April 26, 2010
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549
Attention: Patrick Gilmore, Accounting Branch Chief
| Re: | Ariba, Inc. |
Form 10-K for the Fiscal Year Ended September 30, 2009
Filed November 25, 2009
Form 10-Q for the Fiscal Year Ended December 31, 2009
Filed February 5, 2010
File No. 000-26299
Ladies and Gentlemen:
We are responding to the comments contained in the letter dated March 26, 2010 (the “Comment Letter”) of the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) related to the above referenced filings. For your convenience, we have repeated each comment contained in the Comment Letter below in italic type before our response.
Form 10-K for the Fiscal Year Ended September 30, 2009
Item 11. Executive Compensation (Incorporated by Reference from Definitive Proxy Statement on Schedule 14A. filed January 13, 2010)
Compensation Discussion and Analysis
Compensation Components, page 13
| 1. | In response to prior comment 10, you indicate that your compensation committee considers peer group data as a helpful reference point or data input, along with other information, in evaluating compensation decisions, and is not a material determinant of compensation practices. However, your disclosure on page 13 indicates that your committee makes adjustments, when setting base salary, to reflect competitive market levels of salary according to the peer group data; and that, in making equity awards, the committee “again targeted total direct compensation, at target, to be above the median to approximately the 75th percentile of the 2010 Peer Group.” Given these disclosures, it would appear that peer data comparison was material to the decision making process, and as such, a discussion ofhow it informed the compensation committee’s decision making appears to be appropriate. For instance, to the extent a named executive officer’s base salary was adjusted, even in part, as a result of the peer data analysis, this |
| should be discussed. Alternatively, if the compensation committee concluded that the peer data analysis fully supported its base salary determinations, a discussion to that effect would also provide investors with a clearer understanding of how the compensation committee determined the amount of base salary to pay. This comment applies to your discussion of any other elements of compensation where peer data informed the compensation committee’s decision making. |
Response:
As discussed with the staff of the United States Securities and Exchange Commission, if in future years peer group compensation benchmark data is a material factor in executive compensation decisions by the Compensation Committee, the Company’s proxy statement will explain (i) how the benchmark data was used by the compensation committee in its decision making process, (ii) how individual executive officers compare against target compensation percentile levels at peer group companies and (iii) also explain, if applicable, why individual compensation decisions differ from proposed target percentile levels.
Form 10-Q for the Fiscal Quarter Ended December 31, 2009
Item 1. Financial Statements
Note 5. Stockholders’ Equity
Stock-Based Compensation Plans, page 18
| 2. | Clarify whether the holders of nonvested restricted common stock have nonforfeitable rights to dividends or dividend equivalents. In this regard, tell us whether you consider these awards to be participating securities that should be included in your computation of earnings per share under the two-class method. Refer to ASC 260-10-45-61A. |
Response:
The Company confirms that the holders of nonvested restricted common stock do not have nonforfeitable rights to dividends or dividend equivalents. Specifically, the Company’s restricted stock awards do not convey any rights to dividends until such time as the shares vest and are issued to the awardee. In this regard, the Company does not consider these awards to be participating securities that should be included in its computation of earnings per share under the two-class method.
* * * * *
We would appreciate the Staff’s confirmation by telephone that we have provided an adequate response to the Staff’s comments. If you should have any comments or requests for information, please direct them to me. You can reach me at 11625 Rainwater Drive, Alpharetta, GA 30004 or you can contact by phone number (678) 336-2770 or by fax at (678) 336-2920.
| Very truly yours, |
| Ariba, Inc. |
/s/ Ahmed Rubaie |
| Ahmed Rubaie |
| Chief Financial Officer |
| cc: | Chris Cavanaugh, VP & Corporate Controller |
Lynette Horrell, Ernst & Young LLP
David Middler, General Counsel
Brooks Stough, Esq., Gunderson Dettmer
