Imperva's Leaders Eligible For $42.8M In Payouts In Thoma Bravo Deal

Imperva's top executives and directors could earn as much as a combined $42.8 million in stock, option and severance payouts if the proposed acquisition by Thoma Bravo goes through.

The Redwood Shores, Calif.-based cybersecurity vendor detailed payouts for its four current and former executive officers and six non-employee members of its board of directors in a preliminary proxy statement filed late Wednesday with the U.S. Securities and Exchange Commission (SEC).

Christopher Hylen – Imperva's president and CEO since August 2017 – could receive a payout of as much as $15 million, while Chief Legal Officer and Chief of Staff Tram Phi and Chief Financial Officer Mike Burns and could receive payouts of up to $7.8 million and $6.7 million, respectively. Phi joined Imperva in August 2011 and moved into her current role this August, while Burns joined the company in January.

[Related: Imperva Plans To Buy Prevoty For $140M To Boost DevOps Capabilities]

If Hylen, Phi and Burns remain with Imperva for more than one year after the close of the Thoma Bravo acquisition, the amount of their payouts will be reduced to $14.1 million, $7.2 million, and $6.1 million, respectively. If all three leaders stay with Imperva for more than a year under Thoma Bravo, the company would end up spending $27.4 million on payouts for these executives.

Thoma Bravo in October announced plans to purchase publicly-traded application and data protection vendor Imperva for $2.1 billion, or $55.75 per share. The deal is expected to close late this quarter or early in the first quarter of 2019.

Three Imperva directors, meanwhile, are slated for payouts of between $2 million and $5 million. They are: Albert Pimentel, former McAfee CFO and COO; Allan Tessler, chairman and CEO of International Financial Group and Teton Financial Services; and James Tolonen, former CFO of Business Objects and Novell.

The final three current and former Imperva directors are eligible for payouts of between $700,000 and $1.2 million. They are: Randall Spratt, former CIO and CTO of pharmaceutical distributor McKesson; Roger Sippl, former chairman and CEO of cloud computing company elastic intelligence; and former director Charles Giancarlo, who was previously chief development officer at Cisco and is currently CEO of Pure Storage.

And former Chief Customer Officer Sunil Nagdev will receive $527,000 in option payouts in connection with the Thoma Bravo acquisition.

CRN has reached out to Imperva for comment on the payouts.

Imperva went public on the New York Stock Exchange at $26.40 per share in November 2011, and traded at an all-time high of $76.88 per share four years later. The company was founded in 2002 as a web application firewall vendor, changed its name to Imperva in 2004, and named former Citrix GetGo leader Chris Hylen as its CEO in August 2017.

The largest current owners of Imperva are investment and asset management firms Eminence Capital, Black Rock, The Vanguard Group, and Elliott Associates, which each hold a stake in Imperva of between 5 percent and 9 percent.

Through the first nine months of 2018, Imperva has increased its revenue to $260.7 million, up 13 percent from $230.6 million the year prior. Services revenue soared to $197.7 million, up 20.2 percent from $164.4 million last year. But products and licenses sales dipped to $63 million, down 4.9 percent from $66.2 million in the first nine months of 2017.

The company also took a major hit from a profitability standpoint this year, recording a net loss of $31.8 million, or $0.91 per diluted share, in the first nine months of 2018. That's down from net income of $19.2 million, or $0.56 per diluted share, in the first nine months of 2017.