretionary annual cash bonus target, a stock option awardawards granted in 2018, 2019, 2021 and 2022 and RSUs granted in 2020 under the 2013 Equity Plan, and RSUs and PSUs granted in 2015, and a one-time cash bonus, as further described below. The principal elements of our 2015 compensation program for Messrs. Klein and Zolfaghari were a base salary, an incentive cash bonus opportunity for 2015, and stock option awards2023 under the 20132023 Equity Plan granted in 2013. The principal elements of our 2015 compensation program for Mr. Thede were a base salary and a stock option award under the 2013 Equity Plan granted in 2013. Plan.

We also provided each of our executive officers with certain perquisites and other benefits in 20152023 that the Compensation Committee orand the President & CEO, as applicable, believesbelieve are reasonable and consistent with the objectives of our executive compensation program. Each of these compensation elements satisfies one or more of our performance, alignment, and retention objectives, as described more fully below.

Base Salary

We provide cash compensation in the form of base salary to help (i) attract and retain talented executive officers and (ii) reward overall performance by recognizing the scope of responsibilities placed on eachour executive officer and rewarding each executive officer for his strengths and abilities in his respective field, leadership skills, management experience, and contributions. We also take into consideration economic and industry conditions and Company performance, motivation for continued growth in the future, and the competitive market for talented managers. We do not assign relative weights to Company and individual performance, but instead make a subjective determination after measuring such performances collectively. In 2015,officers. For 2023, a competitive base salary was an important component of compensation as it provided a degree of financial stability for each of our executive officers other than Mr. Saylor.

In September 2014, at Mr. Saylor’s request, the Compensation Committee reduced Mr. Saylor’s annual base salary to $1. The Compensation Committee adopted thisconsidered that following the reduction in Mr. Saylor’s salary and elimination of his incentive cash bonus arrangement, a larger percentage of Mr. Saylor’s compensation would be directly tied to the Company’s stock performance, which is consistent with the Company’s compensation policies approved by stockholders at our 2023 Annual Meeting of Stockholders, and that such change would not adversely impact his financial stability. The Compensation Committee considered Mr. Saylor’s compensation arrangements in each of February 2023 and February 2024 and, in each case at Mr. Saylor’s request, left his annual base salary at $1.

22MICROSTRATEGY | 2024 Proxy Statement


In February 2023, the Compensation Committee approved the base salaries for Messrs. Saylor and Le, and the President & CEO approved the base salaries for Messrs. Adkisson, Kang and Shao, effective January 1, 2023, as indicated in the table below. In February 2024, the Compensation Committee approved the base salaries for Messrs. Saylor and Le and the President & CEO approved the base salaries for Messrs. Kang and Shao, effective January 1, 2024, as indicated in the table below.

 

Base Salary as of

December 31, 2022

($)

Base Salary as of

January 1, 2023

($)

Base Salary as of

January 1, 2024

($)

 

Michael J. Saylor

 1       1       1    

 

Phong Q. Le

 1,000,000       1,000,000       1,000,000    

 

Kevin L. Adkisson(1)

 400,000       400,000       —    

 

Andrew Kang

 640,000       640,000       640,000    

 

W. Ming Shao

 640,000       640,000       640,000    

(1)

Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer on July 5, 2023. Prior to his resignation, his salary was $400,000.

In making these determinations, the Compensation Committee and the President & CEO, as applicable, did not assign relative weights to Company and individual performance, but instead made subjective determinations that the amounts of base salary were appropriate and in so doing considered the following general factors:

each executive officer’s individual performance, as measured against various strategic, operational, and financial objectives in such executive officer’s area of responsibility such as operational excellence and revenue growth, as well as:

Phong Le: the additional responsibilities he undertook in connection with his assumption of the CEO role, including bitcoin-related initiatives and business strategy, his efforts in structuring and executing the Company’s restructuringfinancing transactions and bitcoin strategy, and the additional responsibilities Mr. Le undertook when he assumed the role as head of the Company’s sales organization and sales function upon Mr. Adkisson’s resignation;

Kevin Adkisson: sales execution and performance;

Andrew Kang: financial, accounting, and strategic management initiatives, including his contributions to the Company’s bitcoin strategy and financing transactions; and

Ming Shao: oversight of corporate governance, commercial contracts, legal risk management, and other legal matters, as well as bitcoin-related initiatives and business strategy and his efforts in structuring and cost reductionexecuting the Company’s financing transactions and bitcoin strategy.

job responsibilities of each executive officer as we implement new business initiatives, announcedincluding our business transformation initiative, focus on revenue growth, and adjustment of our strategic plan for an evolving business environment;

each executive officer’s strengths and abilities in his respective field, leadership skills, management experience, employment and compensation history, overall compensation arrangements, and long-term potential to enhance stockholder value;

the competitive market for talented managers with comparable experience and expertise; and

Company performance over the prior several quarters and motivation to grow the business in the second half of 2014. future, as well as general economic and industry conditions.

In addition, in making their determinations with respect to 2023 base salaries, the Compensation Committee and the President & CEO considered analyses received from WTW regarding executive compensation in the Company’s peer group and WTW’s conclusion that the 2022 base salaries for the named executive officers other than Mr. Adkisson, were in the upper quartile of the peer group and generally competitive with the market. Mr. Adkisson’s base salary was in the 50th percentile.

Each position is unique, not only in function, but also in terms of the market norms for compensation and the pool of potential executives who may be available to fill that particular role. Given these unique conditions, determinations regarding base salaries are unique to each executive officer and do not necessarily reflect any comparative judgments.

MICROSTRATEGY | 2024 Proxy Statement

23


Cash Bonuses

Our cash bonus compensation is designed to help (i) attract and retain talented executive officers, (ii) reward achievement of strategic, operational, and financial objectives that support our goal of enhancing stockholder value, and (iii) motivate executive officers to achieve superior performance in their areas of responsibility. Together with equity awards, our cash bonus compensation program is one of the main vehicles for providing performance-based compensation to executive officers. The Compensation Committee, and the President & CEO, as applicable, consider various factors in determining the form and structure of the cash bonus arrangement that is most appropriate for attracting, retaining, rewarding, and motivating the individual executive officer.

No Saylor Cash Bonus

In September 2014, at Mr. Saylor’s request, the Compensation Committee eliminated Mr. Saylor’s incentive cash bonus arrangement. The Compensation Committee considered that, following the reduction in Mr. Saylor’s salary and elimination of his incentive cash bonus arrangement, a larger percentage of Mr. Saylor’s compensation would be directly tied to the Company’s stock performance, which is consistent with the Company’s compensation policies approved by stockholders at our 2014 annual meeting,2023 Annual Meeting of Stockholders, and that such change would not adversely impact his financial stability. The Compensation Committee considered Mr. Saylor’s compensation arrangements in March 2015each of February 2023 and February 2024 and, in each case at Mr. Saylor’s request, left his annual base salary at $1.

Effective April 1, 2015, the CEO increased Mr. Lang’s base salary from $300,000 to $325,000. The CEO made this determination after taking into consideration all other material elements of Mr. Lang’s compensation arrangements and after considering Mr. Lang’s achievement of certain strategic goals in 2015, particularly relating to the release of MicroStrategy 10 Secure Enterprise™.

Cash Bonuses

Our cash bonus compensation is designed to (i) help us attract and retain talented executive officers and (ii) reward achievement of strategic and financial goals that support our objective of enhancing stockholder value and to motivate executive officers to achieve superior performance in their areas of responsibility. Together with our stock option awards, our cash bonus compensation program is one of the main vehicles for providing performance-based compensation to executive officers. We consider various factors in determining the form and structure of the cash bonus arrangement that is most appropriate for rewarding and motivating the individual executive officer.

No Saylor Cash Bonus

In September 2014, at Mr. Saylor’s request, the Compensation Committee eliminated Mr. Saylor’s 2014 incentive cash bonus arrangement. The Compensation Committee adopted this change in connection with the Company’s restructuring efforts and cost reduction initiatives announced in the second half of 2014. At Mr. Saylor’s request, the Compensation Committee did not establish a cash bonus arrangement for him.

Discretionary Annual Cash Bonuses

For 2023, Mr. Saylor with respect to 2015.

21


President Cash Bonus Formulas

In March 2015, the Compensation Committee, based on recommendations from the CEO, established an incentiveLe’s compensation included a discretionary annual cash bonus arrangement for each of Messrs. Klein and Zolfaghari with respect to his respective performance for 2015. At that time, both individuals, as Presidents, had responsibilities that related to our business as a whole. Accordingly, the Compensation Committee believed that basing each President’s incentive cash bonus arrangementtarget established based in part on DEPS, a Company-wide financial metric, with the ability for the Committee to exercise negative discretion based on performance and actual year-end contributions, provided the appropriate incentive for each President’s performance in light of their responsibilities. We believed that establishing DEPS as a performance metric would help to align each President’s interests with those of our stockholders because increases in DEPS directly increase the overall value of the Company to stockholders.

Under the formula established by the Compensation Committee, the amount of the bonus opportunity for each of Messrs. Klein and Zolfaghari was equal to the product of $160,000 multiplied by the Company’s DEPS for the fiscal year ended December 31, 2015, subject to the Compensation Committee’s discretionsubjective evaluation of the appropriate targets to award a cash bonus amount lower thanhelp retain, reward and motivate Mr. Le, and the eligible bonus amount calculated using each 2015 President Bonus Formula. The maximum cash bonus amount for each of Messrs. Klein and Zolfaghari pursuant to his respective 2015 President Bonus Formula was $6,500,000.

In January 2016, the Compensation Committee determined not to pay either Mr. Klein or Mr. Zolfaghari a bonus pursuant to each executive’s respective 2015 President Bonus Formula for the reasons described below.

Discretionary Annual Cash Bonus Targets

The compensation of Messrs. LeKang and Lang in 2015Shao included discretionary annual cash bonus targets that were established based in part on the President & CEO’s subjective evaluation of the appropriate targets to help attract,retain, reward, and motivate them. In addition, in setting the discretionary annual cash bonus targets for 2023, the Compensation Committee and retain the President & CEO considered analyses received from WTW regarding executive target bonuses as a percentage of base salary in the Company’s peer group and WTW’s conclusion that the 2022 target bonuses of the Company’s executive officers were generally aligned with the 75th percentile of the peer group or higher, with Mr. Kang’s cash bonus target approximating the 50th percentile.

In making their determinations of the discretionary annual cash bonus targets for 2023, the Compensation Committee and the President & CEO, as applicable, executive officer, takingtook into account the scope of the executive officer’s responsibilities, his employment and compensation historysame factors described above with us, overall compensation arrangements, and long-term potentialrespect to enhance stockholder value, all in the context of general economic and industry conditions and Company performance.base salary determinations. In setting target bonus amounts for the other executive officers, the President & CEO also considered histhe expectations for the business department headed by each executive officer and the executive officers’ potential for achieving the expectations. In evaluatingThe Compensation Committee and the individual’s performancePresident & CEO, as applicable, believed that a discretionary annual cash bonus arrangement was an appropriate mechanism for retaining, rewarding, and motivating Messrs. Le, Kang, and Shao with respect to 2023 because each of these executive officers was responsible for, among other things, strategic and operational objectives that cannot always be measured by traditional financial metrics, which included the following objectives:

Phong Le: contributions to operational, financial, and human capital management initiatives, including bitcoin-related initiatives and business strategy;

Andrew Kang: financial, accounting, and strategic management initiatives, including his contributions to the Company’s equity offering transactions and bitcoin strategy; and

Ming Shao: oversight of corporate governance, commercial contracts, legal risk management, and other legal matters, as well as bitcoin-related initiatives and business strategy and his efforts in structuring and executing the Company’s equity offering transactions.

The Compensation Committee determined to leave the discretionary bonus target for Mr. Le unchanged for 2023, and the President & CEO determined to leave discretionary bonus targets for Messrs. Kang, and Shao unchanged for 2023, in each case after taking into consideration the factors described above.

The Compensation Committee, in determining the bonus amount,award for Mr. Le with respect to 2023, and the President & CEO, took into considerationin determining the bonus awards for Messrs. Kang and Shao with respect to 2023, subjectively determined each

24MICROSTRATEGY | 2024 Proxy Statement


applicable executive officer’s overall performance and achievement of various strategic, operational, and financial objectives, by each of these executive officers andin relation to the target bonus amount that was previously established for the applicable executive officer, all in the context of general economic and industry conditions and Company performance.

We believe that a discretionary annual cash bonus arrangement was an appropriate mechanism for motivating and rewarding Messrs. Le and Lang in 2015 because each of these executive officers was responsible for, among other things, strategic objectives and operational goals that cannot always be measured by traditional financial metrics. These strategic and operational objectives included sales execution and operational excellence and, with respect to Mr. Lang, technological innovation.

One-Time Bonuses

Mr. Le’s compensation in 2015 included a one-time reporting bonus, which was established by the CEO in order to attract Mr. Le to the Company and which is recoverable by the Company if Mr. Le resigns from his employment with the Company within twelve (12) months of his start date. The CEO determined this one-time reporting bonus based on the CEO’s subjective evaluation of the scope of Mr. Le’s responsibilities and Mr. Le’s long-term potential to enhance stockholder value and in light of the competitive market for talented managers.

Mr. Lang’s compensation in 2015 included a one-time cash bonus that was in addition to the discretionary annual cash bonus target described above and that was established based on the CEO’s subjective evaluation of Mr. Lang’s performance during 2015 and his achievement of certain strategic goals, particularly relating to the Company’s release of its new software platform, MicroStrategy 10 Secure Enterprise, in June 2015.

22


Performance Incentive Plan

Under the Company’s Performance Incentive Plan, the Company has the ability to grant cash bonus awards to participants that provide for a payment calculated as a percentage of the Company’s core operating income with respect to a particular performance period (generally a fiscal year), subject to reduction at the discretion of the administrator of the award for a specified amount of time following the applicable performance period. Core operating income is calculated by subtracting (i) the income (loss) from continuing operations before financing and other income and income taxes for our business unit(s) other than our analytics software and services business unit for the applicable period, if any, from (ii) our consolidated income (loss) from continuing operations before financing and other income and income taxes for such period. Payment of any amount determined under the Performance Incentive Plan generally occurs within 31 days after the third anniversary of the end of the fiscal year in which the performance period occurs. The total amount paid under the Performance Incentive Plan to any individual award recipient may not exceed $1,500,000 in any fiscal year.

The Compensation Committee has the authority to grant and administer awards under the Performance Incentive Plan that we intend to qualify as performance-based compensation under Section 162(m) and to grant and administer awards to the CEO. The CEO has the authority to grant and administer other awards under the Performance Incentive Plan. At this time, For example, the Compensation Committee and the President & CEO believesubjectively determined that the stock options grantedapplicable executive officers enhanced our operational excellence, achieved specific elements of our long-term strategic plans, and implemented development of certain growth initiatives. In addition, the Compensation Committee with respect to Mr. Le and the President & CEO with respect to Messrs. Kang and Shao, subjectively determined that each of the applicable executive officers had made continued progress in the area of his responsibility. The Compensation Committee also considered Mr. Le’s efforts in implementing the Company’s bitcoin strategy and business transformation initiative, and the additional responsibilities he undertook in connection with his assumption of the CEO role, and the President & CEO also considered (i) Mr. Kang’s efforts in developing and implementing the Company’s bitcoin strategy, and his efforts in structuring and executing the Company’s “at the market” equity offering, and (ii) Mr. Shao’s efforts in implementing the corporate governance and regulatory compliance aspects of the bitcoin strategy and his efforts in structuring and executing the Company’s “at the market” equity offering. None of these achievements was assigned any specific weighting or dollar amount of the total bonus.

The Compensation Committee calculated the individual bonus payout to Mr. Le, and the President & CEO calculated individual bonus payouts to each of Messrs. Kang and Shao utilizing the following formula:

Individual Annual Cash Bonus Target for 2023
($)

X

Individual Achievement Percentage
(%)

X

Company Performance Percentage
(%)

=

Individual Bonus Payout
($)

Individual Achievement Percentage. The individual achievement percentage is based on the Compensation Committee’s and President & CEO’s, as applicable, subjective assessment of each executive officer’s overall performance and achievement of objectives for 2023. A higher performance assessment drives a higher individual percentage (and vice-versa) such that it is possible for an executive officer who exceeds performance expectations to receive an individual achievement percentage above 100% and for an executive officer with a low performance assessment to receive less than his bonus target or no bonus. The performance assessments were based on an overall subjective assessment of each executive officer’s performance and no single factor was determinative in the individual achievement percentage, nor was the impact of any individual factor on the individual achievement percentage quantifiable.

Company Performance Percentage. The Company performance percentage is based on the President & CEO’s quarterly subjective assessment (and, in the case of the President & CEO’s discretionary annual bonus, the Compensation Committee’s annual subjective assessment) of the Company’s overall business and product development achievements and financial performance. The Compensation Committee and the President & CEO, as applicable, did not determine any pre-set range for the Company performance percentage and approved a Company performance percentage of 85% for 2023, which was equivalent to the average Company performance percentage used in determining bonuses for all Company employees on a discretionary bonus plan.

In the first quarter of 2024, the Compensation Committee determined the cash bonus award for Mr. Le with respect to performance in 2023, and the President & CEO determined the cash bonus awards to Messrs. Kang and Shao with respect to performance in 2023, as follows:

    Individual Annual Cash
Bonus Target for 2023
($)
  Individual Achievement
Percentage
(%)
  Company
Performance
Percentage
(%)
  Individual Bonus
Payout
($)
  

Phong Q. Le

 

  800,000  100  85  680,000
  

Andrew Kang

 

  500,000  100  85  425,000
  

W. Ming Shao

  500,000  100  85  425,000

MICROSTRATEGY | 2024 Proxy Statement

25


Sales Management Variable Compensation Plan

In February 2023, the President & CEO established a performance-based sales management variable compensation plan for Mr. Adkisson with respect to his performance for 2023. Since Mr. Adkisson was responsible for managing the Company’s worldwide sales organization, the President & CEO believed that basing Mr. Adkisson’s cash bonus plan on his department’s “Contribution” (as defined below) would provide the appropriate reward and incentive for his efforts to strengthen sales execution and operating margin growth. The President & CEO believed that establishing Contribution as a performance metric would help to align Mr. Adkisson’s interests with those of our stockholders because increases in this metric directly increase the overall value of the Company to stockholders.

Under the Sales Management Variable Compensation Plan, Mr. Adkisson was entitled to receive cash bonus compensation, determined and payable quarterly, based on the achievement of three performance criteria:

Individual Achievement – a quantitative measure serving as the baseline for Target Compensation (as described below);

Teamwork – a qualitative measure based on individual and team performance; and

Professional Development – a qualitative measure focused on professional growth.

Individual Achievement, calculated by reference to Contribution as described below, served as the baseline for quarterly Target Compensation, with performance in Teamwork and Professional Development having the potential to serve as accelerators or decelerators to Target Compensation or to defer variable compensation payout.

“Target Compensation” was calculated by multiplying Contribution (defined below) by 1.25%.

“Contribution” was calculated by subtracting Revenue Budget from Revenue, each as defined below.

“Revenue Budget” was the minimum threshold Revenue that Mr. Adkisson’s business unit was required to achieve for Mr. Adkisson to be eligible to receive a payout under the Sales Management Variable Compensation Plan. For 2023, Revenue Budget was $24 million for the first quarter, $29.5 million for the second quarter, $31.75 million for the third quarter, and $44.75 million for the fourth quarter, resulting in total Revenue Budget for the year of $130 million.

“Revenue” was the value of transactions sold during the measurement period. Revenue only included appropriately executed contracts (orders) that included a complete order package containing all elements necessary for the Company to recognize revenue and where the Company has determined that such revenue was recognizable under U.S. GAAP. Transactions “sold” refers to the non-cancellable amounts of an executed contract, excluding any shipping, taxes, referral fees or similar fees. Any Revenue that was cancelled or written off would be charged back for purposes of calculating Mr. Adkisson’s applicable bonus to the extent he had been given credit for such Revenue in calculating such bonus.

Mr. Adkisson was only eligible to receive cash bonus compensation for a given quarter if Revenue exceeded Revenue Budget for the quarter, resulting in positive Contribution. If Contribution was less than zero, then such negative amount was carried forward to the subsequent quarter within the calendar year and included as a charge in computing Contribution under subsequent quarters during the year until the negative amount was eliminated or the calendar year concludes.

Mr. Adkisson’s department achieved Contribution of $3.5 million with respect to the first quarter of 2023, and a negative Contribution with respect to the second quarter of 2023, resulting in Target Compensation of $43,951 for the first quarter, and Mr. Adkisson not being eligible to receive a cash bonus under the plan with respect to the second quarter. Mr. Adkisson resigned in July 2023 and was not eligible to receive payments under the plan with respect to the third and fourth quarters of 2023. The President & CEO determined that no adjustment was necessary for achievement of the Teamwork and Professional Development criteria for each of the first and second quarters, and consequently, after certain adjustments relating to revenue received, Mr. Adkisson received an aggregate bonus payout of $40,185 under the Sales Management Variable Compensation Plan with respect to 2023.

26MICROSTRATEGY | 2024 Proxy Statement


Equity Awards

In September 2013, the Board adopted the 2013 Equity Plan, and our cash bonus arrangements provide appropriate incentives to executive officers to increase stockholder value without further grants of awards underin April 2023, the Performance Incentive Plan.

In March 2012,Board adopted the Compensation Committee, based on recommendations from the CEO, granted awards under the Performance Incentive2023 Equity Plan, for 2012 to Messrs. Klein and Thede based on a percentage of the Company’s core operating income for 2012. The Compensation Committee made a subjective determination that an amount cumulatively representing approximately 1% of the Company’s core operating income for 2012 was an appropriate amount that would help motivate and retain these executive officers. Considering this cumulative amount, the Compensation Committee determined individual award amounts based on its subjective evaluation of the individual performance of each officer in the context of general economic and industry conditions and Company performance, taking into account the scope of the executive officer’s responsibilities, his employment and compensation history with us, overall compensation arrangements, and long-term potential to enhance stockholder value. The individual award amounts are set forth in the Performance Incentive Plan Awards Table. The Compensation Committee approved in March 2013 the dollar amounts for the awards granted for 2012 in each case based on the formula adopted in 2012. Mr. Thede’s employment with the Company ended in October 2015 and, accordingly, he became ineligible to receive any amounts with respect to his award for 2012 under the Performance Incentive Plan. The service period for Mr. Klein’s award was completed in December 2015, and the award was paid to Mr. Klein in January 2016.

In March 2013, the Compensation Committee, based on recommendations from the CEO, and based on the Committee’s subjective evaluation of the same set of factors considered by the Committee in determining the Performance Incentive Plan awards for 2012, granted to Messrs. Klein, Zolfaghari, and Thede awards under the Performance Incentive Plan for 2013. The service periods for these awards would have been completed in December 2016; however, as Mr. Thede’s employment with the Company ended in October 2015, and Messrs. Klein’s and Zolfaghari’s employment with the Company ended in January 2016, each such executive became ineligible to receive any amounts with respect to his award for 2013 under the Performance Incentive Plan. There are currently no awards outstanding under the Performance Incentive Plan pursuant to which any executive officer is eligible to receive any amounts.

MicroStrategy Stock Options

The Board of Directors adopted the 2013 Equity Plan in order to enhance the Company’sour ability to attract, retain, reward, and motivate persons who are expected to make important contributions to the Company, and to provide such persons with equity ownership opportunities and performance-based incentives that are intended to betterfurther align their long-term interests with those of our stockholders.

The 2023 Equity Plan replaced the Company’s stockholders. In October 2015, in order to provide2013 Equity Plan, though awards outstanding under the

23


2013 Equity Plan as of the effective date of the 2023 Equity Plan remain outstanding. Employees, officers, directors, consultants, and advisors (as the terms consultants and advisors are defined and interpreted for purposes of Form S-8 under the Securities Act or any successor form) of the Company with flexibility to issue additional equity incentivemay be granted awards to key personnel inunder the future, the Board2023 Equity Plan. As of Directors adopted Amendment No. 3 to increase the total numberMarch 26, 2024, an aggregate of 225,736 shares of the Company’s classour Class A common stockStock are authorized for issuance under the 20132023 Equity Plan from 1,500,000 to 1,700,000, subject to stockholder approval.

In February 2015, in connection with grants to various members of senior management, the Compensation Committee granted a stock option to purchase 50,000 shares of the Company’s class A common stock to Mr. LangPlan. No additional awards may be issued under the 2013 Equity Plan. The 2023 Equity Plan provides for the grant of incentive stock options intended to qualify as such under Section 422 of the Code, non-statutory stock options, restricted stock, RSUs, stock appreciation rights, other stock-based awards, and cash-based awards. Any type of award granted under the 2023 Equity Plan may be granted subject to the achievement of specified performance goals.

In September 2015, in connection with grants to various members of senior management,2020, the Compensation Committee granted aRSUs to each executive officer, other than Mr. Saylor, in lieu of stock options. In 2021, the Compensation Committee returned to primarily granting stock option awards to purchase 40,000 sharesexecutive officers. In 2022, WTW conducted an assessment of our equity compensation program for executive officers and made several recommendations, including that we tie equity awards more closely to defined annual long term incentive values based on market data and other factors, and that we diversify the types of awards granted to include RSUs and PSUs. In 2023, based upon advice from WTW, the Compensation Committee granted PSUs to executive officers for the first time, and transitioned to a targeted allocation of equity award value of approximately 40% to stock options, 40% to PSUs and 20% to RSUs for executive officers.

In granting equity awards, the Compensation Committee, based on recommendations from the President & CEO, made subjective evaluations of appropriate award amounts to help attract, retain, reward, and motivate the applicable executive officer based on the scope of the executive officer’s responsibilities, employment, and compensation history with us, overall compensation arrangements, including outstanding equity awards held by the executive officer, and long-term potential to enhance stockholder value, all in the context of general economic and industry conditions and Company performance. The Compensation Committee also took into account the stock option grants made in the third and fourth quarters of 2022 to Messrs. Le and Shao, respectively, when determining the grant of equity awards in June 2023, and determined not to grant additional option awards to Messrs. Le and Shao, and to instead grant to them only PSUs and RSUs. Accordingly, in June 2023 Messrs. Le and Shao received awards with value allocated approximately 67% to PSUs and 33% to RSUs. The Compensation Committee generally targeted for each of the executive officers a total value of equity awards in the upper quartile relative to the Company’s class A common stockpeer group.

Pursuant to Mr. Le under the 20132023 Equity Plan, (as contemplatedthe Compensation Committee granted the following awards to named executive officers in his offer letterJune 2023:

     Stock Options     PSUs     RSUs  
  

Phong Q. Le

 

       9,537    4,768 
  

Andrew Kang

 

   4,949    3,406    1,703 
  

W. Ming Shao

 

       3,065    1,533 
  

Kevin Adkisson(1)

   1,980    1,362    681 

(1)

Mr. Adkisson’s awards granted in June 2023 expired unvested in connection with his resignation from the Company in July 2023.

In each case, the awards were granted on the terms and conditions as described below. All outstanding awards are also subject to joinsuch other terms and conditions as are set forth in the Company).applicable plan and the applicable award agreement.

To encourage retention of award recipients, theStock Options

Outstanding stock options granted in 2015generally vest as to 25% of the original number of shares subject to the stock optionaward on the first anniversary of the grant date and as to an additional 25% on each anniversary thereafter until the options areaward is vested in full,

MICROSTRATEGY | 2024 Proxy Statement

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unless earlier terminated in accordance with the terms of the 2013 Equity Planapplicable equity plan or the applicable option agreement,award agreement; provided that the stock options would automaticallyawards granted to executive officers will vest in full, to the extent not already vested, upon the occurrence of a “change in control event” if the executive officer is terminated without “cause” by the Company or resigns for “good reason” (in each case as defined in the applicable award agreement) within 12 months following the change in control event (as defined inor if the applicable option agreement). acquiring company does not assume the award or substitute equivalent awards.

The outstanding stock options are also subjecthave an exercise price per share equal to such other termsthe closing sale price of our Class A Stock as quoted on Nasdaq on the grant date and conditions as are set forth inexpire ten years following the 2013 Equity Plan and the applicable option agreement.grant date.

If the awarda stock option recipient dies or becomes disabled before the final exercise date of an option, the option shall be exercisable within one year of the date of such death or disability; provided that such option shall be exercisable only to the extent that it was exercisable by the award recipient on the date of his or her death or disability and only until the final exercise date.

If the awarda stock option recipient ceases to be eligible to receive award grants under the 2013 Equity Plan,applicable plan, including through termination of employment without cause, the award recipient’sstock option recipient generally retains the right to exercise his or her option generally terminates three months after such cessation, providedto the extent that the option was exercisable on the date of such cessation for a period of three months after such cessation. However, if the awardstock option recipient is terminated for cause, the awardstock option recipient’s right to exercise his or her option will terminateterminates in full immediately upon such termination, and if the awardstock option recipient violates the non-competition or confidentiality provisions of any employment contract, confidentiality and nondisclosure agreement, or other agreement between the awardstock option recipient and the Company, the awardstock option recipient’s right to exercise his or her option will terminateterminates in full immediately upon such violation.

In granting stock optionsRSUs

Outstanding RSUs generally vest as to 25% of the original number of shares subject to the award on the first anniversary of the grant date and as to an additional 25% on each anniversary thereafter until the award is vested in full, unless earlier terminated in accordance with the terms of the applicable equity plan or the applicable award agreement; provided that awards granted to executive officers will vest in full, to the extent not already vested, upon the occurrence of a “change in control event” if the executive officer is terminated without “cause” by the Company or resigns for “good reason” (in each case as defined in the applicable award agreement) within 12 months following the change in control event or if the acquiring company does not assume the award or substitute equivalent awards.

Absent a change in control event, if an RSU recipient ceases to be eligible to receive award grants under the 2013 Equity Plan or the 2023 Equity Plan, as applicable, including through termination of employment without cause, the RSUs that are unvested as of such time are forfeited immediately to the Company without payment of consideration.

PSUs

Based upon advice received from WTW, in February and September 2015,June 2023 the Compensation Committee based on recommendations fromfor the CEO, made subjective evaluationsfirst time granted performance awards, which are subject to achievement of appropriate award amounts to help attract, motivate, and retain the applicable executivea total stockholder return (“TSR”) performance goal. Executive officers received a “target” number of PSUs. The number of PSUs that will vest will be determined based on the scopeCompany’s TSR over a three-year performance period (June 1, 2023 – May 31, 2026) relative to the TSR of the group of companies in the Nasdaq Composite Index. The Compensation Committee granted PSUs with a three-year cliff vesting period and potential payout factors in excess of 100% to promote retention. The Committee selected the Nasdaq Composite Index to measure the Company’s relative TSR because this index provides a sufficient number of comparable companies and represents a significant majority of the companies with which the Company competes for stockholder capital.

The measurement of the achievement of the TSR performance goal will be made based on the average stock price over a 90-trading day period for both the Company and the companies in the Nasdaq Composite Index as of both the beginning and the end of the performance period. Only companies that are in the Nasdaq Composite Index as of both the date that is 90 trading days before the first day of the performance period through, and including, the last day of the performance period will be included in the measurement. The measurement of the 90-trading day period at the beginning of the performance period begins on the day immediately prior to the first day of the performance period. The measurement of the 90-trading day period at the end of the performance period ends on the last day of the performance period.

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The number of PSUs, if any, that vest will be determined and certified by the Compensation Committee following the end of the performance period and will be equal to the product of (i) the target number of PSUs and (ii) the applicable payout factor, calculated as set forth below:

The Company’s TSR Performance Stated as a

Comparative Percentile Ranking Within the Members of

the Nasdaq Composite Index

Payout Factor

75th Percentile

200

50th Percentile

100

25th Percentile

50

< 25th Percentile

0

The payout factor will be linearly interpolated for TSR performance between the 25th and 75th percentiles.

Upon a change in control, achievement of the performance goal will be measured as of immediately prior to the closing of the change in control transaction, and the award will convert to a time-vested RSU for the remainder of the performance period, subject to acceleration on a qualifying termination (i.e., termination without cause or for good reason).

Upon death or disability of a participant, the award would remain outstanding and the participant or his or her estate would receive the pro rata portion of the shares that otherwise would have vested had the participant remained in service through the completion of the applicable performance period and certification of the achievement of the performance goal by the Compensation Committee.

Except as noted above, the participant is required to remain an eligible participant under the 2023 Equity Plan through the Compensation Committee’s certification of the achievement of the performance goal (which we expect to occur shortly after the end of the performance period) for the PSU to be eligible for vesting.

Additionally, several executive officer’s responsibilities, employmentofficers were granted equity awards in prior years. For a description of awards outstanding for each of the named executive officers as of December 31, 2023, please see the information in the table “Outstanding Equity Awards at 2023 Fiscal Year-end” in “Executive Officer Compensation.”

We believe that stock option awards, RSUs, PSUs, discretionary and compensation history with us, overall compensationsales management variable cash bonus arrangements, and our sales performance incentive fund arrangements, as applicable, provide appropriate short and long-term potentialincentives to enhanceour executive officers to increase stockholder value allthrough their collective efforts in the context of general economiccorporate functions, product design, engineering, marketing, and industry conditions.sales and services to our customers.

In September 2013, Mr. Klein and Mr. Zolfaghari were each granted a stock option to purchase 200,000 shares of the Company’s class A common stock. Also in September 2013, Mr. Thede was granted a stock option to purchase 100,000 shares of the Company’s class A common stock. At the time Mr. Thede’s employment with the Company ended in October 2015, 50,000 shares of the Company’s class A common stock subject to such option had vested. The remaining portion of Mr. Thede’s option to purchase an additional 50,000 shares of the Company’s class A common stock was terminated upon his departure pursuant to the terms of his option agreement. Following his departure and prior to December 31, 2015, Mr. Thede exercised his option with respect to the 50,000 shares of the Company’s class A common stock that had vested.

Perquisites and Other Personal Benefits

In 2015,2023, we provided the executive officers with perquisites and other personal benefits that the Compensation Committee and the President & CEO believe are reasonable and consistent with our overall compensation program. We believe that the cost of these benefits to us is a reasonable use of our resources.resources and we monitor these costs closely in reviewing our compensation program. The Company’s payment of these costs may result in imputed compensation to the executive officers for tax purposes. These benefits are designed to:

 

allow our executive officers to participate in important Company meetings and other events for which the Company’s payment of the expenses of such executive officers and their guests may result in imputed compensation to such executive officers for tax purposes;events;

 

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allow our executive officers to maintain appropriate levels of visibility and activity in business, professional, and social circles that may benefit our business, as well as enjoying time with friends and family;

 

allow our executive officers (and in particular, our CEO)Executive Chairman) to make more productive and efficient use of their time for Company business and enhance their personal security, in particular during personal travel;

 

allow our executive officers (and in particular, our CEO)Executive Chairman) to be in communication with the Company and available to quickly respond to time-sensitive Company matters during personal travel in an environment that allows for confidential communications regarding Company business;

 

promote our executive officers’ health and well-being; and

 

enhance our ability to retain our executive officers.

MICROSTRATEGY | 2024 Proxy Statement

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The Company has a program pursuant to which it arranges for individual disability insurance policies to be provided to eligible executive officers and certain other senior employees as a supplement to the group disability insurance that is available to most Company employees and pays the premiums with respect to such supplemental policies. In 2015, Messrs. Saylor, Lang, Klein, Zolfaghari, and Thede wereCertain of our executive officers are eligible to participate in this program. Mr. Le was not eligible to participate in this program in 2015 since his employment with the Company commenced in August 2015.

The Company has a program pursuant to which it pays the cost of annual healthcare screenings for eligible executive officers. In 2015, Messrs. Lang, Klein, Zolfaghari, and Thede wereAll executive officers are currently eligible to participate in this program. Mr. Saylor was not eligible to participate in this program in 2015, and Mr. Le was not eligible to participate in this program in 2015 since his employment with the Company commenced in August 2015.

The Company’s executive officers are also generally eligible to participate in the Company’s 401(k) plan, which includes an employer match of up to $3,000$5,000 annually, and group term life insurance plan, each of which are benefitsis a benefit available to most Company employees. In 2015, each of our executive officers was eligible to participate in these plans.

We ownThe Company owns a Bombardier Global Express XRS aircraft. We refer to the Bombardier Global Express XRS, collectivelyaircraft (collectively with additional aircraft that the Company may lease or charter, asthe “Company Aircraft”). We permitThe Company permits personal use of Company Aircraft by Mr. Saylor and, to the extent approved by Mr. Saylor, other executive officers and employees of the Company when the applicable Company Aircraft is not being used exclusively for business use. We have established various restrictions on the personal use ofbusiness.

The Company Aircraft, including the restriction that personal use by Mr. Saylor and any other director or employee of the Company may not exceed, in the aggregate, 200 flight hours in any fiscal year.

We allowallows executive officers to make personal use of tickets to sporting, charity, dining, entertainment, or similar events, as well as use of corporate suites, club memberships, or similar facilities that wethe Company may acquire which we refer to as(collectively, the “Corporate Development Programs.”Programs”).

From time to time, ourMicroStrategy’s Board of Directors may hold meetings and other related activities in various locations, for which we paythe Company pays specified travel, lodging, food, beverage, entertainment, and related expenses on behalf of the participants (including any participating executive officers) and their guests. Such activities did not result in compensation to any of our executive officers in 2015.

We sponsorThe Company sponsors an annual trip and related events for sales and service personnel who have met specified performance criteria. We determined that participation by Mr. Zolfaghari in these events in 2015 was important and beneficial to us as a means of strengthening his relationships with key sales and services personnel. Accordingly, we authorized Mr. Zolfaghari,criteria as well as his guest, to attend these events. We paidcertain executive officers, other Company personnel, and their guests. The Company pays for specified travel, lodging, food, beverage, entertainment, and related expenses on behalf of the participants (including any participating executive officers) and their guests. We haveThe Company has established a policy that the compensation imputed to Mr.Michael Saylor as a result of this perquisite, excluding any associated tax gross-up payments, may not exceed $30,000 in any fiscal year. Mr. Saylor did not participate in these events in 2015.

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The Company may also request that Company personnel, including executive officers, participate in conferences, symposia, and other similar events or activities relating to the Company’s business for which the Company pays for the expenses of Company participants and their guests. Such events and activities did not result in compensation to any of our executive officers in 2015.

From time to time, certain Company personnel, including executive officers, are offered meals prepared by the Company’s in-house catering department, which we refer to as “Company Meals.” In 2015, all of our executive officers were offered Company Meals.

The Company reimbursed Mr. Lang in 2015 for expenses relating to temporary lodging in connection with Mr. Lang’s relocation to the Washington, D.C. metropolitan area from his previous residence.

In 2015, we also mademakes available to Mr. Saylor, as CEO,MicroStrategy’s Executive Chairman, perquisites that wereare not generally available to other executive officers:

 

We provided Company-owned vehicles and related driving services to Mr. Saylor. In addition to business use, we authorized Mr. Saylor to make personal use of the Company-owned vehicles and related driving services when such vehicles were not being used exclusively for business purposes.

The Company permits Mr. Saylor to use the services of one or more drivers for his personal use. The Company has established a policy that the aggregate compensation to Mr. Saylor and any other director or employee of the Company as a result of personal use of such car services, excluding any associated tax gross-up payments, may not exceed $100,000 in any fiscal year.

 

We pay for the services of one or more drivers for vehicles other than Company-owned vehicles for Mr. Saylor’s personal use. We have established a policy that the aggregate compensation to Mr. Saylor and any other director or employee of the

The Company as a result of personal use of such alternative car services, excluding any associated tax gross-up payments, may not exceed $100,000 in any fiscal year. Mr. Saylor did not make personal use of any alternative car services in 2015.

We subleased,subleases, at no rental cost, periodic use of a standard office spacecubicle at ourthe Company’s current headquarters building to Aeromar Management Company, LLC, which is a company wholly owned by Mr. Saylor and through which Mr. Saylor conducts personal business activities. Beginning in October 2014, theactivities and allows Mr. Saylor certain use of subleased office space was reduced from an office to a cubicle.assistants for personal matters.

 

We pay for various costs related to a CEO security program pursuant to which security services are provided to Mr. Saylor, provided that the total costs to the Company of such program, together with any associated tax gross-up payments to Mr. Saylor, do not exceed $950,000 in any given calendar year (the “CEO Security Program Cap”).

The Company pays for various costs related to a security program pursuant to which security services are provided to Mr. Saylor, provided that the total cost to the Company of such program, together with any associated tax gross-up payments to Mr. Saylor, does not exceed $1,400,000 in any given calendar year (the “Security Program Cap”).

The Company may hold, host, or otherwise arrange events, outings, or other similar entertainment functions at which Mr. Saylor is permitted to entertain personal guests. The Company has established a policy that the aggregate incremental cost to the Company of such entertainment activities (to the extent that they are not Corporate Development Programs) attributable to Mr. Saylor, including any associated tax gross-up payments, may not exceed $75,000 in any fiscal year (the “Entertainment Events Cap”).

 

We permit

The Company permits Mr. Saylor to make personal use of the Company’s in-house catering resources. We refer to such use, other than for Company Meals, as Non-Business Catering Use. We have established a policy thatwebsite, Michael.com, which is owned and maintained by the compensation imputed to Mr. Saylor as a result of Non-Business Catering Use, excluding any associated tax gross-up payments, may not exceed $25,000 in any fiscal year. Mr. Saylor did not have any Non-Business Catering Use in 2015.Company.

 

30MICROSTRATEGY | 2024 Proxy Statement


We may hold, host, or otherwise arrange events, outings, or other similar entertainment functions at which Mr. Saylor is permitted to entertain personal guests. We have established a policy that the aggregate incremental cost to us of such entertainment activities (to the extent that they are not Corporate Development Programs) attributable to Mr. Saylor, including any associated tax gross-up payments, may not exceed $75,000 in any fiscal year (the “Entertainment Events Cap”). There were no such entertainment activities in 2015.

To the extent that any of the arrangements described above result in compensation to an executive officer, the Company pays to (or withholds and pays to the appropriate taxing authority on behalf of) such executive officer a “tax gross-up”tax gross-up in cash approximating his (i) federal and state income and payroll taxes on the taxable income associated with such arrangements, plus (ii) federal and state income and payroll taxes on the taxes that the individual may incur as a result of the payment of taxes by the Company with respect to the imputed compensation, subject to the Entertainment Events Cap and CEO Security Program Cap, as applicable.

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The Compensation Committee periodically reviews the levels of perquisites and other personal benefits provided to the Executive Chairman and President & CEO and may adjust, add, or eliminate certain perquisites or benefits. Similarly, the Compensation Committee and thePresident & CEO periodically review the levels of perquisites and other personal benefits provided to the other executive officers and may adjust, add, or eliminate certain perquisites or benefits.

Change-of-ControlChange-in-control Agreement

The options to purchase shares of our class A common stock option awards and RSUs granted under the 2013 Equity Plan and 2023 Equity Plan to Messrs. Le and Lang in 2015, Mr. Saylor in 2014, and Messrs. Klein, Zolfaghari, and Thede in 2013our executive officers provide or provided, as applicable, (A) for automaticstock options and RSUs vesting in full (i) upon the occurrence of a change in control event under specified conditions or (ii) upon the termination without cause or resignation for good reason of the applicable executive officer within 12 months following a change in control event, and (B) for PSUs, upon a change in control, event (as definedmeasurement of achievement of the performance goal as of immediately prior to the closing of the change in control transaction, with the award converting to a time-vested RSU for the remainder of the performance period, subject to acceleration on a qualifying termination (i.e., termination without cause or for good reason), in each case as described above in the applicable option agreement).“—Elements Used to Achieve 2023 Compensation Objectives—Equity Awards” section. For details on potential payments upon a change-in-control,change in control, please see “Executive and Director Compensation—Executive Officer Compensation—Potential Payments Upon Termination or Change-in-Control.Change in Control.

Determining Compensation

We generally establish performance-based cash bonus arrangements and make determinations regarding adjustments to base salary and cash bonus targets for our executive officers in the first or second quarter of each year. Determinations regarding the actual payment of bonuses are generally made in the first quarter following the applicable performance period.

Base Salary

In September 2014, at Mr. Saylor’s request, the Compensation Committee reduced Mr. Saylor’s annual base salary to $1. The Compensation Committee adopted this change in connection with the Company’s restructuring efforts and cost reduction initiatives announced in the second half of 2014. In addition, the Compensation Committee considered that following the reduction in Mr. Saylor’s salary and elimination of his cash bonus arrangement, a larger percentage of Mr. Saylor’s compensation would be directly tied to the Company’s stock performance, which is consistent with the Company’s compensation policies approved by stockholders at our 2014 annual meeting, and that such change would not adversely impact his financial stability. The Compensation Committee considered Mr. Saylor’s compensation arrangements in March 2015 and again in March 2016 and, at Mr. Saylor’s request, left his annual base salary at $1.

In 2015, the CEO established a base salary for Mr. Le, set forth below, taking into consideration all other material elements of Mr. Le’s compensation arrangements discussed below. Effective April 1, 2015, the CEO adjusted Mr. Lang’s annual base salary, as indicated in the table below, after taking into consideration all other material elements of Mr. Lang’s compensation arrangements discussed below. The CEO also considered the annual base salaries of Messrs. Klein, Zolfaghari, and Thede, set forth below, and, after taking into consideration all other material elements of the executive officers’ compensation arrangements discussed below, and, with respect to Mr. Thede, his plans to retire from the Company, determined to leave such salaries unchanged.

Annual Base Salary ($)

Phong Q. Le*

500,000

Timothy E. Lang

300,000 (effective prior to
April 1, 2015)

325,000 (effective as of
April 1, 2015)

Jonathan F. Klein

800,000

Paul N. Zolfaghari

800,000

Douglas K. Thede**

575,000

*Mr. Le’s employment with the Company commenced in August 2015 and, accordingly, his annual base salary was prorated for 2015 based on the actual time Mr. Le was employed by the Company in 2015.
**Mr. Thede’s employment with the Company ended in October 2015 and, accordingly, he became ineligible to receive any base salary following his departure.

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In January 2016, the CEO again considered Mr. Lang’s annual base salary, as set forth above, and, taking into consideration all other material elements of Mr. Lang’s compensation arrangements, determined to increase Mr. Lang’s annual base salary to $400,000, effective January 1, 2016.

In making these determinations, the CEO made subjective determinations that the amounts of base salary were appropriate, and in so doing considered the following general factors:

Company performance over the prior several quarters and motivation for continued growth in the future, as well as economic and industry conditions;

job responsibilities of each executive officer as we implement new product initiatives and adjust our strategic plan for an evolving business environment;

each executive officer’s strengths and abilities in his respective field, his leadership skills, his management experience, his employment and compensation history, and his future potential;

with respect to Mr. Le, the desire to attract Mr. Le to the Company;

with respect to Mr. Lang, the successful release of MicroStrategy 10 Secure Enterprise in June 2015; and

the competitive market for talented managers with comparable experience and expertise.

Each position is unique, not only in function but also in terms of the market norms for compensation and the pool of potential executives that may be available to fill that particular role. Given these unique conditions, determinations regarding base salaries are unique to each executive and do not necessarily reflect any comparative judgments. With respect to each of the executive officers other than himself, the CEO also conducted a subjective assessment of the executive’s individual performance, as applicable, as measured against various objectives as described above.

Cash Bonuses

No Saylor Cash Bonus

In September 2014, at Mr. Saylor’s request, the Compensation Committee eliminated Mr. Saylor’s 2014 incentive cash bonus arrangement that was established by the Compensation Committee in March 2014. The Compensation Committee adopted this change in connection with the Company’s restructuring efforts and cost reduction initiatives announced in the second half of 2014. In addition, the Compensation Committee considered that following the reduction in Mr. Saylor’s salary and elimination of his cash bonus arrangement, a larger percentage of Mr. Saylor’s compensation would be directly tied to the Company’s stock performance, which is consistent with the Company’s compensation policies approved by stockholders at our 2014 annual meeting.

The Compensation Committee considered Mr. Saylor’s compensation arrangements in March 2015 and, at Mr. Saylor’s request, did not establish a cash bonus arrangement for Mr. Saylor with respect to 2015. The Compensation Committee again considered Mr. Saylor’s compensation arrangements in March 2016 and, at Mr. Saylor’s request, has not established a cash bonus arrangement for Mr. Saylor with respect to 2016.

President Cash Bonus Formulas

In January 2016, the Compensation Committee determined not to award a bonus to each of Messrs. Klein and Zolfaghari under each executive’s respective 2015 President Bonus Formula. Each 2015 President Bonus Formula provided for a bonus opportunity based on a multiplier of the Company’s DEPS. In determining not to pay Messrs. Klein and Zolfaghari a bonus under the 2015 President Bonus Formula, the Compensation Committee exercised its discretion to award a bonus amount lower than the amount calculated using the formula because the Compensation Committee did not view the amounts derived from the formula as consistent with the Compensation Committee’s assessment of Messrs. Klein’s and Zolfaghari’s contributions to the Company’s

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overall performance in 2015, particularly in light of the Compensation Committee’s view of the reductions in the scope of their roles and responsibilities during 2015, their performance in the areas of the business for which they retained responsibility, and the other compensation already paid to Messrs. Klein and Zolfaghari.

Discretionary Annual Cash Bonuses

The CEO used a subjective evaluation process, considering the executive officer’s overall performance and achievement of various strategic, operational, and financial objectives and the target bonus amount that was previously established, as well as Company performance, as discussed earlier, in determining discretionary annual cash bonus awards for Messrs. Le and Lang for 2015. For example, the CEO considered that in 2015 we achieved margin growth, enhanced our sales and operational processes and execution, released MicroStrategy 10 Secure Enterprise, and made continued progress with respect to product development related to Usher. As a result of this subjective evaluation process, in February 2016 the CEO determined a bonus award of $200,000 to Mr. Lang (consistent with his $200,000 annual cash bonus target for 2015) and $142,466 to Mr. Le (representing the prorated amount of Mr. Le’s $400,000 annual cash bonus target based on the actual time Mr. Le was employed with the Company in 2015) with respect to performance in 2015. We did not adopt any cash bonus arrangements for Mr. Thede for 2015 since, in March 2015, he announced his plans to retire from the Company.

In January 2016, the CEO increased Mr. Lang’s annual cash bonus target for 2016 to $400,000.

One-Time Bonuses

In connection with the commencement of his employment with the Company in August 2015, Mr. Le was paid a one-time reporting bonus of $100,000, which is recoverable by the Company if Mr. Le resigns from his employment within twelve (12) months of his start date with the Company. This reporting bonus was awarded by the CEO in order to attract Mr. Le to the Company and was based on the CEO’s subjective evaluation of the scope of Mr. Le’s responsibilities, Mr. Le’s long-term potential to enhance stockholder value and in light of the competitive market for talented managers.

In November 2015, the CEO determined a one-time cash bonus of $150,000 to Mr. Lang that was in addition to the discretionary annual cash bonus described above and that was awarded based on the CEO’s subjective evaluation of Mr. Lang’s performance during 2015 and his achievement of certain strategic goals, particularly relating to the Company’s release of its new software platform, MicroStrategy 10 Secure Enterprise, in June 2015.

MicroStrategy Stock Options

In February 2015, in connection with grants to various members of senior management, the Compensation Committee granted a stock option to purchase 50,000 shares of the Company’s class A common stock to Mr. Lang under the 2013 Equity Plan. Mr. Lang’s award (i) vests in equal annual installments over a four-year vesting period unless accelerated upon a change in control event, as defined in his option agreement, or otherwise in accordance with the provisions of the 2013 Equity Plan or his option agreement, (ii) has an exercise price equal to the fair market value of our class A common stock on the date of grant, (iii) expires ten years following the date of grant, and (iv) is subject to the other terms and conditions of the applicable option agreement and the 2013 Equity Plan. In addition, in September 2015, in connection with grants to various members of senior management, the Compensation Committee granted a stock option to purchase 40,000 shares of the Company’s class A common stock to Mr. Le under the 2013 Equity Plan (as contemplated in his offer letter to join the Company) under the same terms and conditions as Mr. Lang’s award.

In granting stock options under the 2013 Equity Plan, the Compensation Committee, based on recommendations from the CEO, made subjective evaluations of appropriate award amounts to help attract, motivate, and retain the applicable executive officers based on the scope of the executive officer’s responsibilities, employment and compensation history with us, overall compensation arrangements, and long-term potential to enhance stockholder value, all in the context of general economic and industry conditions.

29


Compensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation“Compensation Discussion and AnalysisAnalysis” required by Item 402(b) of Regulation S-K with management.S-K. Based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation“Compensation Discussion and AnalysisAnalysis” be included in this proxy statement and incorporated by reference into the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.2023.

By the Compensation Committee of the Board of Directors of MicroStrategy Incorporated.

Carl J. Rickertsen

Robert H. Epstein

Jarrod M. Patten

Carl J. Rickertsen

Jarrod M. Patten

Leslie J. Rechan

 

MICROSTRATEGY | 2024 Proxy Statement

31

30


Executive Officer Compensation

The compensation information set forth below relates to compensation paid by us to the individuals serving as either our chiefprincipal executive officer our current chiefor principal financial officer our former chief financial officer who departed during 2015, and our threethe other most highly compensated executive officers who were serving as executive officers as of December 31, 2015 (two of whom have since departed the Company).2023. In this section, we refer to all of these individuals as our “named executive officers”. or our “executive officers.”

Summary Compensation Table

The table below sets forth certain information concerning the compensation of the named executive officers for the fiscal years ended December 31, 2015,2023, December 31, 2014,2022, and December 31, 2013.2021, as applicable.

 

Name and Principal Position

  Year   Salary
($)
  Bonus
($)
  Option
Awards
($)
  Non-Equity
Incentive Plan
Compensation
($)
  All Other
Compensation
($) (1)
  Total
($)
 

Michael J. Saylor

   2015     1    —      —      —      592,441(2)   592,442  

Chairman of the Board,

President & Chief Executive Officer

   2014     583,333    —      21,708,000(3)   —      1,810,332    24,101,665  
   2013     875,000    —      —      4,122,000(4)   1,833,310    6,830,310  

Phong Q. Le

   2015     178,030    242,466(5)   3,315,600(3)   —      3,063    3,739,159  

Senior Executive Vice

President & Chief Financial Officer

         

Timothy E. Lang

   2015     318,750    350,000(6)   3,409,500(3)   —      4,533    4,082,783  

Senior Executive Vice President & Chief Technology Officer

   2014     88,636    100,000(7)   —      —      57,976    246,612  
         

Jonathan F. Klein (8)

   2015     800,000    —      —      218,453(9)   16,414(10)   1,034,867  

Former President & Chief Legal Officer

   2014     800,000    —       208,115(11)   22,343    1,030,458  
   2013     770,625    —      8,406,000(3)   1,543,518(12)   39,853    10,759,996  

Paul N. Zolfaghari (13)

   2015     800,000    —      —      —      44,744(14)   844,744  

Former President

   2014     800,000    —      —      70,400(15)   65,991    936,391  
   2013     800,000    —      8,406,000(3)   1,179,200(16)   215,288    10,600,488  

Douglas K. Thede (17)

   2015     541,588(18)   —      —      —      15,594(19)   557,182  

Former Senior Executive Vice President & Chief Financial Officer

   2014     575,000    —      —      137,715(20)   47,854    760,569  
   2013     562,500    575,000(21)   4,203,000(3)   231,804(22)   53,124    5,625,428  

Name and Principal Position

 Year  Salary
($)
  Bonus
($)
  

Stock

Awards

($)(1)

  Option
Awards
($)
(2)
  All Other
Compensation
($)
(3)
  Total
($)
 

Michael J. Saylor(4)

Chairman of the Board & Executive Chairman (Former Principal Executive Officer)

  2023   1            799,669(14)   799,670 
  2022   1            670,811   670,812 
  2021   1            2,780,240   2,780,241 

Phong Q. Le(5)

President & Chief Executive Officer

  2023   1,000,000   680,000(8)   5,954,383      393,872(15)   8,028,255 
  2022   939,773   770,000(8)      18,324,800   139,787   20,174,360 
  2021   900,000   1,000,000(8)      15,237,200   1,581,384   18,718,584 

Andrew Kang(6)

  2023   640,000   425,000(9)   2,126,570   920,217   46,067(16)   4,157,854 

Senior Executive Vice President & Chief Financial Officer

  2022   413,333   424,658(10)   987,200   1,921,500   5,080   3,751,771 

Kevin L. Adkisson(7)

  2023   233,333   142,370(11)   850,378   368,161   100,904(17)   1,695,146 

Senior Executive Vice President & Chief Revenue Officer

 

 

 

 

2022

 

 

 

 

 

 

400,000

 

 

 

 

 

 

645,804

 

(12) 

 

 

 

 

 

 

 

 

 

 

4,550,200

 

 

 

 

 

 

27,563

 

 

 

 

 

 

5,623,567

 

 

W. Ming Shao

Senior Executive Vice President, General Counsel & Secretary

  2023   640,000   425,000(13)   1,913,802      52,344(18)   3,031,146 
 

 

 

 

2022

 

 

 

 

 

 

640,000

 

 

 

 

 

 

550,000

 

(13) 

 

 

 

 

 

 

 

 

 

 

6,983,800

 

 

 

 

 

 

36,487

 

 

 

 

 

 

8,210,287

 

 

  2021   600,000   650,000(13)      7,618,600   42,445   8,911,045 

 

(1)All Other Compensation includes

Stock Awards include RSUs granted prior to 2023, and RSUs and PSUs granted in 2023. Represents the grant date fair value of RSUs granted under the 2013 Equity Plan and the 2023 Equity Plan and PSUs granted under the 2023 Equity Plan, calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation.” See Note 11 “Share-based Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for the assumptions made in determining grant date fair value for the RSUs and PSUs. This amount reflects the grant date fair value for the RSUs and PSUs and is not intended to represent the value, of perquisites and other personal benefits, employer 401(k) plan match, and group term life insurance premiums forif any, that has been or will be actually realized by the named executive officer, as well as tax “gross-ups” paid to him for the fiscal year, but does not include perquisites and other personal benefits for the named executive officer if the total value of all perquisites and other personal benefits for such named executive officer in a given fiscal year was less than $10,000.individual.

For purposes of the amounts reported in this column for 2015:

“401(k) Plan Match” refers to matching payments of up to $3,000 annually made by the Company under the Company’s 401(k) plan, which is a benefit available to most Company employees;

“CEO Security Program” refers to the expenses related to the CEO security program, pursuant to which the Company pays for various costs related to the provision of security to Mr. Saylor;

31


“Company Aircraft” refers to the Bombardier Global Express XRS aircraft owned by the Company as well as such other aircraft (i) that we may, from time to time, lease or charter, including, without limitation, any aircraft subject to a fractional interest program in which we may participate by leasing a fractional interest, and (ii) that has been designated by the Company to be “Company Aircraft” under our aircraft use policy;

“Company Meals” refers to meals prepared, from time to time, by the Company’s in-house catering department offered to Company personnel, including the named executive officers;

“Company Vehicles” refers to the Company’s sedan and sports utility vehicle, and related driving services;

“Corporate Development Programs” refers to tickets to sporting, charity, dining, entertainment, or similar events as well as use of corporate suites, club memberships, or similar facilities that the Company may acquire;

“Executive Healthcare Screening Program” refers to a program pursuant to which the Company pays the cost of annual healthcare screenings for eligible named executive officers;

“Life Insurance” refers to premiums paid by the Company with respect to group term life insurance policies, which is a benefit available to most Company employees;

“President’s Club” refers to an annual trip and related events for sales and service personnel who have met specified performance criteria;

“Sublease” refers to the sublease of office space by the Company to Aeromar Management Company, LLC, which is wholly owned by Mr. Saylor; and

“Supplemental Disability Insurance” refers to the premiums paid by the Company with respect to individual disability insurance policies provided to certain Company personnel, including named executive officers, as a supplement to the group disability insurance that is available to most Company employees.

See “Executive and Director Compensation—Compensation Discussion and Analysis” for further discussion of the benefits referred to in this footnote.

With respect to each item of All Other Compensation, we report the aggregate incremental cost to the Company. We generally calculate aggregate incremental cost to the Company by disregarding fixed costs that the Company has already incurred as a general matter but are necessary to provide the item, and aggregating only the variable costs that the Company incurs as a result of providing the item to the named executive officer. We calculate aggregate incremental cost to the Company for the following perquisites that represented the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for a particular named executive officer in 2015 as indicated below:

With respect to Company Aircraft, we have determined that there is no aggregate incremental cost to the Company when personal guests of named executive officers accompany named executive officers on business flights. In determining the aggregate incremental cost of providing the Company Aircraft for personal use when the purpose of the flight is personal in nature, we aggregated variable costs associated with the particular flight such as fuel costs, crew travel expenses, casual and temporary labor costs, aviation staff expenses, aircraft trip planning fees, handler and landing fees, and catering costs.

32


With respect to the CEO Security Program, we have determined that the aggregate incremental cost to the Company of providing this benefit is calculated by prorating the aggregated costs associated with the operation of the CEO Security Program by the percentage of time spent by the security specialists on security matters that are personal in nature. Costs associated with the operation of the CEO Security Program include compensation for the security specialists, travel, parking, lodging, and meal expenses associated with the provision of security services, consulting and advisory fees, rent and rent related office expenses, and other business costs.

(2)Amount shown consists of (i) $102,424 in connection with personal use of the Company Aircraft, (ii) $355,049 in connection with the CEO Security Program, (iii) $76,422 in tax “gross-ups” paid to Mr. Saylor for the fiscal year, and (iv) amounts in connection with the Sublease, personal use of Company Vehicles, personal use of Corporate Development Programs, Supplemental Disability Insurance, and Company Meals.
(3)

Represents the grant date fair value of an option to purchase shares of classour Class A common stock of MicroStrategyStock granted under the 2013 Equity Plan and the 2023 Equity Plan, calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation”.Compensation.” See Note 12,11 “Share-based Compensation,”Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the yearsyear ended December 31, 2013, December 31, 2014, and December 31, 2015, as applicable,2023, for the assumptions made in determining grant date fair value for the option. This amount reflects the grant date fair value for the option and is not intended to represent the value, if any, that has been or will be actually realized by the individual.

(3)

All Other Compensation includes the value of perquisites and other personal benefits, employer 401(k) Plan Match, and group term Life Insurance for the executive officer, as well as tax gross-ups paid to such executive officer for the fiscal year.

For purposes of the amounts reported in this column for 2023:

“401(k) Plan Match” refers to matching payments of up to $5,000 annually made by the Company under the Company’s 401(k) plan, which is a benefit available to most Company employees;

“Company Aircraft” refers to the Bombardier Global Express XRS aircraft owned by the Company collectively with additional aircraft that we may lease or charter;

“Life Insurance” refers to premiums paid by the Company with respect to a group term life insurance plan, which is a benefit available to most Company employees;

“President’s Club” refers to an annual trip and related events for sales and services personnel who have met specified performance criteria as well as certain executive officers, other Company personnel, and their guests;

“Security Program” refers to the expenses related to the security program pursuant to which the Company pays for various costs related to the provision of security to Mr. Saylor;

32MICROSTRATEGY | 2024 Proxy Statement


“Supplemental Disability Insurance” refers to premiums paid by the Company with respect to individual disability insurance policies provided to certain Company personnel, including eligible executive officers, as a supplement to the group disability insurance that is available to most Company employees.

“Executive Physicals” refers to the costs of annual healthcare screenings provided by a third-party health care provider for which certain company executives, other than Mr. Saylor, are eligible.

See “Executive and Director Compensation—Compensation Discussion and Analysis” for further discussion of the benefits referred to in this footnote.

With respect to each item of All Other Compensation, we report the aggregate incremental cost to the Company. We generally calculate aggregate incremental cost to the Company by disregarding fixed costs that the Company has already incurred as a general matter but are necessary to provide the item and aggregating only the variable costs that the Company incurs as a result of providing the item to the executive officer. We calculate aggregate incremental cost to the Company for the following perquisites that represented the greater of $25,000 or 10% of the total amount of perquisites and personal benefits for a particular executive officer as indicated below:

With respect to the Company Aircraft, we have determined that there is no aggregate incremental cost to the Company when personal guests of executive officers accompany executive officers on business flights. When the purpose of the flight is personal in nature, we determine the aggregate incremental cost of providing the Company Aircraft for personal use by aggregating variable costs associated with the particular flight such as fuel costs, crew travel expenses, casual and temporary labor costs, aviation staff expenses, aircraft trip planning fees, handler and landing fees, and catering costs. In addition, with respect to 2021 only, when determining the aggregate incremental cost of providing the Company Aircraft for personal use we also attributed to such personal use a pro rata share of the fixed costs of maintaining the Company Aircraft during the year (determined based on the total flight hours of an executive officer’s personal use in 2021 compared to the total flight hours of the Company Aircraft for all uses during 2021), due to the overall use of the Company Aircraft in 2021 having been primarily for personal rather than business purposes. This resulted in a substantial increase in aggregate incremental cost per flight hour of personal use for 2021 as compared to 2022 and 2023.

With respect to Mr. Saylor’s use of assistants for personal matters, we have determined that there is no aggregate incremental cost to the Company as such Company personnel are otherwise performing services for the Company in connection with the business of the Company.

With respect to the Security Program, we have determined that the aggregate incremental cost to the Company of providing this benefit is calculated by prorating certain aggregated costs associated with the operation of the Security Program by the percentage of time spent by the security specialists on matters that are personal in nature. Such costs include compensation and fees for the security specialists, travel, parking, lodging, and meal expenses associated with the provision of security services, consulting and advisory fees, rent and related office expenses, training, and other business costs. In addition, the aggregate incremental cost to the Company of providing the Security Program includes amounts paid by the Company to enhance the operation and security of the network infrastructure at certain properties owned by Mr. Saylor.

(4)Amount shown represents the bonus awarded to

Mr. Saylor pursuant to his cash bonus formula for 2013.ceased serving as the Company’s Chief Executive Officer and began serving as the Company’s Executive Chairman in August 2022.

(5)Of the amount shown, $100,000 represents a one-time reporting bonus awarded

From July 2020 to May 2022, Mr. Le was appointed as the Company’s President and ceased serving as the Company’s Senior Executive Vice President & Chief Operating Officer, but remained in connection withhis role as Chief Financial Officer. Mr. Le ceased serving as the commencement of his employment withCompany’s Chief Financial Officer in May 2022 and began serving as the CompanyCompany’s President & Chief Executive Officer in August 2015, which is recoverable by the Company if Mr. Le resigns from his employment with the Company within twelve (12) months of his start date, and $142,466 represents a discretionary bonus awarded to Mr. Le with respect to 2015.2022.

(6)Of

Mr. Kang joined the amount shown, $150,000 represents a one-time discretionary bonus awarded to Mr. LangCompany and began serving as the Company’s Senior Executive Vice President & Chief Financial Officer in 2015 in recognition of his achievement of certain strategic goals and $200,000 represents a discretionary annual bonus awarded to Mr. Lang with respect to 2015.May 2022.

(7)

Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer effective as of July 5, 2023.

(8)

Amount shown represents a discretionary cash bonus awarded to Mr. Lang with respect to 2014.

(8)Mr. Klein’s employment withLe for the Company ended in January 2016.respective fiscal year.

(9)Represents Mr. Klein’s percentage-based bonus award under the Company’s Performance Incentive Plan with respect to the 2012 fiscal year, which was earned in December 2015 and paid in January 2016.
(10)Amount shown represents amounts in connection with (i) Supplemental Disability Insurance, (ii) Company Meals, (iii) 401(k) Plan Match, (iv) Life Insurance, and (v) tax “gross-ups” paid to Mr. Klein for the fiscal year.
(11)Of the amount shown, $70,400 represents the bonus awarded to Mr. Klein pursuant to his President cash bonus formula for 2014 and $137,715 represents Mr. Klein’s percentage-based bonus award under the Company’s Performance Incentive Plan with respect to the 2011 fiscal year, which was earned in December 2014 and paid in January 2015.
(12)Of the amount shown, $1,179,200 represents the bonus awarded to Mr. Klein pursuant to his President cash bonus formula for 2013 and $364,318 represents Mr. Klein’s percentage-based bonus award under the Company’s Performance Incentive Plan with respect to the 2010 fiscal year, which was earned in December 2013 and paid in January 2014.
(13)Mr. Zolfaghari’s employment with the Company ended in January 2016.
(14)Amount shown represents amounts in connection with (i) personal use of Corporate Development Programs, (ii) President’s Club, (iii) Supplemental Disability Insurance, (iv) the Executive Healthcare Screening Program, (v) Company Meals, (vi) 401(k) Plan Match, and (vii) Life Insurance, and also includes $12,994 in tax “gross-ups” paid to Mr. Zolfaghari for the fiscal year.
(15)Amount shown represents the bonus awarded to Mr. Zolfaghari pursuant to his President cash bonus formula for 2014.
(16)Amount shown represents the bonus awarded to Mr. Zolfaghari pursuant to his President cash bonus formula for 2013.
(17)Mr. Thede’s employment with the Company ended in October 2015.

33


(18)Amount shown includes the value of Mr. Thede’s accrued vacation at the time that his employment with the Company ended, which amount was paid to Mr. Thede in connection with his departure.
(19)Amount shown represents amounts in connection with (i) Supplemental Disability Insurance, (ii) the Executive Healthcare Screening Program, (iii) Company Meals, (iv) 401(k) Plan Match, (v) Life Insurance, and (vi) tax “gross-ups” paid to Mr. Thede for the fiscal year.
(20)Amount shown represents Mr. Thede’s percentage-based bonus award under the Company’s Performance Incentive Plan with respect to the 2011 fiscal year, which was earned in December 2014 and paid in January 2015.
(21)Amount shown represents a discretionary cash bonus awarded to Mr. ThedeKang for 2023.

(10)

Amount shown represents (i) a one-time reporting bonus of $100,000 and (ii) a prorated discretionary cash bonus of $324,658 awarded to Mr. Kang for 2022. The cash bonus award was a prorated amount to reflect time worked in 2022.

(11)

Amount shown represents (i) a one-time severance payment of $100,000 and (ii) a cash bonus award pursuant to Mr. Adkisson’s 2023 Sales Management Variable Compensation Plan (“Variable Compensation Plan”) made with respect to 2013.Mr. Adkisson’s performance in the first quarter of 2023. Such amount was determined according to performance criteria relating to revenue, teamwork, and professional development goals specified in the Variable Compensation Plan.

(22)(12)

Amount shown represents quarterly cash bonus awards pursuant to Mr. Thede’s percentage-basedAdkisson’s 2022 Sales Management Variable Compensation Plan (“2022 Variable Compensation Plan”) as well as additional promotional cash bonus award under the Company’s Performance Incentive Planawards paid to Mr. Adkisson pursuant to a sales performance inventive fund (“SPIF”) for migrating customers to our MCE (Cloud) service, all of which were made with respect to Mr. Adkisson’s performance in 2022. The amounts of these individual cash bonus awards were determined according to performance criteria relating to revenue, teamwork, and professional development goals specified in the 2010 fiscal year, which was earned in December 20132022 Variable Compensation Plan and paid in January 2014.under the SPIF, as applicable.

(13)

Amount shown represents a discretionary cash bonus awarded to Mr. Shao for the respective fiscal year.

(14)

Amount shown consists of (i) $293,987 in connection with the Security Program, (ii) $351,003 in connection with personal use of the Company Aircraft, (iii) $143,740 in tax gross-ups paid to Mr. Saylor for 2023, (iv) $6,000 in connection with personal use of a Company website, and (v) $4,939 in Supplemental Disability Insurance.

(15)

Amount shown consists of (i) $238,288 in connection with personal use of the Company Aircraft, (ii) $133,000 in tax gross-ups paid to Mr. Le for 2023, (iii) $13,714 in connection with President’s Club, (iv) $5,000 in connection with 401(k) Plan Match, (v) $3,750 in connection with Executive Physicals and (vi) $120 in connection with Life Insurance.

(16)

Amount shown consists of (i) $22,480 in connection with President’s Club, (ii) $18,467 in tax gross-ups paid to Mr. Kang for 2023, (iii) $5,000 in connection with 401(k) Plan Match and (iv) $120 in connection with Life Insurance.

(17)

Amount shown consists of (i) $53,846 in connection with accrued but unused vacation in connection with Mr. Adkisson’s resignation from the Company, (ii) $23,387 in connection with President’s Club, (iii) $18,601 in tax gross-ups paid to Mr. Adkisson for 2023, (iv) $5,000 in 401(k) Plan Match, and (v) $70 in connection with Life Insurance.

(18)

Amount shown consists of (i) $19,167 in tax gross-ups paid to Mr. Shao for 2023, (ii) $15,592 in connection with President’s Club, (iii) $12,465 in Supplemental Disability Insurance, (iv) $5,000 in connection with 401(k) Plan Match, and (v) $120 in connection with Life Insurance.

MICROSTRATEGY | 2024 Proxy Statement

33


Grants of Plan-BasedPlan-based Awards for 20152023

The following table sets forth certain information concerning grants of plan-based awards to the named executive officers for the fiscal year ended December 31, 2015:2023:

 

     

 

 

Estimated Possible Payouts Under Non-Equity

                         Incentive Plan Awards                        

  All Other
Options
Awards:
Number of
Securities
Underlying
Options
(#) (1)
  Exercise
or Base
Price of
Option
Awards
($/Sh) (2)
  Grant Date
Fair Value
of Option
Awards
($) (3)
 

Name

 Grant Date  Threshold ($)  Target ($)  Maximum ($)    

Michael J. Saylor

  —      —      —      —      —      —      —    

Phong Q. Le

  9/8/2015    —      —      —      40,000   $201.25    3,315,600  

Timothy E. Lang

  2/2/2015    —      —      —      50,000   $165.01    3,409,500  

Jonathan F. Klein

      (4)       (4)   70,400(4)   6,500,000(4)   —      —      —    

Paul N. Zolfaghari

      (4)       (4)   70,400(4)   6,500,000(4)   —      —      —    

Douglas K. Thede

  —      —      —      —      —      —      —    
     

 

   

 

 

All Other Stock
Awards:
Number of
Shares of Stock
or Units
(#)
(1)

 

All Other Option
Awards:

Number of
Securities
Underlying
Options

(#)(2)

 

Exercise or Base

Price of Option

Awards
($/Sh)

 

Grant Date  

Fair Value of  

Stock and  

Option Awards  

($)(3)

 

Name

 Grant Date 

 Grant 

Type

 

Michael J. Saylor

              

 

Phong Q. Le

 6/5/2023 RSUs   4,768        $1,317,684

 

Phong Q. Le

 6/5/2023 PSUs   9,537        $4,636,699

 

Kevin L. Adkisson(4)

 6/5/2023 Options      1,980   $276.36  $368,161

 

Kevin L. Adkisson(4)

 6/5/2023 RSUs   681        $188,201

 

Kevin L. Adkisson(4)

 6/5/2023 PSUs   1,362        $662,177

 

Andrew Kang

 6/5/2023 Options      4,949   $276.36  $920,217

 

Andrew Kang

 6/5/2023 RSUs   1,703        $470,641

 

Andrew Kang

 6/5/2023 PSUs   3,406        $1,655,929

 

W. Ming Shao

 6/5/2023 RSUs   1,533        $423,660

 

W. Ming Shao

 6/5/2023 PSUs   3,065        $1,490,142

 

(1)Amounts

Amount shown relates to RSUs and PSUs. The RSUs (i) will vest as to 25% of the original number of RSUs on the first anniversary of the date of grant and will vest as to an additional 25% on each anniversary thereafter until fully vested, unless earlier terminated in accordance with the terms of the 2023 Equity Plan and/or the applicable RSU agreement, (ii) provide for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable RSU agreement, and (iii) are otherwise subject to such other terms and conditions as are set forth in the RSU agreement and the 2023 Equity Plan. Each PSU represents a contingent right to receive shares of Class A Stock of between 0% and 200% of the target number of units, with the percentage determined based on our relative TSR as compared to the TSR of members of the Nasdaq Composite Index over a three-year performance period (June 1, 2023 to May 31, 2026). Vesting is subject to certification by the Compensation Committee of the level of achievement of the performance goal and the participant’s continued service through that date. The PSUs are otherwise subject to such other terms and conditions as are set forth in the PSU agreement and the 2023 Equity Plan. The “target” number of PSUs is provided in this table.

(2)

The amounts shown relate to options to purchase shares of our classClass A common stockStock granted under the 20132023 Equity Plan.

(2)Each option (i) is not intended to qualify as an incentive stock option, (ii) has an exercise price per share equal to the closing sale price of our class A common stock as quoted on Nasdaq on the date of grant (or, if the grant date was a non-trading day, the date of the immediately preceding trading day), (iii) expires on the tenth anniversary of the date of grant, (iv) vests as to 25% of the original number of shares subject to the stock option on the first anniversary of the date of grant, and as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan or the applicable option agreement, (v) provides for automatic vesting in full upon a change in control event (as defined in the applicable option agreement), and (vi) is otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2013 Equity Plan.
(3)Amounts calculated in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation”. See Note 12, “Share-based Compensation,” to the Company’s consolidated financial statements set forth in the Company’s Form 10-K for the year ended December 31, 2015, for the assumptions made in determining grant date fair values. These amounts reflect the grant date fair values for these options and are not intended to represent the value, if any, that has been or will be actually realized by the individual.
(4)

On March 6, 2015, the Compensation Committee established the 2015 President cash bonus formulas for each of Messrs. Klein and Zolfaghari based on a performance goal relating to the Company’s diluted earnings per share for fiscal year 2015, as discussed in “Executive and Director Compensation—Compensation Discussion and Analysis.” The maximum bonus amount that could be awarded to each of Messrs. Klein and Zolfaghari pursuant to these formulas was $6,500,000. There were no threshold or target bonus amounts under the 2015 President cash bonus formulas. When target awards are not determinable, SEC rules require the disclosure of

34


representative amounts based on the previous year’s performance. Accordingly, the amount in the “Target” column represents the award for which each of Messrs. Klein and Zolfaghari would have been eligible if the Company’s diluted earnings per share for fiscal year 2015 had been the same as the Company’s diluted earnings per share for fiscal year 2014. On January 8, 2016, the Compensation Committee determined to award no bonus to either Mr. Klein or Mr. Zolfaghari pursuant to their respective 2015 President cash bonus formulas with respect to their performance during fiscal year 2015.

Outstanding Equity Awards at 2015 Fiscal Year-End

The following table sets forth information concerning unexercised options outstanding as of December 31, 2015 for each of the named executive officers. All option awards were with respect to our class A common stock and were granted under the 2013 Equity Plan.

Name

  Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
  Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
  Option
Exercise
Price per
Share ($)
   Option
Expiration
Date
 

Michael J. Saylor

   100,000(1)   300,000(1)   121.43     4/30/2024  

Phong Q. Le

   —      40,000(1)   201.25     9/8/2025  

Timothy E. Lang

   —      50,000(1)   165.01     2/2/2025  

Jonathan F. Klein

   100,000(2)   100,000(2)   92.84     9/5/2023  

Paul N. Zolfaghari

   100,000(2)   100,000(2)   92.84     9/5/2023  

Douglas K. Thede

   —      —      —       —    

(1)Each option (i) is not intended to qualify as an incentive stock option, (ii) has an exercise price per share equal to the closing sale price of our class A common stock as quoted on Nasdaq on the date of grant, (iii) expires on the tenth anniversary of the date of grant, (iv) vested or will vest as to 25% of the original number of shares subject to the stock option on the first anniversary of the date of grant and vests as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 20132023 Equity Plan or the applicable option agreement, (v)(iv) provides for automatic vesting in full uponin connection with a change in control event (as definedunder specified conditions as set forth in the applicable option agreement),agreement, and (vi)(v) is otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 20132023 Equity Plan.

(2)(3)

Amounts calculated in accordance with FASB ASC Topic 718, “Compensation – Stock Compensation.” See Note 11 “Share-based Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, for the assumptions made in determining grant date fair values. These amounts reflect the grant date fair values for the options and RSUs and are not intended to represent the value, if any, that has been or will be actually realized by the individual.

(4)

Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer effective as of July 5, 2023.

34MICROSTRATEGY | 2024 Proxy Statement


Outstanding Equity Awards at 2023 Fiscal Year-end

The following table sets forth information concerning unexercised options and unvested RSUs and PSUs outstanding as of December 31, 2023, for each of the executive officers. All option awards, RSUs and PSUs were with respect to our Class A Stock and were granted under the 2013 Equity Plan and 2023 Equity Plan.

    Option Awards    Stock Awards 
Name  

Number of
Securities
Underlying
Unexercised
Options

(#)

Exercisable(1)

   

Number of
Securities
Underlying
Unexercised
Options

(#)

Unexercisable(1)

   Option
Exercise
Price
per
Share
($)
   Option
Expiration
Date
      

Number of

Shares or

Units of

Stock that

Have Not

Vested

(#)(2)

   

Market

Value of

Shares or

Units of

Stock that

Have Not

Vested

($)(3)

 

Michael J. Saylor

   400,000        121.43    4/30/2024          

Phong Q. Le

   5,000        189.16    3/8/2027          
    65,000        151.60    11/22/2029          
    20,000    20,000    691.23    2/23/2031          
    10,000    30,000    404.60    2/17/2032          
    15,000    45,000    231.15    9/13/2032          
                     250    48,068 
                     4,768    1,317,648 
                     9,537    2,635,645 

Kevin L. Adkisson(4)

                         

Andrew Kang

   3,750    11,250    197.44    5/18/2032          
        4,949    276.36    6/5/2033          
                     3,750    740,400 
                     1,703    470,641 
                     3,406    941,282 

W. Ming Shao

   12,500        151.60    11/22/2029          
    10,000    10,000    691.23    2/23/2031          
    5,000    15,000    404.60    2/17/2032          
    5,000    15,000    175.00    11/10/2032          
                     250    48,068 
                     1,533    423,660 
                      3,065    847,043 

(1)

Each option (i) is not intended to qualify as an incentive stock option, (ii) has an exercise price per share equal to the closing sale price of our classClass A common stockStock as quoted on Nasdaq on the grant date, of grant, (iii) expires on the tenth anniversary of the grant date, (iv) vested or will vest as to 25% of the original number of shares subject to the stock option on the first anniversary of the grant (iv)date and vests as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan, the 2023 Equity Plan or the applicable option agreement, (v) provides for automatic vesting in full uponin connection with a change in control event (as definedunder specified conditions as set forth in the applicable option agreement),agreement, and (v)(vi) is otherwise subject to such other terms and conditions as are set forth in the applicable option agreement, and the 2013 Equity Plan and the 2023 Equity Plan.

(2)

Amounts shown relate to RSUs and PSUs. The time vesting requirementRSUs (i) will vest as to 25% of the original numberunderlying shares on the first anniversary of shares subject to each option was met on July 26, 2014,the grant date and was met as to an additional 25% on each anniversary thereafter until the RSUs are vested in full, unless earlier terminated in accordance with the terms of the original2013 Equity Plan, the 2023 Equity Plan or the applicable RSU agreement, (ii) provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable RSU agreement, and (iii) is otherwise subject to such other terms and conditions as are set forth in the applicable RSU agreement, the 2013 Equity Plan and the 2023 Equity Plan, as applicable. Each PSU represents a contingent right to receive shares of Class A Stock of between 0% and 200% of the target number of sharesunits, with the percentage determined based on our relative TSR as compared to the TSR of members of the Nasdaq Composite Index over a three-year performance period (June 1, 2023 to May 31, 2026). Vesting is subject to certification by the Compensation Committee of the level of achievement of the performance goal and the participant’s continued service through that date. The PSUs are otherwise subject to such other terms and conditions as are set forth in the PSU agreement and the 2023 Equity Plan. The “target” number of PSUs is provided in this table.

MICROSTRATEGY | 2024 Proxy Statement

35


(3)

The market value of the RSUs and PSUs is based on the closing price of our Class A Stock on Nasdaq on December 29, 2023.

(4)

Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer on July 26, 2015.5, 2023 and has no exercisable options or unvested RSUs or PSUs remaining as of December 31, 2023.

35


Option Exercises and Stock Vested in 20152023

The following table sets forth information concerning (i) the number of shares acquired and the value realized on exercise or transfer for value of stock options and (ii) the number of shares acquired, and the value realized on vesting of stock awards during the fiscal year ended December 31, 20152023, by each of the named executive officers.

 

Name

  Number of Shares
Acquired on Exercise
(#)
   Value Realized
on Exercise
($)
 

Michael J. Saylor

   —       —    

Phong Q. Le

   —       —    

Timothy E. Lang

   —       —    

Jonathan F. Klein

   —       —    

Paul N. Zolfaghari

   —       —    

Douglas K. Thede

   50,000     4,214,194  
    Option Awards   Stock Awards 
                  

Name

  

Number of Shares

Acquired on Exercise

(#)

   

Value Realized

on Exercise

($)

   

Number of Shares

Acquired on Vesting

(#)

   

Value Realized

on Vesting

($)

 

Michael J. Saylor

                

Phong Q. Le

   35,000   $8,898,232    250   $126,220 

Kevin L. Adkisson(1)

   15,000   $2,172,250         

Andrew Kang

           1,250   $359,475 

W. Ming Shao

   12,000   $2,368,344    250   $126,220 

(1)

Although Mr. Adkisson resigned as Senior Executive Vice President & Chief Revenue Officer on July 5, 2023, his employment with the Company continued through July 31, 2023, as a result of which options to purchase an additional 3,125 shares vested on July 31, 2023 prior to his departure from the Company.

Potential Payments Upon Termination or Change-in-ControlChange in Control

The options to purchase shares of our classClass A common stockStock granted under the 2013 Equity Plan and the2023 Equity Plan to Messrs. Saylor, Le, Lang, Klein, and Zolfagharithe executive officers outstanding as of December 31, 2023 provide for automatic vesting in full uponin connection with a change in control event (asif the executive officer is terminated without “cause” by the Company or resigns for “good reason,” in each case as defined in the applicable option agreement).agreement, within 12 months following the change in control event or if the acquiring company does not assume the options or substitute equivalent awards. If such a change ofin control event had occurred on December 31, 2015:2023, and the specified conditions as set forth in the applicable option agreement were satisfied:

 

the vesting

no portion of the optionsoption held by Mr. Saylor would have been subject to accelerated with respect to 300,000 shares, representing a benefitvesting because the option was already fully vested as of $17,358,000, based on the difference between $121.43, the exercise price per share of the options, and $179.29, the closing price of our class A common stock on Nasdaq on December 31, 2015;2023;

 

the

vesting of the options held by Mr. Le would have been accelerated with respect to 40,000 shares; however,(i) 30,000 shares granted in February 2022, representing a benefit of $6,810,600, based on the difference between $404.60, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023 and (ii) 45,000 shares granted in September 2022, representing a benefit of $18,016,650, based on the difference between $231.25, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023; no portion of the remaining options held by Mr. Le would have been subject to accelerated vesting, or if subject to accelerated vesting would have resulted in a benefit, because (i) with respect to the option granted in 2017, the remaining shares underlying such option were already fully vested as of December 31, 2023, (ii) with respect to the option granted in 2019, the remaining shares underlying such option were already fully vested as of December 31, 2023, and (iii) with respect to the option granted in 2021, the remaining shares underlying such option were either already vested as of December 31, 2023 or would not have resulted in a benefit because the exercise price of Mr. Le’s options, $201.25, is higherthe shares underlying such option was greater than the closing price of our classClass A common stockStock on Nasdaq on December 31, 2015, Mr. Le would not have received any benefit from the acceleration;29, 2023;

 

the

vesting of the options held by Mr. LangKang would have been accelerated with respect to 50,000(i) 11,250 shares granted in May 2022, representing a benefit of $714,000,$4,884,525, based on the difference between $165.01,$197.44, the exercise price per share of the options,option, and $179.29,$631.62, the closing price of our classClass A common stockStock on Nasdaq on December 31, 2015;29, 2023 and (ii) 4,949 shares granted in June 2023, representing a benefit of $1,758,182, based on the difference between $276.36, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023;

 

36MICROSTRATEGY | 2024 Proxy Statement


the

vesting of the options held by Messrs. Klein and ZolfaghariMr. Shao would have been accelerated with respect to 100,000(i) 15,000 shares for eachgranted in February 2022, representing a benefit of them, representing benefits for each of $8,645,000,$3,405,300, based on the difference between $92.84,$404.60, the exercise price per share of each of their options,the option, and $179.29,$631.62, the closing price of our classClass A common stockStock on Nasdaq on December 29, 2023 and (ii) 15,000 shares granted in November 2022, representing a benefit of $6,849,300, based on the difference between $175.00, the exercise price per share of the option, and $631.62, the closing price of our Class A Stock on Nasdaq on December 29, 2023; no portion of the remaining options held by Mr. Shao would have been subject to accelerated vesting, or if subject to accelerated vesting would have resulted in a benefit, because (i) with respect to the option granted in 2019, the remaining shares underlying such option were already vested as of December 31, 2015.2023 and (ii) with respect to the option granted in 2021, the remaining shares underlying such option were either already vested as of December 31, 2023 or would not have resulted in a benefit because the exercise price of the shares underlying such option was greater than the closing price of our Class A Stock on Nasdaq on December 29, 2023.

As with the options, the RSUs granted under the 2013 Equity Plan and 2023 Equity Plan to the executive officers outstanding as of December 31, 2023 provide for vesting in full in connection with a change in control event if the executive officer is terminated without “cause” by the Company or resigns for “good reason,” in each case as defined in the applicable RSU agreement, within 12 months following the change in control event or if the acquiring company does not assume the RSUs or substitute equivalent awards. If such a change in control event had occurred on December 31, 2023, and the specified conditions as set forth in the applicable RSU agreement were satisfied, (i) the vesting of the RSUs held by Mr. Le would have been accelerated with respect to 5,018 shares, representing a benefit of $3,169,469, (ii) the vesting of the RSUs held by Mr. Kang would have been accelerated with respect to 5,453 shares, representing a benefit of $3,444,224, and (iii) the vesting of the RSUs held by Mr. Shao would have been accelerated with respect to 1,783 shares representing a benefit of $1,126,178, in each case based on the $631.62 closing price of our Class A Stock on Nasdaq on December 29, 2023.

For PSUs, upon a change in control, achievement of the performance goal will be measured as of immediately prior to the closing of the change in control transaction, and the award will convert to a time-vested RSU for the remainder of the performance period, subject to acceleration on a qualifying termination (i.e., termination without cause or for good reason), in each case as described above in the “—Elements Used to Achieve 2023 Compensation Objectives—Equity Awards” section. If such events had occurred on December 31, 2023, (i) the vesting of the PSUs held by Mr. Le would have been accelerated with respect to 19,074 shares, representing a benefit of $12,047,520, (ii) the vesting of the PSUs held by Mr. Kang would have been accelerated with respect to 6,812 shares, representing a benefit of $4,302,595, and (iii) the vesting of the PSUs held by Mr. Shao would have been accelerated with respect to 6,130 shares representing a benefit of $3,871,831 in each case based on the $631.62 closing price of our Class A Stock on Nasdaq on December 29, 2023 and reflecting a payout factor of 200%. In addition, under the offer letter he executed in connection with joining the Company, Mr. Kang is entitled to a severance payment in the event that his employment was terminated without cause, as defined in the offer letter, in an amount equal to twelve (12) months of base salary and an additional amount to be determined by the Company not to exceed his annual bonus potential prorated for the time he worked in that year up through his termination date, contingent on signing and not revoking a general release of claims against the Company. Assuming that the triggering event for such payment occurred on December 31, 2023, Mr. Kang would have been entitled to a severance payment of $640,000 (his base salary as of such date) plus an additional amount to be determined by the Company of up to $500,000 (his annual bonus potential for 2023).

In connection with his resignation in July 2023, Mr. Adkisson entered into an agreement with the Company, which provided for a lump-sum cash payment of $100,000.

 

MICROSTRATEGY | 2024 Proxy Statement

37

36


Director Compensation

Each In 2023, prior to our 2023 Annual Meeting, each non-employee or “outside” director receivesreceived a fee of $37,500 for each quarterly meeting of the Board of Directors that the outside director attends in person. An outside director may be paid this fee for attending a quarterly board meeting via telephonic conference call if the outside director has good reason for the outside director’s failure to attend such meetingattended in person, as determined by the Chairman of the Board of Directors, but such payment is limited to one occurrence in any given fiscal year.telephonically, or virtually. Each outside director who iswas (i) a member of the Audit Committee also receivesreceived a fee of $10,000 (or $12,500 in the case of the ChairmanChair of the Audit Committee) for each quarterly meeting of such committeethe Audit Committee, that the outside director attendsattended in person. Each outside director who isperson, telephonically, or virtually, and (ii) a member of the Compensation Committee also receivesreceived a fee of $5,000 (or $7,500 in the case of the ChairmanChair of the Compensation Committee), which iswas paid quarterly provided(provided that, in order to be eligible to receive the fee with respect to a fiscal quarter, the outside director must have served on the Compensation Committee on the last day of such fiscal quarter.quarter). Each outside director maywas also entitled to receive up to an additional $12,000 of fees in the aggregate in any fiscal quarter for additional services delegated by the Board of Directors to such outside director in the outside director’s capacity as a member of the Audit Committee, the Compensation Committee, the Board, of Directors, or any other committeescommittee of the Board of Directors,Board; provided that any such fee paid with respect to a particular service mustwas required to be approved by the Board of Directors following the completion of such service by the outside director.

In April 2023, the Compensation Committee recommended, and the Board approved, amendments to the compensation program for the Company’s outside directors, which commenced with the conclusion of the 2023 Annual Meeting. Since our 2023 Annual Meeting, each outside director is entitled to receive an annual retainer of $100,000 ($25,000 per quarter), which is not contingent on meeting attendance. Each outside director who is a member of the Audit Committee is also entitled to receive a quarterly fee of $10,000 (or $15,000 in the case of the Chair of the Audit Committee); provided that, in order to be eligible to receive the fee with respect to a fiscal quarter, the outside director must serve on the Audit Committee on the last day of such fiscal quarter. Each outside director who is a member of the Compensation Committee is also entitled to receive a quarterly fee of $5,000 (or $7,500 in the case of the Chair of the Compensation Committee); provided that, in order to be eligible to receive the fee with respect to a fiscal quarter, the outside director must serve on the Compensation Committee on the last day of such fiscal quarter. Outside directors are no longer eligible to receive additional retainers for additional delegated services.

Beginning in April 2021, outside directors have received all fees for their service on the Board in bitcoin instead of cash. At the time of payment, the fees are converted from U.S. dollars into bitcoin by the payment processor and then deposited into the digital wallet of the applicable outside director.

Additionally, pursuant to the 2023 Equity Plan, on May 31 of each year beginning in 2023, each non-employee director who is then serving as a non-employee director as of such date is automatically granted Awards with an aggregate fair value (calculated based on grant date fair value for financial reporting purposes) equal to $300,000, half of which ($150,000) consist of non-statutory stock options and half of which ($150,000) consist of RSUs. Each such Award vests on the first anniversary of the date of grant.

In establishing the new director compensation program, the Board and Compensation Committee reviewed analysis and recommendations prepared by WTW, including peer group data and percentiles provided by WTW as a baseline for comparison. The estimated total remuneration associated with the new compensation program for all the Company’s current outside directors in the aggregate (calculated by including annual retainers and equity awards for all outside directors but excluding all committee retainers and meeting fees) is at approximately the 50th percentile relative to the peer group.

From time to time, the Board of Directors may hold meetings and other related activities in various locations for which the Company pays for the expenses of outside directors and their guests (“Meeting Activities”). In addition, we may hold, host, or otherwise arrange parties, outings, or other similar entertainment events for which the Company pays for the expenses of outside directors and their guests (“Entertainment Events”). We may also request that outside directors participate in conferences, symposia, and other similar events or activities relating to our business for which the Company pays the expenses of outside directors and their guests (“Company-SponsoredCompany-sponsored Activities” and collectively with Meeting Activities and Entertainment Events, “MicroStrategy Activities”). Any employee director is also eligible to participate in MicroStrategy Activities.

We are also authorized to make available, from time to time, for personal use by outside directors, our executive officers, and other employees of the Company and its subsidiaries:directors: tickets to sporting, charity, dining, entertainment, or similar events, as well as use of corporate suites, club memberships, or similar facilities that we may acquire; Company-owned vehicles and related driving services; the services of one or more drivers for vehicles other than Company-owned vehicles; and “Company Aircraft” which includes the Company’s Bombardier Global Express XRS aircraft as well as such other(collectively with additional aircraft (i) that we may from time to time, lease or charter, including, without limitation, any aircraft subject to a fractional interest program in which we may participate by leasing a fractional interest, and (ii) that has been designated by the Company to be “Company Aircraft” under our aircraft use policy.). Outside directors may make personal use of

38MICROSTRATEGY | 2024 Proxy Statement


Company AircraftAircraft; provided that (i)(a) all outside directors are invited by the Company to travel on the applicable flight and (ii)(b) such personal use is in connection with the outside director’s participation in one or more (A)(1) Meeting Activities, (B)(2) Entertainment Events to which all outside directors have been invited, or (C) Company-Sponsored(3) Company-sponsored Activities. In addition, outside directors may make personal use of Company Aircraft on a “ride-along” basis. We also make available to outside directors certain medical, dental, and vision insurance plan benefits that we offer to our U.S. employees.

To the extent that any of the arrangements described above, other than fee compensation, result in imputed compensation to an outside director, we pay to (or withhold and pay to the appropriate taxing authority on behalf of) such outside director a “tax gross-up”tax gross-up in cash approximating his (i) federal and state income and payroll taxes on the taxable income associated with such arrangements, plus (ii) federal and state income and payroll taxes on the taxes that the outside director may incur as a result of the payment of taxes by us with respect to the imputed compensation, subject to the aggregate amount limitations described above in “Executive and Director Compensation—Compensation Discussion and Analysis”,Analysis,” if applicable.

37


The following table sets forth information concerning the compensation of each of our non-employee directors for the fiscal year ended December 31, 2015.2023. For more information regarding the compensation of our employee director, Mr.directors, Messrs. Saylor and Le, please see “Executive and Director Compensation—Executive Officer Compensation” above.

 

Name

  Fees Earned or
Paid in Cash
($)
   Option
Awards
($) (1)
   All Other
Compensation
($) (2)
   Total
($)
   Fees Earned or
Paid in Bitcoin
($)
   Equity Awards
($)
(1)
   All Other
Compensation
($)
(2)
   Total
($)
 

Robert H. Epstein

   170,000     362,650     7,827     540,477  

Stephen X. Graham

   190,000     362,650     —       552,650     170,000    299,896    7,600    477,496 

Jarrod M. Patten

   220,000     362,650     —       582,650     172,500    299,896        472,396 

Leslie J. Rechan

   132,500    299,896    12,980    445,376 

Carl J. Rickertsen

   220,000     362,650     5,734     588,384     182,500    299,896    8,665    491,061 

 

(1)

Represents the aggregate grant date fair value of an optionautomatic annual grants made pursuant to purchase shares of class A common stock of MicroStrategy awardedour 2023 Equity Plan to each non-employee director on May 31, 2015, constituting the first automatic annual grant awarded to each non-employee director pursuant to the 2013 Equity Plan,2023, and calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation”.Compensation.” Pursuant to the 2023 Equity Plan, in May 2023 we granted to each of our non-employee directors 497 RSUs and options to purchase 761 shares of our Class A Stock. See Note 12,11 “Share-based Compensation,”Compensation” to the Company’s consolidated financial statements set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015,2023, for the assumptions made in determining grant date fair value for these options. The amounts reflect the grant date fair value for these options and are not intended to represent the value, if any, that has been or will be actually realized by the individual. As of December 31, 2015,2023, our non-employee directors held the following shares of our classClass A common stock,Stock and the following number of outstanding options to purchase shares of our classClass A common stock:Stock:

 

Name

  Shares of class A
common stock
   Outstanding
Options (a)
   Shares
of
Class A
Stock
  Outstanding
Options
(a)
  

Unvested

RSUs(b)

Robert H. Epstein

   —       23,750  

Stephen X. Graham

   200     30,000  

Jarrod M. Patten

   —       40,000  

Leslie J. Rechan

Carl J. Rickertsen

   3,000     40,000  

 

 (a)

Each option (i) is not intended to qualify as an incentive stock option, (ii) has an exercise price per share equal to the closing sale price of our classClass A common stockStock as quoted on Nasdaq on the grant date, of grant, (iii) expires on the tenth anniversary of the grant date, of grant,and (iv) provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable option agreement. Stock options granted prior to May 2023 vested or will vest as to 25% of the original number of shares subject to the stock option on the first anniversary of the grant date of grant, and vests as to an additional 25% on each anniversary thereafter until the option is vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan or the applicable option agreement, (v) provides for automatic vesting in full upon a change in control event (as defined in the applicable option agreement), and (vi) isare otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2013 Equity Plan. Stock options granted in May 2023 will vest as to 100% of the original number of shares subject to the stock option on the first anniversary of the grant date, unless earlier terminated in accordance with the terms of the 2023 Equity Plan or the applicable option agreement, and are otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2023 Equity Plan.

(b)

Each RSU vests as to 100% on the first anniversary of the grant date, unless earlier terminated in accordance with the terms of the 2023 Equity Plan or the applicable RSU agreement, and is otherwise subject to such other terms and conditions as are set forth in the applicable RSU agreement and the 2023 Equity Plan. The RSU agreement provides for vesting in full in connection with a change in control event under specified conditions as set forth in the applicable RSU agreement.

 

(2)

All Other Compensation includes the value of perquisites and other personal benefits for the director, as well as tax “gross-ups”gross-ups paid to the applicable director for the fiscal year, but does not include perquisites and other personal benefits for the director if the total value of all perquisites and other personal benefits for such director in a given fiscal year was less than $10,000. For the fiscal year ended December 31, 2015, the total value of all perquisites and other personal benefits, if any, for each of our non-employee directors was less than $10,000 and, accordingly,2023, the figures shown in this column represent only tax “gross-ups”gross-ups paid to the applicable director for the fiscal year. Personal use of the Company Aircraft by Messrs. Graham, Patten, and Rickertsen resulted in no aggregate incremental cost to the Company.

 

MICROSTRATEGY | 2024 Proxy Statement

39

38


Equity Compensation Plan Information

The following table provides information as of December 31, 2023, about the classour Class A common stock of the CompanyStock authorized for issuance under our 2013 Equity Plan, 2023 Equity Plan and our 2021 Employee Stock Purchase Plan (the “2021 ESPP”), which were our only equity compensation plans in effect as of December 31, 2015:

Plan category

  Number of
securities
to be
issued upon
exercise of
outstanding
options,
warrants
and rights

(#)
   Weighted
average
exercise
price of
outstanding
options,
warrants
and rights

($)
   Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans

(#)
 

Equity compensation plans approved by stockholders

   1,297,750     128.34     102,500  

Equity compensation plans not approved by stockholders (1)

   —       —       200,000  
  

 

 

   

 

 

   

 

 

 

Total

   1,297,750     128.34     302,500  
  

 

 

   

 

 

   

 

 

 

2023:
Plan category
Number of securities
to be issued upon
exercise of outstanding
options, warrants, and rights
(#)
Weighted average
exercise price of
outstanding options,
warrants, and rights
($/Sh)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(#)
Equity compensation plans approved by stockholders1,529,530
$286.78
(1)
298,200
(2)
Equity compensation plans not approved by stockholders
Total1,529,530
$286.78
(1)
298,200
(2)
(1)Relates to Amendment No. 3 toRepresents the weighted-average exercise price of 1,293,627 options, 185,153 RSUs, and 50,750 PSUs (which is the maximum shares issuable upon vesting of the 25,375 PSUs granted under the 2023 Equity Plan) issued under our 2013 Equity Plan and 2023 Equity Plan. The weighted-average exercise price of the options is $286.78. The RSUs and PSUs do not have an exercise price.
(2)Consists of 238,593 shares remaining available for issuance under the 2023 Equity Plan and 59,607 shares remaining available for issuance under the 2021 ESPP. This number excludes 6,932 shares that were issued at the end of the ESPP purchase period, which began on September 1, 2023, and ended on February 29, 2024, after the end of our 2023 fiscal year. Shares available for issuance under the 2023 Equity Plan may be issued pursuant to options, stock appreciation rights, restricted stock, RSUs, PSUs and other stock-based awards.
40
MICROSTRATEGY
 | 2024 Proxy Statement

Pay Versus Performance
As discussed in “Executive and Director Compensation—Compensation Discussion and Analysis,” the goal of our compensation
program
for our executive officers is the same as our goal for operating the Company—to create long-term value for our stockholders. The following tables and related disclosures provide information about (i) the “total compensation” of our principal executive officers (the “PEOs”) and our other named executive officers (the
“Non-PEO
Named Executive Officers”) as presented in the Summary Compensation Table on page 32 (the “SCT Amounts”), (ii) the “compensation actually paid” to our PEOs and our
Non-PEO
Named Executive Officers, as calculated pursuant to the SEC’s
pay-versus-performance
rules (the “CAP Amounts”), (iii) certain financial performance measures, and (iv) the relationship of the CAP Amounts to those financial performance measures.
This disclosure has been prepared in accordance with Item 402(v) of Regulation
S-K
under the Exchange Act and does not necessarily reflect value actually realized by the executives or how our Compensation Committee or President & CEO, as applicable, make compensation decisions in light of Company or individual performance. For discussion of how our Compensation Committee and the President & CEO, as applicable, make compensation decisions, please see “Executive and Director Compensation—Compensation Discussion and Analysis.”
Pay Versus Performance
Year
 
Summary
Compen-
sation
Table
Total for
First PEO
(Saylor)
(1) ($)
 
Summary
Compen-
sation
Table
Total for
Second
PEO (Le)
(1) ($)
 
Compen-
sation
Actually
Paid to
First PEO
(Saylor)
(2) ($)
 
Compen-
sation
Actually
Paid to
Second
PEO (Le)
(2) ($)
 
Average
Summary
Compen-
sation
Table
Total for
Non-PEO

Named
Executive
Officers (3)
($)
 
Average
Compen-
sation
Actually Paid
to
Non-PEO

Named
Executive
Officers (2)
($)
 
Value of Initial

Fixed $100
Investment Based on:
 
Net
Income
(Loss)
($) (in
thousands)
(6)
 
Non-GAAP

Adjusted
Income
from
Operations
($) (in
thousands)
(6)
 
Total
Shareholder
Return
(4) ($)
 
Peer Group
Total
Shareholder
Return (5)
($)
2023   N/A   8,028,255   N/A   63,649,217   2,420,954   10,435,349   443   221   429,121   70,375
2022   670,812   20,174,360   670,812   (15,836,288)   6,282,443   (1,983,026)   99   133   (1,469,797)   74,163
2021   2,780,241   N/A   2,780,241   N/A   12,152,910   27,803,878   382   207   (535,480)   90,220
2020   407,160   N/A   407,160   N/A   1,308,109   11,094,471   272   150   (7,524)   68,226
(1)Mr. Saylor (our “First PEO”) served as our PEO in 2020, 2021 and until August 7, 2022. Mr. Le (our “Second PEO”) is the current PEO and has served as our PEO since August 8, 2022. The amounts reported under Summary Compensation Table Total for First PEO and Summary Compensation Table Total for Second PEO reflect the total compensation amounts reported in the “Summary Compensation Table” for our First PEO and our Second PEO, respectively, for each respective year in which such individual served as PEO for any portion of the year.
(2)
The following table describes the adjustments, each of which is subjectprescribed by SEC rule, to stockholder approval. For additional information regarding Amendment No. 3calculate the CAP Amounts from the SCT Amounts. The SCT Amounts and the CAP Amounts do not reflect the actual amounts of compensation earned by or paid to the 2013 Equity Plan, see “Proposal 2—To approve Amendment No. 3 toexecutives during the MicroStrategy Incorporated 2013 applicable years, but rather are amounts determined in accordance with Item 402 of Regulation
S-K
under the Exchange Act.
MICROSTRATEGY
 | 2024 Proxy
Statement
41

Adjustments
 
2023
  
2022
  
2021
  
2020
 
 
PEO
($)
  
Non-PEO

Named
Executive
Officers *
($)
  
First PEO
($)
  
Second PEO
($)
  
Non-PEO

Named
Executive
Officers* ($)
  
PEO
($)
  
Non-PEO

Named
Executive
Officers *
($)
  
PEO
($)
  
Non-PEO  

Named
Executive  
Officers *  
($)
 
SCT Total Compensation
  8,028,255   2,420,954   670,812   20,174,360   6,282,443   2,780,241   12,152,910   407,160   1,308,109 
Adjustments for stock and option awards 
Less: Aggregate value for stock awards and option awards included in SCT Amounts for the covered fiscal year  (5,954,383  (1,544,782     (18,324,800  (5,204,525     (10,158,133     (144,203
Plus: Fair value at year end of awards granted during the covered fiscal year that were outstanding and unvested at the covered fiscal year end  14,378,619   3,063,917      8,087,752   2,363,133      6,768,250      291,412 
Year-over-year change in fair value at covered fiscal year end of awards granted in any prior fiscal year that were outstanding and unvested at the covered fiscal year end  35,805,915   5,448,715      (14,730,642  (3,518,449     6,072,885      9,894,279 
Change as of the vesting date (from the end of the prior fiscal year) in fair value of awards granted in any prior fiscal year for which vesting conditions were satisfied during the covered fiscal year  11,390,811   1,481,456      (11,042,958  (1,905,628     12,967,966      424,806 
Less: Fair value at end of prior fiscal year of awards granted in any prior fiscal year that failed to meet the applicable vesting conditions during the covered fiscal year   (434,911                    (679,932
CAP Amounts (as calculated)
 
 
63,649,217
 
 
 
10,435,349
 
 
 
670,812
 
 
 
(15,836,288
 
 
(1,983,026
 
 
2,780,241
 
 
 
27,803,878
 
 
 
407,160
 
 
 
11,094,471
 
42
MICROSTRATEGY
 | 2024 Proxy Statement

*
Amounts presented are averages for the entire group of
Non-PEO
Named Executive Officers in each respective year.
Stock Incentive Plan to increaseoption grant date fair values were calculated based on the numberBlack-Scholes valuation model as of sharesthe grant date. The calculations of stock option fair values as of each measurement date were made using the Black-Scholes valuation model, using the stock price as of the measurement date with updated assumptions (i.e., expected term, volatility, and risk free rates) as of the measurement date. In updating the expected term assumptions as of each measurement date, we considered the passage of time, exercise history, and
“in-the-money”
status of awards (i.e. how much the award’s exercise price was above or below the market price of the underlying class A common stock authorized for issuance underissuable upon exercise of such planaward) and adjusted the expected term, as applicable. RSU grant date fair values were calculated using the stock price as of the grant date. RSU fair values as of
year-end
and as of each date of vesting were calculated using the stock price as of the applicable date. All of our PSUs include a market condition such that vesting is subject to the Company’s achievement of a relative total shareholder return performance goal over a three-year performance period. The number of PSUs that will vest will be based on the percentile ranking of the Company’s TSR over the three-year performance period as compared to the TSR of the members of the Nasdaq Composite Index over the same period, with the payout factor ranging from 1,500,0000% to 1,700,000.”200% of the number of PSUs granted. The PSU grant date fair values were calculated using a Monte Carlo simulation as of the grant date. The calculations of unvested PSU fair values as of
year-end
were made using a Monte Carlo simulation, using the stock price as of
year-end
with updated assumptions (i.e., expected term, volatility, risk free rates, actual TSR from date of grant to
year-end)
as of the measurement date.
(3)
The amounts reported under Average Summary Compensation Table Total for
Non-PEO
Named Executive Officers reflect the average of the total compensation amounts reported in the “Summary Compensation Table” for the
Non-PEO
Named Executive Officers for each respective year. The
Non-PEO
Named Executive Officers were:
For 2023, Messrs. Saylor, Adkisson, Kang, and Shao;
For 2022, Messrs. Adkisson, Kang, Lang, and Shao;
For 2021, Messrs. Lang, Le, and Shao;
For 2020, Ms. Mayr and Messrs. Lang, Le, and Shao.
(4)For the fiscal years ended December 31, 2023, 2022, 2021, and 2020 represents the cumulative total shareholder return (“TSR”) of our Class A Stock (“MicroStrategy TSR”) for the measurement periods beginning as of market close on December 31, 2019 and ending on December 31, 2023, 2022, 2021 and 2020, respectively.
(5)
For the fiscal years ended December 31, 2023, 2022, 2021 and 2020, represents the cumulative TSR of the Nasdaq Computer Index (“Peer Group TSR”) for the measurement periods beginning as of market close on December 31, 2019 and ending on December 31 of each of 2023, 2022, 2021, and 2020, respectively. The Nasdaq Computer Index is the peer group used by the Company for purposes of Item 201(e) of Regulation
S-K
under the Exchange Act in the Company’s Annual Report on Form
10-K
for the fiscal year ended December 31, 2023.
(6)
Reflects “Net Income (Loss)” for the fiscal years ended December 31, 2023, 2022, and 2021 included in the Company’s Consolidated Statements of Operations included in the Company’s Annual Report on Form
10-K
for the fiscal year ended December 31, 2023, and “Net Income (Loss)” for the fiscal year ended December 31, 2020 included in the Company’s Consolidated Statements of Operations included in the Company’s Annual Report on Form
10-K
for the fiscal year ended December 31, 2022.
(7)
Non-GAAP
Adjusted Income from Operations is a
non-GAAP
financial measure calculated by adjusting loss from operations to exclude digital asset impairment losses and share-based compensation expense.
The following table lists the six financial and
non-financial
performance measures that, in our assessment, represent the most important performance measures that our Compensation Committee and President & CEO, as applicable, assess to link the CAP Amounts for our named executive officers for 2023 (our most recently completed fiscal year), to Company performance.
Measure
Nature
Explanation
RevenueFinancial MeasureRevenue generated by our business intelligence operating strategy in 2023
Current Subscription BillingsFinancial Measure
A
non-GAAP
financial measure calculated as the sum of subscription services revenues and change in current deferred subscriptions services revenues
Non-GAAP
Adjusted Income from Operations
Financial Measure
A
non-GAAP
financial measure calculated by adjusting loss from operations to exclude digital asset impairment losses and share-based compensation expense.
Non-GAAP
Operating Margin
Financial Measure
The ratio of
Non-GAAP
Adjusted Income from Operations to Total Revenue
Total Stockholder ReturnFinancial MeasureTotal returns on an investment in shares of Class A Stock
Bitcoin-Related Initiatives
Non-Financial

Measure
Subjective evaluation of the effectiveness of the execution of our strategy to acquire and hold bitcoin to create shareholder value.
MICROSTRATEGY
 | 2024 Proxy Statement
43

The following charts show graphically the relationships over the past four years of the CAP Amounts for our PEOs and
Non-PEO
Named Executive Officers as compared to MicroStrategy TSR, Net Income (Loss), and
Non-GAAP
Adjusted Income from Operations, as well as the relationship between MicroStrategy TSR and Peer Group TSR:
LOGO
For each of the fiscal years shown, we believe the CAP Amounts for our PEO(s) and
Non-PEO
Named Executive Officers were consistent with the changes in MicroStrategy TSR. Although CAP amounts for our PEO(s) and
Non-PEO
Named Executive Officers may be correlated to our Net Income (Loss) between the fiscal years ended December 31, 2021 and 2023, this is not a performance measure we use to link compensation actually paid to our named executive officers to Company performance.
44
MICROSTRATEGY
 | 2024 Proxy Statement

CEO Pay Ratio
Pursuant to applicable SEC rules, set forth below is the ratio of the total annual compensation of our CEO as of December 31, 2023
to
the median
of
the total annual compensation of our employees (excluding our CEO) for 2023. The ratio below is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation
S-K.
We selected the median employee from the group of 1,933 U.S. and
non-U.S.,
full-time, part-time, temporary, and seasonal workers who were employed as of December 31, 2023 (the “Employee Pool”). The Employee Pool did not include Phong Le, who served as our CEO as of December 31, 2023, or third-party consultants and contractors. In identifying our median employee, we calculated the total annual compensation of each employee for the year ended December 31, 2023, using internal payroll and human resources records. Compensation calculated in foreign currency was converted into U.S. dollars using fixed foreign exchange rates set by our finance department.
As
disclosed
in the Summary Compensation Table on page 32, the total compensation for Mr. Le in 2023, as determined under Item 402 of
Regulation S-K,
was $8,028,255. The total compensation for our median employee in 2023, as determined under Item 402 of Regulation
S-K,
was $86,494. Based on the foregoing, for 2023, we estimate the ratio of our CEO’s total annual compensation to our median employee’s total annual compensation to be 92.8 to 1. Given the different methodologies that companies use in estimating their pay ratios, our estimated pay ratio set forth above should not be used as a basis for comparing companies.
MICROSTRATEGY
 | 2024 Proxy Statement
45


AUDIT COMMITTEE REPORT

 

39


AUDIT COMMITTEE REPORT

The Audit Committee of the Company’s Board of Directors acts under a written charter most recently amended and restated on April 25, 2013. Each member of the Audit Committee meets the Nasdaq Marketplace Rules definition of “independent” for audit committee purposes, as well as the independence requirements of Rule 10A-3 under the Securities Exchange Act.

The Audit Committeehas reviewed the Company’s audited financial statements for the fiscal year ended December 31, 20152023, and discussed these financial statements with the Company’s management. Management has the primary responsibility for the Company’s financial statements and the reporting process, including the system of internal controls. The Company’s independent registered public accounting firm is responsible for performing an independent audit of the Company’s financial statements in accordance with auditing standards generally accepted in the United States of America and for issuing a report on those financial statements. The Audit Committee is responsible for monitoring and overseeing these processes. As appropriate, the Audit Committee reviews and evaluates, and discusses with the Company’s management, internal accounting, financial and auditing personnel and the independent registered public accounting firm, the following, among other things:

the plan for, and the independent registered public accounting firm’s report on, each audit of the Company’s financial statements;

the Company’s financial disclosure documents, including all financial statements and reports filed with the SEC or sent to stockholders;

changes in the Company’s accounting practices, principles, controls, or methodologies;

management’s selection, application, and disclosure of critical accounting policies;

significant developments or changes in accounting rules applicable to the Company; and

the adequacy of the Company’s internal controls and accounting, financial, and auditing personnel.

Through periodic meetings during the fiscal year ended December 31, 2015 and the first quarter of 2016, the Audit Committee discussed the following significant itemsthem with management and KPMG LLP, the Company’s independent registered accounting firm (“KPMG”), with respect to the Company’s audited financial statements for the fiscal year ended December 31, 2015:

significant revenue contracts;

significant and complex transactions;

significant accounting and reporting issues and policies;

quarterly business results and financial statements; and

legal claims and other loss contingencies.

During the fiscal year ended December 31, 2015 and the first quarter of 2016, the Audit Committee performed the following, among other, functions:

selected KPMG as the Company’s independent registered public accounting firm, for the fiscal year ended December 31, 2015;

monitored the annual independent audit by KPMG for the fiscal year ended December 31, 2015;

pre-approved all audit and permitted non-audit services KPMG provided to the Company and concluded that KPMG’s provision of these services was compatible with the maintenance of KPMG’s independence;

reviewed the Company’s risk assessment and management procedures, including the Company’s enterprise risk management policies, practices, and procedures;

40


oversaw the Company’s internal controls over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and

reviewed quarterly reports as required by the Company’s Board of Directors regarding significant revenue contracts requiring advance approval from the Audit Committee, litigation and regulatory matters, and the status of internal controls and procedures.

During the fiscal year ended December 31, 2015, the Audit Committee also met in separate sessions with KPMG, the Company’s Chief Executive Officer, former President & Chief Legal Officer, former President, former and current Chief Financial Officer, Senior Executive Vice President & Chief Technology Officer, Senior Executive Vice President, Worldwide Sales, Senior Executive Vice President, Worldwide Services, Senior Executive Vice President & General Counsel, Executive Vice President, Corporate Development, Senior Vice President & Worldwide Controller, Senior Vice President & Deputy General Counsel, Senior Vice President, Worldwide Revenue Recognition, Vice President, Financial Reporting and Compliance, and former Vice President, Internal Audit.

Management represented to the Audit Committee that the Company’s financial statements relating to the fiscal year ended December 31, 2015 had been prepared in accordance with accounting principles generally accepted in the United States.LLP (“KPMG”).

The Audit Committee also reviewed andhas discussed with KPMG the audited financial statements and the matters required by Public Company Accounting Oversight Board Auditing Standard No. 16,Communications with Audit Committees.

KPMG also provided the Audit Committee with the written disclosures and the letter requiredto be discussed by the applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. The Audit Committee has also received and reviewed the written disclosures and the letter from KPMG required by applicable requirements of the Public Company Accounting Oversight Board regarding itsKPMG’s communications with the Audit Committee concerning independence. The Audit Committeeindependence and has discussed with KPMG its independence from the Company.

Based on itsthe review and discussions with management and KPMG, as well as its review of the representations and information provided by management and KPMG,described above, the Audit Committee recommended to the Company’s Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015.2023.

By the Audit Committee of the Board of Directors of MicroStrategy Incorporated.

Stephen X. Graham

Jarrod M. Patten

Carl J. Rickertsen

41


PROPOSAL 2

TO APPROVE AMENDMENT NO. 3 TO THE MICROSTRATEGY INCORPORATED 2013 STOCK

INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS A COMMON STOCK

AUTHORIZED FOR ISSUANCE UNDER SUCH PLAN FROM 1,500,000 TO 1,700,000

Introduction

In September 2013, the Board of Directors adopted the Company’s 2013 Stock Incentive Plan (the “Original 2013 Equity Plan”). In April 2014, the Board of Directors adopted Amendment No. 1 to the Original 2013 Equity Plan (“Amendment No. 1”) and the Compensation Committee of the Board of Directors adopted Amendment No. 2 to the Original 2013 Equity Plan (“Amendment No. 2”) (the Original 2013 Equity Plan as amended by Amendment No. 1 and Amendment No. 2, the “Previously Amended 2013 Equity Plan”). Amendment No. 1 increased the total number of shares of the Company’s class A common stock (referred to in this Proposal 2 as the “Common Stock”) authorized for issuance under the Original 2013 Equity Plan from 600,000 to 1,500,000. Amendment No. 2 provided for automatic annual stock option grants to each of the Company’s non-employee directors with respect to 5,000 shares of Common Stock, per director, per year, beginning in May 2015. In April 2015, the Company’s stockholders approved Amendments No. 1 and 2 at the Company’s annual meeting of stockholders.

We are now asking stockholders to approve Amendment No. 3 to the Previously Amended 2013 Equity Plan (“Amendment No. 3”) (the Previously Amended 2013 Equity Plan as amended by Amendment No. 3, the “2013 Equity Plan”). The 2013 Equity Plan was established in order to enhance the Company’s ability to attract, retain, and motivate persons who are expected to make important contributions to the Company and to provide such persons with equity ownership opportunities and performance-based incentives that are intended to further align their long-term interests with those of the Company’s stockholders. As indicated above, the Board of Directors had authorized 1,500,000 shares of Common Stock for issuance under the Previously Amended 2013 Equity Plan. Following option grants made by the Compensation Committee in September 2015, there were options outstanding with respect to all 1,500,000 shares of Common Stock.

On October 23, 2015, in order to enable the Company to issue additional equity incentive awards to key personnel, the Board of Directors adopted Amendment No. 3 and authorized an additional 200,000 shares of Common Stock for issuance under the 2013 Equity Plan, subject to stockholder approval. Amendment No. 3 increases the total number of shares of Common Stock authorized for issuance under the 2013 Equity Plan from 1,500,000 to 1,700,000.

Following all grants made by the Compensation Committee under the 2013 Equity Plan through April 19, 2016, as well as the termination of certain stock options as described further below, there are currently 602,500 shares of Common Stock authorized and available for grant under the 2013 Equity Plan (inclusive of the 200,000 shares of Common Stock subject to stockholder approval of Amendment No. 3). If Amendment No. 3 is not approved by stockholders, there would be 402,500 shares of Common Stock authorized and available for grant under the 2013 Equity Plan immediately following the Annual Meeting, assuming no additional awards are granted or terminated under the 2013 Equity Plan prior to the Annual Meeting.

42


New Plan Benefits

The table below sets forth certain information regarding the awards granted under the 2013 Equity Plan through April 19, 2016:

MicroStrategy Incorporated 2013 Stock Incentive Plan

   Number of Shares  Dollar Value Of
Option Grant
 

Michael J. Saylor

   400,000(1)   21,708,000(2) 

Chairman of the Board, President & Chief Executive Officer

   

Phong Q. Le

   40,000(1)   3,315,600(2) 

Senior Executive Vice President & Chief Financial Officer

   

Timothy E. Lang

   50,000(1)   3,409,500(2) 

Senior Executive Vice President & Chief Technology Officer

   

Jonathan F. Klein

   200,000(1)(3)   8,406,000(2) 

Former President & Chief Legal Officer

   

Paul N. Zolfaghari

   200,000(1)(3)   8,406,000(2) 

Former President

   

Douglas K. Thede

   100,000(1)(4)   4,203,000(2) 

Former Senior Executive Vice President & Chief Financial Officer

   

Current executive officers as a group (6 persons)

   630,000    38,265,500(2) 

Non-executive directors as a group (4 persons)

   140,000    7,963,000(2) 

Non-executive officer employees as a group (11 persons)

   140,000    10,175,550(2) 

Stephen X. Graham

Jarrod M. Patten

Carl J. Rickertsen

 

(1)
46None of the stock options granted to Messrs. Saylor, Le, Lang, Klein, Zolfaghari, or Thede are subject to stockholder approval of Amendment No. 3. The stock options granted to Messrs. Klein, Zolfaghari, and Thede were granted in 2013. The stock option granted to Mr. Saylor was granted in 2014. The stock options granted to Messrs. Le and Lang were granted in 2015.MICROSTRATEGY | 2024 Proxy Statement
(2)Represents the grant date fair value of an option to purchase shares of Common Stock granted under the Previously Amended 2013 Equity Plan, calculated in accordance with FASB ASC Topic 718, “Compensation—Stock Compensation”. See Note 12, “Share-based Compensation,” to the Company’s consolidated financial statements set forth in the Company’s Form 10-K for the years ended December 31, 2013, December 31, 2014, and December 31, 2015, as applicable, for the assumptions made in determining grant date fair value for this option. This amount reflects the grant date fair value for this option and is not intended to represent the value, if any, that has been or will be actually realized by the individual.
(3)In September 2013, each of Messrs. Klein and Zolfaghari were granted a stock option to purchase 200,000 shares of Common Stock. The unvested portion of Mr. Klein’s option (100,000 shares of Common Stock) terminated upon his departure from the Company in January 2016 in accordance with the terms of the 2013 Equity Plan and his option agreement. In March 2016, Mr. Klein exercised his option with respect to the 100,000 shares of the Company’s Common Stock that had vested. Following Mr. Zolfaghari’s departure from the Company in January 2016, the entirety of Mr. Zolfaghari’s option terminated in accordance with the terms of the 2013 Equity Plan and his option agreement.
(4)In September 2013, Mr. Thede was granted a stock option to purchase 100,000 shares of Common Stock. The unvested portion of Mr. Thede’s option (50,000 shares of Common Stock) terminated upon his departure from the Company in October 2015 in accordance with the terms of the 2013 Equity Plan and his option agreement. Following his departure and prior to December 31, 2015, Mr. Thede exercised his option with respect to the 50,000 shares of the Company’s Common Stock that had vested.

The Company and each non-employee director, executive officer, and non-executive officer employee who received stock options under the Previously Amended 2013 Equity Plan entered into option agreements with respect to these options. Each option (i) has an exercise price per share equal to the closing sale price of the Common Stock as quoted on Nasdaq on the date of grant (or, if the grant date was a non-trading day, the date of


43


the immediately preceding trading day), (ii) expires on the tenth anniversary of the date of grant, (iii) vests as to 25% of the original number of shares subject to the stock option on the first anniversary of the date of grant, and as to an additional 25% on each anniversary of the first vesting date until the option is vested in full, unless earlier terminated in accordance with the terms of the 2013 Equity Plan or the applicable option agreement, (iv) provides for automatic vesting in full upon a change in control event (as defined in the applicable option agreement), and (v) is otherwise subject to such other terms and conditions as are set forth in the applicable option agreement and the 2013 Equity Plan. Each option is a non-statutory stock option and is intended to constitute “performance-based” compensation that is exempt from the deduction limitations of Section 162(m) (“Section 162(m)”) of the Internal Revenue Code of 1986, as amended (the “Code”).

On April 19, 2016, the closing sale price on the Nasdaq of the Common Stock was $189.35 per share.

Description of the 2013 Equity Plan

The following is a brief summary of the 2013 Equity Plan. The following summary is qualified in its entirety by reference to the full text of the 2013 Equity Plan, including Amendments No. 1, 2, and 3, copies of which have been included inAppendix 1 to this proxy statement.

Amendment No. 3 to the Previously Amended 2013 Equity Plan

Under this proposal, the number of shares of Common Stock authorized for issuance under the 2013 Equity Plan would be increased from 1,500,000 to 1,700,000.

Types of Awards

The 2013 Equity Plan provides for the grant of incentive stock options intended to qualify as such under Section 422 of the Code, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, and other stock-based awards (collectively, “Awards”) as more fully described below.

Incentive Stock Options and Non-statutory Stock Options

Option holders receive the right to purchase a specified number of shares of Common Stock at a specified exercise price and subject to such other terms and conditions as are specified in connection with the option grant. Options shall be granted at an exercise price not less than 100% of the fair market value of the Common Stock on the date of grant. The 2013 Equity Plan permits the following forms of payment of the exercise price of options: (i) payment by cash, check, or in connection with a “cashless exercise” through a broker, which we refer to as exercises for “cash”, (ii) surrender to the Company of shares of Common Stock, or (iii) any other lawful means.

Restricted Stock and Restricted Stock Units

Restricted stock or restricted stock unit holders receive the right to acquire shares of Common Stock, or in the case of restricted stock units, cash at the time such Award vests, subject to such restrictions, conditions and other terms as the Board of Directors may determine, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any. Under the 2013 Equity Plan, holders of restricted stock units shall have no voting rights with respect to such Awards. Unless otherwise provided in the applicable Award agreement, any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of restricted stock shall be paid to the holder only if such shares become free from the restrictions on transferability and forfeitability that apply to such shares. The Award agreement for restricted stock units may provide holders with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock, and such dividend equivalents may be subject to the same restrictions on transfer and forfeitability as the restricted stock units to the extent provided in the restricted stock unit Award agreement.

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Stock Appreciation Rights

Stock appreciation rights (“SARs”) holders receive the right to acquire the number of shares of Common Stock determined by reference to appreciation from and after the date of grant, in the fair market value of a share of Common Stock over a predetermined measurement price. SARs shall be granted at a measurement price not less than 100% of the fair market value of the Common Stock on the date of grant. The Company may not satisfy its obligation upon exercise of SARs in cash, among other actions, without the approval of the Company’s stockholders.

Other Stock-Based Awards

Other Awards with respect to shares of Common Stock under the 2013 Equity Plan may be paid in shares of Common Stock or cash, as the Board of Directors shall determine. The Board of Directors shall also determine the applicable terms and conditions of such Award.

Transferability of Awards

Except as the Board of Directors may otherwise determine or provide in an Award, Awards may not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an incentive stock option, pursuant to a qualified domestic relations order; provided that a participant may transfer Awards to (i) one or more of the following members of the participant’s family: spouse, former spouse, domestic partner sharing the participant’s household, child (whether natural or adopted), stepchild, or grandchild; (ii) a trust in which the participant and/or one or more of the above-referenced family members of the participant have more than fifty percent of the beneficial interest; (iii) a foundation in which the participant and/or one or more of the above-referenced family members of the participant control the management of assets; or (iv) any other transferee specifically approved by the Board of Directors. During the life of the participant, Awards are exercisable only by the participant or a permitted transferee.

Eligibility to Receive Awards

Employees, officers, directors, consultants, and advisors of the Company and its subsidiaries may be granted Awards under the 2013 Equity Plan. As of December 31, 2015, we had a total of 1,947 employees (including five executive officers), four non-employee directors, and 375 consultants.

Administration

The Board of Directors administers the 2013 Equity Plan, and has the authority to adopt, amend and repeal the administrative rules, guidelines and practices relating to the 2013 Equity Plan and to interpret its provisions. Pursuant to the terms of the 2013 Equity Plan, the Board of Directors may delegate authority under the 2013 Equity Plan to one or more committees or subcommittees of the Board of Directors. The Board of Directors has authorized the Compensation Committee to administer certain aspects of the 2013 Equity Plan, including the grant of Awards under the 2013 Equity Plan but excluding the right to amend the 2013 Equity Plan unless specifically delegated the right to do so by the Board of Directors.

Acceleration

The Board of Directors may, at any time, provide that any Award becomes immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part.

Limitation on Repricing

Unless approved by our stockholders and except for permissible adjustments such as stock splits or reorganization events, the Company may not (1) amend any outstanding option or SAR granted under the 2013 Equity Plan to provide an exercise or measurement price that is lower than the then-current exercise or

45


measurement price of such option or SAR, (2) cancel any outstanding option or SAR (whether or not granted under the 2013 Equity Plan) and grant in substitution for that option or SAR any new awards under the 2013 Equity Plan (other than substitute awards granted in connection with a merger with another entity or acquisition of the property or stock of an entity) covering the same or a different number of shares and having an exercise or measurement price lower than the then-current exercise or measurement price of the canceled option or SAR, (3) cancel in exchange for a cash payment an option or SAR with an exercise or measurement price above the then-current fair market value of the shares, or (4) take any other action under the 2013 Equity Plan that constitutes a repricing under the rules of Nasdaq.

Amendment or Termination

The Board of Directors determines the effect on an Award of a holder’s disability, death, termination or other cessation of employment, authorized leave of absence, or other change in employment status. No Awards may be granted under the 2013 Equity Plan after the expiration of 10 years from the 2013 Equity Plan’s effective date in 2013, but Awards previously granted may extend beyond that date. In addition, no option or SAR may be granted with a term in excess of 10 years. The Board of Directors may at any time amend, suspend or terminate the 2013 Equity Plan, except that no Award designated as subject to Section 162(m) by the Board of Directors after the date of such amendment shall become exercisable, realizable or vested (to the extent such amendment was required to grant such Award) unless and until such amendment shall have been approved by the Company’s stockholders in the manner required by Section 162(m) and no amendment that would require stockholder approval under the rules of Nasdaq may be made effective until our stockholders approve such amendment.

Potential Costs, Dilution, and Burn Rate

Over the life of the 2013 Equity Plan through April 19, 2016, we have granted options to purchase an aggregate of 1,725,000 shares of Common Stock, of which (i) options to purchase an aggregate of 896,250 shares of Common Stock remain outstanding, and (ii) options to purchase an aggregate of 627,500 shares of Common Stock have been terminated in connection with the departures of certain employees from the Company and have been returned to the pool of authorized shares available for grant under the 2013 Equity Plan. If Amendment No. 3 is not approved by stockholders, there would be 402,500 shares of Common Stock authorized and available for grant under the 2013 Equity Plan immediately following the Annual Meeting, assuming no additional awards are granted or terminated under the 2013 Equity Plan prior to the Annual Meeting. Shares available for grant under the 2013 Equity Plan are reduced by the automatic annual grants of options to our non-employee directors under the 2013 Equity Plan.

We recognize that equity awards have potential costs and may dilute existing stockholders. The Compensation Committee reviews the objectives and costs of our equity program to balance the goal of compensating and motivating our employees against our stockholders’ interest in limiting dilution from equity grants. In evaluating whether to adopt Amendment No. 3, the Board of Directors and the Compensation Committee, respectively, considered a number of measures of potential cost and dilution, such as the potential impact on earnings per share, equity overhang, and burn rate.

In connection with the adoption of Amendment No. 3 by the Board of Directors in October 2015, based on the assumption that all of the additional 200,000 shares would have a hypothetical exercise price of $199.79 (which was based on the fair market value of our Common Stock on October 15, 2015), we estimated that the Company would recognize a total aggregate accounting charge of approximately $4.1 million per year over the course of the standard four-year vesting period and the aggregate annual impact of such awards on after-tax basic earnings per share would be $(0.22) per year for each of the four years. Assuming the hypothetical strike price of $199.79 per share, the Company could potentially realize approximately $40.0 million in total cash proceeds over a four year vesting period, if Amendment No. 3 is approved by stockholders and assuming all of the options to purchase an aggregate of 200,000 shares of Common Stock were outstanding and were exercised for cash. As of December 31, 2015, total share based compensation expense recognized for 2015 was approximately $17.3 million, and we estimated that the option awards granted under the 2013 Equity Plan outstanding as of

46


December 31, 2015 were expected to result in additional share-based compensation expense of approximately $47.8 million over the remaining weighted average vesting period of approximately 2.7 years. Included in these amounts is approximately $6.8 million of total unrecognized share-based compensation expense related to unvested stock options subsequently forfeited in January 2016 as a result of the departures of Messrs. Klein and Zolfaghari. Prior to such departures, such amount was expected to be recognized over a remaining service period of 1.6 years.

As used here, equity overhang means the total number of shares of Common Stock subject to outstanding stock options plus the total number of shares of Common Stock available for grant, in each case under the 2013 Equity Plan, together as a percentage of the total number of shares of Common Stock subject to outstanding stock options plus the total number of shares of Common Stock available for grant, in each case under the 2013 Equity Plan, plus the total number of shares outstanding of our class A and class B common stock. As of March 31, 2016, our equity overhang (excluding the total number of shares of Common Stock available for grant that are subject to stockholder approval of Amendment No. 3) was equal to 10.21%. If Amendment No. 3 is approved by our stockholders, this equity overhang (based on the equity awards and shares outstanding as of March 31, 2016) will increase to 11.60%. We believe this percentage is comparable to the percentage of equity reserved for issuance under stockholder-approved equity incentive plans used in 2013 and 2014 by certain other technology companies that have a market cap of less than $5 billion, including Qlik Technologies, Tableau Software, Rackspace Hosting and CommVault Systems. Each of those companies reported information about their respective equity plans in documents filed with the Securities and Exchange Commission.

As used here, burn rate means shares subject to options granted during a fiscal year under the Previously Amended 2013 Equity Plan less option terminations during that fiscal year, together as a percentage of total shares of our class A and class B common stock outstanding. As of December 31, 2015, our “burn rate” for 2015 was 1.64%. We adopted, and began granting awards under, the 2013 Equity Plan in September 2013 in order to transition from our previous long-term incentive plan arrangements to the 2013 Equity Plan. Accordingly, the small amount of historical data under the 2013 Equity Plan may limit the current utility of this metric.

In October 2015, the Board of Directors expected that the increase in shares authorized for issuance under the 2013 Equity Plan pursuant to Amendment No. 3 would be used for the automatic annual grants to non-employee directors under the 2013 Equity Plan, as well as discretionary grants that the Compensation Committee may desire to make to new and existing key personnel. The Board of Directors and Compensation Committee continue to evaluate our needs and may propose additional grants under, or may consider additional amendments to increase the number of shares authorized for issuance under, the 2013 Equity Plan in the future.

Equity Compensation Plan Information

For more information on our equity compensation plans, please see “Executive and Director Compensation—Equity Compensation Plan Information” above.

Federal Tax Consequences

The following is a summary of the United States federal income and employment tax consequences that generally will arise with respect to Awards granted under the 2013 Equity Plan and with respect to the sale of shares of Common Stock acquired under the 2013 Equity Plan. This summary is based on the federal tax laws in effect as of the date of this proxy statement. Changes to the laws could alter the tax consequences described below. In addition, this summary assumes that all awards are exempt from, or comply with, the rules under Section 409A of the Code regarding nonqualified deferred compensation.

Incentive Stock Options

In general, a participant will not recognize taxable income upon the grant or exercise of an incentive stock option. Also, except as described below, a participant will not recognize income upon exercise of an incentive stock option if the participant has been employed by the Company or a 50% or more-owned corporate subsidiary

47


at all times beginning with the date of grant and ending three months before the date the participant exercises the option. Thus, income tax withholding, Federal Insurance Contributions Act (“FICA”) taxes (i.e., Social Security taxes up to applicable annual wage base and Medicare taxes), and, if the participant’s income exceeds certain thresholds, the additional Medicare tax and the net investment income tax will not apply at the time of grant. However, if at exercise, the participant has not been so employed during that time, the tax consequence will be the same as for “Non-statutory Stock Options” described below. Otherwise with respect to incentive stock options, a participant will recognize taxable income upon the sale of Common Stock acquired through the exercise of the option (“ISO Stock”). However, such income is generally not subject to income tax withholding and employment taxes, including FICA taxes and the additional Medicare tax (if applicable). The exercise of an incentive stock option, however, may subject the participant to the alternative minimum tax.

Generally, the tax consequences of selling ISO Stock will vary with the length of time that the participant has owned the ISO Stock at the time it is sold. If the participant sells ISO Stock after having owned it for more than two years from the date of grant and one year from the exercise date of the option, then the participant will recognize long-term capital gain in an amount equal to the excess of the sale price of the ISO Stock over the exercise price. In addition to income tax, the participant may be subject to the net investment income tax on the amount of the capital gain if the participant’s income exceeds certain thresholds.

If the participant sells ISO Stock for more than the exercise price prior to having owned it for more than two years from the date of grant and one year from the exercise date (a “Disqualifying Disposition”), then all or a portion of the gain recognized by the participant will be ordinary compensation income and the remaining gain, if any, will be a capital gain. The portion of the gain treated as ordinary compensation income is based on the excess of the fair market value on the exercise date over the exercise price. No portion of the ordinary compensation income is subject to income tax withholding (although it is subject to income tax), FICA taxes, the additional Medicare tax, or the net investment income tax. The capital gain portion will be treated as long-term capital gain if the participant has held the ISO Stock for more than one year prior to the date of sale. In addition to income tax, the portion of the recognized gain that is treated as a capital gain may be subject to the net investment income tax, if the participant’s income exceeds certain thresholds.

If a participant sells ISO Stock for less than the exercise price, then the participant will recognize capital loss in an amount equal to the excess of the exercise price over the sale price of the ISO Stock. This capital loss will be a long-term capital loss if the participant has held the ISO Stock for more than one year prior to the date of sale.

Non-statutory Stock Options

As in the case of an incentive stock option, a participant will not recognize taxable income upon the grant of a non-statutory stock option. Unlike the case of an incentive stock option, however, a participant who exercises a non-statutory stock option generally will recognize ordinary compensation income in an amount equal to the excess of the fair market value of the Common Stock acquired through the exercise of the option (“NSO Stock”) on the exercise date over the exercise price. In addition to income tax withholding, the ordinary compensation income is generally subject to FICA taxes, including, if the participant’s income exceeds certain thresholds, the additional Medicare tax.

With respect to any NSO Stock, a participant will have a tax basis equal to the exercise price plus any income recognized upon the exercise of the option. Upon selling NSO Stock, a participant generally will recognize capital gain or loss in an amount equal to the difference between the sale price of the NSO Stock and the participant’s tax basis in the NSO Stock. This capital gain or loss will be a long-term gain or loss if the participant has held the NSO Stock for more than one year prior to the date of the sale. In addition to income tax, any capital gain recognized may be subject to the net investment income tax, if the participant’s income exceeds certain thresholds.

48


Restricted Stock

A participant acquiring restricted stock generally will recognize ordinary income equal to the fair market value of the shares on the vesting date. If the participant is an employee, such ordinary income generally is subject to withholding of income and employment taxes, including FICA taxes, and, if the participant’s aggregate wages for the year exceed $200,000, the additional Medicare tax. The participant may elect, pursuant to Section 83(b) of the Code, to accelerate the ordinary income tax event to the date of acquisition by filing an election with the Internal Revenue Service no later than 30 days after the date the shares are acquired. Upon the sale of shares acquired pursuant to a restricted stock award, any gain or loss, based on the difference between the sale price and the fair market value on the date the ordinary income tax event occurs, will be taxed as capital gain or loss, with the gain or loss being long-term if the participant held the shares for more than one year after vesting (if participant did not make an 83(b) election) or grant (if participant made an 83(b) election) and otherwise will be short-term. In addition to income tax, any capital gain recognized may be subject to the net investment income tax, if the participant’s income exceeds certain thresholds.

Restricted Stock Units

There are no immediate tax consequences of receiving an award of restricted stock units. A participant who is awarded restricted stock units will be deemed to have wages subject to FICA taxes, including potentially the additional Medicare tax, based on the value of the restricted stock units at the end of the applicable vesting period. For income tax withholding purposes, a participant who is awarded restricted stock units will be required to recognize ordinary income in an amount equal to the fair market value of shares issued to such participant (or the cash paid in settlement of the restricted stock units in lieu of shares) on the settlement date elected by the Compensation Committee or a participant. Any additional gain or loss recognized upon any later disposition of any shares received would be capital gain or loss, with the gain or loss being long-term if the participant held the shares for more than one year after receipt and otherwise will be short-term. In addition to income tax, any capital gain recognized may be subject to the net investment income tax, if the participant’s income exceeds certain thresholds. A cash payment in lieu of shares would be treated as ordinary compensation income.

Stock Appreciation Rights

In general, no taxable income is reportable when a stock appreciation right is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the fair market value of any shares of Common Stock received. If the participant is an employee, such ordinary income is generally subject to withholding of income taxes and FICA taxes, including the additional Medicare tax (if applicable). Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss, with the gain or loss being long-term if the participant held the shares for more than one year after receipt and otherwise will be short-term. In addition to income tax, any capital gain recognized may be subject to the net investment income tax, if the participant’s income exceeds certain thresholds.

Other Stock-Based Awards

The tax consequences associated with any other stock-based Award granted under the 2013 Equity Plan will vary depending on the specific terms of such Award. Among the relevant factors are whether or not the Award has a readily ascertainable fair market value, whether or not the Award is subject to forfeiture provisions or restrictions on transfer, the nature of the property to be received by the participant under the Award, and the participant’s holding period and tax basis for the Award or underlying common stock.

Tax Consequences to the Company

In general, when a participant recognizes ordinary income from the exercise of non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights, or other stock-based awards, the Company is liable for FUTA tax and the employer’s share of FICA taxes on the ordinary income recognized. There will be no other tax consequences to the Company except that we will be entitled to a deduction when a participant has compensation income. Any such deduction will be subject to the limitations of Section 162(m).

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Certain Interests of Executive Officers and Directors

In considering the recommendation of the Board of Directors with respect to Amendment No. 3 to the Previously Amended 2013 Equity Plan, stockholders should be aware that members of the Board of Directors and our executive officers are eligible to receive awards under the 2013 Equity Plan and, accordingly, may from time to time have interests that present them with conflicts of interest in connection with this proposal to approve Amendment No. 3. There are currently 602,500 shares of Common Stock authorized and available for grant under the 2013 Equity Plan (inclusive of the 200,000 shares of Common Stock subject to stockholder approval of Amendment No. 3) and, under the 2013 Equity Plan, the Company’s non-employee directors are entitled to automatic annual stock option grants with respect to 5,000 shares of Common Stock per director, per year.

The Board of Directors believes that approval of Amendment No. 3 to the Previously Amended 2013 Equity Plan will advance the interests of the Company and its stockholders by providing the Company with flexibility to issue additional Awards to key personnel and encouraging Award recipients to make significant contributions to the long-term success of the Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE APPROVAL OF THE PROPOSED AMENDMENT NO. 3 TO THE MICROSTRATEGY INCORPORATED 2013 STOCK INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF CLASS A COMMON STOCK AUTHORIZED FOR ISSUANCE UNDER SUCH PLAN FROM 1,500,000 TO 1,700,000.

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PROPOSAL 3

2—RATIFICATION OF THE SELECTION OF KPMG LLP AS THE

COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

FOR THE FISCAL YEAR ENDING DECEMBER 31, 20162024

Selection of Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 2016

The Audit Committee has selected and the Board of Directors has ratified the Audit Committee’s selection of, the firm of KPMG as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2016.2024, and the Board has submitted the Audit Committee’s selection of KPMG to the stockholders for ratification. Although stockholder approval of the selection of KPMG is not required by law, the Company believes that it is advisable to give stockholders an opportunity to ratify this selection. If this proposalProposal 2 is not approved at the Annual Meeting, the Audit Committee may reconsider its selection of KPMG.

Representatives of KPMG are expected to be present atattend the virtual Annual Meeting, and will have the opportunity to make a statement if they desire to do so, and are expected towill be available to respond to appropriate questions from stockholders.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE SELECTION OF KPMG.

The Board Recommends a Vote “FOR” the Ratification

of the Selection of KPMG.

 

MICROSTRATEGY | 2024 Proxy Statement

47

51



INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES AND SERVICES

Fees and Services

Aggregate fees for professional services rendered by KPMG to us for work performed during and related to the fiscal years ended December 31, 20152023, and 20142022 are summarized in the table below.

 

  Year Ended December 31,   Year Ended December 31, 

Fee Category

  2015 ($)   2014 ($)   2023
($)
   2022
($)
 
 

Audit Fees

  $1,733,293     1,689,177     3,190,428    3,013,754 

Audit-Related Fees

   25,000     25,000  

Tax Fees

   —       —    

All Other Fees

   53,735     —    
  

 

   

 

  

Total Fees

   1,812,028     1,714,177     3,190,428    3,013,754 
  

 

   

 

 

Audit Fees. This category includes fees for professional services rendered for the audits of our consolidated financial statements, and statutory and subsidiary audits, services related to Sarbanes-Oxley Act compliance, and assistance with review of documents filed with the SEC.

Audit-Related Fees. This category includes fees for assurance and relatedSEC, services performed in connection with employee benefit planthe issuance of comfort letters and consents, and statutory audits.

Tax Fees. This category includes fees for international payroll and sales and useKPMG did not provide any audit-related, tax consultations.

All Other Fees. This category includes fees for professionalor other services rendered in connection with assessmentsto us during either of a new revenue recognition standard.the periods presented.

Audit Committee Pre-ApprovalPre-approval Policies and Procedures

During the fiscal years ended December 31, 20152023, and 2014,2022, the Audit Committee pre-approved all services (audit and non-audit) provided to MicroStrategy by our independent registered public accounting firm. In situations where a matter cannot wait until a full Audit Committee meeting, the ChairmanChair of the Audit Committee has authority to consider and, if appropriate, approve audit and non-audit services. Any decision by the ChairmanChair of the Audit Committee to pre-approve services must be presented to the full Audit Committee at its next scheduled quarterly meeting. The Audit Committee requires us to make required disclosure in our SEC periodic reports relating to the approval by the Audit Committee of audit and non-audit services to be performed by the independent registered public accounting firm and the fees paid by us for such services. All fees related to services performed by KPMG during the fiscal years ended December 31, 20152023, and 2014,2022, respectively, were approved by the Audit Committee.

48MICROSTRATEGY | 2024 Proxy Statement


OTHER MATTERS

 

52


OTHER MATTERS

The Board of Directors does not know of any other matters that may come before the Annual Meeting. However, if any other matters are properly presented at the Annual Meeting, it is the intention of the persons named in the accompanying proxy to vote or otherwise act in accordance with their judgment on such matters.

All costs

By Order of the Board of Directors,
W. Ming Shao
Senior Executive Vice President, General Counsel and Secretary

April 12, 2024

The Board hopes that stockholders will attend the Annual Meeting. Whether or not you plan to attend, to help ensure representation of solicitation of proxies will be borne by us. In addition to solicitations by mail, our directors, officers and employees, without additional remuneration, may solicit proxies by telephone and personal interviews, and we reserveyour shares at the right to retain outside agencies for the purpose of soliciting proxies. Brokers, custodians, and fiduciaries will be requested to forward proxy soliciting material to the owners of stock held in their names, and, as required by law, we will reimburse them for their out-of-pocket expenses in this regard.

Householding of Annual Meeting, Materialsyou are urged to submit your voting instructions over the telephone or on the Internet or, if you received a printed copy of the proxy materials, by completing, signing, dating, and returning your proxy card or voting instruction form. Submitting voting instructions or a proxy card will not prevent you from attending the Annual Meeting and voting online during the Annual Meeting.

MICROSTRATEGY | 2024 Proxy Statement

49


LOGO


Some banks, brokers,LOGO

MICROSTRATEGY INCORPORATED

ATTN: GENERAL COUNSEL

1850 TOWERS CRESCENT PLAZA

TYSONS CORNER, VA 22182

LOGO

VOTE BY INTERNET

Before the Meeting - Go to www.proxyvote.com or scan the QR Barcode above

Use the Internet to transmit your voting instructions and other nominee record holdersfor electronic delivery of information up until 11:59 p.m. Eastern Daylight Time on May 21, 2024. Have your Proxy Card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.

During the Meeting - Go to www.virtualshareholdermeeting.com/MSTR2024

You may be participatingattend the Meeting via the Internet and vote during the Meeting. Have the information that is printed in the practice of “householding” proxy statements,box marked by the arrow available and annual reports. This means that only one copy of our proxy statement or annual report may have been sent to multiple stockholders infollow the same household. We will promptly deliver a separate copy of either document to any stockholder upon request submitted in writing to us at the following address: MicroStrategy Incorporated, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182, Attention: Investor Relations, or by calling 703-848-8600. Any stockholder who wants to receive separate copies of the annual report and proxy statement in the future, or who is currently receiving multiple copies andinstructions.

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

If you would like to receive only one copy for his or her household, should contact his or her bank, broker, or other nominee record holder, or contact us atreduce the above address and phone number.

Stockholder Proposals

Proposals of stockholders intended to be presented at the 2017 Annual Meeting of Stockholders, including director nominations described above under the caption “Director Candidates,” must be receivedcosts incurred by us at our principal offices, 1850 Towers Crescent Plaza, Tysons Corner Virginia 22182 by December 23, 2016 for inclusioncompany in themailing proxy materials, you can consent to receiving all future proxy statements, proxy cards, and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the 2017 Annual Meeting of Stockholders. MicroStrategy suggests that proponents submit their proposals by certified mail, return receipt requested, addressed to the Secretary of the Company.

If a stockholder wishes to present a proposal before the 2017 Annual Meeting of Stockholders, but does not wish to have the proposal considered for inclusion in our proxy statement and proxy card, such stockholder must also give written notice to the Secretary of the Company at the address noted above. The Secretary must receive such notice by March 9, 2017, and if a stockholder fails to provide such timely notice of a proposal to be presented at the 2017 Annual Meeting of Stockholders, the proxies designated by the Board of Directors will have discretionary authorityinstructions above to vote on any such proposal.

By Order of the Board of Directors,

W. Ming Shao

Senior Executive Vice President,

General Counsel,and Secretary

April 21, 2016

THE BOARD OF DIRECTORS HOPES THAT STOCKHOLDERS WILL ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE ENCLOSED PROXY CARD IN THE ACCOMPANYING ENVELOPE. STOCKHOLDERS WHO ATTEND THE MEETING MAY VOTE THEIR STOCK PERSONALLY EVEN IF THEY HAVE SENT IN THEIR PROXIES.

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Appendix 1

MICROSTRATEGY INCORPORATED

2013 STOCK INCENTIVE PLAN

(adopted by the Board of Directors on September 4, 2013,

Amendment No. 1 adopted by the Board of Directors on April 25, 2014,

Amendment No. 2 adopted by the Compensation Committee of the Board of Directors on April 30, 2014, and

Amendment No. 3 adopted by the Board of Directors on October 23, 2015)


MICROSTRATEGY INCORPORATED

2013 STOCK INCENTIVE PLAN

1.Purpose

The purpose of this 2013 Stock Incentive Plan (the “Plan”) of MicroStrategy Incorporated, a Delaware corporation (the “Company”), is to advance the interests of the Company’s stockholders by enhancing the Company’s ability to attract, retain and motivate persons who are expected to make important contributions to the Company and by providing such persons with equity ownership opportunities and performance-based incentives that are intended to better align the interests of such persons with those of the Company’s stockholders. Except where the context otherwise requires, the term “Company” shall include any of the Company’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Internal Revenue Code of 1986, as amended, and any regulations thereunder (the “Code”) and any other business venture (including, without limitation, joint venture or limited liability company) in which the Company has a controlling interest, as determined by the Board of Directors of the Company (the “Board”).

2.Eligibility

All of the Company’s employees, officers and directors, as well as consultants and advisors to the Company (as such terms are defined and interpreted for purposes of Form S-8 under the Securities Act of 1933, as amended (the “Securities Act”), or any successor form) are eligible to be granted Awards under the Plan. Each person who is granted an Award under the Plan is deemed a “Participant.” “Award” means Options (as defined in Section 5), SARs (as defined in Section 6), Restricted Stock (as defined in Section 7), Restricted Stock Units (as defined in Section 7) and Other Stock-Based Awards (as defined in Section 8).

3.Administration and Delegation

(a)Administration by Board of Directors. The Plan will be administered by the Board. The Board shall have authority to grant Awards and to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable. The Board may construe and interpret the terms of the Plan and any Award agreements entered into under the Plan. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent it shall deem expedient and it shall be the sole and final judge of such expediency. All decisions by the Board shall be made in the Board’s sole discretion and shall be final and binding on all persons having or claiming any interest in the Plan or in any Award.

(b)Appointment of Committees. To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”). All references in the Plan to the “Board” shall mean the Board or a Committee of the Board to the extent that the Board’s powers or authority under the Plan have been delegated to such Committee.

4.Stock Available for Awards

(a)Number of Shares; Share Counting.

(1)Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 600,000 shares of class A common stock, $0.001 par value per share, of the Company (the “Common Stock”), any or all of which Awards may be in the form of Incentive Stock Options (as defined in Section 5(b)). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

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(2)Share Counting. For purposes of counting the number of shares available for the grant of Awards under the Plan:

(A) all shares of Common Stock covered by SARs shall be counted against the number of shares available for the grant of Awards under the Plan and against the sublimit listed in Section 4(b);provided,however, that if the Company grants an SAR in tandem with an Option for the same number of shares of Common Stock and provides that only one such Award may be exercised (a “Tandem SAR”), only the shares covered by the Option, and not the shares covered by the Tandem SAR, shall be so counted, and the expiration of one in connection with the other’s exercise will not restore shares to the Plan;

(B) if any Award (i) expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of Common Stock subject to such Award being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right) or (ii) results in any Common Stock not being issued (including as a result of an SAR that was settleable either in cash or in stock actually being settled in cash), the unused Common Stock covered by such Award shall again be available for the grant of Awards;provided,however, that (1) in the case of Incentive Stock Options, the foregoing shall be subject to any limitations under the Code, (2) in the case of the exercise of an SAR, the number of shares counted against the shares available under the Plan and against the sublimit listed in Section 4(b) shall be the full number of shares subject to the SAR multiplied by the percentage of the SAR actually exercised, regardless of the number of shares actually used to settle such SAR upon exercise and (3) the shares covered by a Tandem SAR shall not again become available for grant upon the expiration or termination of such Tandem SAR;

(C) shares of Common Stock delivered (either by actual delivery, attestation, or net exercise) to the Company by a Participant to (i) purchase shares of Common Stock upon the exercise of an Award or (ii) satisfy tax withholding obligations (including shares retained from the Award creating the tax obligation) shall not be added back to the number of shares available for the future grant of Awards; and

(D) shares of Common Stock repurchased by the Company on the open market using the proceeds from the exercise of an Award shall not increase the number of shares available for future grant of Awards.

(b)Section 162(m) Per-Participant Limit. The maximum number of shares of Common Stock with respect to which Awards may be granted to any Participant under the Plan shall be 1,000,000 per calendar year. For purposes of the foregoing limit, the combination of an Option in tandem with an SAR shall be treated as a single Award. The share counting provisions set forth in Section 4(a)Internet and, the per Participant limit described in this Section 4(b) each shall be construed and applied consistently with Section 162(m) of the Code or any successor provision thereto, and the regulations thereunder (“Section 162(m)”).

(c)Substitute Awards. In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards in substitution for any options or other stock or stock-based awards granted by such entity or an affiliate thereof. Substitute Awards may be granted on such terms as the Board deems appropriate in the circumstances, notwithstanding any limitations on Awards contained in the Plan. Substitute Awards shall not count against the overall share limit set forth in Section 4(a)(1) or any sublimit contained in the Plan, except as may be required by reason of Section 422 and related provisions of the Code.

5.Stock Options

(a)General. The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option, including conditions relating to applicable federal or state securities laws, as it considers necessary or advisable.

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(b)Incentive Stock Options. An Optionwhen prompted, indicate that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall only be granted to employees of MicroStrategy Incorporated, any of MicroStrategy Incorporated’s present or future parent or subsidiary corporations as defined in Sections 424(e) or (f) of the Code, and any other entities the employees of which are eligibleyou agree to receive Incentive Stock Options under the Code, and shall be subjector access proxy materials electronically in future years.

VOTE BY PHONE - 1-800-690-6903

Use any touch-tone telephone to and shall be construed consistently with the requirements of Section 422 of the Code. An Option that is not intended to be an Incentive Stock Option shall be designated a “Nonstatutory Stock Option.” The Company shall have no liability to a Participant, or any other party, if an Option (or any part thereof) that is intended to be an Incentive Stock Option is not an Incentive Stock Option or if the Company converts an Incentive Stock Option to a Nonstatutory Stock Option.

(c)Exercise Price The Board shall establish the exercise price of each Option and specify the exercise price in the applicable Option agreement. The exercise price shall be not less than 100% of the Fair Market Value per share of Common Stock on the date the Option is granted. If the Board approves the grant of an Option with an exercise price to be determined on a future date, the exercise price shall be not less than 100% of the Fair Market Value on such future date. For purposes of this Plan, unless otherwise expressly determined by the Board, the “Fair Market Value” of a share of Common Stock will be determined as follows:

(1) if the Common Stock trades on a national securities exchange, the closing sale price as officially quoted (for the primary trading session) on the date of determination;

(2) if the Common Stock does not trade on any such exchange, the average of the closing bid and asked prices as reported by an authorized OTCBB market data vendor as listed on the OTCBB website (otcbb.com) on the date of determination; or

(3) if the Common Stock is not publicly traded, the Board will determine the Fair Market Value for purposes of the Plan using any measure of value it determines to be appropriate (including, as it considers appropriate, relying on appraisals) in a manner consistent with the valuation principles under Section 409A of the Code, except as the Board may expressly determine otherwise.

For any date that is not a trading day, the Fair Market Value of a share of Common Stock for such date shall be determined by using the closing sale price or average of the closing bid and asked prices, as appropriate, for the immediately preceding trading day. The Board can substitute a particular time of day or other measure of “closing sale price” or “bid and asked prices” if appropriate because of exchange or market procedures or can, in its sole discretion, use weighted averages either on a daily basis or such longer period as complies with Code Section 409A.

The Board has sole discretion to determine the Fair Market Value for purposes of the Plan, and all Awards are conditioned on the participants’ agreement that the Administrator’s determination is conclusive and binding even though others might make a different determination.

(d)Duration of Options. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement;provided, however, that no Option will be granted with a term in excess of 10 years.

(e)Exercise of Options. Options may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with payment in full (in the manner specified in Section 5(f)) of the exercise price for the number of shares for which the Option is exercised. Shares of Common Stock subject to the Option will be delivered by the Company as soon as practicable following exercise.

(f)Payment Upon Exercise. Common Stock purchased upon the exercise of an Option granted under the Plan shall be paid for as follows:

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(1) in cash or by check, payable to the order of the Company;

(2) except as may otherwise be provided in the applicable Option agreement, or approved by the Board, in its sole discretion, by (i) delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price and any required tax withholding or (ii) delivery by the Participant to the Company of a copy of irrevocable and unconditionaltransmit your voting instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price and any required tax withholding;

(3) to the extent provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by delivery (either by actual delivery or attestation) of shares of Common Stock owned by the Participant valued at the per share Fair Market Value of the Common Stock;provided (i) such method of payment is then permitted under applicable law, (ii) such Common Stock, if acquired directly from the Company, was owned by the Participant for such minimum period of time, if any, as may be established by the Board in its discretion and (iii) such Common Stock is not subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements;

(4) to the extent provided for in the applicable Nonstatutory Stock Option agreement or approved by the Board, in its sole discretion, by delivery of a notice of “net exercise” to the Company, as a result of which the Participant would receive (i) the number of shares underlying the portion of the Option being exercised, less (ii) such number of shares as is equal to (A) the aggregate exercise price for the portion of the Option being exercised divided by (B) the Fair Market Value on the date of exercise;

(5) to the extent permitted by applicable law and provided for in the applicable Option agreement or approved by the Board, in its sole discretion, by payment of such other lawful consideration as the Board may determine; or

(6) by any combination of the above permitted forms of payment.

(g)Limitation on Repricing. Unless such action is approved by the Company’s stockholders, the Company may not (except as provided for under Section 9): (1) amend any outstanding Option granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option, (2) except in connection with Section 4(c), cancel any outstanding option (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of shares of Common Stock and having a measurement price or an exercise price per share lower than the then-current exercise price per share of the cancelled option, (3) cancel in exchange for a cash payment any outstanding Option with an exercise price per share above the then-current Fair Market Value, or (4) take any other action under the Plan that constitutes a repricing within the meaning of the rules of The NASDAQ Global Select Market (“NASDAQ”).

6.Stock Appreciation Rights

(a)General. The Board may grant Awards consisting of stock appreciation rights (“SARs”) entitling the holder, upon exercise, to receive an amount of Common Stock determined by reference to appreciation, from and after the date of grant, in the Fair Market Value of a share of Common Stock over the measurement price established pursuant to Section 6(b). The date as of which such appreciation is determined shall be the exercise date.

(b)Measurement Price. The Board shall establish the measurement price of each SAR and specify it in the applicable SAR agreement. The measurement price shall be not less than 100% of the Fair Market Value on the date the SAR is granted. If the Board approves the grant of an SAR effective as of a future date, the measurement price shall be not less than 100% of the Fair Market Value on such future date.

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(c)Duration of SARs. Each SAR shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable SAR agreement;provided,however, that no SAR will be granted with a term in excess of 10 years.

(d)Exercise of SARs. SARs may be exercised by delivery to the Company of a notice of exercise in a form (which may be electronic) approved by the Company, together with any other documents required by the Board.

(e)Limitation on Repricing. Unless such action is approved by the Company’s stockholders, the Company may not (except as provided for under Section 9): (1) amend any outstanding SAR granted under the Plan to provide a measurement price per share that is lower than the then-current measurement price per share of such outstanding SAR, (2) except in connection with Section 4(c), cancel any outstanding SAR (whether or not granted under the Plan) and grant in substitution therefor new Awards under the Plan covering the same or a different number of shares of Common Stock and having a measurement price or an exercise price per share lower than the then-current measurement price per share of the cancelled SAR, (3) cancel in exchange for a cash payment any outstanding SAR with a measurement price per share above the then-current Fair Market Value, or (4) take any other action under the Plan that constitutes a repricing within the meaning of the rules of NASDAQ.

7.Restricted Stock; Restricted Stock Units

(a)General. The Board may grant Awards entitling recipients to acquire shares of Common Stock (“Restricted Stock”), subject to the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price (or to require forfeiture of such shares if issued at no cost) from the recipient in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award. The Board may also grant Awards entitling the recipient to receive shares of Common Stock or cash to be delivered at the time such Award vests (“Restricted Stock Units”) (Restricted Stock and Restricted Stock Units are each referred to herein as a “Restricted Stock Award”).

(b)Terms and Conditions for All Restricted Stock Awards. The Board shall determine the terms and conditions of a Restricted Stock Award, including the conditions for vesting and repurchase (or forfeiture) and the issue price, if any.

(c)Additional Provisions Relating to Restricted Stock.

(1)Dividends. Unless otherwise provided in the applicable Award agreement, any dividends (whether paid in cash, stock or property) declared and paid by the Company with respect to shares of Restricted Stock (“Accrued Dividends”) shall be paid to the Participant only if and when such shares become free from the restrictions on transferability and forfeitability that apply to such shares. Each payment of Accrued Dividends will be made no later than the end of the calendar year in which the dividends are paid to stockholders of that class of stock or, if later, the 15th day of the third month following the lapsing of the restrictions on transferability and the forfeitability provisions applicable to the underlying shares of Restricted Stock.

(2)Stock Certificates. The Company may require that any stock certificates issued in respect of shares of Restricted Stock, as well as dividends or distributions paid on such Restricted Stock, shall be deposited in escrow by the Participant, together with a stock power endorsed in blank, with the Company (or its designee). At the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or if the Participant has died, to his or her Designated Beneficiary. “Designated Beneficiary” means (i) the beneficiary designated, in a manner determined by the Board, by a Participant to receive amounts due or exercise rights of the Participant in the event of the Participant’s death or (ii) in the absence of an effective designation by a Participant, the Participant’s estate.

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(d)Additional Provisions Relating to Restricted Stock Units.

(1)Settlement. Upon the vesting of and/or lapsing of any other restrictions (i.e., settlement) with respect to each Restricted Stock Unit, the Participant shall be entitled to receive from the Company the number of shares of Common Stock or the amount of cash provided in the applicable Award agreement. The Board may, in its discretion, provide that settlement of Restricted Stock Units shall be deferred, on a mandatory basis or at the election of the Participant in a manner that complies with Section 409A of the Code.

(2)Voting Rights. A Participant shall have no voting rights with respect to any Restricted Stock Units.

(3)Dividend Equivalents. The Award agreement for Restricted Stock Units may provide Participants with the right to receive an amount equal to any dividends or other distributions declared and paid on an equal number of outstanding shares of Common Stock (“Dividend Equivalents”). Dividend Equivalents may be paid currently or credited to an account for the Participant, may be settled in cash and/or shares of Common Stock and may be subject to the same restrictions on transfer and forfeitability as the Restricted Stock Units with respect to which paid, in each case to the extent provided in the Award agreement.

8.Other Stock-Based Awards

(a)General. Other Awards of shares of Common Stock, and other Awards that are valued in whole or in part by reference to, or are otherwise based on, shares of Common Stock or other property, may be granted hereunder to Participants (“Other Stock-Based-Awards”). Other Stock-Based Awards may be paid in shares of Common Stock or cash, as the Board shall determine.

(b)Terms and Conditions. Subject to the provisions of the Plan, the Board shall determine the terms and conditions of each Other Stock-Based Award, including any purchase price applicable thereto.

9.Adjustments for Changes in Common Stock and Certain Other Events

(a)Changes in Capitalization. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or any dividend or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under the Plan, (ii) the share counting rules and sublimit set forth in Sections 4(a) and 4(b), (iii) the number and class of securities and exercise price per share of each outstanding Option, (iv) the share and per-share provisions and the measurement price of each outstanding SAR, (v) the number of shares subject to and the repurchase price per share subject to each outstanding Restricted Stock Award and (vi) the share and per-share-related provisions and the purchase price, if any, of each outstanding Other Stock-Based Award, shall be equitably adjusted by the Company (or substituted Awards may be made, if applicable) in the manner determined by the Board. Without limiting the generality of the foregoing, in the event the Company effects a split of the Common Stock by means of a stock dividend and the exercise price of and the number of shares subject to an outstanding Option are adjusted as of the date of the distribution of the dividend (rather than as of the record date for such dividend), then an optionee who exercises an Option between the record date and the distribution date for such stock dividend shall be entitled to receive, on the distribution date, the stock dividend with respect to the shares of Common Stock acquired upon such Option exercise, notwithstanding the fact that such shares were not outstanding as of the close of business on the record date for such stock dividend.

(b)Reorganization Events.

(1)Definition. A “Reorganization Event” shall mean: (a) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash, securities or other property or is cancelled, (b) any transfer or disposition of all of the Common Stock of the Company for cash, securities or other property pursuant to a share exchange or other transaction or (c) any liquidation or dissolution of the Company.

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(2)Consequences of a Reorganization Event on Awards Other than Restricted Stock.

(A) In connection with a Reorganization Event, the Board may take any one or more of the following actions as to all or any (or any portion of) outstanding Awards other than Restricted Stock on such terms as the Board determines (except to the extent specifically provided otherwise in an applicable Award agreement or another agreement between the Company and the Participant): (i) provide that such Awards shall be assumed, or substantially equivalent Awards shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (ii) upon written notice to a Participant, provide that all of the Participant’s unexercised Awards will terminate immediately prior to the consummation of such Reorganization Event unless exercised by the Participant (to the extent then exercisable) within a specified period following the date of such notice, (iii) provide that outstanding Awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an Award shall lapse, in whole or in part prior to or upon such Reorganization Event, (iv) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “Acquisition Price”), make or provide for a cash payment to Participants with respect to each Award held by a Participant equal to (A) the number of shares of Common Stock subject to the vested portion of the Award (after giving effect to any acceleration of vesting that occurs upon or immediately prior to such Reorganization Event) multiplied by (B) the excess, if any, of (I) the Acquisition Price over (II) the exercise, measurement or purchase price of such Award and any applicable tax withholdings, in exchange for the termination of such Award, (v) provide that, in connection with a liquidation or dissolution of the Company, Awards shall convert into the right to receive liquidation proceeds (if applicable, net of the exercise, measurement or purchase price thereof and any applicable tax withholdings) and (vi) any combination of the foregoing. In taking any of the actions permitted under this Section 9(b)(2), the Board shall not be obligated by the Plan to treat all Awards, all Awards held by a Participant, or all Awards of the same type, identically.

(B) Notwithstanding the terms of Section 9(b)(2)(A), in the case of outstanding Restricted Stock Units that are subject to Section 409A of the Code: (i) if the applicable Restricted Stock Unit agreement provides that the Restricted Stock Units shall be settled upon a “change in control event” within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i), and the Reorganization Event constitutes such a “change in control event”, then no assumption or substitution shall be permitted pursuant to Section 9(b)(2)(A)(i) and the Restricted Stock Units shall instead be settled in accordance with the terms of the applicable Restricted Stock Unit agreement; and (ii) the Board may only undertake the actions set forth in clauses (iii), (iv) or (v) of Section 9(b)(2)(A) if the Reorganization Event constitutes a “change in control event” as defined under Treasury Regulation Section 1.409A-3(i)(5)(i) and such action is permitted or required by Section 409A of the Code; if the Reorganization Event is not a “change in control event” as so defined or such action is not permitted or required by Section 409A of the Code, and the acquiring or succeeding corporation does not assume or substitute the Restricted Stock Units pursuant to clause (i) of Section 9(b)(2)(A), then the unvested Restricted Stock Units shall terminate immediately prior to the consummation of the Reorganization Event without any payment in exchange therefor.

(C) For purposes of Section 9(b)(2)(A)(i), an Award (other than Restricted Stock) shall be considered assumed if, following consummation of the Reorganization Event, such Award confers the right to purchase or receive pursuant to the terms of such Award, for each share of Common Stock subject to the Award immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock);provided,however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise or settlement of the Award to consist solely of such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Board determined to be

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equivalent in value (as of the date of such determination or another date specified by the Board) to the per share consideration received by holders of outstanding shares of Common Stock as a result of the Reorganization Event.

(3)Consequences of a Reorganization Event on Restricted Stock. Upon the occurrence of a Reorganization Event other than a liquidation or dissolution of the Company, the repurchase and other rights of the Company with respect to outstanding Restricted Stock shall inure to the benefit of the Company’s successor and shall, unless the Board determines otherwise, apply to the cash, securities or other property which the Common Stock was converted into or exchanged for pursuant to such Reorganization Event in the same manner and to the same extent as they applied to such Restricted Stock;provided,however, that the Board may provide for termination or deemed satisfaction of such repurchase or other rights under the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, either initially or by amendment. Upon the occurrence of a Reorganization Event involving the liquidation or dissolution of the Company, except to the extent specifically provided to the contrary in the instrument evidencing any Restricted Stock or any other agreement between a Participant and the Company, all restrictions and conditions on all Restricted Stock then outstanding shall automatically be deemed terminated or satisfied.

10.General Provisions Applicable to Awards

(a)Transferability of Awards. Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution or, other than in the case of an Incentive Stock Option, pursuant to a qualified domestic relations order, and, during the life of the Participant, shall be exercisable only by the Participant;provided, however, that the Board may permit or provide in an Award for the gratuitous transfer of the Award by the Participant to or for the benefit of any transferee if the Company would be eligible to use a Form S-8 under the Securities Act for the registration of the sale of the Common Stock subject to such Award to such proposed transferee;providedfurther, that the Company shall not be required to recognize any such permitted transferup until such time as such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument in form and substance satisfactory to the Company confirming that such transferee shall be bound by all of the terms and conditions of the Award. References to a Participant, to the extent relevant in the context, shall include references to authorized transferees. For the avoidance of doubt, nothing contained in this Section 10(a) shall be deemed to restrict a transfer to the Company.

(b)Documentation. Each Award shall be evidenced in such form (written, electronic or otherwise) as the Board shall determine. Each Award may contain terms and conditions in addition to those set forth in the Plan.

(c)Board Discretion. Except as otherwise provided by the Plan, each Award may be made alone or in addition or in relation to any other Award. The terms of each Award need not be identical, and the Board need not treat Participants uniformly.

(d)Termination of Status. The Board shall determine the effect on an Award of the disability, death, termination or other cessation of employment, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.

(e)Withholding. The Participant must satisfy all applicable federal, state, and local or other income and employment tax withholding obligations before the Company will deliver stock certificates or otherwise recognize ownership of Common Stock under an Award. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Participant must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations. Payment of withholding

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obligations is due before the Company will issue any shares on exercise, vesting or release from forfeiture of an Award or at the same time as payment of the exercise or purchase price, unless the Company determines otherwise. If provided for in an Award or approved by the Board, in its sole discretion, a Participant may satisfy such tax obligations in whole or in part by delivery (either by actual delivery or attestation) of shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their Fair Market Value;provided,however, except as otherwise provided by the Board, that the total tax withholding where stock is being used to satisfy such tax obligations cannot exceed the Company’s minimum statutory withholding obligations (based on minimum statutory withholding rates for federal and state tax purposes, including payroll taxes, that are applicable to such supplemental taxable income). Shares used to satisfy tax withholding requirements cannot be subject to any repurchase, forfeiture, unfulfilled vesting or other similar requirements.

(f)Amendment of Award. Except as expressly provided in this Plan, including Sections 5(g) and 6(e), the Board may amend, modify or terminate any outstanding Award, including but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option. The Participant’s consent to such action shall be required unless (i) the Board determines that the action, taking into account any related action, does not materially and adversely affect the Participant’s rights under the Plan or (ii) the change is permitted under Section 9.

(g)Conditions on Delivery of Stock. The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously issued or delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and regulations and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

(h)Acceleration. The Board may at any time provide that any Award shall become immediately exercisable in whole or in part, free of some or all restrictions or conditions, or otherwise realizable in whole or in part, as the case may be.

11.Miscellaneous

(a)No Right To Employment or Other Status. No person shall have any claim or right to be granted an Award by virtue of the adoption of the Plan, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company. The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan, except as expressly provided in the applicable Award.

(b)No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder of such shares.

(c)Effective Date and Term of Plan. The Plan shall become effective on the date the Plan is adopted by the Board of Directors of MicroStrategy Incorporated (the “Effective Date”); provided that no Award shall be made before stockholder approval of the Plan, unless the Award is conditioned upon stockholder approval of the Plan and the Award provides that (i) it will terminate or be forfeited if stockholder approval of the Plan is not obtained within 12 months from the date of the grant of such Award and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval. No Awards shall be granted under the Plan after the expiration of 10 years from the Effective Date, but Awards previously granted may extend beyond that date.

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(d)Amendment of Plan. The Board may amend, suspend or terminate the Plan or any portion thereof at any time provided that (i) to the extent required by Section 162(m), no Award granted to a Participant that is intended to comply with Section 162(m) after the date of such amendment shall become exercisable, realizable or vested, as applicable to such Award, unless and until the Company’s stockholders approve such amendment in the manner required by Section 162(m); and (ii) no amendment that would require stockholder approval under the rules of NASDAQ may be made effective unless and until the Company’s stockholders approve such amendment. In addition, if at any time the approval of the Company’s stockholders is required as to any other modification or amendment under Section 422 of the Code or any successor provision with respect to Incentive Stock Options, the Board may not effect such modification or amendment without such approval. Unless otherwise specified in the amendment, any amendment to the Plan adopted in accordance with this Section 11(d) shall apply to, and be binding on the holders of, all Awards outstanding under the Plan at the time the amendment is adopted, provided the Board determines that such amendment, taking into account any related action, does not materially and adversely affect the rights of Participants under the Plan. No Award shall be made that is conditioned upon stockholder approval of any amendment to the Plan unless the Award provides that (i) it will terminate or be forfeited if stockholder approval of such amendment is not obtained within 12 months from the date of the grant of such Award and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

(e)Authorization of Sub-Plans (including for Grants to non-U.S. Employees). The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable securities, tax or other laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to the Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.

(f)Compliance with Section 409A of the Code. Except as provided in individual Award agreements initially or by amendment, if and to the extent (i) any portion of any payment, compensation or other benefit provided to a Participant pursuant to the Plan in connection with his or her employment termination constitutes “nonqualified deferred compensation” within the meaning of Section 409A of the Code and (ii) the Participant is a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code, in each case as determined by the Company in accordance with its procedures, by which determinations the Participant (through accepting the Award) agrees that he or she is bound, such portion of the payment, compensation or other benefit shall not be paid before the day that is six months plus one day after the date of “separation from service” (as determined under Section 409A of the Code) (the “New Payment Date”), except as Section 409A of the Code may then permit. The aggregate of any payments that otherwise would have been paid to the Participant during the period between the date of separation from service and the New Payment Date shall be paid to the Participant in a lump sum on such New Payment Date, and any remaining payments will be paid on their original schedule.

The Company makes no representations or warranty and shall have no liability to the Participant or any other person if any provisions of or payments, compensation or other benefits under the Plan are determined to constitute nonqualified deferred compensation subject to Section 409A of the Code but do not to satisfy the conditions of that section.

(g)Limitations on Liability. Notwithstanding any other provisions of the Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Plan, nor will such individual be personally liable with respect to the Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company. The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or

A-10


power relating to the administration or interpretation of the Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the Board’s approval) arising out of any act or omission to act concerning the Plan unless arising out of such person’s own fraud or bad faith.

(h)Governing Law. The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of the State of Delaware, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the State of Delaware.

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MICROSTRATEGY INCORPORATED

Amendment No. 1 to

2013 Stock Incentive Plan

Pursuant to Section 11(d) of the 2013 Stock Incentive Plan (the “Plan”) of MicroStrategy Incorporated (the “Company”), the Plan is hereby amended as follows:

Section 4(a)(1) of the Plan is amended to read in its entirety as follows:

“(1)Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 1,500,000 shares of class A common stock, $0.001 par value per share, of the Company (the “Common Stock”), any or all of which Awards may be in the form of Incentive Stock Options (as defined in Section 5(b)). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.”

This Amendment shall become effective on the date it is adopted by the Board; provided that, to the extent required, no Award shall be made pursuant to the Plan (other than an Award that would have been authorized under the Plan as in effect prior to this Amendment) before stockholder approval of this Amendment, unless the Award is conditioned upon stockholder approval of this Amendment and the Award provides that (1) it will terminate or be forfeited if stockholder approval of the Amendment is not obtained within 12 months from the date of the grant of such Award and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

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MICROSTRATEGY INCORPORATED

Amendment No. 2 to

2013 Stock Incentive Plan

Pursuant to Section 11(d) of the 2013 Stock Incentive Plan, as amended (the “Plan”) of MicroStrategy Incorporated (the “Company”), the Plan is hereby further amended as follows:

A new Section 5(h) shall be inserted in the Plan immediately following Section 5(g) of the Plan, to read in its entirety as follows:

“(h)Annual Stock Option Grants to Outside Directors.

(1)Annual Grant. Beginning in 2015,11:59 p.m. Eastern Daylight Time on May 31 of each year, each Outside Director who is21, 2024. Have your Proxy Card in hand when you call and then serving as an Outside Director (as defined in Section 5(h)(4)) as of such date shall automatically be granted (without further action byfollow the Board or any committee thereof) an Award consisting of a Nonstatutory Stock Option to purchase 5,000 shares of Common Stock (subject to adjustment pursuant to Section 9).instructions.

(2)Terms of Annual Stock Option Grants. Options granted under Section 5(h)(1) shall (i) have an exercise price equal to the Fair Market Value of the Common Stock on the date of grant; (ii) become exercisable as to 25% of the original number of shares subject to such option on the first anniversary of the date of grant and as to an additional 25% on each anniversary thereafter until such option becomes vested in full; (iii) unless earlier terminated, expire at 5:00 p.m., Eastern Time, on the tenth anniversary of the date of grant; and (iv) otherwise be on and subject to such other terms and conditions as are set forth in the option agreement with respect to such grant and as the Board may determine.

(3)Limitations. Notwithstanding Section 5(h)(1), in the event that the number of shares of Common Stock prescribed by Section 4(a)(1) is not sufficient to cover the Awards granted pursuant to Section 5(h)(1), the remaining shares of Common Stock available for issuance shall be prorated among the Outside Directors entitled to receive such Awards. Any further grants pursuant to Section 5(h)(1) shall then be deferred until such time, if any, as additional shares of Common Stock become available for grant under the Plan, whether pursuant to amendment of the Plan pursuant to Section 11(d) to increase the number of shares available for issuance under the Plan or pursuant to the mechanisms set forth in Section 4(a)(2)(B).

(4)Definition. An “Outside Director” shall mean a member of the Board who is not employed by the Company. Payments by the Company to a member of the Board solely in connection with providing services to the Company as a member of the Board shall not be sufficient to constitute “employment” by the Company.”

This Amendment shall become effective on the date it is adopted by the Board; provided that, to the extent required, no Award shall be made pursuant to this Amendment before stockholder approval of this Amendment, unless the Award is conditioned upon stockholder approval of this Amendment and the Award provides that (1) it will terminate or be forfeited if stockholder approval of the Amendment is not obtained within 12 months from the date of the grant of such Award and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

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MICROSTRATEGY INCORPORATED

Amendment No. 3 to

2013 Stock Incentive Plan

Pursuant to Section 11(d) of the 2013 Stock Incentive Plan (as previously amended, the “Plan”) of MicroStrategy Incorporated (the “Company”), the Plan is hereby amended as follows:

Section 4(a)(1) of the Plan is amended to read in its entirety as follows:

“(1)Authorized Number of Shares. Subject to adjustment under Section 9, Awards may be made under the Plan for up to 1,700,000 shares of class A common stock, $0.001 par value per share, of the Company (the “Common Stock”), any or all of which Awards may be in the form of Incentive Stock Options (as defined in Section 5(b)). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.”

This Amendment shall become effective on the date it is adopted by the Board; provided that, to the extent required, no Award shall be made pursuant to the Plan (other than an Award that would have been authorized under the Plan as in effect prior to this Amendment) before stockholder approval of this Amendment, unless the Award is conditioned upon stockholder approval of this Amendment and the Award provides that (1) it will terminate or be forfeited if stockholder approval of the Amendment is not obtained within 12 months from the date of the grant of such Award and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

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LOGO

MICROSTRATEGY INCORPORATED

ATTN: GENERAL COUNSEL

1850 TOWERS CRESCENT PLAZA

TYSONS CORNER, VA 22182

VOTE BY MAIL

Please fill in, date, and sign your proxy cardProxy Card and return it in the postage-paid envelope we have provided as soon as possibleby May 21 2024. or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.

 

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

E05376-P75103V38387-P07351        KEEP THIS PORTION FOR YOUR RECORDS

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DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

MICROSTRATEGY INCORPORATED

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

MICROSTRATEGY INCORPORATED 

Withhold

Authority

For All Nominees

 

The Board of Directors recommends you vote FOR each of the following nominees:

For All NomineesFor All Except

 1. 

To elect the following six (6) directors for the next year.
Nominees:
01) Michael J. Saylor
02) Phong Q. Le
03) Stephen X. Graham
04) Jarrod M. Patten
05) Leslie J. Rechan
06) Carl J. Rickertsen
 

To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) For whom you wish to withhold authority on the line below.

The Board of Directors recommends you vote FOR the following:

For All

Nominees

For All

Nominees

For All

Except

1.To elect the following five (5) directors for the next year.¨¨¨ 

  
  
  Nominees:  
     

01)   Michael J. Saylor

02)   Robert H. Epstein

03)   Stephen X. Graham

04)   Jarrod M. Patten

05)   Carl J. Rickertsen

The Board of Directors recommends you vote FOR the following proposals:proposal: For AgainstFor Abstain  Against Abstain 
2.

To approve Amendment No. 3 to the MicroStrategy Incorporated 2013 Stock Incentive Plan to increase the number of shares of class A common stock authorized for issuance under such plan from 1,500,000 to 1,700,000.

¨¨¨
3. 

To ratify the selection of KPMG LLP as MicroStrategy Incorporated’s independent registered public accounting firm for the fiscal year ending
December 31, 2016.2024.

¨¨¨

To change the address on your account, please check the box at the right and indicate your new address in the address space on the back of this Proxy Card. Please note that changes to the registered name(s) on the account may not be submitted via this method.

¨

Please sign exactly as your name or names appear on this Proxy Card. When shares are held jointly, each holder should sign. When signing as executor,administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

   
    ☐ 
     
     
 

Please sign exactly as your name or names appear(s) on this Proxy Card. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee, or guardian, please give full title as such. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

Signature [PLEASE SIGN WITHIN BOX] Date 
 
Signature (Joint Owners) Date 


Notice of Internet Availability of Proxy Materials:

The Annual Report and Notice of Meeting & Proxy Statement and Proxy Card are available athttp://ir.microstrategy.com/financials.cfmwww.proxyvote.com.

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E05377-P75103V38388-P07351    

 

MICROSTRATEGY INCORPORATED

Proxy for the Annual Meeting of Stockholders

to be held on Thursday,Wednesday, May 12, 201622, 2024

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY

The undersigned, revoking all prior proxies, hereby appoint(s) Michael J. Saylor Phong Q. Le, and W. Ming Shao, and each of them, with full power of substitution, as proxies to represent and vote, as designated herein, all shares of stock of MicroStrategy Incorporated (the “Company”) which the undersigned would be entitled to vote if personally present at the Annual Meeting of Stockholders of the Company to be held exclusively via live webcast at MicroStrategy’s offices, 1850 Towers Crescent Plaza, Tysons Corner, Virginia 22182,www.virtualshareholdermeeting.com/MSTR2024, on Thursday,Wednesday, May 12, 201622, 2024 at 10:00 a.m., local time,Eastern Daylight Time, and at any adjournment thereof (the “Meeting”).

In their discretion, the proxies are authorized to vote upon such other matters as may properly come before the Meeting.

This proxy, when properly delivered, will be voted in the manner directed herein by the undersigned stockholder(s). If no direction is given, this proxy will be voted “FOR ALL NOMINEES” with respect to Proposal 1, and “FOR” Proposals 1, 2, and 3.with respect to Proposal 2. This proxy may be revoked by the undersigned at any time before its exercise by delivery of written revocation or a subsequently dated proxy cardProxy Card to the Secretary of the Company or by voting in person atelectronically during the Meeting.

Address Changes: 

(If you noted any Address Changes above, please mark corresponding box on the reverse side.)

Continued and to be signed on reverse side