SUMO Sumo Logic Inc

Filed by the Registrant ☒

Filed by a Party other than the Registrant   ☐

Check the appropriate box:

Payment of Filing Fee (Check the appropriate box):

Holders of our common stock as of the close of business on May 23, 2022, the record date for the Annual Meeting, may vote at the Annual Meeting. As of the record date, there were 115,732,441 shares of our common stock outstanding. Stockholders are not permitted to cumulate votes with respect to the election of directors. Each share of common stock is entitled to one vote on each proposal.

Registered Stockholders. If shares of our common stock are registered directly in your name with our transfer agent, American Stock Transfer & Trust Company, LLC, you are considered the stockholder of record with respect to those shares, and the Notice was provided to you directly by us. As the stockholder of record, you have the right to grant your voting proxy directly to the individuals listed on the proxy card or to vote live at the Annual Meeting. Throughout this proxy statement, we refer to these registered stockholders as “stockholders of record.”

Street Name Stockholders. If shares of our common stock are held on your behalf in a brokerage account or by a bank or other nominee, you are considered to be the beneficial owner of shares that are held in “street name,” and the Notice was forwarded to you by your broker or nominee, who is considered the stockholder of record with respect to those shares. As the beneficial owner, you have the right to direct your broker, bank, or other nominee as to how to vote your shares. Beneficial owners are also invited to attend the Annual Meeting. However, since a beneficial owner is not the stockholder of record, you may not vote your shares of our common stock live at the Annual Meeting unless you follow your broker’s

procedures for obtaining a legal proxy. If you request a printed copy of our proxy materials by mail, your broker, bank, or other nominee will provide a voting instruction form for you to use. Throughout this proxy statement, we refer to stockholders who hold their shares through a broker, bank, or other nominee as “street name stockholders.”

A quorum is the minimum number of shares required to be present at the Annual Meeting to properly hold an annual meeting of stockholders and conduct business under our amended and restated bylaws and Delaware law. The presence, virtually or by proxy, of a majority of the voting power of all issued and outstanding shares of our common stock entitled to vote at the Annual Meeting will constitute a quorum at the Annual Meeting. Abstentions, withhold votes, and broker non-votes are counted as shares present and entitled to vote for purposes of determining a quorum.

If you are a stockholder of record, there are several ways to vote:

Even if you plan to attend the Annual Meeting, we recommend that you also vote by proxy so that your vote will be counted if you later decide not to attend the Annual Meeting.

If you are a street name stockholder, you will receive voting instructions from your broker, bank, or other nominee. You must follow the voting instructions provided by your broker, bank, or other nominee in order to direct your broker, bank, or other nominee on how to vote your shares. Street name stockholders should generally be able to vote by returning a voting instruction form, or by telephone or on the Internet. However, the availability of telephone and Internet voting will depend on the voting process of your broker, bank, or other nominee. As discussed above, if you are a street name stockholder, you may not vote your shares live at the Annual Meeting unless you obtain a legal proxy from your broker, bank, or other nominee.

Brokerage firms and other intermediaries holding shares of our common stock in street name for their customers are generally required to vote such shares in the manner directed by their customers. In the absence of timely directions, your broker will generally have discretion to vote your shares on our sole “routine” matter: the proposal to ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2023. Your broker will not have discretion to vote on any other proposals, which are “non-routine” matters, absent direction from you (and failure to provide instructions on these matters will result in a “broker non-vote”).

Yes. If you are a stockholder of record, you can change your vote or revoke your proxy any time before the Annual Meeting by:

If you are a street name stockholder, your broker, bank, or other nominee can provide you with instructions on how to change your vote.

Proxies are solicited by and on behalf of our board of directors. Ramin Sayar, Stewart Grierson, and Katherine Haar have been designated as proxy holders by our board of directors. When proxies are properly dated, executed, and returned, the shares represented by such proxies will be voted at the Annual Meeting in accordance with the instructions of the stockholder. If the proxy is dated and signed, but no specific instructions are given, the shares will be voted in accordance with the recommendations of our board of directors as described above. If any matters not described in this proxy statement are properly presented at the Annual Meeting, the proxy holders will use their own judgment to determine how to vote the shares. If the Annual Meeting is adjourned, the proxy holders can vote the shares on the new Annual Meeting date as well, unless you have properly revoked your proxy, as described above.

In accordance with the rules of the Securities and Exchange Commission (“SEC”), we have elected to furnish our proxy materials, including this proxy statement and our Annual Report on Form 10-K, primarily via the Internet. The Notice containing instructions on how to access our proxy materials is first being mailed on or about May 26, 2022 to all stockholders entitled to vote at the Annual Meeting. Stockholders may request to receive all future proxy materials in printed form by mail or electronically by email by following the instructions contained in the Notice. We encourage stockholders to take advantage of the availability of our proxy materials on the Internet to help reduce the environmental impact and cost of our annual meetings of stockholders.

Our board of directors is soliciting proxies for use at the Annual Meeting. All expenses associated with this solicitation will be borne by us. We will reimburse brokers or other nominees for reasonable expenses that they incur in sending our proxy materials to you if a broker, bank, or other nominee holds shares of our common stock on your behalf. In addition, our directors and employees may also solicit proxies by telephone, by electronic communication, or by other means of communication. Our directors and employees will not be paid any additional compensation for soliciting proxies.

We will announce preliminary voting results at the Annual Meeting. We will also disclose voting results on a Current Report on Form 8-K that we will file with the SEC within four business days after the Annual Meeting. If final voting results are not available to us in time to file a Form 8-K within four business days after the Annual Meeting, we will file a Form 8-K to publish preliminary results and will provide the final results in an amendment to the Form 8-K as soon as they become available.

We have adopted a procedure called “householding,” which the SEC has approved. Under this procedure, we deliver a single copy of the Notice and, if applicable, our proxy materials, to multiple stockholders who share the same address, unless we have received contrary instructions from one or more of such stockholders. This procedure reduces our printing costs, mailing costs, and fees.

Stockholders who participate in householding will continue to be able to access and receive separate proxy cards. Upon written or oral request, we will deliver promptly a separate copy of the Notice and, if applicable, our proxy materials, to any stockholder at a shared address to which we delivered a single copy of any of these materials. To receive a separate copy, or, if a stockholder is receiving multiple copies, to request that we only send a single copy of the Notice and, if applicable, our proxy materials, such stockholder may contact us at:

Sumo Logic, Inc.

Attention: Corporate Secretary

305 Main Street

Redwood City, California 94063

(650) 810-8700

Street name stockholders may contact their broker, bank, or other nominee to request information about householding.

Stockholders as of the record date (or their duly appointed proxy holder) may attend, vote and submit questions virtually at the Annual Meeting by visiting www.virtualshareholdermeeting.com/SUMO2022. To log in, stockholders (or their authorized representatives) will need the control number provided on their proxy card, voting instruction form or Notice. If you are not a stockholder or do not have a control number, you may still access the meeting as a guest, but you will not be able to submit questions or vote at the meeting.

The Annual Meeting webcast will begin promptly at 10:00 a.m. Pacific Time on July 21, 2022. We encourage you to access the meeting prior to the start time. Online access will open at 9:45 a.m. Pacific Time, and you should allow ample time to log in to the meeting webcast and test your computer audio system. We recommend that you carefully review the procedures needed to gain admission in advance. A recording of the meeting will be available at www.virtualshareholdermeeting.com/SUMO2022 until July 20, 2023.

Stockholders as of the record date who attend the Annual Meeting will have an opportunity to submit questions live via the Internet during a designated portion of the meeting. Additional rules and procedures regarding asking questions will be available on the virtual meeting website. Stockholders must have available their control number provided on their proxy card, voting instruction form or Notice to ask questions during the meeting.

We will endeavor to answer as many questions as time permits that comply with the meeting rules of conduct. We reserve the right to edit any inappropriate language and to exclude questions regarding topics that are not pertinent to meeting matters or our business. If we receive substantially similar questions, we may group such questions together and provide a single response to avoid repetition in the interest of time and fairness to all stockholders.

Technicians will be ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting, please call the technical support number that will be posted on the virtual meeting login page: www.virtualshareholdermeeting.com/SUMO2022.

Corporate Secretary in accordance with our amended and restated bylaws, which, in general, require that the notice be received by our Corporate Secretary within the time periods described above under the section titled “Stockholder Proposals” for stockholder proposals that are not intended to be included in a proxy statement.

Availability of Bylaws

A copy of our amended and restated bylaws is available via the SEC’s website at www.sec.gov. You may also contact our Corporate Secretary at the address set forth above for a copy of the relevant bylaw provisions regarding the requirements for making stockholder proposals and nominating director candidates.

Our business affairs are managed under the direction of our board of directors, which currently consists of ten directors. Eight of our directors are “independent” under the listing standards of the NASDAQ Global Select Market (“Nasdaq”).

We have a classified board of directors consisting of three classes of approximately equal size, each serving staggered three-year terms. Only one class of directors is elected at each annual meeting of stockholders, with the other classes continuing for the remainder of their respective three-year terms. Each director’s term will continue until the end of such director’s three-year term and the election and qualification of their successor, or their earlier death, resignation, or removal.

The following table sets forth, as of May 23, 2022, the names, ages, and certain other biographical information for each of our directors with terms expiring at the Annual Meeting (who are also nominees for election as directors at the Annual Meeting) and for each of the continuing members of our board of directors:

Our corporate governance and nominating committee is responsible for reviewing with our board of directors the appropriate characteristics, skills, and experience required for the board of directors as a whole and its individual members. Our corporate governance and nominating committee uses a variety of methods to identify and evaluate director nominees who may come to the attention of the committee through other board members, our management team, our stockholders, third-party search firms, or other persons. In September 2021, Ms. Francis was appointed to the board of directors as a Class III director upon the recommendation of our corporate governance and nominating committee. Ms. Francis was referred to us by Erevena, Inc., a third-party search firm. After conducting its evaluation, including interviews with Ms. Francis, the corporate governance and nominating committee recommended her appointment to the board of directors. In May 2022, Mr. Harkey was appointed to our board of directors as a Class II director, and to our audit committee and compensation and talent committee, consistent with that certain letter agreement by and between the Company and Scalar Gauge Fund LP and certain other affiliated entities and persons (collectively, “Scalar Gauge”), dated as of May 3, 2022 and included as an exhibit to our Current Report on Form 8-K filed with the SEC on May 5, 2022 (the “Cooperation Agreement”).

Some of the factors that our corporate governance and nominating committee considers when evaluating director nominees include, without limitation, character, integrity, judgment, corporate experience, diversity (including such factors as gender, race, ethnicity, differences in professional background, education, skill and other individual qualities and attributes that contribute to the total mix of viewpoints and experience represented on our board of directors), independence, area of expertise, length of service, potential conflicts of interest, other commitments and the like, including as required by applicable laws, rules, and regulations. Nominees must also have: the highest personal and professional ethics and integrity; proven achievement and competence in their field and the ability to exercise sound business judgment; skills that are complementary to those of the existing board of directors; the ability to assist and support management and make significant contributions to our success; and an understanding of the fiduciary responsibilities that are required of a member of our board of directors and the commitment of time and energy necessary to diligently carry out those responsibilities. Members of our board of directors are expected to prepare for, attend, and participate in all board of directors and applicable committee meetings. Our corporate governance and nominating committee may also consider such other factors as it may deem, from time to time, are in our and our stockholders’ best interests.

In its evaluation of director candidates, our corporate governance and nominating committee considers the suitability of each director candidate, including current directors, in light of current size and composition, organization, and governance of our board of directors and the needs of our board of directors and the respective committees of our board of directors. Although we do not maintain a specific policy with respect to board diversity, our board of directors believes that the board should be a diverse body, and our corporate governance and nominating committee considers a broad range of backgrounds and experiences. In making determinations regarding nominations of directors, our corporate governance and nominating committee may take into account the benefits of diverse viewpoints. Additionally, while we do not maintain a specific board composition strategy or specific targets, in evaluating director candidates each year we evaluate the skills and criteria that best complement and expand on the attributes of our current directors.

Our corporate governance and nominating committee also considers the above factors and other factors as it oversees the annual board of director and committee evaluations. After completing its review and evaluation of director candidates, including incumbent directors, our corporate governance and nominating committee recommends to our full board of directors the director nominees for selection.

 

We believe the composition of our board of directors, including the diversity of experiences, knowledge, and viewpoints of our directors, is critical to our success. Our board of directors has identified certain attributes, qualifications, and experiences that we believe provide a range of expertise and perspectives relevant to our business and the achievement of our long-term objectives:

Our directors represent a balanced mix of these attributes, qualifications, and experiences:

 

management software company. Mr. Gottfried also serves on the board of directors of another privately-held company and provides consulting services to a variety of high-growth startups. From January 2015 to April 2017, Mr. Gottfried served as chief financial officer at AppDynamics, Inc., an application performance management company. Mr. Gottfried holds a B.B.A. in Accounting from the University of Michigan and an M.B.A. from the Kellogg Graduate School of Management at Northwestern University. Mr. Gottfried was selected to serve on our board of directors because of his significant operational experience as an executive with technology companies and his deep understanding of finance, financial reporting, strategy, operations, and risk management. In particular, we believe Mr. Gottfried has the following attributes, qualifications, and experiences: executive leadership, global leadership, cloud/SaaS, growth and operational scale, business development and strategy, finance and accounting, legal, regulatory, and compliance, and public company board.

John D. Harkey, Jr. Mr. Harkey has served as a member of our board of directors since May 2022. Mr. Harkey has served as the principal and founder of JDH Investment Management, LLC, an investment advisory firm, since 2007, and as chairman and chief executive officer of Consolidated Restaurant Operations, Inc., a full-service and franchise restaurants company, since 1998. Mr. Harkey is also a co-founder, and has served on the board of directors, of Cessation Therapeutics, a developer of vaccines for addictions to fentanyl, heroin and nicotine, since June 2018. In addition, he was a co-founder of AveXis, Inc., a biotechnology company, from 2010 until it was acquired in 2018 by Novartis AG, and served as executive chairman from 2010 to 2015. Mr. Harkey serves on the board of directors of several privately-held companies and non-profit organizations, and previously served on the board of directors of several public companies, including Loral Space & Communications Inc., a satellite communications company, from November 2005 to November 2021, and Emisphere Technologies, Inc., a commercial stage pharmaceutical and drug delivery company, from 2006 to November 2020. Mr. Harkey holds a B.B.A. in Business Honors from the University of Texas at Austin, a J.D. from the University of Texas School of Law, and an M.B.A. from Stanford Graduate School of Business. Mr. Harkey brings to our board of directors his extensive operational experience as a private investor and chief executive, in both public and private companies, across a wide range of industries. In particular, we believe Mr. Harkey has the following attributes, qualifications, and experiences: executive leadership, global leadership, growth and operational scale, business development and strategy, finance and accounting, legal, regulatory, and compliance, and public company board.

Tracey Newell. Ms. Newell has served as a member of our board of directors since December 2020. From July 2018 until January 2021, Ms. Newell was President, Global Field and Marketing Operations at Informatica LLC, a software company. Prior to this, Ms. Newell was Executive Vice President, Global Field Operations, at Proofpoint, Inc., an enterprise security software company, from August 2013 until July 2018, and Executive Vice President, Global Sales at Polycom, Inc., a video, voice, and content solutions provider, from July 2011 until August 2013. Ms. Newell currently serves on the board of directors of SailPoint Technologies Holdings, Inc., an identity and access management provider, and on the board of directors of several privately-held companies. Prior to joining the management team at Informatica, Ms. Newell served on their board of directors from July 2016 to June 2018. Ms. Newell holds a B.A. in Business Economics from the University of California, Santa Barbara. Ms. Newell was selected to serve on our board of directors because of her extensive experience in operations and her experience as a director of public and private technology companies. In particular, we believe Ms. Newell has the following attributes, qualifications, and experiences: executive leadership, global leadership, cloud/SaaS, go-to-market, growth and operational scale, business development and strategy, and public company board.

Joseph Ansanelli. Mr. Ansanelli has served as a member of our board of directors since May 2013. Mr. Ansanelli has served as chief executive officer at Gladly Software, Inc., a customer service platform, since January 2015 and as a Partner at Greylock Partners, a venture capital firm, or Greylock, since June 2012. Mr. Ansanelli currently serves on the boards of directors of several privately-held companies. Mr. Ansanelli holds a B.S. in Applied Economics from The Wharton School of the University of Pennsylvania. Mr. Ansanelli was selected to serve on our board of directors because of his extensive operating and management experience, his knowledge of technology companies, and his extensive

experience as a venture capital investor. In particular, we believe Mr. Ansanelli has the following attributes, qualifications, and experiences: executive leadership, cloud/SaaS, go-to-market, growth and operational scale, and business development and strategy.

Christian Beedgen. Mr. Beedgen is a co-founder of Sumo Logic and has served as our Chief Technology Officer and a member of our board of directors since our founding. Prior to co-founding Sumo Logic, Mr. Beedgen served in various roles at ArcSight, Inc., an enterprise security management company, including most recently as chief architect, director of engineering, and co-founded Gigaton, Inc., a cloud file management company. Mr. Beedgen holds an Associate’s Degree in Social Sciences from Humboldt-Universität zu Berlin and a Bachelor’s Degree in Digital Communication and Media from Fachhochschule Brandenburg. Mr. Beedgen was selected to serve on our board of directors because of the perspective and experience he brings as a co-founder and as our Chief Technology Officer. In particular, we believe Mr. Beedgen has the following attributes, qualifications, and experiences: executive leadership, global leadership, technology, cloud/SaaS, and growth and operational scale.

Margaret Francis. Ms. Francis has served as a member of our board of directors since September 2021. Ms. Francis currently has served as chief product officer of dbt Labs, a data analytics software company, since January 2022. Prior to dbt Labs, Ms. Francis was the president and chief operating officer at Armory Inc., a collaborative software delivery platform, from September 2020 to December 2021. Ms. Francis has also served on the board of directors of Armory since September 2020. Prior to joining Armory, Ms. Francis served as senior vice president of products and general manager of Heroku, Inc., a cloud platform-as-a-service provider and a subsidiary of Salesforce.com, Inc., from March 2018 to September 2020, as senior vice president of Salesforce Platform Data Products from 2018 to 2020, and as vice president of product management from January 2014 to March 2018. Ms. Francis has also held product leadership positions at ExactTarget and Beckon. Ms. Francis holds a B.A. in Art from Yale University and a M.F.A in Photography from the San Francisco Art Institute. Ms. Francis was selected to serve on our board of directors because of her experience with technology companies, particularly her deep understanding of product and engineering strategy for high-growth software companies. In particular, we believe Ms. Francis has the following attributes, qualifications, and experiences: executive leadership, global leadership, technology, cloud/SaaS, go-to-market, and growth and operational scale.

William D. (BJ) Jenkins, Jr. Mr. Jenkins has served as a member of our board of directors since March 2018. Mr. Jenkins has served as president of Palo Alto Networks, Inc., a cybersecurity company, since August 2021. Prior to Palo Alto Networks, Mr. Jenkins was president and chief executive officer of Barracuda Networks, Inc., a security and networking company, from November 2012 to August 2021. Mr. Jenkins continues to serve on the board of directors of Barracuda. Mr. Jenkins also serves as a member of the board of directors of Generac Holdings Inc., a manufacturer of backup power generation products and Skydeck Acquisition Corporation, a special purpose acquisition company. Mr. Jenkins previously served on the boards of directors at a number of other companies, including Nimble Storage, Inc., a flash storage company, from March 2015 to March 2017. Mr. Jenkins holds a B.S. in General Engineering from the University of Illinois and an M.B.A. from Harvard Business School. Mr. Jenkins was selected to serve on our board of directors because of his significant operational experience as an executive with technology companies and his experience serving on the boards of directors of other public technology companies. In particular, we believe Mr. Jenkins has the following attributes, qualifications, and experiences: executive leadership, global leadership, cloud/SaaS, go-to-market, business development and strategy, finance and accounting, and public company board.

Charles J. Robel. Mr. Robel has served as a member of our board of directors since April 2018. Mr. Robel currently serves as the Chairman of the board of directors of GoDaddy Inc., a web hosting company, Sportradar Group AG, a global sports technology company, and on the board of directors of several privately-held companies. Mr. Robel previously served on the boards of directors at a number of other companies, including Model N, Inc., a revenue management software company, from January 2007 to February 2019, and Jive Software, Inc., a collaborative software company, from January 2011 to June 2017. From June 2000 to December 2005, Mr. Robel served as general partner and chief of operations of Hummer Winblad Venture Partners, L.P., a venture capital firm. From January 1974 to May 2000, Mr. Robel served in various roles at PricewaterhouseCoopers LLP, an accounting firm, including most recently as a partner. Mr. Robel holds a B.S. in Accounting from Arizona State University. Mr. Robel was

selected to serve on our board of directors because of his financial, accounting, M&A, strategic, corporate governance, compliance and investor relations expertise and his experience serving on the boards of directors of multiple public and private technology companies. In particular, we believe Mr. Robel has the following attributes, qualifications, and experiences: executive leadership, global leadership, cloud/SaaS, business development and strategy, finance and accounting, legal, regulatory, and compliance, and public company board.

Ramin Sayar. Mr. Sayar has served as our President, Chief Executive Officer, and as a member of our board of directors since December 2014. From April 2010 to December 2014, Mr. Sayar served as senior vice president and general manager, cloud management business unit at VMware, Inc., a software virtualization company. From November 2006 to April 2010, Mr. Sayar served as vice president of products and strategy at HP Software Technology Pvt. Ltd., a software development company. Mr. Sayar holds a B.A. in History from the University of California, Santa Barbara and an M.B.A. from San Jose State University. Mr. Sayar was selected to serve on our board of directors because of the perspective and experience he brings as our President and Chief Executive Officer. In particular, we believe Mr. Sayar has the following attributes, qualifications, and experiences: executive leadership, global leadership, technology, cloud/SaaS, go-to-market, growth and operational scale, and business development and strategy.

Under the listing rules of Nasdaq, independent directors must comprise a majority of a listed company’s board of directors. In addition, Nasdaq rules require that, subject to specified exceptions, each member of a listed company’s audit, compensation, and nominating and corporate governance committees be independent. Under Nasdaq rules, a director will only qualify as an “independent director” if, in the opinion of the company’s board of directors, the director does not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Our board of directors has undertaken a review of the independence of each director. Based on information provided by each director concerning his or her background, employment, and affiliations, our board of directors has determined that Messrs. Ansanelli, Gottfried, Harkey, Jenkins, and Robel and Mses. Bergeron, Francis, and Newell do not have a relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director and that each of these directors is “independent” as that term is defined under Nasdaq listing rules. In making these determinations, our board of directors considered the current and prior relationships that each non-employee director has with our company and all other facts and circumstances our board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and the transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.”

We believe that the structure of our board of directors and its committees provides strong oversight of our company. Our board of directors has adopted Corporate Governance Guidelines that provide that one of our independent directors shall serve as our lead independent director if the chairperson of our board of directors is not independent. Our board of directors has not designated a chairperson, but has appointed Mr. Robel to serve as lead independent director. As our lead independent director, Mr. Robel is responsible for calling separate meetings of the independent directors, determining the agenda and serving as chairperson of meetings of independent directors, reporting to our Chief Executive Officer regarding feedback from executive sessions, and performing such other responsibilities as may be designated by a majority of our independent directors from time to time.

Only independent directors serve on the audit committee, the compensation and talent committee, and the corporate governance and nominating committee of our board of directors. As a result of its committee system and the existence of a majority of independent directors, our board of directors believes it maintains effective oversight of our business operations, including independent oversight of our financial

statements, executive compensation, selection of director candidates, and corporate governance programs. We believe that the leadership structure of our board of directors as well as the strong independent committees of our board of directors is appropriate and enhances our board of directors’ ability to effectively carry out its roles and responsibilities on behalf of our stockholders.

Our board of directors has established an audit committee, a compensation and talent committee, and a corporate governance and nominating committee. The composition and responsibilities of each of the committees of our board of directors is described below. Members will serve on these committees until their resignation or until as otherwise determined by our board of directors.

Our audit committee consists of Ms. Bergeron and Messrs. Gottfried, Harkey, and Robel. Mr. Robel served as Chairperson of our audit committee until May 2022, when he was succeeded by Mr. Gottfried, the current Chairperson. Each member of our audit committee meets the requirements for independence of audit committee members under Nasdaq listing standards and SEC rules and regulations and also meets the financial literacy and sophistication requirements of the Nasdaq listing standards. Our board of directors has determined that each of Messrs. Harkey, Gottfried, and Robel is an audit committee financial expert within the meaning of Item 407(d) of Regulation S-K under the Securities Act of 1933, as amended (“Securities Act”). Our audit committee is responsible for, among other things:

Our audit committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our audit committee is available on our website at investor.sumologic.com. During fiscal 2022, our audit committee held eight meetings.

Our compensation and talent committee consists of Messrs. Ansanelli and Harkey and Mses. Francis and Newell, with Ms. Newell serving as Chairperson. Ms. Bergeron and Mr. Jenkins served on our compensation and talent committee until May 2022. Each member of our compensation and talent committee meets the requirements for independence for compensation committee members under the listing standards of Nasdaq. Each of Messrs. Ansanelli and Harkey and Mses. Francis and Newell is also a non-employee director, as defined pursuant to Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended (“Exchange Act”). Our compensation and talent committee is responsible for, among other things:

Our compensation and talent committee operates under a written charter that satisfies the applicable rules and regulations of the SEC and the listing standards of Nasdaq. A copy of the charter for our compensation and talent committee is available on our website at investor.sumologic.com. During fiscal 2022, our compensation and talent committee held eleven meetings.

Our corporate governance and nominating committee consists of Mses. Bergeron and Newell and Messrs. Jenkins and Robel. Mr. Jenkins served as Chairperson of our corporate governance and nominating committee until May 2022, when he was succeeded by Mr. Robel, the current Chairperson. Each member of our corporate governance and nominating committee meets the requirements for independence under the listing standards of Nasdaq. Our corporate governance and nominating committee is responsible for, among other things:

Our corporate governance and nominating committee operates under a written charter that satisfies the applicable Nasdaq listing standards. A copy of the charter for our corporate governance and nominating committee is available on our website at investor.sumologic.com. During fiscal 2022, our corporate governance and nominating committee held one meeting.

During fiscal 2022, our board of directors held eight meetings (including regularly scheduled and special meetings). Each director attended at least 75% of the aggregate of (i) the total number of meetings of our board of directors held during the period for which he or she has been a director and (ii) the total number of meetings held by all committees of our board of directors on which he or she served during the periods that he or she served.

Although we do not have a formal policy regarding attendance by members of our board of directors at annual meetings of stockholders, we strongly encourage, but do not require, our directors to attend.

Our corporate governance and nominating committee will consider director candidates recommended by stockholders holding at least one percent (1%) of the fully diluted capitalization of Sumo Logic continuously for at least 12 months prior to the date of the submission of the recommendation, so long as such recommendations comply with our amended and restated certificate of incorporation, amended and restated bylaws, and applicable laws, rules and regulations, including those promulgated by the SEC. Our corporate governance and nominating committee will evaluate such recommendations in accordance with its charter, our amended and restated bylaws and our policies and procedures for director candidates, as well as the regular director nominee criteria described above. This process is designed to ensure that our board of directors includes members with diverse backgrounds, skills, and experience, including appropriate financial and other expertise relevant to our business. Eligible stockholders wishing to recommend a candidate for nomination should direct the recommendation in writing by letter to us, attention of the General Counsel or legal department, at Sumo Logic, Inc., 305 Main Street, Redwood City, California 94063. Such recommendations must include the candidate’s name, home and business contact information, detailed biographical data, relevant qualifications, a statement of support by the recommending stockholder, a signed letter from the candidate confirming willingness to serve on our board of directors, information regarding any relationships between the candidate and our company, evidence of the recommending stockholder’s ownership of our capital stock, and any other information required by our amended and restated bylaws. Our corporate governance and nominating committee has discretion to decide which individuals to recommend for nomination as directors.

Under our amended and restated bylaws, stockholders may also directly nominate persons for our board of directors. Any nomination must comply with the requirements set forth in our amended and restated bylaws and should be sent in writing to our Corporate Secretary at Sumo Logic, Inc., 305 Main Street, Redwood City, California 94063. To be timely for the 2023 annual meeting of stockholders, nominations must be received by our Secretary observing the same deadlines for stockholder proposals discussed above under “General Information—What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?—Stockholder Proposals.”

Interested parties wishing to communicate with non-management members of our board of directors may do so by writing and mailing the correspondence to our General Counsel or legal department at Sumo Logic, Inc., 305 Main Street, Redwood City, California 94063. Each communication should set forth (i) the name and address of the stockholder, as it appears on our books, and if the shares of our common stock are held by a broker, bank or nominee, the name and address of the beneficial owner of such shares, and (ii) the class and number of shares of our common stock that are owned of record by the record holder and beneficially by the beneficial owner.

Our General Counsel or legal department, in consultation with appropriate members of our board of directors as necessary, will review all incoming stockholder communications (except for mass mailings, product complaints or inquiries, job inquiries, business solicitations and patently offensive or otherwise inappropriate material) and, if appropriate, will route such communications to the appropriate member or members of our board of directors, or if none is specified, to the chairperson of our board of directors or the lead independent director if there is not an independent chairperson of our board of directors.

Our General Counsel or legal department may decide in the exercise of their or its judgment whether a response to any stockholder communication is necessary and shall provide a report to our corporate governance and nominating on a quarterly basis of any stockholder communications received for which the General Counsel or legal department has responded. This procedure for stockholder communications with non-management members of our board of directors is administered by our corporate governance and nominating committee.

This procedure does not apply to (i) communications to non-management directors from our officers or directors who are stockholders or (ii) stockholder proposals submitted pursuant to Rule 14a-8 under the Exchange Act, which are discussed above under “General Information—What is the deadline to propose actions for consideration at next year’s annual meeting of stockholders or to nominate individuals to serve as directors?—Stockholder Proposals.”

Our board of directors has adopted Corporate Governance Guidelines to assist our board of directors in the exercise of its responsibilities and to serve the interests of the Company and our stockholders in a manner that is consistent with its fiduciary duties. The Corporate Governance Guidelines address a variety of matters such as the role of our board of directors, the qualifications and responsibilities of our directors and director candidates, including independence standards, board meetings and board committee matters, and other applicable corporate governance policies and standards.

In addition, our board of directors has adopted a Code of Business Conduct and Ethics that applies to all of our employees, contractors, consultants, officers, and directors. We have implemented our Code of Business Conduct and Ethics to ensure that our core values remain with us as we strive to create value for our employees, customers, partners, and stockholders. Our Code of Business Conduct and Ethics outlines general guidelines and standards for business conduct, and is designed to deter wrongdoing and promote:

Our Corporate Governance Guidelines provide that no director should serve on more than four additional public company boards without the approval of our board of directors. In addition, our Code of Business Conduct and Ethics provides that our executive officers cannot serve on the advisory board or the board of directors of any for-profit entity without the approval of our board of directors. If approved, subject to limitations under applicable law, such service shall be limited to one board of directors of a for-profit entity and one advisory board of a for-profit entity. Our board of directors may make exceptions to such limitations.

A copy of our Corporate Governance Guidelines and our Code of Business Conduct and Ethics is posted on our website at investor.sumologic.com. We will post amendments to our Code of Business Conduct and Ethics or any waivers of our Code of Business Conduct and Ethics for directors and executive officers on the same website or in filings under the Exchange Act.

Risk is inherent with every business, and we face a number of risks, including strategic, financial, business and operational, legal and compliance, and reputational, in the pursuit and achievement of our strategic objectives. We have designed and implemented processes to manage risk in our operations. Management is responsible for the day-to-day oversight and management of strategic, operational, legal and compliance, cybersecurity, and financial risks, while our board of directors, as a whole and assisted by its committees, has responsibility for the oversight of our risk management framework, which is designed to identify, assess, and manage risks to which our company is exposed, as well as to foster a corporate culture of integrity. Consistent with this approach, our board of directors regularly reviews our strategic and operational risks in the context of discussions with management, question and answer

sessions, and reports from the management team at each regular board meeting. Our board of directors also receives regular reports on all significant committee activities at each regular board meeting, and evaluates the risks inherent in significant transactions.

In addition, our board of directors has tasked designated standing committees with oversight of certain categories of risk management. Our audit committee assists our board in fulfilling its oversight responsibilities with respect to risk management in the areas of internal control over financial reporting and disclosure controls and procedures, and legal and regulatory compliance. Our audit committee also, among other things, discusses with management, the internal auditors, and the independent auditor guidelines and policies with respect to risk assessment and risk management, as well as potential conflicts of interest. Our compensation and talent committee assesses risks arising from our compensation philosophy and practices applicable to all employees to determine whether they encourage excessive risk-taking and evaluates policies and practices that could mitigate such risks. Our corporate governance and nominating committee assesses risks relating to our corporate governance practices and the independence of the board of directors.

Our board of directors believes its current leadership structure supports the risk oversight function of the board.

We recognize that our commitment to managing environmental, social, and governance (“ESG”) risks and opportunities is essential to long-term value creation for our stockholders, employees, customers, communities, and other stakeholders. Our approach to ESG is anchored in our mission to democratize machine data and empower organizations with the critical data and insights required to address technology and collaboration challenges with prescriptive action in real time—a modern business imperative. Both our management team and our board of directors believe that our environmental stewardship, social responsibility, and corporate governance practices are foundational to our operational success, growth strategy, and financial priorities.

Our board of directors is responsible for promoting our strong culture of corporate citizenship and adherence to business standards guided by our Code of Business Conduct and Ethics. Members of our board of directors possess a variety of tenure, qualifications, and experiences contributing to a board that is well-rounded and well-positioned to effectively oversee our business and promote the interests of our stakeholders. See the section above titled “—Board Composition and Director Experience.”

Our corporate governance and nominating committee has oversight of our ESG practices, as outlined in its committee charter. Other board committees also play a role in ESG, with responsibilities across areas such as cybersecurity, human capital management, and risk assessment and management. In addition, members of our management team and subject matter experts across our company are responsible for developing the implementation of our ESG strategy, initiatives, and communications. We have an ESG Steering Committee, comprised of our chief financial officer, our chief human resources officer, our chief security officer, and our general counsel, which meets at least quarterly to support our strategic ESG priorities for the fiscal year. A copy of our inaugural ESG report with further analysis of our ESG practices can be found on our website at investor.sumologic.com/esg-0. Our websites, reports and media channels are not part of and are not incorporated by reference into this proxy statement.

 

Honest and ethical conduct is critical to our business. Our success depends on the trust we foster with our employees, with our customers and partners, and with our community by acting with integrity and in accordance with applicable laws. We expect every employee, officer, director, and consultant to not only read and understand our Code of Business Conduct and Ethics, but also to apply good judgment and the highest personal ethical standards in making business decisions.

We encourage employees to raise concerns and be alert to possible violations and report them without fear of retaliation. We have established the Sumo Logic Compliance Hotline, hosted by an independent third party provider, for employees or other stakeholders to report any questions, concerns, or suspected violations. Reports may be submitted online at http://sumologic.ethicspoint.com or by calling the U.S. toll-free number +1 (866) 714-1294 (or other global phone numbers available on the website). Reports may be submitted anonymously, depending on local laws.

Our board of directors plays a key role in the oversight of our culture, setting the tone at the top and holding management accountable for maintaining high ethical standards. Our board of directors believes that human capital management, including diversity, equity, inclusion, and belonging (“DEIB”) initiatives, is important to our long-term success. Our compensation and talent committee reviews and discusses annually with management the risks arising from our compensation philosophy and practices applicable to all employees to determine whether they encourage excessive risk-taking and to evaluate compensation policies and practices that could mitigate such risks.

We are incredibly proud of our community of passionate, talented employees committed to creating positive customer impact and value. It is our mission to create the organizational conditions and culture for talented individuals to continue to thrive. We focus on identifying, recruiting, retaining, incentivizing, and engaging our new and existing employees and consultants. Our compensation program is designed to advance our technological innovation, business success, and stockholder value by motivating individuals to perform to the best of their abilities and achieve our strategic objectives. We offer competitive pay and benefits, equity grants, including paid family leave, flexible work schedules, and a comprehensive health and wellness program. In addition to medical, dental, and vision plans that also extend to dependents and family, we provide flexible spending accounts, tax-free commuter and parking expenses, 401(k) plans, and access to multiple other platforms. In addition to traditional employee benefits, we have implemented a number of innovative initiatives to support the well-being of our employee base. We encourage continuous learning and professional development.

A diverse and inclusive workforce is a business imperative and key to our long-term success. We strive to cultivate a high-performing and diverse workforce and to foster a culture of collaboration and learning, where all employees feel valued and enhance each other’s performance. We will continue making positive strides in developing and integrating a progressive DEIB strategy. As such, we have taken steps to advance DEIB initiatives, such as DEIB awareness training and employee resource groups (“ERGs”). We support a variety of employee-led ERGs for different identity groups and communities within our workforce, including our Black employees, FIERCE (our women’s network), Planeteers (sustainability initiatives), and Q&A (our LGBTQ+ network). Our ERGs focus on providing and promoting professional development and mentoring, education, advocacy, allyship, philanthropy, and service opportunities. Each of our ERGs has an executive sponsor, and we are creating a Diversity Council to champion and support our ERG programs.

We actively seek opportunities for regular engagement and communication by our chief executive officer and other senior executive leaders with our broader employee population. For example, we host periodic town halls that provide an opportunity for our chief executive officer and other senior leaders to be accessible to our global employees while discussing topics such as recent financial results, innovative growth initiatives, and customer success stories. We also host a series of “ask-me-anything” sessions to enable direct interaction and communication with our senior leadership. In addition, we conduct an annual confidential company-wide employee engagement survey. Feedback from these surveys provides our management team with valuable information about our workplace culture and corporate mission, and the results are used to develop and refine other aspects of our overall human capital management strategies.

We conducted a full assessment of our carbon, water, and waste footprint at our headquarters in Redwood City, California. In addition, we assess environmental criteria when evaluating new offices, and consider environmental management strategies based on the Sustainability Accounting Standards Board frameworks. Furthermore, as a cloud-native company, we are not reliant on large data centers and thus we have a significantly reduced environmental footprint, including low Scope 1 and Scope 2 emissions.

To remain a resilient business, we need to anticipate and mitigate ESG-related risks. Data security and business continuity practices are material to our long-term operational sustainability and business success and that of our customers. Our audit committee is responsible for the oversight of enterprise-wide risk assessment and risk management, including our operational infrastructure pertaining to security, data privacy, reliability, business continuity, and capacity matters. As such, our audit committee reviews our risk management framework and programs, as well as the framework by which management discusses our risk profile and risk exposures with our board of directors and its committees at least annually.

Our platform is built on a multi-tenant cloud architecture, hosted on Amazon Web Services (“AWS”) using intelligent resource management, auto scaling, and partitioning logic to manage our compute and storage footprint so that we can deliver resiliency and optimal performance while maintaining efficiency. Our platform runs across multiple regions and within each region across multiple AWS data centers. Our microservices are distributed to avoid single-points-of-failure and to ensure fault-tolerance even in the case of full physical data center outage.

All data to our platform is encrypted in transit. Additionally, all data in our platform is encrypted at rest, with unique rotating customer key chains which are themselves encrypted to ensure data security. We utilize numerous controls to ensure platform security, including identity and access management, multi-factor authentication, multiple audit trails, real-time security monitoring, encrypted operating system volumes and more. We have a dedicated system and organization controls (“SOC”) security operations center with an incident response program escalating to our chief executive officer and our chief security officer, as well as to our audit committee, if warranted. We have a robust security and data privacy training program required for all employees and contractors upon hire and ongoing annually. Finally, our privacy statement reinforces our commitment to safeguards around the information used with our cloud analytics solutions.

Our distinct public cloud offering is built out and operated in accordance with NIST 800-53 FedRAMP-Moderate framework. We engage independent, third-party assessors to audit and certify our compliance annually.

Specifically, our platform is PCI-DSS 3.2.1 Service Provider Level 1 certified, SOC 2 Type 2 attested, HIPAA compliance attested, ISO 27001 certified, and has FedRAMP Moderate Authorization.

rounded down to the nearest whole share (the “Initial Award Value”). The Initial Award will vest as to one-third of the RSUs subject to the Initial Award on the first quarterly vesting date that is on or after the one-year anniversary of the Initial Award’s grant date and as to one-third of the RSUs on each annual anniversary thereafter subject to the non-employee director continuing to provide services to us through the applicable vesting date. A quarterly vesting date is the first trading day on or after each of March 15, June 15, September 15, and December 15. If the person was a member of the board of directors and also an employee, becoming a non-employee director due to termination of employment will not entitle the non-employee director to an Initial Award.

Annual Award. Each non-employee director who has served as a director for at least six months prior to the applicable annual meeting of our stockholders automatically will receive, on the date of each annual meeting of our stockholders following the effective date of the policy (the “Annual Meeting Date”), an award of RSUs, or an Annual Award, covering a number of shares of our common stock having a value (determined as described above) equal to the annual award value (determined as described below), rounded down to the nearest whole share. Each non-employee director who has not served as a director for at least six months prior to the applicable Annual Meeting Date automatically will only receive, on the Annual Meeting Date, an Annual Award covering a number of shares of our common stock having a value equal to the total additional value (determined as described below) and not the base value (as described below), rounded down to the nearest whole share. Each Annual Award will vest on the earlier of the one-year anniversary of the Annual Award’s grant date, or the day prior to the Annual Meeting Date next following the Annual Award’s grant date, subject to the non-employee director’s continued service through the applicable vesting date.

The Annual Award value will equal $180,000, or the base value, plus the total additional value received by the non-employee director and will be calculated on the Annual Award’s grant date.

Following the effective date of the policy, non-employee directors who serve in the following roles will receive “additional value” as an equity grant for each position the non-employee director holds as of the Annual Meeting Date as follows:

Each non-employee director who serves as the chair of a committee will receive only the additional value as the chair of the committee, and not the additional value as a member of the committee. The total additional value for a non-employee director will be calculated based on the positions held by the non-employee director as of the Annual Meeting Date and will not be adjusted for any changes to the positions held by the non-employee director after the Annual Award’s grant date and before the next Annual Meeting Date.

In the event of a “change in control” (as defined in our 2020 Equity Incentive Plan (“2020 Plan”)), each non-employee director will fully vest in their outstanding company equity awards issued under the director compensation policy, including any Initial Award or Annual Award, unless specifically provided otherwise in the applicable award agreement or other written agreement between the non-employee director and us.

In our fiscal year ended January 31, 2022, there were no other professional services provided by PricewaterhouseCoopers LLP, other than those listed above, that would have required our audit committee to consider their compatibility with maintaining the independence of PricewaterhouseCoopers LLP.

Our audit committee has established a policy governing our use of the services of our independent registered public accounting firm. Under this policy, our audit committee is required to pre-approve all services performed by our independent registered public accounting firm in order to ensure that the provision of such services does not impair the public accountants’ independence. All services provided by PricewaterhouseCoopers LLP for our fiscal year ended January 31, 2021 were approved by our audit committee, and following adoption of our pre-approval policy in September 2020, all services provided by PricewaterhouseCoopers LLP for our fiscal year ended January 31, 2022, which includes all fees for audit services, were pre-approved by our audit committee in accordance with the policy.

The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for our fiscal year ending January 31, 2023 requires the affirmative vote of a majority of the voting power of the shares of our common stock present in person or by proxy at the Annual Meeting and entitled to vote thereon. Abstentions will have the effect of a vote against this proposal, and broker non-votes will have no effect.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.

For Mr. Sayar’s biography, see the section above titled “Board of Directors and Corporate Governance—Continuing Directors.”

Stewart Grierson. Mr. Grierson has served as our Chief Financial Officer since December 2021. Prior to joining Sumo Logic, Mr. Grierson was the chief financial officer of Delphix Corporation, an enterprise software development and IT operations company, from April 2015 to December 2021. Prior to joining Delphix, Mr. Grierson served as chief financial officer and senior vice president, operations at Coraid, Inc. and as chief financial officer of ArcSight, Inc. Earlier in Mr. Grierson's career, he worked at KPMG LLP as a senior manager. Mr. Grierson also serves on the board of directors of a privately-held company. Mr. Grierson holds a B.A. in Economics and a graduate’s degree in Accounting from McGill University.

Suku Krishnaraj Chettiar. Mr. Krishnaraj Chettiar has served as our Chief Marketing Officer since October 2018, having previously served as our Vice President of Marketing from September 2015 to October 2018. From May 2014 to September 2015, Mr. Krishnaraj Chettiar served as vice president and general manager, cloud business unit at CenturyLink, Inc., a connectivity, cloud, and security services company. From June 2012 until its acquisition by CenturyLink, Mr. Krishnaraj Chettiar served as chief marketing officer of AppFog, Inc., a platform-as-a-service company. Mr. Krishnaraj Chettiar holds a B.E. in Computer Science and Engineering from the University of Mysore and an M.B.A. from the Leavey School of Business at Santa Clara University.

Lynne Doherty. Ms. Doherty has served as our President, Worldwide Field Operations since November 2021. Prior to joining Sumo Logic, Ms. Doherty was executive vice president, global sales and marketing in the enterprise business group of McAfee Enterprise, an enterprise cybersecurity company, from May 2020 to October 2021. Prior to joining McAfee, Ms. Doherty held numerous positions at Cisco Systems, Inc., an internet technology company, most recently as senior vice president of U.S. commercial sales from August 2018 to May 2020. Prior to this position, Ms. Doherty also served as Cisco’s vice president, Americas security sales from January 2017 to October 2018, and as area vice president of U.S. commercial sales, from June 2013 to January 2017. Earlier in Ms. Doherty’s career, she served as a programmer at Bell Atlantic Corporation (now Verizon Communications Inc.) before joining Sun Microsystems, Inc. as a regional executive in sales and engineering. Ms. Doherty holds a B.S. in Mathematics & Computer and Information Science from Temple University.

Katherine Haar. Ms. Haar has served as our General Counsel since November 2018 and as our Secretary since March 2019. Prior to joining Sumo Logic, Ms. Haar served in various roles between February 2010 and November 2018 at Informatica LLC, a software company, including most recently as senior vice president, general counsel and chief privacy officer from August 2015 to November 2018, and as vice president and deputy general counsel from January 2013 to August 2015. From October 2000 to January 2010, Ms. Haar was an associate at Wilson Sonsini Goodrich and Rosati, P.C., a law firm. Ms. Haar holds a B.A. in Economics from the University of Chicago and a J.D. from the University of California, Berkeley.

This Compensation Discussion and Analysis provides information regarding our fiscal 2022 executive compensation program, including a comprehensive overview of the company’s executive compensation philosophy together with our compensation policies and practices. This section describes the basis for the compensation paid to our named executive officers (“NEOs”), as well as certain key compensation decisions that have been approved for them. It also analyzes the factors considered by the compensation and talent committee or the board of directors in designing pay that reflects performance and aligns with the interests of our stockholders.

Our NEOs for fiscal 2022 were:

Sumo Logic empowers the people who power modern, digital businesses. Our mission is to be the leading software-as-a-service analytics platform for reliable and secure cloud-native applications. With our platform, we help our customers ensure application reliability, secure and protect against modern security threats, and gain insights into their cloud infrastructure. Our multi-tenant, cloud-native platform – which we refer to as our Continuous Intelligence Platform – provides powerful, real-time, machine data analytics and insights across observability and security solutions.

Our financial performance has reflected significant growth in revenue over the past few fiscal years. We grew revenue to $242.1 million in fiscal 2022, representing an increase of 19% year-over-year. For fiscal 2022, our ARR was $258.9 million, representing a year-over-year growth rate of 24%. See “Compensation Elements–Annual Cash Incentive” below for a definition of ARR.

 

We continue to invest in our growing market opportunity as we demonstrate our ability to meet increasing customer demand. Some of our other fiscal 2022 highlights include:

The primary elements of our executive compensation program are base salary, annual cash incentive, and long-term equity incentive. A significant portion of our executive compensation program, including the annual cash and long-term equity incentives, is “at risk” to align the executives’ interests with those of our stockholders.

 

The compensation and talent committee considers the following objectives when designing pay programs and making compensation decisions:

The compensation and talent committee provides oversight of our compensation policies and plans and benefits programs, and is responsible for our overall compensation philosophy. The compensation and talent committee is empowered to review and approve, or when appropriate recommend to our board of directors for approval, the annual compensation and compensation plans, policies, and practices applicable to our chief executive officer and other executive officers. The compensation and talent committee is also responsible for administering our equity compensation plans.

In performing its duties and responsibilities, the compensation and talent committee evaluates our compensation plans, policies, and practices, focusing on the extent to which they reflect our executive compensation philosophy, develops strategies, and makes decisions that are consistent with the development of best compensation practices and aligned with our stockholders’ interests. The compensation and talent committee meets at least quarterly.

In carrying out its responsibilities, the compensation and talent committee meets with our management or other employees, including our chief executive officer, as part of the compensation planning and administration process throughout the year. The compensation and talent committee reviews and discusses our chief executive officer’s recommendations for executives other than himself, and considers them as one factor in determining and approving the compensation of our executive officers. While the compensation and talent committee may solicit input from our chief executive officer on his expectations regarding his own compensation, the compensation and talent committee deliberates and makes decisions with respect to his compensation without him present. Members of management, including our chief executive officer, attend the compensation and talent committee’s meetings, but leave the meetings as appropriate when matters of executive compensation specific to them are discussed.

Our management also assists the compensation and talent committee by providing information on corporate and individual performance, market compensation data, and management’s perspective on compensation matters.

This is the first year our stockholders will have the opportunity to participate in a non-binding vote to approve the compensation of our NEOs. Our board and the compensation and talent committee will consider the outcome of this advisory vote, as well as feedback received from our stockholders throughout the year, when making future compensation decisions for our NEOs.

The compensation and talent committee has the authority to retain the services of external advisors, including compensation consultants, from time to time, as it sees fit, in connection with performing its duties.

Radford served as our independent compensation consultant through June 2021. Starting from June 2021, the compensation and talent committee engaged Compensia, a nationally recognized compensation consulting firm, to serve as its compensation consultant to advise on executive compensation matters, including competitive market pay practices for our NEOs and selection of the peer group.

The compensation consultant reports directly to the compensation and talent committee and its chair and serves at the discretion of the compensation and talent committee, which reviews the engagement annually. Radford and Compensia provided no other services to us in fiscal 2022 besides services related to their engagements as the independent consultants.

In accordance with SEC and Nasdaq rules regarding the independence of compensation consultants, the compensation and talent committee considered a number of factors to determine whether its engagement with Radford and Compensia raised any potential conflicts of interest including (i) any other services the independent compensation consulting firm provides to the company, (ii) the amount of fees paid to the independent compensation consulting firm by the company, (iii) the independent compensation consulting firm’s policies and procedures designed to prevent conflicts of interest, (iv) any business or personal relationship the independent compensation consulting firm may have with any members of the compensation and talent committee or any of the NEOs, (v) and whether the independent compensation consulting firm and its employees owned any stock in Sumo Logic. Following its review, the compensation and talent committee concluded that its engagements with Radford and Compensia did not raise any conflicts of interest for fiscal 2022.

With the assistance of our independent compensation consultant, the compensation and talent committee considers the compensation levels and practices of a selected group of peer companies for the purpose of assessing our executive compensation position against market. In evaluating potential peer companies, the independent compensation consultant solicits input from the compensation and talent committee as well as from members of management on the appropriate parameters for comparison. The specific criteria for selection into the peer group are set annually by the compensation and talent committee. In selecting a peer group, the compensation and talent committee uses companies in the software and technology industries that, in its view, compete with us for talent and have a similar business and financial profile. When the peer group is reviewed each year, companies may be removed for failure to meet the selection criteria or new companies may be added as necessary to ensure a significant sample size of companies. In selecting the companies for the fiscal 2022 peer group, the compensation and talent committee used the following criteria:

We believe that pay practices, disclosure requirements, and investor expectations often vary based on company location so, we considered country of incorporation to be a major criterion. Also, companies in similar industries reflect potential labor market competition and jobs of similar scope. Revenue and market capitalization were used because we believe these financial size measures have a significant influence on executive compensation levels. While the criteria for the fiscal 2022 peer group were the same as the criteria used in establishing the fiscal 2021 peer group, one company was removed due to acquisition (Carbon Black) and four companies were added (Appian, Cloudflare, Datadog, and Medallia) to the fiscal 2022 peer group. Our fiscal 2022 peer group was comprised of the following companies:

In December 2021, the peer group was revised for fiscal 2023 based on feedback from the compensation and talent committee and Compensia to better position our company closer to the median on the key financial size metrics of revenue and market capitalization. In determining the fiscal 2023 peer group, we removed 15 companies from the fiscal 2022 peer group that were no longer within the revenue and market capitalization criteria (with Elastic N.V., PagerDuty, and Qualys remaining from the fiscal 2022 peer group), and replaced them with 18 companies that were closer to our company in size. The peer group for fiscal 2023 consists of 21 companies, with Sumo Logic positioned at the 40^th percentile on revenue and 50^th percentile on market capitalization at the time of selection.

In selecting the companies for the fiscal 2023 peer group, we generally considered the following criteria:

The peer group for fiscal 2023 included the following companies:

 

As shown below, almost all of our chief executive officer’s total target direct compensation opportunity was delivered in the form of at-risk annual cash and long-term incentives that are aligned with our company performance. We consider the RSU portion of our long-term equity incentives to be at-risk because the value delivered to recipients can vary significantly based on our stock price performance following grant. Similarly, an average of almost 80% of total target direct compensation for our other NEOs was at-risk and in the form of annual cash incentives or long-term equity incentives.

 

We use base salary as fixed cash compensation to attract and retain our talented executives based on their services, performance, and criticality to the organization. The compensation and talent committee annually reviews and recommends the base salary amounts for each executive officer based on the position, performance, experience, and the competitive market data for each role.

Changes to base salaries for each of Messrs. Sayar and Chettiar and Mses. Carey and Haar were made in March 2021 in order to better align with the market and reflect their performance and criticality to the

organization. Mr. Chettiar and Ms. Haar each received a subsequent base salary increase to address shortfalls in annual compensation levels versus the market. At the time of hiring Mr. Grierson and Ms. Doherty, the compensation and talent committee considered data provided by Compensia, including data from our peer group, in setting their base salaries.

The base salaries of our NEOs for fiscal 2022 were as follows:

Our board of directors adopted our Executive Incentive Compensation Plan (“Bonus Plan”) in March 2020, effective for fiscal years commencing on or after the Bonus Plan’s adoption date. The aim of the Bonus Plan is to attract, motivate, and retain talented executives, and incent short-term operational performance that will lead to long-term shareholder value creation.

Each of our NEOs participated in our Bonus Plan for fiscal 2022 and were eligible to receive an annual cash incentive under the Bonus Plan. The compensation and talent committee establishes target annual bonus amounts for each NEO expressed as a percent of base salary. Changes to the target bonus amounts for each of Messrs. Sayar and Chettiar and Mses. Carey and Haar were made in March 2021 in order to better align with the market and reflect their performance and criticality to the organization. At the time of hiring Mr. Grierson and Ms. Doherty, the compensation and talent committee considered data provided by Compensia, including data from our peer group, in setting their target bonus amounts. The target bonus amounts for our NEOs for fiscal 2022 were as follows:

For fiscal 2022, the payouts under the Bonus Plan were based on company performance against pre-established quarterly revenue (40% weighting), ARR (40% weighting) and non-GAAP operating loss (20% weighting) goals.

 

We have not disclosed specific quarterly targets or actual financial results under the Bonus Plan because we believe doing so would cause competitive harm and severely inhibit our ability to operate within our highly competitive industry, but the compensation and talent committee believes achievement of target level of performance was challenging.

The following table reflects company achievement against the Bonus Plan goals and the payout as a percentage of target for each quarter of fiscal 2022. Although the compensation and talent committee retains discretion to adjust the payout of any bonus amounts, it did not use this discretion in fiscal 2022.

We generally measure, determine, and pay bonuses quarterly after the end of each fiscal quarter. The actual cash incentive amounts paid to each NEO for each quarter are reflected below.

We define ARR as the annualized recurring revenue run-rate from all customers that are under contract with us at the end of the period or with which we are negotiating a renewal contract. Given our historical experience of customer renewals, if we are in active discussions for a renewal, we continue to include customers with expired contracts in our ARR until the customer either renews its contract or negotiations terminate without renewal. For certain customers whose revenue may fluctuate from month to month based upon their specific contractual arrangements, we calculate ARR using the annualized monthly recurring revenue, or MRR, run-rate (MRR multiplied by 12). This enables us to calculate our anticipated recurring revenue for all customers based on our packaging and licensing models, which we believe provides a more accurate view of our anticipated recurring revenue.

Long-term equity incentive awards are generally provided each year to our NEOs to align the executives' long-term interests with those of stockholders and to establish retention incentives through multi-year vesting periods for time-based awards. The size of long-term awards provided to any NEO is determined after reviewing the applicable market data for each position, the recommendations of our chief executive officer, and the compensation and talent committee’s determination of such NEO’s performance and criticality to the organization.

Our fiscal 2022 annual long-term equity incentive awards were comprised of RSUs and performance-based units (“PSUs”). PSUs are intended to provide direct alignment between company long-term performance and executive pay, while RSUs provide significant executive retention. The compensation and talent committee did not establish a fixed weighting between RSUs and PSUs for fiscal 2022 grants, but instead determined each executive’s mix between the two award types based on an assessment of competitive market data and retention considerations. In additional to annual long-term incentive awards, the compensation and talent committee occasionally also grants other types of awards which are described below.

Based on the recommendation of the compensation and talent committee, the board of directors granted the following long-term equity incentive awards to the NEOs in fiscal 2022:

As a part of the annual compensation cycle, Messrs. Sayar and Chettiar and Mses. Carey and Haar received annual refresh RSUs in March 2021. These RSUs vest quarterly over a four-year period, subject to continued service. We believe these awards help motivate our executives to create sustained shareholder value and promote the stability and retention of a high-performing executive team over the longer term.

Messrs. Sayar and Chettiar and Mses. Carey and Haar received their annual refresh PSUs in March 2021. These awards were subject to both time- and performance-based vesting and could be earned based on achievement of company revenue and non-GAAP operating margin performance goals measured over fiscal 2022. However, these goals were not met, and all PSU awards were forfeited. By awarding PSUs, we aim to pay our executives for their performance and to align the interests of our stockholders with those of our executives through performance targets that correlate with key drivers of stockholder value.

Based on the recommendation of the compensation and talent committee, the board of directors awarded additional RSUs to certain executives who it determined were significantly below market in terms of cash compensation in order to better align total compensation with the market. These grants were made to Messrs. Sayar and Chettiar and Mses. Carey and Haar in March 2021, and vest in equal quarterly increments over a one-year period.

In light of the intense competitive pressures of 2021 and to ensure key executives were incentivized to remain with the company, the compensation and talent committee recommended that our board of directors grant additional one-time awards to provide retention, address shortfalls in annual compensation levels versus the market, and promote internal pay equity between our executives. In September 2021, Ms. Haar was awarded a retention award of 19,811 RSUs, which vests over a two-year period as to 1/8th of the RSUs on the first trading day on or after December 15, 2022, and the remaining RSUs on a quarterly basis thereafter, subject to continued service. Ms. Haar was also awarded a retention award of 94,458 RSUs in December 2021, which vests in equal quarterly increments over a four-year period, subject to continued service. Further in December 2021, Mr. Chettiar received two retention awards to better align his compensation with market conditions: (1) a retention award of 60,096 RSUs, which vests 100% on the first trading day on or after December 15, 2022, subject to continued service, and (2) a retention award of 240,384 RSUs, which vests quarterly over a four-year period, subject to continued service.

In connection with her appointment as our president, worldwide field operations, in November 2021, based on the recommendation of the compensation and talent committee, the board of directors granted to Ms. Doherty an RSU award with the number of RSUs calculated by dividing $10,560,000 (the value in Ms. Doherty’s offer letter) by the average closing price for the company’s stock during the month of August 2021. Further, in December 2021, based on the recommendation of the compensation and talent committee, the board of directors granted to Mr. Grierson an RSU award with the number of RSUs calculated by dividing $8,160,000 (the value in Mr. Grierson’s offer letter) by $17.00. These RSUs will vest as to 1/4th on December 15, 2022, and 1/16th of the RSUs will vest on a quarterly basis thereafter. In determining the size of these new hire awards, the compensation and talent committee used market data, including the peer group data provided by Compensia.

We maintain a tax-qualified 401(k) retirement plan for all U.S. employees, including our NEOs. Under our 401(k) plan, employees may elect to defer up to all eligible compensation, subject to applicable annual Code limits. We do not match any contributions made by our employees, including executives. We intend for our 401(k) plan to qualify under Section 401(a) and 501(a) of the Internal Revenue Code (the “Code”) so that contributions by employees to our 401(k) plan, and income earned on those contributions, are not taxable to employees until withdrawn from our 401(k) plan.

We usually do not provide perquisites or other personal benefits to our NEOs. We may provide perquisites or other personal benefits in the future in limited circumstances, such as when we believe it is necessary to assist an NEO in performing his or her duties and to make our NEOs more efficient and effective. Our compensation and talent committee will approve and review all future practices regarding perquisites or other personal benefits on a regular basis.

While our fiscal 2023 compensation program is expected to be similar to the fiscal 2022 program described above, we have made the following changes to the program for fiscal 2023, which we believe will strengthen the pay-for-performance philosophy of our program and further align our executives’ incentives with shareholder interests.

The initial terms and conditions of employment for our chief executive officer and other NEOs are set forth in written employment letters. All the employment letter agreements were negotiated with the oversight and approval of our board of directors or compensation and talent committee. Each of these employment letter arrangements does not have a specific term, provides for “at will” employment (meaning either we or the NEO may terminate the employment relationship at any time without cause) and generally set forth the NEO’s initial base salary, target annual incentive opportunity, if applicable, and eligibility to participate in our employee benefit plans.

The compensation and talent committee believes that maintaining a competitive level of post-employment compensation is appropriate as part of our overall compensation program to our NEOs and in line with its objective to attract, retain and motivate high-caliber executives. We have entered into change in control and severance agreements with each of our NEOs that provides for the severance and change in control benefits. These agreements provide standardized payments and benefits to the NEOs in the event of a termination of employment under specified circumstances, including following a change in control of the company. In the case of change in control, we use a double-trigger arrangement in which the severance benefits will be provided only if there is an involuntary termination of employment following a change in control of the company. Detailed information on the change in control and severance agreement can be found below under “Potential Payments on Termination or Change in Control.”

The compensation and talent committee has not yet adopted a policy with respect to whether we will make retroactive adjustments to any cash or equity-based incentive compensation paid to our NEOs or other employees where the payment was based on the achievement of financial results that were subsequently revised. Our compensation and talent committee intends to adopt a general compensation recovery policy after the SEC adopts final rules implementing the requirements of Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Under our insider trading policy, our officers, directors, and employees may not (i) trade in publicly-traded options, such as puts and calls, and other derivative securities with respect to our securities (other than stock options and other compensatory equity awards issued to such persons by Sumo Logic), including any hedging or similar transaction designed to decrease the risks associated with holding our common stock, (ii) pledge our securities as collateral for loans, or (iii) hold our securities in margin accounts.

Each individual has until the later of May 14, 2026, or five years from the date of their appointment or hire, to achieve the required ownership levels. For the purposes of the guidelines, shares directly held by the individual and outstanding time-vesting equity awards such as RSUs count towards the ownership requirement, but unearned PSUs and unexercised stock options do not. Our compensation and talent committee may waive, at its discretion, these guidelines for non-employee directors joining our board of directors from government, academia, or similar professions. Our compensation and talent committee may also temporarily suspend, at its discretion, these guidelines if compliance would create a severe hardship or prevent an executive officer or non-employee director from complying with a court order. We believe that these guidelines promote the further alignment of the interests of our executive officers and non-employee directors with the interests of our stockholders.

The compensation and talent committee takes the applicable tax and accounting requirements into consideration in designing and overseeing our executive compensation program.

As per Section 162(m) of the Code, compensation paid to our covered executive officers (including the chief executive officer and former highly compensated executive officers) will not be deductible to the extent it is in excess of $1 million per person. Though our compensation and talent committee considers the deductibility of awards when making compensation decisions, it also takes into account other factors and may include compensation awards that are not tax deductible to ensure its intention to be consistent with the predetermined executive compensation goals if the compensation and talent committee determines that doing so is in our best interests.

Sections 280G and 4999 of the Code provides that executives and directors who hold significant equity interests and other service providers may be subject to additional taxes if they receive payments or benefits in connection with a change in control of the company that exceeds certain prescribed limits, and that we or a successor may forfeit a deduction on the amounts subject to this additional tax. Section 409A specifies the rules on additional significant taxes on the individual where an executive officer, director, or other service provider receives deferred compensation that does not meet certain requirements of Section 409A. We do not provide, and do not have any obligation to provide, any NEO with a tax gross-up or other reimbursement for any tax liability he or she may owe resulting from Sections 280G, 4999 or 409A of the Code. If any of the payments or benefits provided for under the change in control and severance agreements or otherwise payable to a NEO would constitute “parachute payments” within the meaning of Section 280G of the Code and could be subject to the related excise tax, he or she would be entitled to receive either full payment of such payments and benefits or such lesser amount that would result in no portion of the payments and benefits being subject to the excise tax, whichever results in the greater amount of after-tax benefits to the NEO.

Our compensation and talent committee takes accounting considerations into account in deciding the compensation program for the purpose of incentivizing our executives. ASC Topic 718 requires us to measure the expense for all share-based payment awards made to all employees including NEOs and directors based on the grant date fair value of the awards.

ASC Topic 718 also provides that it is mandatory to recognize the compensation cost of our share-based payment awards in our income statement over the period that an employee, including our executive officers, is required to provide services to us in exchange for the vesting of the equity award.

The compensation and talent committee examines and considers potential risks when approving our compensation plans, policies, and practices for our executive officers. Because our employees' base salaries are set, we do not believe they incentivize unnecessary risks. While our annual cash incentives are geared towards achieving short-term company goals, we believe that they appropriately balance risk with the desire to focus on short-term goals that are important to our long-term success. Our long-term incentives, in the form of equity awards, are vital to further align our employees’ interests with those of our stockholders. Given that such time-based awards have multi-year vesting timelines and that ultimately their final value is connected to our stock price, we do not believe they encourage excessive or unnecessary risk-taking. Based on this analysis, the compensation and talent committee believes that the design of our compensation program encourages our executive officers to remain focused on both short-term and long-term strategic goals, and that any risks associated with our program are unlikely to have a substantially negative impact on us.