ADOBE INC. ADBE

39% shingled-prose overlap between the two filings.

2025: 136,997 chars · 2026: 134,224 chars

• Committee Report:78% overlap (982 → 967 chars)
• Pay Ratio (Item 402(u)):69% overlap (1,985 → 1,985 chars)
• Say-on-Pay proposal:45% overlap (4,290 → 4,461 chars)

• changedThis Compensation Discussion and Analysis provides information regarding our executive compensation programs during fiscal year 2025 2024for the following executive officers of Adobe:
• newShantanu NarayenDaniel DurnAnil ChakravarthyDavid WadhwaniLouise PentlandChair of the Board and CEOCFO and Executive Vice President, Finance, Technology, Security and OperationsPresident, Customer Experience Orchestration Business(1)President, Creativity and Productivity Business(1)Chief Legal Officer and Executive Vice President, Legal and Government Relations
• new(1)During fiscal year 2025 and until January 2026, Mr. Chakravarthy served as President, Digital Experience Business and Mr. Wadhwani served as President, Digital Media Business.
• newIn January 2026, Mr. Chakravarthy was named President, Customer Experience Orchestration Business and Mr. Wadhwani was named President, Creativity and Productivity Business.
• changedThis Compensation Discussion and Analysis describes the material elements of our executive compensation programs for our executive officers during fiscal year 2025. 2024.
• changedFinally, it analyzes how and why the Executive Compensation Committee of our Board (the “Committee”) made its compensation decisions for our executive officers, including our NEOs, in fiscal year 2025. 2024.
• changedFor a summary of our fiscal year 2025 2024financial performance and business highlights, see the section titled “Proxy Summary—Fiscal Year 2025 2024Financial Highlights.”
• changedOur executive compensation programs are designed by the Committee to directly tie the amounts realized under our incentive compensation programs by our executive officers to the achievement of our key strategic performance objectives, returns to our stockholders and the creation of sustainable long-term financial stockholdervalue.
• changedOur fiscal year 2025 2024compensation programs continued to reflect this philosophy, and the incentive compensation earned by our NEOs executiveofficersreflected our business achievements.
• newThe Committee believes that our NEOs’ fiscal year 2025 compensation opportunities are commensurate with our size and performance, the breadth of their roles and responsibilities and their strong leadership aligned with driving our strategy and stockholder value, and are competitively necessary in the environment in which we operate and compete for top executive talent.
• changedContinued Strong Emphasis on Pay for Performance forFiscalYear2024
• changedOur pay for performance philosophy is reflected in the pie charts below, which depict the composition of our CEO and the average of our other NEOs’ fiscal year 2025 2024target total direct compensation (“TDC”).
• changedOur CEO’s target TDC is approximately 70% performance-based and approximately 97% at-risk and all other NEOs’ (excluding Ms. Pentland) average target TDC is approximately 63% 60%performance-based and approximately 95% 94%at-risk.
• changedExecutive Compensation | 2026 2025Proxy Statement 31
• changedCEO and All Other NEOs’ Target Pay Mix for Fiscal Year 2025(1)(2)________________________(1)The amounts shown for all other NEOs represent their average target pay mix. 2024(1)
• newThe mechanism for calculating target equity award values is described in detail in the section titled “Equity Incentives—Equity Compensation Mix.” For the actual grant date fair value of equity awards, computed in accordance with stock-based compensation accounting principles, please see the section titled “Executive Compensation—Summary Compensation Table for Fiscal Years 2025, 2024 and 2023” as well as the related discussion about the calculation of such amounts set forth below under the sections titled “Equity Incentives—Target Values and Grants in Fiscal Year 2025” and “Accounting and Tax Considerations.”(2)The target pay mix for “All Other NEOs” excludes Ms. Pentland, who joined Adobe in May 2025 and received a new hire equity award of RSUs for fiscal year 2025.CEO CompensationOur CEO’s fiscal year 2025 compensation continues to emphasize pay for performance with:•Over 90% of target TDC continuing to be comprised of long-term equity awards; and•A substantial percentage (70%) of the long-term equity awards mix continuing to be performance-based awards, with the remainder (30%) continuing to be time-based RSUs vesting ratably over four years, to maintain the heavier performance-based weighting the Committee has implemented over time to further strengthen alignment between our CEO’s pay outcomes and the Company’s long-term performance.Equity and Cash Incentive Programs Tied to Rigorous TargetsConsistent with our pay for performance philosophy and informed by our ongoing stockholder engagements, we continue to establish challenging targets across our compensation programs.Long-Term Equity Incentives: As with our 2023 and 2024 Performance Share Programs (“PSPs”), our 2025 PSP continued to require both strong financial performance and relative Company performance in order for our NEOs to earn a 100% payout, with results determined based on two equally weighted metrics—relative total stockholder return and net new sales.
• changedBecause Adobe common stock underlies our performance share awards, the immediate value of these awards is subject to fluctuationsinourstock price fluctuations, price,strongly aligning the interests of our NEOs, including our CEO, with those of our stockholders.
• changedRelative Total Stockholder Return•In order to achieve 100% payout for the relative total stockholder return (“TSR”) component, the 2025 2024PSP requires achieving a TSR rank at the 55th percentile relative to TSRrankagainstcompanies that comprised the Nasdaq 100 Index as of January 1, 2025, 2024,excluding the second class of stock for any company with dual-classes of stock (the “Index Companies”) over a three-year performance period (the “Relative TSR Goal”).
• changed•The Committee uses a 90-day average price at the beginning and end of the 3-year period to calculate TSR and sets setthe target at the 55th percentile relative to the Index Companies for 100% payout to ensure that NEOs benefit only from sustained value creation for our stockholders that outperforms the Index Companies and do not benefit from temporary spikes in stock price.
• newNet New Sales•In order to achieve 100% payout under the net new sales component, the 2025 PSP sets rigorous standards, requiring achievement above the net new sales target set by the Committee at the beginning of the fiscal year (the “Net New Sales Goal”).
• newFor fiscal year 2025, the Net New Sales Goal was based on (1) ending annualized recurring revenue (“ARR”) growth in Digital Media and (2) subscription revenue growth in Digital Experience.•The Committee set the fiscal year 2025 Net New Sales Goal target required for 100% payout above the midpoint of fiscal year 2025 public guidance provided by the Company in December 2024 and above the fiscal year 2024 Net New Sales Goal target for 100% payout to motivate our NEOs to deliver even stronger financial performance and long-term value creation for our stockholders.
• changedAnnual Cash Incentive: Our 2025 Executive Annual Incentive Plan (“2025 Cash Incentive Plan”) planis similarly designed to align our NEOs’ cash incentives to strong Company financial performance, with cash incentives payable only if certain threshold financial performance goals are met.
• changedRevenue and Non-GAAP Diluted Earnings Per Share•The performance required targetfor 100% payout performancefor each of revenue and non-GAAP diluted earnings per share (“EPS”) goals for the 2025 Cash 2024ExecutiveAnnualIncentive Plan (“2024CashIncentivePlan”)was set above the midpoint of the fiscal year 2025 public guidance provided by the Company in December 2024 and above the 2024 2023Executive Annual Incentive Plan revenue and non-GAAP diluted EPS targets for 100% payout. performanceandactualresults.
• changed•To enhance plan rigor and alignment of furtheralignour NEOs' cash incentives with Company financial performance, forfiscalyear2025,the Committee increased the threshold financial performance required for payout from 90% in fiscal year 2024 to 95% in fiscal year 2025, and eliminated the individual performance component of the plan.
• changedThe elimination of individual goals accordinglyreduced the overall maximum annual cash incentive our NEOs are willbeeligible to earn from 200% to 155% of their target opportunity opportunity,and accordingly increased the importance of long-term performance equityto our NEOs’ pay outcomes. NEOsoverallcompensation.
• changedExecutive Compensation | 2026 2025Proxy Statement 33
• changedWe believe the payouts under our PSPs and annual cash incentive plan summarized below are a testament to the effective application of our pay for performance compensation philosophy and program design that require achievement of rigorous targets goalsthat create sustained, long-term value for our stockholders in order for our NEOs to receive a 100% payout.
• newANNUAL CASH INCENTIVE PLAN104%payout under our 2025 Cash Incentive Plan, following a 6% downward Strategic Performance Adjustment to the Financial Performance Result of 110%.LONG-TERM EQUITY INCENTIVES 2023 PSP Relative TSR Goal Payout PercentageFY 2025 Net New Sales Goal Payout Percentage45%Applies to 2023 to 2025 Relative TSR performance period99%Applies to fiscal year 2025 tranche under each of the 2023, 2024 and 2025 PSPs2023 PSP Overall Payout Percentage83%weighted-average payout of the three-year Relative TSR Goal achievement and the Net New Sales Goal achievement for each of fiscal years 2023, 2024 and 2025.
• changedOur Theseresults for revenue, non-GAAP diluted EPS and Net New Sales are consistent with our strong financial and operational performance during fiscal year 2025, 2024,which translated into above 100% payout targetachievementfor the financial performance result of the annual cash incentive plan and near 100% payout abovetargetachievementof the 2025 2024Net New Sales Goal.
• changedHowever, because our three-yearstock price performance for the three-year performance period ended December 31, 2025 2024relative to the Index Companies fell short of the our55th percentile outperformance target, the overall payout for the 2023 2022PSP was 83%. 79%.
• newThis result demonstrates that our executive compensation program is working as intended to align pay outcomes with performance and stockholder experience.
• newThe chart below illustrates the continued alignment of our CEO’s realized PSP pay outcomes relative to his target opportunities awarded for the last three fully completed PSP performance periods.
• newThe chart below compares our CEO’s target equity value for performance shares granted under each of the 2021, 2022 and 2023 PSPs with the realized value for performance shares earned under such PSP as of the vest date, based on the Company’s financial performance under the Net New Sales Goals and relative and absolute stockholder value delivered, as applicable.
• new__________________•Target value represents the Committee’s target award dollar value for performance shares granted to the CEO under each of the 2021, 2022 and 2023 PSPs.•Realized value represents the dollar value of the number of performance shares earned by the CEO following certification by the Committee of the Net New Sales Goals and Relative TSR Goal, as applicable, multiplied by Adobe’s closing stock price on the respective vest date for each of the 2021, 2022 and 2023 PSPs.•2021 PSP was based solely on a three-year Relative TSR Goal, and 100% payout required 50th percentile relative performance.
• new100% payout for the three-year Relative TSR Goal portion of the 2022 and 2023 PSPs required 55th percentile relative performance.Compensation Program Changes During Fiscal Year 2025The Committee reviews our executive compensation programs each year.
• newIn evaluating our executive compensation programs for fiscal year 2025, the Committee considered feedback from stockholders and the results of our 2024 and 2025 annual stockholder advisory votes on NEO compensation.
• newThe Committee made the following changes:•Increased the threshold financial performance required for payout from 90% to 95% for the cash incentive plan to further align our NEOs’ cash incentives with Company financial performance.•Eliminated the individual goals component from the cash incentive plan so payout calculations are based more on objective, formulaic assessments.
• newThe elimination of individual goals reduced the overall maximum annual cash incentive our NEOs are eligible to earn from 200% to 155% of their target opportunity and accordingly increased the importance of long-term performance to our NEOs’ pay outcomes.•Decreased fiscal year 2025 CEO security-related expenses compared to fiscal year 2024 due to reduced capital expenditures required to provide security services.
• changedExecutive Compensation | 2026 2025Proxy Statement 35
• new•Reassessed peer group composition and added three additional peers to the Company’s 2026 peer group to position Adobe closer to the median of its peer group on the basis of revenue and market capitalization.Compensation Philosophy and ObjectivesGuiding PrinciplesWe are focused on our mission to empower everyone to create.
• changedWe believe that the skills, experience and dedication of our executive officers are critical factors that contribute directly to our operating results, thereby enhancing financial stockholdervalue.
• newWe achieve our objectives through our compensation programs that are designed to: •provide competitive compensation opportunities that attract and retain top talent with the skills necessary for us to achieve our business objectives and motivate our executive officers to deliver the highest-level impact and results for Adobe;•deliver a substantial majority of our executive officers’ pay through performance-based incentives to align the interests of our executive officers with those of our stockholders in the overall success of Adobe; •encourage our executive officers to focus on our Company priorities;•reward and motivate Adobe’s executive officers to operate as one team to execute Adobe’s annual operating priorities and long-term financial performance; •avoid encouraging undue risk-taking by our executive officers; and •create direct alignment with our stockholders in the overall success of Adobe by providing equity ownership.Executive Compensation Policies and PracticesWe believe our executive compensation programs have been effective at driving the achievement of our target financial and strategic results, appropriately aligning executive pay and operational and financial performance and enabling us to attract and retain top executives within our industry, which is highly competitive for executive talent and talent at other levels.
• changedFiscal Year 2025 Compensation Program DesignOverviewOur Ourexecutive compensation program includes programsincludecash compensation, in the form of base salary and an annual cash incentive opportunity, and long-term equity incentive awards, in the form of our PSP and grants of RSUs.
• changedThe following table illustrates the objectives we believe are supported furtheredby each element of our compensation programs.
• changedObjectivesCompensation ElementDescriptionAttract/Retain Key PerformersReward Short-Term PerformanceReward Long-Term PerformanceBase SalaryBase salary provides market competitive compensation in recognition of role and responsibilities.üAnnual Cash IncentivesCash incentives are earned in full or in part only if (1) we achieve certain pre-established one-year Company performance targets and targets,(2) therecipientachievesindividualperformancelevelsorobjectivesand(3)the recipient remains employed with Adobe through the achievement certification date.üüLong-Term Equity IncentivesEquity incentives are awarded upon hire and then typically annually thereafter.
• changedThe Committee considered a number of factors in setting our NEOs’ fiscal year 2025 2024target TDC (base salary, target annual cash incentives and target long-term equity value), including: competitive pay practices reflected in the peer group data; each NEO’s contribution to Adobe; the scope, complexity and capabilities required of each NEO’s position; Company and individual performance; anticipated future contributions; our employee retention objectives and competition for talent; internal pay equity; pay trends; and historical pay levels.
• newFor our CEO, the Committee recognized Mr. Narayen’s leadership as our CEO over the past 18+ years, and for his continued leadership on driving Adobe’s growth in the AI era, delivering product innovations such as Acrobat Studio, Adobe Firefly, Adobe Firefly Foundry and Adobe GenStudio.
• newThe Committee also assessed the Company’s relative performance over the past few years and the dynamic and competitive environment in which the Company operates.
• newIn light of these considerations, the Committee believed the existing compensation program’s pay for performance design is functioning as intended, requiring rigorous financial, operational and relative stock price performance for the CEO to earn most of his compensation.
• newAccordingly, the Committee similarly structured Mr. Narayen’s 2025 compensation to motivate him to continue leading Adobe during a period of significant change for the technology industry.
• newAs a team, our NEOs are uniquely positioned to lead the Company because they combine deep industry expertise with a proven track record of innovation and strategic execution.
• newThey bring a wealth of experience in software, AI, marketing, operations and governance, enabling them to navigate a complex and competitive industry.
• newContinuing to retain and incentivize our NEOs is critical to execute our long-term strategy and annual operational and financial priorities to drive Adobe’s leadership in empowering our customers to be more creative, productive and successful.
• newHow We Align Pay and Performance
• changedIn HowWeAlignPayandPerformanceInsetting the mix among the different elements of executive compensation, we do not target specific allocations, but generally emphasize at-risk and performance-based opportunities compensationfor both cash (target incentives) and equity.
• changedOur NEOs’ target TDC is alsocomprised of less total target cash compensation (base salary and target cash incentives) than total target equity compensation.
• changedSuch allocation between cash and equity reflects our belief that a significant portion of our NEOs’ compensation should be based on Company performance andindividualperformance,as well as service requirements requirements,to increase alignment with our stockholders’interestsandmotivateperformancethatcreatessustainablelong-termstockholdervalue.
• changedExecutive Compensation | 2026 2025Proxy Statement 37
• newstockholders’ interests and motivate performance that creates sustainable long-term financial value.
• newFor example, for fiscal year 2025, our CEO’s target TDC was approximately 97% at-risk and approximately 70% performance-based.
• changedSince our actual performance can deviate from the predetermined target goals, our compensation structure creates both upside opportunities and downside risks and the amount of actual compensation actuallyrealized will likely differ from the target values.
• changedIf results do not exceed the rigorous targets set by the Committee, meetourexpectations,our NEOs will receive compensation thatisbelow 100% payouts targetlevelsand may be below market in comparison to our peer group.
• changedSimilarly, when superior results are achieved, our NEOs may receive compensation that is above 100% payout targetlevelsand above our peer group. market.
• changedBase SalaryBase salary is used to provide our executive officers with a competitive amount of fixed annual cash compensation.
• changedThe Committee sets base salaries for our NEOs after considering the scope, complexity and capabilities required of each NEO’s position, competitive market conditions, past performance and internal pay equity.Cash Incentives2025 Cash Incentive PlanWe provide our NEOs with the opportunity to earn an annual cash incentive. equity.
• changedOur 2025 2024Cash Incentive Plan was continuedtobedesigned to continue emphasizing emphasizestrong financial performance as a gating factor to the annual cash incentive that NEOs ultimately realize.
• changedThe Committee approved the 2025 2024Cash Incentive Plan to drive revenue growth, encourage accountability, drive execution of short-term priorities tied to long-term strategy and annual operating plan objectives and recognize and reward our executive officers upon the achievement of certain objectives.
• changedAsinpastyears,Awards under our 2025 2024Cash Incentive Plan were calculated based solely on (1)the corporate performance result (the “Corporate Performance Result”), which was comprised of the financial performance of the Company in fiscal year 2025 2024(the “Financial Performance Result”) with anda discretionary strategic performance adjustment (a “Strategic Performance Adjustment”) that could result in the Corporate Performance Result being adjusted up or down. down,and(2)anindividualperformanceresult.
• changedThe Committee, in its sole discretion, may make a Strategic Performance Adjustment based on its theCommittee’sassessment of the Company’s corporate priorities and objectives for the performance period, including, but not limited to, adjustments as a result of (i) reorganizing and restructuring charges; (ii) discontinued operations; (iii) asset write-downs; (iv) gains or losses on the disposition of an asset or business; (v) mergers, acquisitions or dispositions; dispositions(subjecttotheprovisionsabove);(vi) extraordinary, unusual and/or non-recurring items of gain or loss; and (vii) foreign currency fluctuations.For fiscal year 2025, the Committee updated our 2025 Cash Incentive Plan by increasing the threshold performance level from 90% to 95% of target (as compared to fiscal year 2024) for each of the two gating Financial Performance Result metrics required to receive any cash incentive amount, further ensuring pay for performance alignment. fluctuations.
• changedAccordingly, the maximum cash incentive that our NEOs are eligible to earn forfiscalyear2025was decreased from 200% in fiscal year 2024 to 155% in fiscal year 2025 of their target annual cash incentive opportunity.
• changedAdditionally, withthe removal of the individual performance component results in a more objective component,thepayout calculation willbebased primarily moreon objective,formulaic assessments of financial performance.
• changedThis change also responds to alignswithfeedback received from stockholders to enhance the transparency of our annual cash incentive payout calculation.
• changedThe dollar value of each NEO’s award for fiscal year 2025 2024was calculated according to the below formula:
• changedCorporatePerformance Result(1) (%)XIndividualPerformanceResult(3)(%)XIndividualTarget CashIncentive($)=Individual EAIP Award(3) Award(4)($)Financial Performance Result(2) (%)+Strategic Performance Adjustment (+/- up to 25 pct pts)Base pts)IndividualObjectives&People,OrgandCultureBaseSalaryXTarget Cash Incentive (%)95% (%)90%achievement threshold required for any payout
• new(3)Capped at 155% of target
• changedFor fiscal year 2025, 2024,two threshold goals determine the Financial Performance Result and serve as gating factors that must be achieved before our NEOs are wereeligible to receive any cash incentive amounts under the 2025 2024Cash Incentive Plan.
• newThe Company must achieve at least 95% of each of its annual (1) revenue target and (2) non-GAAP diluted EPS target, based on targets approved by the Committee at the beginning of fiscal year 2025.
• newPerformance Against Revenue TargetRevenue Performance(in billions)Performance Against Non-GAAP Diluted EPS TargetNon-GAAP Diluted EPS PerformanceFinancial Performance ResultBelow 95%<$22.25andBelow 95%<$19.33→ 0%100%$23.43and100%$20.35→ 95%100.5%$23.55and100.7%$20.50→ 100%104% and above$24.36and103.9% and above$21.15→ 130%
• changedFor fiscal year 2025, 2024,the Financial Performance Result was based on our revenue and non-GAAP diluted EPS performance against pre-determined targets approved by the Committee. InitialPublicGuidance.
• newThe Committee and our management team believe that our Financial Performance Result metrics are strong indicators of the forward-looking health of Adobe’s business.

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