SCHEDULE 14A INFORMATION

(RULE 14a-101)

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  ☒

Filed by a Party other than the Registrant  ☐

Check the appropriate box:

NUANCE COMMUNICATIONS, INC.

(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):

Nuance Communications, Inc.

One Wayside Road  ◾  Burlington, MA 01803

Items of Business

Voting

Your vote is important. Voting over the Internet or by telephone, written proxy or voting instruction card will ensure your representation at the Annual Meeting regardless of whether you attend the virtual meeting.

VIA THE INTERNET Visit the website listed on your proxy card, notice or voting instruction form		BY PHONE Call the phone number listed on your proxy card or voting instruction form		BY MAIL Complete, sign, date and return your proxy card or voting instruction form in the envelope provided

Important Meeting Information

Meeting Access

We are very pleased that this year’s Annual Meeting will be a completely virtual meeting of shareholders, conducted via live audio webcast on an online platform that will allow shareholders to submit questions directly to our Board of Directors and management. We believe a virtual meeting format facilitates shareholder attendance and participation by enabling all shareholders, regardless of size, resources or physical location, to attend the Annual Meeting and ask questions. In addition, the virtual meeting format enables us to protect the health and safety of all attendees, particularly in light of the COVID-19 pandemic.

The Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/NUAN2021, where you will be able to listen to the meeting live, submit questions and vote online. To participate in and vote at the Annual Meeting, you will need the 16-digit control number included on your Notice of Internet Availability of Proxy Materials, on your proxy card, or on the instructions that accompanied your proxy materials.

Notice of the 2021 Annual Meeting of Shareholders

Record Date

Shareholders of record as of the close of business on December 10, 2020 will be entitled to notice of, and to vote and ask questions at, the 2021 Annual Meeting and at any postponements or adjournments thereof.

Technical Issues

We will have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. Contact 1-844-986-0822 (US) or 1-303-562-9302 (international) for any technical difficulties or trouble accessing the virtual meeting, or if you are unable to locate your 16-digit control number.

Asking Questions

During the Annual Meeting, shareholders can submit questions in the “Ask A Question” box on the virtual meeting page, which can be accessed at www.virtualshareholdermeeting.com/NUAN2021. During the Annual Meeting, we will answer as many shareholder-submitted questions as time permits, and any questions that we are unable to address during the Annual Meeting will be published and answered on the investor page of our website following the meeting with the exception of any questions that are irrelevant to the purpose of the Annual Meeting or our business or that contain inappropriate or derogatory references which are not in good taste. If we receive substantially similar questions, we will group such questions together and provide a single response to avoid repetition.

Proxy Materials

We are relying upon the U.S. Securities and Exchange Commission rules that allow issuers to furnish proxy materials to its shareholders via the Internet. Pursuant to these rules, instead of mailing a printed copy of our proxy materials to each shareholder, we have elected to provide access to our proxy materials over the Internet. Accordingly, with the exception of certain shareholders who requested to receive printed copies of the Company’s proxy materials by mail, shareholders of record will receive a Notice of Internet Availability of Proxy Materials that explains how to access and review our proxy materials on the Internet, how to submit the proxy card on the Internet, and how to request to receive a printed copy of our proxy materials. We expect to mail the Notice of Internet Availability of Proxy Materials on or about December 17, 2020.

The Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020 accompanies this Notice of the 2021 Annual Meeting of Shareholders and the proxy statement. These documents may also be accessed free of charge at www.proxyvote.com.

By Order of the Board of Directors,

Wendy Cassity

Secretary

Burlington, Massachusetts

December 17, 2020

				2021 Proxy Statement

Dear Fellow Shareholders,

Supporting our Employees and their Families

Everything we did this year prioritized the safety and well-being of our employees and their families, our customers, and our communities. From an employee perspective, that meant making the quick and early decision to transition our employees worldwide to work remotely, offering flexible schedules to enable better work-life balance, providing home-office equipment stipends, and enhancing our mental health and wellness offerings to provide additional support. As part of these efforts, we also increased our communications across the company, including higher-frequency updates from our Executive and leadership teams, as well as weekly emails from me, all of which has helped to keep our employees informed on all that is going on across the company and foster a shared sense of community despite being remote. While working from home certainly has its unique challenges, I am extremely proud that our teams have remained engaged and highly productive, and we did, and will continue to do, everything we can to support our employees so that they stay safe, healthy, and successful. We are also very proud that our work earned us the distinction as a “Best Place to Work” in multiple industry reports, and we remain committed to continuing to support our employees in a way that embodies these rankings.

Caring for our Customers During the Pandemic

Our customers operate in the most critical industries – healthcare, financial services, telecommunications, logistics and travel – and we have stayed true to our “Focus on the Customer” value every day, never losing sight of the importance of supporting those we serve. With the onset of the pandemic, our customers began seeing increased pressures related to physician burnout, the need for telehealth solutions, increasing cybercrime and fraudulent activity, rising call center volumes, and the need for seamless digital customer experiences across any channel. To support them, we provided complimentary services and access to our solutions to help navigate those challenges and pressures, including:

				2021 Proxy Statement

A Message from Our Chief Executive Officer

We also provided more than 12,500 meals to healthcare workers, sent care packages to more than 2,650 clinical staff, and donated dozens of tablets to enable patients to communicate with their loved ones while receiving treatment. Additionally, our employees supported our local communities through hundreds of hours of remote volunteering and philanthropic donations, and we provided a 2-for-1 charity donation match. Our ability to come together, despite being remote, to support our frontline workers, our global, communities, and our customers during this time of need was truly incredible.

Driving Meaningful Financial Results

In addition to crystalizing our priorities and galvanizing us as a One Nuance Team, the pandemic also tested our company strategy and the resiliency of our business. While we were not impervious to the dynamic market shifts, the strategic decisions that we made in prior years and quarters – such as simplifying our portfolio, pivoting to the cloud, and paying down debt – have resulted in a strong financial profile with a highly recurring revenue model and strong balance sheet. These decisions have positioned Nuance well from both a financial and operational perspective and enabled us to prioritize the preservation of our employees’ jobs as we weathered near-term headwinds. While we did adjust our guidance in light of the market dynamics, we remained focused on delivering our commitments and executing on our goals, which resulted in our meeting and beating our guidance expectations in fiscal 2020.

We enter fiscal 2021 armed with the strength of our financial profile, the trust of our customers, the power of our cutting-edge technology, and the deep commitment and passion of our employees—and because of this, we are confident that we will emerge from COVID-19 well positioned and stronger as a company. As we look to the year ahead, we believe that the pandemic will be a key turning point in the shift to cloud-based technology, digitalization, and automation with AI solutions at the core. We also believe the markets that we serve will continue to be critical to our economies, and that we will maintain our market leadership position as our customers continue to partner with us as trusted advisors who deliver cutting-edge technology that drives meaningful results.

I know I speak for our entire Executive Team when I say: our best days are ahead and we couldn’t be prouder of our amazing employees, and to be a part of this incredible company.

Please stay safe, and wishing you my personal best,

Mark Benjamin

				2021 Proxy Statement

Dear Shareholders,

One of the things that makes Nuance unique is the high level of commitment the Board of Directors, management team and employees have to upholding the Company’s Values, no matter what the circumstance. In many ways, this last year has truly highlighted Nuance’s character. As we all grappled with the uncertainties of the pandemic, we chose to rise to the occasion by remaining true to our values – keeping our employees, customers, and communities at the forefront of all our decisions – and staying focused on executing against our strategic priorities. We are proud of all that Nuance and our talented employees have achieved, and we would like to share some highlights with you:

Executing on Strategic Priorities

In fiscal 2020, Nuance continued to make excellent progress executing against a number of strategic transformation efforts, expanding in key markets and driving organic growth. We also made strong progress in our SaaS model shift, which has been instrumental to strengthening our financial profile and has proved critical to stabilizing our businesses during the volatile months of the pandemic. This year, Nuance also issued its inaugural Environmental, Social, and Governance (ESG) report that details actions we have taken to create a supportive, ethical, and equitable culture for our employees; ways we are investing in and caring for our communities; how we are ensuring our customers’ data is secure; how we are increasing our engagement and alignment with our shareholders; activities we are taking to reduce our carbon footprint; and how we have been supporting our customers both in normal times and amidst a global pandemic. It is a shining example of Nuance’s “Act with Integrity” Value and underscores our unwavering commitment to upholding high ethical standards. While the company has been pursuing work in each of these areas for several years, this is the first time we have formally reported progress on these initiatives, and we will continue to build on these efforts in the years ahead.

Committed to Maintaining a Highly Ethical, Equitable, and Supportive Culture

Given that Nuance operates in highly regulated industries, we take strong proactive measures to protect customer data. As part of our commitment to transparency, resiliency and integrity, the company launched the Nuance Trust Center, a resource for customers, partners, and shareholders that details our Security, Privacy, and Compliance policies. The site also outlines the measures we take to protect customer data, using it only to optimize our technology and drive improved results, which is a key competitive differentiator for us in the market.

Additionally, we remain fiercely committed to fostering a diverse, inclusive, and equitable culture, as we know that it is our diversity of thought, experience, gender, orientation, race, and religion that makes our technology better and increases our ability to deliver amazing outcomes for our customers worldwide. In fiscal 2020, we made good progress implementing policies and practices in support of this, including significant changes to our recruiting and hiring practices with a strong focus on improving our ability to find the best, most diverse candidate pools possible. As a result, we now work with an alliance partner to share our job postings across hundreds of different networks to reach a diverse array of candidates, we are ensuring diverse interview panels for positions across all company levels, and we are developing diverse candidate slates when hiring. We are also fiercely committed to pay equity and providing equal pay for equal work – regardless of race, gender, or other personal attributes. These are initial steps, and we will continue to make changes and provide resources so that we can all work together to create a just and equitable environment for everyone.

Transparent and Regular Communications with our Shareholders

Both Nuance’s Board of Directors and the Executive Team value our shareholders’ feedback and want to thank you for sharing your perspectives with us. Throughout the course of fiscal 2020, we regularly engaged with our shareholders, and leveraged the insights we gained from our various conversations to inform our strategic decisions. This included reaching out to holders of approximately 65 percent of our outstanding shares and engaging with 30 percent in the Fall of 2020 to discuss our governance practices and changes that were under consideration for the 2021 executive compensation program. This robust level of engagement and ongoing dialogue is something we look forward to continuing in fiscal 2021.

				2021 Proxy Statement

        A Message from our Board of Directors

The efforts we have made to improve our overall corporate governance policies and practices were recognized as in November when Nuance was named “Governance Team of the Year” and Wendy Cassity, our Chief Legal Officer, was named “Governance Professional of the Year,” in each case for a small to mid-cap company, in Corporate Secretary’s 2020 Corporate Governance Awards. This was an exciting achievement for Nuance and the Board of Directors, and we are committed to continuing this important work in the years ahead.

In closing, we are extremely proud of all that Nuance accomplished this year: executing on our transformation efforts, continuing to bring cutting-edge technology to market, and, importantly staying true to our Purpose and Values and going above and beyond to support our customers, communities, and one another. As a company, we are aligned behind a unified strategy and we are committed to creating the best solutions to market to serve our customers. Because of that, we are confident that Nuance is well-positioned for continued success in the future.

Sincerely,

The Nuance Board of Directors

				2021 Proxy Statement

This summary highlights select information that is provided in more detail throughout this Proxy Statement. This summary does not contain all of the information you should consider before voting. You should read the full Proxy Statement before casting your vote.

Meeting Information

2021 Annual Meeting of Shareholders

Date and Time:   February 2, 2021 8:00 a.m. Eastern Time				Location:   Virtually via live audio webcast at www.virtualshareholdermeeting.com/NUAN2021				Record Date:   December 10, 2020

This proxy statement (the “Proxy Statement”) provides information for shareholders of Nuance Communications, Inc. (“Nuance,” “the Company,” “we,” “us,” and “our”) as part of the solicitation of proxies by the Company and its board of directors (the “Board” or “Board of Directors”) from holders of the outstanding shares of the Company’s common stock (“Common Stock”), for use at the Company’s annual meeting of shareholders to be held virtually via live audio webcast on February 2, 2021 at 8:00 a.m. Eastern Time, and at any adjournments or postponements thereof. The 2021 Annual Meeting can be accessed by visiting www.virtualshareholdermeeting.com/NUAN2021 where you will be able to listen to the meeting live, submit questions and vote online.

Voting Items

The following table summarizes the proposals to be considered at the 2021 Annual Meeting and the Board voting recommendations with respect to each proposal.

Proposal Number		Proposal		Board’s Recommendation				Page      Number
1		Elect the nine nominees named in this Proxy Statement as directors				FOR each Director Nominee		4
2		Approve a non-binding advisory resolution regarding compensation of the Company’s named executive officers				FOR		66
3		Ratify the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm for the fiscal year ending September 30, 2021				FOR		67
4		Approve the non-binding shareholder proposal to require shareholder right to written consent as described in this Proxy Statement				AGAINST		70

		i		2021 Proxy Statement

Proxy Statement Summary

Nuance at a Glance

Nuance is a technology pioneer and market leader in conversational artificial intelligence (“AI”) and ambient clinical intelligence. We deliver intuitive solutions that understand, analyze and respond to people, amplifying their ability to help others with increased productivity and security. We work with thousands of organizations to create stronger relationships and better experiences for their customers and workforces. We offer our customers a wide range of products and services, increasingly utilizing our innovations in AI to create smarter, more natural experiences with technology.

Every day, millions of people and thousands of businesses experience how Nuance’s products transform the way we interact with information and technology. In our Healthcare business, we help doctors spend more time with patients and less on paperwork with our clinical documentation solutions that capture information efficiently, enable better decision-making in clinical settings, and facilitate accurate reimbursement. In our Enterprise business, our automated customer engagement technology helps companies and their customers interact seamlessly with each other in a variety of sectors such as financial services, telecommunications, government, and retail.

Nuance Business Segments—Fiscal 2020

Nuance brings intelligence to everyday work and life with software and cloud-based solutions that understand, analyze and respond to human language to increase productivity and amplify intelligence. We have two business segments, Healthcare and Enterprise, and within each of these segments, we concentrate on our core competency of AI. We will continue to build on this by focusing on our cloud-growth strategy, accelerating our innovation activities, expanding our go-to-market presence, including in international markets, and pursuing targeted acquisitions and strategic investments.

		ii		2021 Proxy Statement

Proxy Statement Summary

Recent Events

The below graphic provides a timeline of recent events highlighting changes to our Board, executive team, and governance and compensation practices in conjunction with our business transformation.

		iii		2021 Proxy Statement

Proxy Statement Summary

Transformation Execution

In recent years, we have undergone a strategic transformation to become a simpler, more growth-oriented company. The main priority of this transformation was to focus our investments in our high-performing core business segments, Healthcare and Enterprise. The chart below shows our non-GAAP revenues by business segment for fiscal 2018 (“Old” Nuance) compared against the non-GAAP revenues for fiscal 2020 for the Healthcare and Enterprise segments (“New” Nuance).

Within these areas, we are concentrating on our core competency of AI, which includes conversational AI, natural language understanding, and machine learning. To deliver on our promises in the future, we will continue to build on our core competencies by focusing on our cloud-growth strategy, accelerating our innovation activities, expanding our go-to-market presence, including in international markets, and pursuing targeted acquisitions and strategic investments.

With this renewed focus, we have made remarkable advances in our Healthcare and Enterprise solutions. As a result of transitioning our Healthcare solutions from on-premise data centers to the cloud, our Healthcare annual recurring revenue (ARR) is growing. In Enterprise, we successfully optimized our Interactive Voice Response (IVR) technology, built our AI-powered Intelligent Engagement solutions and services, and launched our security and biometrics solution, Nuance Gatekeeper. These offerings enable human-like interactions that combine assisted and self-service support securely across all channels and touchpoints of the customer journey.

Nuance’s Response to COVID-19

In the wake of the COVID-19 pandemic, we rose to the challenges presented to support our employees, our customers, and our communities. We serve our customers in some of the most critical industries impacted by the COVID-19 pandemic—healthcare, telecommunications, financial services, and government. The robust continuity and disaster recovery capabilities we invested in long ago were in place to support our employees and our customers.

We made the early decision to transition nearly all of our employees to work-from-home, quickly transforming the way we do business to keep our employees and their families and communities safe. We provided our employees with a variety of new tools and resources to give them as much support as possible while working in changed and challenging circumstances. The well-being, both physical and mental, of our employees and their families is our top priority. Our team remains engaged, highly productive, and committed to driving business results, which is a testament to the resiliency and spirit of our employees and preparedness across the Company.

Through decades of experience, we have cultivated deep knowledge in building tailored solutions for the healthcare sector, which enabled us to respond quickly and effectively to the pandemic. We offered free add-on Dragon Medical licenses and a COVID-19 Content Pack for all Dragon Medical customers. The add-on licenses enable nurses and physicians to capture the patient story using their mobile phones so they can continue to work efficiently and capture crucial COVID-19 patient data. We also distributed more than 50,000 free temporary product licenses to healthcare providers to help keep clinicians from sharing microphones,

		iv		2021 Proxy Statement

Proxy Statement Summary

provided support to additional medical staff, and most importantly, outfitted mobile hospital units, such as the Jacob Javits Center in the heart of NYC. We also provided other complimentary services and access to our solutions to facilitate telehealth and enabled clinicians to continue their work remotely.

In Enterprise, we responded quickly to the dual challenge many of our customers faced of increased call and digital volumes while contact center employees were working from home. We provided temporary volume spike capacity and solutions to automate self-service with the expansion of digital virtual agents.

Fiscal 2020 Financial Performance Summary

In fiscal 2020, we continued to execute on our strategic initiatives, accelerating our cloud transition in Healthcare and focusing on our AI-first approach in Enterprise. Despite the impact of COVID-19 on our financial performance, particularly in the Healthcare segment, we achieved the following in fiscal 2020:

A reconciliation of the GAAP to non-GAAP financial measures is set forth in Annex A to this Proxy Statement.

		v		2021 Proxy Statement

Proxy Statement Summary

Stock Performance Chart

Our stock performed well in fiscal 2020 as illustrated in the chart below. Our total shareholder return was 134% during fiscal 2020, which is significantly above the S&P Software & Services Select Industry Index and the Russell 2000 Index. Please note that this chart is a comparison of 1-year cumulative return if you invested $100 on September 30, 2019 in our stock or one of the indices, including reinvestment of dividends.

		vi		2021 Proxy Statement

Proxy Statement Summary

Board of Directors

During the past few years the Company undertook a comprehensive Board refreshment process which resulted in the appointment of seven new directors.

Diverse Perspectives and Experience

Our Board members’ comprehensive set of skills and diverse backgrounds are designed to ensure effective oversight of our business strategy and our corporate governance practices. The Board includes two women, and members from varying ethnic and professional backgrounds. The members of our Board are:

		vii		2021 Proxy Statement

Proxy Statement Summary

Each of our non-employee directors has extensive professional experience. The chart below highlights areas in which we believe certain directors have particularly deep experience relevant to the Company’s current profile and strategic needs, and indicates which of our directors identify as female and as members of an underrepresented minority:

Skills, Qualifications, & Background

Senior Leadership/CEO The Company is a complex, global organization benefiting from experienced oversight of its overall strategy and management including assessing the strategies and operations of the Company

✓

✓

✓

✓

✓

✓

Knowledge of Business & Industry The Company is a software, solutions and professional services organization benefiting from experienced directors knowledgeable in the industry and multiple marketplaces in which the Company operates

✓

✓

✓

✓

✓

✓

Financial Markets & Accounting The Company is a global publicly traded corporation conducting complex financial transactions requiring oversight in order to oversee the processes associated its financial management with and the integrity of its financial results

✓

✓

✓

Technology & Innovation The Company is a leading provider of voice recognition and natural language understanding solutions in highly dynamic and competitive market and benefits from experience in understanding market trends and disruptive technologies and solutions

✓

✓

✓

Risk Oversight The Company is an organization requiring compliance with a variety of global laws, regulations and standards and requires experienced oversight in order to understand and oversee risks facing The Company and ensuring there are appropriate risk frameworks and policies are in place to both manage and identify emerging risks

✓

✓

✓

✓

Global & Emerging Markets The Company is a global organization participating in mature and emerging markets, and benefits from a Board with prior international exposure and experience

✓

✓

✓

✓

✓

✓

Identify as Female

✓

✓

Race/Ethnicity/Nationality

African American / Black

✓

Asian / South Asian

✓

White / Caucasian

✓

✓

✓

✓

✓

✓

		viii		2021 Proxy Statement

Proxy Statement Summary

Comprehensive Approach to Shareholder Engagement

2020 Shareholder Engagement on Compensation

Our Board values our shareholders’ views on our executive compensation program. Our annual say-on-pay vote is an opportunity for us to receive feedback from shareholders regarding our executive compensation program. We were exceptionally pleased with the results of our advisory say-on-pay proposal at our last annual meeting, with 92% approval, a significant improvement over previous years’ results. The Board is committed to ongoing engagement with shareholders as it continues to refine our compensation programs.

As a part of the Board’s process for determining our fiscal 2020 compensation program, in the fall of 2019, we reached out to shareholders owning approximately 60% of our outstanding shares and spoke with shareholders owning approximately 35% of our outstanding shares to solicit their feedback on changes under consideration for our fiscal 2020 executive compensation program. Our Compensation Committee Chair, Sanjay Vaswani, participated in a majority of these engagements, and all shareholder feedback was shared with the full Board to assist them in evaluating our executive compensation program.

Over the course of previous shareholder engagement, we had learned that shareholders were generally supportive of the design of our compensation program, which was reflected in the results of our advisory say-on-pay proposal that received 92% approval at last year’s annual meeting. However, certain shareholders had asked Nuance to consider increasing the performance-based restricted stock unit (PSU) portion of our CEO’s annual long-term incentive (“LTI”) award to be greater than 50% of the value of his annual LTI award. The Compensation Committee considered shareholders’ feedback and previewed its decision to increase the PSU portion of our CEO’s annual LTI award from 50% to 60% of the total value of his annual LTI award to shareholders in the fall of 2019. Shareholders were broadly supportive of this decision and expressed that it reflected a good balance between PSUs and restricted stock units (RSUs). As such, in November 2019, the Compensation Committee approved the design change and communicated it to shareholders in last year’s proxy.

A general overview of our fiscal 2020 annual executive compensation program is below:

Fiscal 2021 Compensation Program Changes

As discussed in last year’s proxy statement, certain shareholders also requested the Compensation Committee consider adding an operational metric to our PSUs in addition to relative total shareholder return (“TSR”). During our engagement with

		ix		2021 Proxy Statement

Proxy Statement Summary

shareholders in the fall of 2019, we shared our Compensation Committee’s perspective that, given the ongoing business transformation occurring at Nuance, relative TSR was the most appropriate performance metric for the fiscal 2020 PSU awards, and that it appropriately tied pay outcomes to the overall shareholder experience. As a result, shareholders were overwhelmingly supportive of maintaining relative TSR as the sole metric for the 2020 PSU awards. However, certain shareholders expressed their desire for the Compensation Committee to incorporate an operational metric once the business was further through the Company’s transformation. In response to this feedback, in last year’s proxy, the Compensation Committee committed to incorporating an operational metric in the fiscal 2021 PSU awards and engaged with shareholders in the fall of 2020 to provide shareholders the opportunity to share their perspectives on the design under consideration.

In the fall of 2020, Nuance reached out to shareholders owning approximately 65% of our outstanding shares and spoke with shareholders owning approximately 30% of our outstanding shares to solicit their feedback on the design of the fiscal 2021 PSU awards. The Compensation Committee specifically sought feedback on designing the fiscal 2021 PSU awards to incorporate a three-year revenue compound annual growth rate (CAGR) metric weighted at 20%. Shareholders were broadly supportive of selecting three-year CAGR as the operational metric and the corresponding weighting of 20%.

Taking this feedback into account, in November 2020, the Compensation Committee approved basing 20% of the 2021 PSU awards upon performance against a three-year CAGR metric with the remaining 80% of the awards upon our relative TSR as compared to the S&P Software & Services Index, in each case assuming target performance.

The design change for our CEO’s PSU award is illustrated below:

2020 Shareholder Engagement on Governance

In the fall of 2020, Nuance reached out to shareholders owning approximately 65% of our outstanding shares and spoke with shareholders owning approximately 30% of our outstanding shares. In these engagements, shareholders applauded Nuance’s strong governance practices, including the significant progress made in recent years to adopt strong governance practices at Nuance. We also received positive feedback on our inaugural ESG report and shareholders recommended that going forward Nuance enhance its diversity and pay equity disclosures, which Nuance intends to do in its 2021 ESG report. Lastly, shareholders expressed their support of the current composition of the Board.

Strong Governance and Compensation Practices

Over the past few years, the Board conducted an in-depth review of the Company’s corporate governance practices and approved a number of significant changes including those highlighted below:

		x		2021 Proxy Statement

Proxy Statement Summary

We are committed to good corporate governance, which encompasses properly managing compensation risk in order to promote the long-term interests of our shareholders. Below are highlights of some of our key governance and compensation practices. Additional details on our corporate governance can be found starting on page 9.

		xi		2021 Proxy Statement

Proxy Statement Summary

Environmental, Social and Governmental (ESG) Highlights

Nuance is committed to creating value and making a positive and lasting impact for our employees, customers, shareholders, and community. In July 2020 we issued our first ESG report, an exciting milestone for our company, that outlines our sustainability strategy and programs, as well as the work we are doing to drive meaningful change socially, economically, and environmentally. In our 2020 ESG Report, we cover a broad range of topics: actions that we have taken to create a supportive, ethical, and equitable culture for our employees; an overview of the ways we are investing in and caring for our communities; how we are ensuring our customers’ products and data are secure; ways we are increasing our engagement and alignment with our shareholders; activities we are taking to reduce our carbon footprint; and how we support our customers both in normal times and amidst a global pandemic. Below are some key ESG highlights:

We encourage you to review the full version of our 2020 ESG report, which can be found at “ESG Report & Trust Center” in the Investors section of our website, www.nuance.com.

		xii		2021 Proxy Statement

This Proxy Statement is furnished in connection with the solicitation by Nuance Communications, Inc. on behalf of the Board of Directors of proxies for use at the 2021 Annual Meeting of Shareholders of the Company to be held on February 2, 2021 at 8:00 a.m., Eastern Time, virtually via live audio webcast at www.virtualshareholdermeeting.com/NUAN2021. We intend to mail a Notice of Internet Availability of Proxy Materials, and this Proxy Statement and the accompanying form of proxy to shareholders to certain requesting shareholders, on or about December 17, 2020.

Table of Contents

				2021 Proxy Statement

Table of Contents

				2021 Proxy Statement

Voting Rights

Voting Rights

Each share of Common Stock entitles the holder thereof to one vote on matters to be acted upon at the 2021 Annual Meeting, including the election of directors. Votes cast electronically at the 2021 Annual Meeting or by proxy will be tabulated by Broadridge Financial Solutions, Inc., the Inspector of Elections. Any proxy that is voted according to the instructions included in the Notice of Internet Availability of Proxy Materials or on the proxy card will be voted in accordance with the instructions thereon, and if no instructions are given, will be voted: (i) ”FOR” the election of all of the director nominees as described in Proposal One; (ii) “FOR” the nonbinding advisory resolution regarding the compensation of the Company’s named executive officers under Proposal Two; (iii) “FOR” ratification of the appointment of BDO USA, LLP as the Company’s independent registered public accounting firm described in Proposal Three; (iv) “AGAINST” the shareholder proposal described in Proposal Four; and (v) as the proxy holders deem advisable in their sole discretion on any other matters that may properly come before the 2021 Annual Meeting. A shareholder may indicate when it votes by the Internet, by telephone or on the enclosed proxy that it is abstaining from voting on a particular matter (an “abstention”). A broker may indicate that it does not have discretionary authority as to certain shares to vote on a particular matter (a “broker non-vote”). Abstentions and broker non-votes are each tabulated separately.

The Inspector of Elections will determine whether or not a quorum is present at the 2021 Annual Meeting. In general, Delaware law and the Bylaws provide that a majority of the shares issued and outstanding and entitled to vote, present in person or represented by proxy, constitutes a quorum. Abstentions and broker non-votes of shares that are entitled to vote are treated as shares that are present in person or represented by proxy for purposes of determining the presence of a quorum.

In determining whether a proposal has been approved, abstentions are treated as present in person or represented by proxy and entitled to vote, but not as voting for such proposal, and hence have the same effect as votes against such proposal, while broker non-votes are not treated as present in person or represented by proxy but not entitled to vote, and hence have no effect on the vote for such proposal.

Record Date and Share Ownership

Holders of record of Common Stock as of the close of business on December 10, 2020 have the right to receive notice of and to vote at the 2021 Annual Meeting. On December 10, 2020, the Company had 284,896,588 shares of Common Stock issued and outstanding.

		1		2021 Proxy Statement

Proxies for use at the 2021 Annual Meeting are being solicited by the Company from its shareholders. Any person giving a proxy in the form accompanying this Proxy Statement has the power to revoke it at any time before its exercise by (i) filing with the Secretary of the Company a signed written statement revoking his or her proxy or (ii) submitting an executed proxy bearing a date later than that of the proxy being revoked. A proxy may also be revoked by attendance at the 2021 Annual Meeting and the election to vote by Internet during the virtual meeting. Attendance at the 2021 Annual Meeting will not by itself constitute the revocation of a proxy.

Shareholder Proposals and Director Nominations for the 2022 Annual Meeting of Shareholders

Shareholders may present proper proposals or nominations for inclusion in the Company’s proxy statement and for consideration at next year’s annual meeting of shareholders by submitting their proposals or nominations in writing to the Company’s Secretary in a timely manner. The Bylaws require that certain information and acknowledgments with respect to the proposal or nomination be set forth in the shareholder’s notice. A copy of the relevant Bylaw provision is available upon written request to Nuance Communications, Inc., One Wayside Road, Burlington, MA 01803, Attention: Investor Relations. In addition, the Bylaws were filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the Securities and Exchange Commission (the “SEC”) on November 7, 2019 and may be accessed through the SEC’s website at www.sec.gov/edgar.

Inclusion of Shareholder Proposals in Proxy Statement

Proposals of shareholders that are intended to be presented at the Company’s 2022 Annual Meeting of Shareholders (the “2022 Annual Meeting”) must comply with the requirements of SEC Rule 14a-8. A shareholder’s proposal must be delivered to or mailed and received by us no later than August 19, 2021 in order for it to be included in the Company’s proxy statement and form of proxy relating to the meeting.

Inclusion of Director Nominees in Proxy Statement

The Bylaws provide that a shareholder, or group of up to 20 shareholders, that has owned continuously for at least three years an aggregate of at least 3% of the outstanding Common Stock, may nominate and include in the Company’s proxy materials director nominees constituting up to 20% of the number of directors in office as of the deadline for such nomination, provided that the shareholder(s) and nominee(s) satisfy the requirements in the Bylaws. To be timely, a nomination notice and required information must be delivered to or mailed and received by the Secretary at our principal executive offices not later than the close of business on the 120th day and not earlier than the close of business on the 150th day prior to the anniversary of the date (as stated in our proxy materials) the definitive proxy statement with respect to the preceding year’s annual meeting was first sent to shareholders; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after the anniversary of the preceding year’s annual meeting, notice by the shareholder to be timely must be so received no earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of (i) the 60th day prior to such annual meeting or (ii) the 10th day following the date on which we publicly announce the meeting date. Assuming the date of our 2022 Annual Meeting is not so advanced or delayed, shareholders who wish to include a director nominee in our 2022 proxy statement must notify us no earlier than July 20, 2021 and no later than the close of business on August 19, 2021. Such notice must provide the information required by our Bylaws.

		2		2021 Proxy Statement

Proxies

Inclusion of Shareholder Proposals or Nominations in Annual Meeting Agenda but Not in Proxy Statement

A shareholder proposal or a nomination for director to be presented at the Company’s 2022 Annual Meeting that is not to be included in the Company’s proxy statement and form of proxy relating to the meeting must be delivered to or mailed and received by the Company (a) not later than the close of business on the 90th calendar day, nor earlier than the close of business on the 120th day, prior to the first anniversary of the preceding year’s annual meeting, or (b) not later than the close of business on the 45th calendar day, nor earlier than the close of business on the 75th calendar day, prior to the first anniversary of the date on which we first mailed our proxy materials for the preceding year’s annual meeting, whichever period occurs first. Assuming the date of our 2022 Annual Meeting is not so advanced or delayed, shareholders who wish to make a proposal at the 2022 Annual Meeting must notify us no earlier than October 3, 2021 and no later than the close of business on November 2, 2021. Such notice must provide the information required by the Bylaws with respect to each matter the shareholder proposes to bring before the 2022 Annual Meeting.

Proxy Solicitation Costs

The expense of solicitation of proxies will be borne by the Company. In addition to solicitation of proxies by mail, certain officers, directors and Company employees, who will receive no additional compensation for their services, may solicit proxies by telephone or in person. The Company is required to request brokers and nominees who hold stock in their name to furnish this proxy material to beneficial owners of the stock and will reimburse such brokers and nominees for their reasonable out-of-pocket expenses in so doing. In addition, we have engaged Georgeson LLC to assist in the solicitation of proxies and provide related advice and informational support for a service fee of $18,500 plus reimbursement of out-of-pocket expenses.

		3		2021 Proxy Statement

At the 2021 Annual Meeting, nine directors will be elected to the Board. The Nominating & Governance Committee of the Board of Directors recommended, and the Board of Directors approved, Lloyd Carney, Mark Benjamin, Daniel Brennan, Thomas Ebling, Robert Finocchio, Laura Kaiser, Michal Katz, Mark Laret, and Sanjay Vaswani as nominees for election at the 2021 Annual Meeting. The term of office of each person elected as a director will continue until the next annual meeting of shareholders or until a successor has been elected and qualified.

Information Regarding the Nominees for Election as Directors

		4		2021 Proxy Statement

Proposal One — Election of Directors

		5		2021 Proxy Statement

Proposal One — Election of Directors

		6		2021 Proxy Statement

Proposal One — Election of Directors

		7		2021 Proxy Statement

Proposal One — Election of Directors

Vote Required; Recommendation of the Board

Each nominee for director shall be elected to the Board if the votes cast for such nominee’s election exceed the votes against and withheld from such nominee’s election. Unless marked to the contrary, proxies received will be voted “FOR ALL” the Board’s nominees. Withhold votes will have the same effect as a vote “Against” the proposal. Broker non-votes will have no effect on the outcome of the vote.

THE BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS VOTE “FOR ALL” ON THE ELECTION OF THE FOREGOING NOMINEES TO SERVE AS DIRECTORS UNTIL THE NEXT ANNUAL MEETING OF SHAREHOLDERS.

		8		2021 Proxy Statement

Corporate Governance Overview and Shareholder Engagement

We are committed to good corporate governance, which we believe promotes the long-term interests of our shareholders and strengthens our Board and management accountability. Highlights of our corporate governance practices include the following:

We believe that effective corporate governance should also include regular, constructive conversations with our shareholders. The Board and management conducted extensive shareholder outreach throughout fiscal 2020 to solicit feedback on the Company’s corporate governance. During the fall of 2020 alone, we reached out to shareholders owning approximately 65% of our outstanding shares and spoke with shareholders owning approximately 30% of our outstanding shares. In response to shareholder feedback from the last few years and a comprehensive assessment of Nuance’s governance practices, the Board has made a number of significant changes to the Company’s corporate governance practices, including among those highlighted above.

Board Leadership Structure

Our current leadership structure splits the roles of CEO and Chairman. As part of our CEO transition in 2018, our Board considered the appropriate leadership structure for the Board and decided to have a separate Chair and CEO. Our Corporate Governance Guidelines provide our Board of Directors with flexibility to select the appropriate leadership structure based on the specific needs of our business and the best interests of our shareholders. The Board has determined that having this current leadership structure allows our CEO to focus on the operations of our business while the Chairman focuses on leading the Board in its responsibilities, and is in the best interests of Nuance’s shareholders at this time as well as in the foreseeable future. The Board will continue to evaluate its leadership structure on an ongoing basis and make any changes as appropriate.

As Chairman of our Board, Mr. Carney has the following responsibilities:

Chairman Responsibilities

		9		2021 Proxy Statement

Corporate Governance

Independence of our Board

The Board has determined that Messrs. Brennan, Carney, Ebling, Finocchio, Laret and Vaswani and Mses. Kaiser and Katz are independent under the director independence standards of the Nasdaq Stock Market LLC (“Nasdaq”) and the SEC, including Rule 10A-3(b)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Board has also determined that each member of our standing committees is independent within the meaning of both Nasdaq’s and the SEC’s director independence standards. In making these determinations, the Board solicited information from each of our directors regarding whether such director, or any member of his or her immediate family, had a direct or indirect material interest in any transaction involving Nuance, or received personal benefits outside the scope of such person’s normal consideration.

There are no family relationships among any of our directors or executive officers.

Corporate Governance Guidelines

The Board is governed by its Corporate Governance Guidelines, which were amended in January 2020, and are available under “Corporate Governance – Governance Documents” in the Investors section of our website, www.nuance.com. These guidelines cover, among other items, the following significant topics:

Board Selection Process and Qualifications.    The Nominating & Governance Committee is responsible for reviewing the skills and characteristics required of prospective Board members and is responsible for recommending to the Board candidates for directorship. Among the criteria the Board may consider are experience, diversity, an understanding of the fiduciary responsibilities that are required of a member of the Board, and the time commitment and energy necessary to diligently carry out those responsibilities. With respect to diversity, the Board may consider such factors as gender, race, ethnicity, differences in professional background, experience at policy making levels in business, finance and technology and other areas, education, skill, and other individual qualities and attributes. While the Company does not have a formal policy with regard to the consideration of diversity in identifying director nominees, the Board does endorse the value of seeking qualified directors from backgrounds relevant to the Company’s mission, strategy and business operations and perceived needs of the Board at a given time.

Director’s Eligibility, Education, and Term of Office.    Directors may not serve on the board of directors of more than four other public companies without first obtaining specific approval from the Board. Each director is required to notify the Chairman and the Chair of the Nominating & Governance Committee upon a change in principal professional responsibilities. The Nominating & Governance Committee may consider such change of status in recommending to the Board whether the director should continue serving as a member of the Board, and the Nominating & Governance Committee reassesses the commitments of the Board members on an ongoing basis to ensure each director has sufficient time to be a fully engaged member of our Board. The Board encourages, and the Company will reimburse the costs associated with, directors participating in continuing director education. The Board believes that term and age limits may result in the loss of long-serving directors who over time have developed unique and valuable insights into the Company’s business and therefore can provide a significant contribution to the Board. As a result, there are no term limits on Board service, and the Board removed the director age limit from its Corporate Governance Guidelines effective April 2019.

Board Leadership.    The leadership of the Board shall include a Chairman of the Board and, if the Chairman of the Board is an employee, a Lead Independent Director designated by the Nominating & Governance Committee. The Lead Independent Director, who shall be independent under the independence rules of Nasdaq, shall serve as the focal point for non-employee directors in resolving conflicts with the CEO, or other non-employee directors, and coordinating feedback to the CEO on behalf of non-employee directors regarding business issues and Board management. While Nuance currently has an Independent Chairman, our Board revised our Corporate Governance Guidelines in January 2020 to enhance the responsibilities of a lead independent director, who would be appointed if the Chairman were not independent. These enhanced responsibilities include:

		10		2021 Proxy Statement

Corporate Governance

Committees.    The current committee structure of the Board includes the following standing committees: Audit, Compensation and Nominating & Governance. Committees may be created or disbanded upon approval of the Board. The Nominating & Governance Committee recommends, and the full Board approves, the composition of the Board’s standing committees. The charters of each standing committee are reviewed periodically with a view to delegating committees the authority of the Board concerning specified matters appropriate to such committee.

Board Composition and Annual Evaluation Process

Our Board members’ comprehensive set of skills and diverse backgrounds are designed to ensure effective oversight of our business strategy and our corporate governance practices. The Board consists of directors with a diversity of gender, ethnicity, skills and experiences, with women and ethnically diverse directors representing 44% of our Board. Each of our non-employee directors has extensive professional experience relevant to Nuance’s current profile and strategic needs. Following our extensive board refreshment efforts in fiscal year 2018, our average director tenure is 3.8 years.

In an effort to maintain a Board of Directors with collectively diverse skills and experiences that evolve with the Company and its strategy, our Board conducts annual self-evaluations overseen by the Nominating & Governance Committee. This evaluation process plays a critical role in ensuring our Board functions effectively, as well as identifies any gaps in the necessary skills needed to effectively oversee the Company’s management, strategy and risk profile. In fiscal 2020, at the direction of the Nominating & Governance Committee, our annual self-evaluations took the form of both one-on-one interviews between the Chairman and each of the other Board members, and written assessments developed by the Chairman together with the Nominating & Governance Committee. Assessments relating to the functioning of the full Board and each of its Committees were circulated to the Board members and the respective Committee members prior to our July 2020 Board meetings. The results of the assessments were reviewed by the Chairman, the CEO, the Committee Chairs and the Corporate Secretary, then shared with the Board and the Committee members and discussed by the Board and the Committees at the July 2020 meetings. The results of the Chairman’s interviews with Board members were also discussed at such meetings. The assessments covered topics including Board operations and performance, the relationship of the committees and Board with management and external advisors, the skills mix and diversity of the Board members, the composition and leadership of each of the committees, the effectiveness of the Chairman as leader of the Board, and the effectiveness of the Company’s response to the COVID-19 pandemic. In response to the feedback, Committee and Board practices were updated. For fiscal year 2022 and subsequent years, the Nominating & Governance Committee will consider incorporating in the annual self-evaluation process discussion facilitated by third parties.

Committees of the Board of Directors

The composition, duties and responsibilities of our committees are as set forth below. Each of these committees has a written charter approved by our Board. Copies of these committee charters as well as our Corporate Governance Guidelines are available, without charge, upon request in writing to Nuance Communications, Inc., One Wayside Road, Burlington, MA 01803, Corporate Secretary, or under “Corporate Governance—Governance Documents” in the Investors section of our website, www.nuance.com.

		11		2021 Proxy Statement

Corporate Governance

All members of the committees are appointed by the Board and meet the independence requirements of the respective committees on which they serve.

Functions of the Committees

		12		2021 Proxy Statement

Corporate Governance

Compensation Advisor

The Compensation Committee retains the right to engage independent advisors to assist in fulfilling its charter and is responsible for assessing their performance and independence as required under any applicable law, regulation, or listing standard. The Compensation Committee engaged Semler Brossy in August 2018 to serve as its independent advisor. Semler Brossy advised the Compensation Committee with respect to trends in executive compensation, review of market information, and assessment of compensation actions required under its charter.

Semler Brossy has not provided any other services to us nor received compensation from us other than with respect to the services described above. Based on the consideration of the various factors as set forth in the rules of the SEC and the listing standards of Nasdaq, the Compensation Committee has determined that its relationship with Semler Brossy has not raised any conflict of interest.

Compensation Committee Interlocks and Insider Participation

None of the members of the Compensation Committee has been or is an officer or employee of the Company. In addition, none of the Company’s executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on the Company’s Board or Compensation Committee.

		13		2021 Proxy Statement

Corporate Governance

Consideration of Shareholder Nominees for Director

The Nominating & Governance Committee will consider properly submitted shareholder nominations for candidates for membership on the Board as well as candidates recommended for consideration by the Nominating & Governance Committee as described below under “Identifying and Evaluating Nominees for Directors.” Any shareholder nominations must comply with the requirements of the Company’s Bylaws and should include all information relating to such nominee as would be required to be disclosed in solicitations of proxies for the election of such nominee as a director pursuant to Regulation 14A under the Exchange Act, such nominee’s written consent to be named in the proxy statement as a nominee and to serve as a director if elected, as well as a written statement executed by such nominee acknowledging that as a director of the Company, such nominee will owe a fiduciary duty under the General Corporation Law of the State of Delaware exclusively to the Company and its shareholders. In addition, shareholder nominations should be submitted within the time frame as specified under “Shareholder Proposals and Director Nominations for the 2021 Annual Meeting of Shareholders” above for inclusion in the proxy materials or agenda, as appropriate, and addressed to: Nuance Communications, Inc., Attention: Corporate Secretary, One Wayside Road, Burlington, MA 01803.

A shareholder that instead desires to merely recommend a candidate for consideration by the Nominating & Governance Committee shall direct the recommendation in writing to Nuance Communications, Inc., Attention: Corporate Secretary, One Wayside Road, Burlington, MA 01803, and must include the candidate’s name, home and business contact information, detailed biographical data and qualifications, information regarding any relationships between the candidate and the Company within the last three years and evidence of the nominating person’s ownership of Company stock.

		14		2021 Proxy Statement

Corporate Governance

Board and Committee Meeting Attendance

All directors attended at least 75% of the board and committee meetings held during fiscal 2020.

Annual Meeting Attendance

Although we do not have a formal policy regarding attendance by members of the Board of Directors at our annual meetings of shareholders, directors are encouraged to attend annual meetings of the Company. All of our directors attended the 2020 Annual Meeting, with one director attending by telephone and the others in person.

Communication with the Board of Directors

Although we do not have a formal policy regarding communications with the Board of Directors, shareholders who are interested in communicating with the Board of Directors are encouraged to do so by submitting an email to generalcounsel@nuance.com or by writing to us at Nuance Communications, Inc., Attention: Corporate Secretary, One Wayside Road, Burlington, MA 01803. Shareholders who would like their submission directed to a particular member of the Board of Directors may so specify.

Code of Ethics

Our Board of Directors adopted a Code of Conduct and Business Ethics applicable to all of our directors, officers and employees. Our Code of Conduct and Business Ethics can be found at “Corporate Governance – Governance Documents” in the Investors section of our website, www.nuance.com. We will provide to any person without charge, upon request, a copy of our Code of Conduct and Business Ethics. Such a request should be made in writing and addressed to Nuance Communications, Inc., Attention: Investor Relations, One Wayside Road, Burlington, MA 01803. If we make any substantive amendments to the Code of Conduct and Business Ethics or grant any waiver, including any implicit waiver, from a provision of the Code of Conduct and Business Ethics affecting our executive officers, we will disclose the nature of such amendment or waiver on that website or in a Current Report on Form 8-K.

Stock Ownership Guidelines

The Board has approved stock ownership guidelines for our executive officers and non-employee directors. These guidelines were adopted to further align the interests of our executive officers and non-employee directors with the interests of our shareholders and to promote the Company’s commitment to sound corporate governance practices.

Under these guidelines, the target share ownership levels are five times base salary for our CEO, three times base salary for our other executive officers, and five times the annual cash retainer for our non-employee directors. The following shares and units count towards satisfaction of the guidelines: shares owned outright by the executive or non-employee director or his or her immediate family members residing in the same household; shares held in trust for the benefit of the executive or non-employee director or his or her family; 50% of unvested restricted stock units; and vested shares or units held in any deferral plan. Unvested performance awards do not count for purposes of satisfying the guidelines.

Each executive and non-employee director must achieve the guideline amount within five years of becoming subject to the guidelines. In addition, until an individual has reached the appropriate target level, an executive is required to retain 25% of the net shares received as a result of the exercise of stock options or vesting of long-term equity awards, and a non-employee director is required to retain 25% of the net shares received as a result of the exercise of stock options or vesting of restricted stock units.

The Nominating & Governance Committee reviews these guidelines and compliance with these guidelines on an annual basis. As of the end of fiscal 2020, all non-employee directors and NEOs had satisfied our stock ownership guidelines.

		15		2021 Proxy Statement

Corporate Governance

Board’s Role in Strategy and Risk Oversight

Strategy

A central focus for our Board is oversight of our corporate strategy and management’s execution of such strategy. The Board believes that this is a continuous process that requires regular attention from the full Board as well as each Board committee. This ongoing effort focuses the Board on the Company’s operational and financial performance over the short, intermediate and long term.

Fiscal 2020 was a busy year for our Board as they oversaw the continued implementation of the strategic transformation of the Company, including the completion of the Company’s spin-off of its Auto business, and well as the Company’s continued focus on its strategic initiatives of accelerating cloud transition in Healthcare, focusing on AI-first approach in Enterprise, accelerating innovation activities, and expanding go-to-market presence, including in international markets.    At each Board meeting, the full Board discussed the progress of these strategic initiatives, receiving updates from our executive officers as well as other managers from key business units. In its July 2020 meeting, the Board and management held focused strategy sessions centered on growth opportunities in each of Healthcare and Enterprise as well as capital allocation options.

Additionally, during fiscal 2020 the Board provided active oversight of the Company’s response to COVID-19. During the initial months of the pandemic, the Board met with management on at least a twice-monthly basis to review the Company’s crisis management and business continuity plans, evaluate the Company’s financial resiliency, and receive updates on employee health and well-being and IT and systems resilience and security, among other matters, and the Board received regular email updates from management between meetings.

		16		2021 Proxy Statement

Corporate Governance

Risk Management

The Board has an active role, as a whole and also at the committee level, in overseeing management of Company risk. This role is one of informed oversight rather than direct management of risk. The Board regularly reviews and consults with management on strategic direction, and challenges and risks faced by the Company. The Board also reviews and discusses with management quarterly financial results and forecasts. The following graphic and subsequent paragraphs summarize the Board’s role in risk oversight at Nuance:

The full Board oversees the Company’s overall enterprise risk management framework and program. In addition, the Audit Committee oversees management of financial risks, including investment and foreign currency fluctuation risk mitigation policies and risks. The Board and Audit Committee share oversight of cybersecurity and privacy risk, receiving quarterly reporting and updates from senior management and the Company’s experts in areas such as cybersecurity threats, technologies and solutions deployed internally and for the benefit of Company customers and technologies, and policies and procedures to address these risks. The Compensation Committee of the Board is responsible for overseeing the management of risks relating to and arising from the Company’s compensation plans and arrangements. The Nominating & Governance Committee oversees the composition of our Board and development of our directors, as well as oversees management in executing corporate human capital management initiatives and defining the corporate culture. These committees provide regular reports—generally on a quarterly basis—to the full Board.

Management has responsibility for the direct management and oversight of legal, financial, cybersecurity, privacy and commercial compliance matters, which includes identifying areas of risk and implementing policies, procedures and practices to mitigate the identified risks. In fiscal 2020, Nuance enhanced its enterprise risk management program. The Company engaged a third-party consultant to conduct a risk identification survey. Survey results were then reviewed with the executive-level Nuance Risk Committee to decide upon a register of key risks for oversight by the Nuance Risk Committee and the Board. Each key risk was assigned to an executive sponsor and program lead responsible for implementing a mitigation plan for that risk. Program leads

		17		2021 Proxy Statement

Corporate Governance

meet regularly to review progress against mitigation plans and report regularly to the Nuance Risk Committee and the Board. The Company intends to conduct a subsequent risk identification survey and risk assessment in fiscal 2021.

Additionally, the CFO, Chief Legal Officer and Senior Director of Corporate Compliance provide regular reports to the Audit Committee concerning financial, tax, legal and compliance related risks and the Company’s Chief Legal Officer, Chief Information Officer, Chief Information Security Officer and Chief Privacy Officer report to the Board regularly on cybersecurity and privacy. Management also provides the Audit Committee with periodic reports on the Company’s ethics and compliance programs and efforts, investment policy and practices, and compliance with debt covenants. The Compensation Committee’s independent compensation consultant provides analysis of risks related to the Company’s compensation programs and practices to the Compensation Committee.

Board’s Role in ESG Oversight

As part of our strategic transformation, CEO Mark Benjamin has been focused on defining our corporate culture, leading with purpose and introducing a number of new corporate giving and social responsibility programs. The Board and management recognize the importance of minimizing our environmental impact and maximizing our positive corporate social responsibility. After focusing over the last few years on refreshing our Board and improving our corporate governance and executive compensation practices, our Board is now spending more time and attention focused on the “E” (Environmental) and “S” (Social) elements of ESG. Led by our Nominating & Governance Committee and informed by our management team, the Board is committed to improving our ESG impacts and increasing disclosure of our ESG practices.

Together with our Board, Nuance is committed to creating value and making a positive and lasting impact for our employees, customers, shareholders, and community. In July 2020 we issued our first ESG report, an exciting milestone for our company, that outlines our sustainability strategy and programs, as well as the work we are doing to drive meaningful change socially, economically, and environmentally. In our 2020 ESG Report, we cover a broad range of topics: actions that we have taken to create a supportive, ethical, and equitable culture for our employees; an overview of the ways we are investing in and caring for our communities; how we are ensuring our customers’ products and data are secure; ways we are increasing our engagement and alignment with our shareholders; activities we are taking to reduce our carbon footprint; and how we support our customers both in normal times and amidst a global pandemic. Below are some key ESG highlights:

		18		2021 Proxy Statement

Corporate Governance

We encourage you to review the full version of our 2020 ESG report, which can be found at “ESG Report & Trust Center” in the Investors section of our website, www.nuance.com.

Human Capital Management

The Board plays an active role in overseeing the Company’s human capital management efforts. The full Board has worked closely with the executive management team, and in particular the Company’s Chief People Officer, in helping to shape the newly defined culture and focus efforts on developing formal human capital management and talent development initiatives to better support our workforce as the Company continues to evolve. The Board and management strive to foster a diverse and inclusive, collaborative environment for all employees and strongly believe that formalizing current and future corporate initiatives that support this vision will further drive positive company performance. The Board’s oversight activities in this area include review of CEO and executive officer succession planning, review of diversity and other employee metrics, and review of the results of the Company’s annual employee engagement survey.

Compensation Risk Assessment

In November 2020, the Compensation Committee conducted its annual review of Nuance’s compensation philosophy and strategy, including compensation-related risk management. The Compensation Committee reviews the Company’s compensation programs for executives and employees, including both short-term compensation and long-term equity-based incentive awards. We believe that the mix and design of the elements of our executive compensation are well balanced and do not encourage our employees, including our executives, to take or assume unreasonable risk.

Compensation of Non-Employee Directors

Non-employee director compensation is recommended by the Compensation Committee and approved by the Board. In recommending the types and amounts of non-employee director compensation to the Board, the Compensation Committee generally considers market information provided and reviewed by its independent compensation consultant regarding the non-employee director pay practices of the peer companies described in the Compensation Discussion and Analysis below.

Under our non-employee director compensation program, cash compensation is paid quarterly in arrears and equity awards are granted under our 2020 Stock Plan on an annual basis. The Company also reimburses non-employee directors for their expenses in connection with their attendance at Board and committee meetings.

The structure of our non-employee director compensation program for fiscal 2020 is set forth below:

		19		2021 Proxy Statement

Corporate Governance

Committee member, committee chair and independent Chairman of the Board fees were paid in addition to the annual board service retainer. The committee chair fee is paid in lieu of the committee member fee for the chair of a committee.

In fiscal 2020, we adopted a non-qualified deferred compensation plan pursuant to which non-employee directors

could elect to defer their receipt of all or a portion of their cash compensation. No non-employee directors participated

in this plan during fiscal 2020.

Cash and equity compensation paid to non-employee members of the Board for fiscal 2020 is included in the table below:

FISCAL 2020 DIRECTOR COMPENSATION TABLE

		20		2021 Proxy Statement

Corporate Governance

		21		2021 Proxy Statement

Information Concerning Current Executive Officers

		22		2021 Proxy Statement

Executive Compensation, Management and Other Information

		23		2021 Proxy Statement

Executive Compensation, Management and Other Information

		24		2021 Proxy Statement

Executive Compensation, Management and Other Information

		25		2021 Proxy Statement

This Compensation Discussion and Analysis section (“CD&A”) describes the material elements of our executive compensation programs and policies for fiscal 2020, the principles underlying, and objectives of, our decisions with respect to the fiscal 2020 compensation for our Named Executive Officers (“NEOs”) and the significant changes we have made to better align our executive compensation programs and policies with our pay-for-performance philosophy. The Nuance Board, Compensation Committee and management team are committed to maintaining a competitive and comprehensive executive compensation program aligned with market best practices and seeking ongoing shareholder feedback with respect to our program.

Named Executive Officers

Our NEOs for the fiscal year ending September 30, 2020 are:

Nuance at a Glance

Nuance is a technology pioneer and market leader in conversational artificial intelligence and ambient clinical intelligence. We deliver intuitive solutions that understand, analyze and respond to people, amplifying their ability to help others with increased productivity and security. We work with thousands of organizations to create stronger relationships and better experiences for their customers and workforces. We offer our customers a wide range of products and services, increasingly utilizing our innovations in AI to create smarter, more natural experiences with technology.

Every day, millions of people and thousands of businesses experience how Nuance’s products transform the way we interact with information and technology. In our Healthcare business, we help doctors spend more time with patients and less on paperwork with our clinical documentation solutions that capture information efficiently, enable better decision-making in clinical settings, and facilitate accurate reimbursement. In our Enterprise business, our automated customer engagement technology helps companies and their customers interact seamlessly with each other in a variety of sectors such as financial services, telecommunications, government, and retail.

		26		2021 Proxy Statement

Compensation Discussion and Analysis

Nuance Business Segments—Fiscal 2020

Nuance brings intelligence to everyday work and life with software and cloud-based solutions that understand, analyze and respond to human language to increase productivity and amplify intelligence. We have two business segments, Healthcare and Enterprise, and within each of these segments, we concentrate on our core competency of AI. We will continue to build on this by focusing on our cloud-growth strategy, accelerating our innovation activities, expanding our go-to-market presence, including in international markets, and pursuing targeted acquisitions and strategic investments.

Transformation Execution

In recent years, we have undergone a strategic transformation to become a simpler, more growth-oriented company. The main priority of this transformation was to focus our investments in our high-performing core business segments, Healthcare and Enterprise. The chart below shows our non-GAAP revenues by business segment for fiscal 2018 (“Old” Nuance) compared against the non-GAAP revenues for fiscal 2020 for the Healthcare and Enterprise segments (“New” Nuance).

Within these areas, we are concentrating on our core competency of AI, which includes conversational AI, natural language understanding, and machine learning. To deliver on our promises in the future, we will continue to build on our core competencies by focusing on our cloud-growth strategy, accelerating our innovation activities, expanding our go-to-market presence, including in international markets, and pursuing targeted acquisitions and strategic investments.

With this renewed focus, we have made remarkable advances in our Healthcare and Enterprise solutions. As a result of transitioning our Healthcare solutions from on-premise data centers to the cloud, our Healthcare annual recurring revenue (ARR) is growing. In Enterprise, we successfully optimized our Interactive Voice Response (IVR) technology, built our AI-powered

		27		2021 Proxy Statement

Compensation Discussion and Analysis

Intelligent Engagement solutions and services, and launched our security and biometrics solution, Nuance Gatekeeper. These offerings enable human-like interactions that combine assisted and self-service support securely across all channels and touchpoints of the customer journey.

Nuance’s Response to COVID-19

In the wake of the COVID-19 pandemic, we rose to the challenges presented to support our employees, our customers, and our communities. We serve our customers in some of the most critical industries impacted by the COVID-19 pandemic—healthcare, telecommunications, financial services, and government. The robust continuity and disaster recovery capabilities we invested in long ago were in place to support our employees and our customers.

We made the early decision to transition nearly all of our employees to work-from-home, quickly transforming the way we do business to keep our employees and their families and communities safe. We provided our employees with a variety of new tools and resources to give them as much support as possible while working in changed and challenging circumstances. The well-being, both physical and mental, of our employees and their families is our top priority. Our team remains engaged, highly productive, and committed to driving business results, which is a testament to the resiliency and spirit of our employees and preparedness across the Company.

Through decades of experience, we have cultivated deep knowledge in building tailored solutions for the healthcare sector, which enabled us to respond quickly and effectively to the pandemic. We offered free add-on Dragon Medical licenses and a COVID-19 Content Pack for all Dragon Medical customers. The add-on licenses enable nurses and physicians to capture the patient story using their mobile phones so they can continue to work efficiently and capture crucial COVID-19 patient data. We also distributed more than 50,000 free temporary product licenses to healthcare providers to help keep clinicians from sharing microphones, provided support to additional medical staff, and most importantly, outfitted mobile hospital units, such as the Jacob Javits Center in the heart of NYC. We also provided other complimentary services and access to our solutions to facilitate telehealth and enabled clinicians to continue their work remotely.

In Enterprise, we responded quickly to the dual challenge many of our customers faced of increased call and digital volumes while contact center employees were working from home. We provided temporary volume spike capacity and solutions to automate self-service with the expansion of digital virtual agents.

Fiscal 2020 Financial Performance Summary

In fiscal 2020, we continued to execute on our strategic initiatives, accelerating our cloud transition in Healthcare and focusing on our AI-first approach in Enterprise. Despite the impact of COVID-19 on our financial performance, particularly in the Healthcare segment, we achieved the following in fiscal 2020:

		28		2021 Proxy Statement

Compensation Discussion and Analysis

A reconciliation of the GAAP to non-GAAP financial measures is set forth in Annex A to this Proxy Statement.

Stock Performance Chart

Our stock performed well in fiscal 2020, as illustrated in the chart below. Our total shareholder return was 134% during fiscal 2020, which is significantly above the S&P Software & Services Select Industry Index and the Russell 2000 Index. Please note that this chart is a comparison of 1-year cumulative return if you invested $100 on September 30, 2019 in our stock or one of the indices, including reinvestment of dividends.

Compensation Philosophy and Objectives

Our compensation philosophy is designed to promote our business objectives and is based on the principle that our strategic and operational achievements result from the coordinated efforts of all employees working toward common strategic goals. Our guiding compensation principles focus on:

Our overall compensation objective is to compensate our executive officers and other employees in a manner that attracts and retains the caliber of individuals needed to lead, manage and staff a dynamic, highly-complex business in an innovative and competitive industry, which we believe will result in successful execution of strategic priorities and consistent delivery of shareholder value.

		29		2021 Proxy Statement

Compensation Discussion and Analysis

Engaging with Shareholders and Evolving our Executive Compensation Program

Shareholder Engagement on Compensation

Our Board values our shareholders’ views on our executive compensation program. Our annual say-on-pay vote is an opportunity for us to receive feedback from shareholders regarding our executive compensation program. We were exceptionally pleased with the results of our advisory say-on-pay proposal at our last annual meeting, with 92% approval, a significant improvement over previous years’ results. The Board is committed to ongoing engagement with shareholders as it continues to refine our compensation programs.

As a part of the Board’s process in determining our fiscal 2020 compensation program, in the fall of 2019, we reached out to shareholders owning approximately 60% of our outstanding shares and spoke with shareholders owning approximately 35% of our outstanding shares to solicit their feedback on changes under consideration for our fiscal 2020 executive compensation program. Our Compensation Committee Chair, Sanjay Vaswani, participated in a majority of these engagements, and all shareholder feedback was shared with the full Board to assist them in evaluating our executive compensation program.

Over the course of previous shareholder engagement, we had learned that shareholders were generally supportive of the design of our compensation program, which was reflected in the results of our advisory say-on-pay proposal that received 92% approval at last year’s annual meeting. However, certain shareholders had asked Nuance to consider increasing the performance-based restricted stock unit (PSU) portion of our CEO’s annual long-term incentive (LTI) award to be greater than 50% of the value of his annual LTI award. The Compensation Committee considered shareholders’ feedback and previewed its decision to increase the PSU portion of our CEO’s annual LTI award from 50% to 60% of the total value of his annual LTI award to shareholders in the fall of 2019. Shareholders were broadly supportive of this decision and expressed that it reflected a good balance between PSUs and restricted stock units (RSUs). As such, in November 2019, the Compensation Committee approved the design change and communicated it to shareholders in last year’s proxy.

A general overview of our fiscal 2020 annual executive compensation program is below:

		30		2021 Proxy Statement

Compensation Discussion and Analysis

Fiscal 2021 Compensation Program Changes

As discussed in last year’s proxy statement, certain shareholders also requested the Compensation Committee consider adding an operational metric to our PSUs in addition to relative TSR. During our engagement with shareholders in the fall of 2019, we shared our Compensation Committee’s perspective that, given the ongoing business transformation occurring at Nuance, relative TSR was the most appropriate performance metric for the fiscal 2020 PSU awards, and that it appropriately tied pay outcomes to the overall shareholder experience. As a result, shareholders were overwhelmingly supportive of maintaining relative TSR as the sole metric for the 2020 PSU awards. However, certain shareholders expressed their desire for the Compensation Committee to incorporate an operational metric once the business was further through the Company’s transformation. In response to this feedback, in last year’s proxy, the Compensation Committee committed to incorporating an operational metric in the fiscal 2021 PSU awards and engaged with shareholders in the fall of 2020 to provide shareholders the opportunity to share their perspectives on the design under consideration.

In the fall of 2020, Nuance reached out to shareholders owning approximately 65% of our outstanding shares and spoke with shareholders owning approximately 30% of our outstanding shares to solicit their feedback on the design of the fiscal 2021 PSU awards. The Compensation Committee specifically sought feedback on designing the fiscal 2021 PSU awards to incorporate a three-year revenue compound annual growth rate (CAGR) metric weighted at 20%. Shareholders were broadly supportive of selecting three-year CAGR as the operational metric and the corresponding weighting of 20%.

Taking this feedback into account, in November 2020, the Compensation Committee approved basing 20% of the 2021 PSU awards upon performance against a three-year CAGR metric and the remaining 80% of the awards upon our relative TSR as compared to the S&P Software & Services Index, in each case assuming target performance.

The design change for our CEO’s PSU award is illustrated below:

Robust Process to Ensure Responsiveness to Shareholder Feedback

Our executive compensation program has undergone meaningful changes over the last several years in response to shareholder feedback. The Compensation Committee and management team are committed to continued engagement on an ongoing basis.

		31		2021 Proxy Statement

Compensation Discussion and Analysis

The below graphic provides a timeline for shareholder engagement and decisions made by the Compensation Committee, taking into account shareholder feedback.

		32		2021 Proxy Statement

Compensation Discussion and Analysis

Compensation Governance Highlights

Our executive compensation program also includes a number of key features intended to manage compensation risk, which are highlighted below.

Elements of Fiscal 2020 Executive Compensation

Overview of Fiscal 2020 Executive Compensation Program

The executive compensation program for our NEOs for fiscal 2020 consisted of a mix of variable and fixed compensation in order to align compensation with short- and long-term performance and shareholder value creation. These fiscal 2020 compensation elements included:

		33		2021 Proxy Statement

Compensation Discussion and Analysis

Our compensation philosophy places an emphasis on “at-risk” pay, with a balanced focus on short-term and long-term performance. Consistent with this philosophy, the majority of the annual compensation opportunities of our executive officers, including our NEOs, is variable in nature, the payment and value of which depends on our performance. As illustrated below, in fiscal 2020, 92% of our CEO’s total target compensation and 85% of other NEO’s total target compensation was based on stock price or other performance metrics and was therefore at-risk.

To further align the interest of our executives with our shareholders, our performance-based annual bonuses under the STIP may be paid out in cash or RSUs, or a combination of both, with vesting of any RSUs occurring shortly after the date of grant. We also grant long-term incentive compensation under our LTI Plan in the form of RSUs and PSUs that are settled in shares of our common stock.

The performance measures we establish for the performance-based annual bonuses and the PSUs are designed to promote market share increase, revenue and earnings growth and increased shareholder returns.

In addition, the Compensation Committee uses a combination of different non-GAAP financial measures in our STIP. A description of these measures, as well as a discussion of how they are used in our executive compensation program, is set forth in this CD&A. A reconciliation of the GAAP to non-GAAP financial measures is set forth in Annex A to this Proxy Statement.

Compensation-Setting Process

The Compensation Committee reviews the compensation of our executive officers, including our NEOs, annually to ensure that it is consistent with our compensation philosophy, corporate and individual performance, changes in the competitive market and our executive officers’ individual responsibilities.

For its review of the CEO’s performance for purposes of determining the STIP payout, we conduct the following:

		34		2021 Proxy Statement

Compensation Discussion and Analysis

For its annual review of executive officers other than the CEO, our CEO presents to the Compensation Committee at the end of the fiscal year his evaluation of each executive officer, which includes a review of the executive officer’s contribution and performance during the fiscal year compared against the executive officer’s MBOs established at the beginning of the fiscal year by our CEO. The Compensation Committee reviews and evaluates this information in consultation with the CEO.

On the basis of the MBO assessment and full performance appraisals, the Compensation Committee approves each executive officer’s STIP payout, if any, for the last completed fiscal year, as well as any compensation adjustments. Adjustments, if any, to elements of each executive officer’s total compensation opportunity, including performance-based compensation, take into account the scope of the executive officer’s responsibilities and experience; internal pay parity; an evaluation of the competitive market; and the need to retain executives.

Compensation Peer Group

The Compensation Committee reviews annually the compensation for comparable positions within our industry, the historical compensation levels of our executive officers and the individual performance of our executive officers evaluated against their individual objectives established for the preceding fiscal year.

The Compensation Committee obtains compensation data for comparable positions from publicly available proxy statements and other public filings of our compensation peer group. In addition, this data is supplemented by Radford executive compensation survey data representing a broader group of technology companies that are of similar size, with revenues greater than $1 billion.

The Compensation Committee, with the assistance of its compensation consultant, Semler Brossy, updated the compensation peer group in April 2019 for purposes of the Compensation Committee’s fiscal 2020 compensation analysis. The group consisted of the following companies:

The Compensation Committee reviewed the peer group in April 2020 for purposes of fiscal 2021 compensation analysis to ensure alignment between the members of our peer group and our revenue and market capitalization. At that time, the Compensation Committee recommended maintaining the current peer group for fiscal 2021.

Base Salary

We use base salary to provide our executive officers, including our NEOs, with a basic fixed amount of compensation. Base salary levels reflect each executive officer’s responsibilities, performance and expertise and are intended to be competitive with the base salary levels of comparable positions at the companies in our compensation peer group.

The Compensation Committee establishes base salary levels based, in part, on a review of market data from our compensation peer group, as well as input from our compensation consultant, the job performance and level of experience of each individual

		35		2021 Proxy Statement

Compensation Discussion and Analysis

executive officer, and internal pay parity considerations. Based on these considerations, the Compensation Committee approved an increase in the base salary of Mr. Dahdah for fiscal 2020 in order to bring his base salary more in line with market levels and individual responsibility. The Compensation Committee did not increase the base salary of any other NEO for fiscal 2020. Generally, we tie the performance-based incentive compensation opportunities and post-employment compensation arrangements for each executive officer to his or her base salary.

The base salaries of our NEOs during fiscal 2020 were as follows: