Company: CALX
Filing Date: 2025-03-27
Form Type: DEF 14A
Source: 0001406666-25-000011
Chunk: 67

Company: CALIX, INC
Filing Date: 2025-03-27
Form: DEF 14A
Chunk 67
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. This value creation is evident in our record gross margin expansion and a 34% increase in remaining performance obligations (RPOs) year-over-year. Despite the visibility into our customers’ plans from direct relationships and cloud data that have enabled us to navigate recent challenges, Calix experienced a decrease in revenue in the first half of 2024 due to an industry-wide impact on demand for our appliances. We returned to sequential growth in the second half of the year. Our focus on operational excellence enabled us to achieve our 18th consecutive quarter of positive free cash flow while helping us maintain a healthy balance sheet. A summary of our financial results over the past four years is shown below.

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Summary of Executive Compensation Actions Taken in 2024

• Base salaries were kept flat from 2023;

• Target bonuses were unchanged from 2023;

• In aggregate we paid bonuses at 98.5% of target; and

• Equity grants were 100% performance-based stock options that require both achieving financial performance goals plus stock price appreciation to deliver value to executives. Because both financial performance and stock price appreciation are required for the executives to receive any value from these awards, these performance options are much more performance oriented than PSUs that are issued by most companies and which only require achievement of one set of performance goals in order to provide significant value.

Annual Stockholder Advisory Vote on Executive Compensation ("Say on Pay")

We hold an advisory, non-binding stockholder vote on executive compensation every year. At our Annual Meeting of Stockholders, our stockholders voted to approve, on an advisory basis, the compensation of our NEOs, with approval of 77.9% of the votes cast. The Talent and Compensation Committee intends to continue to take into consideration the outcome of our stockholders’ advisory “say-on-pay” votes along with market practices and the recommendations of its executive compensation advisor when making future compensation decisions for the NEOs. We also regularly engage in discussions with our largest institutional stockholders and solicit feedback on executive compensation as well as other areas. We take shareholder feedback seriously and believe our “go forward” compensation practices should address concerns raised, including:

• We capped the uncapped gross margin performance metric in our bonus plan for 2025;

• Unlike in 2023, we did not change our performance-based targets for 2024 (but we have now built into the bonus plans an ability to use discretion of up to 20% (up or down) to address unforeseen circumstances);