8x8 (EGHT) DEF 14ADefinitive proxy

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

TO OUR STOCKHOLDERS:

Thank you for your continued support and investment in our company.

In fiscal 2023 we achieved record service and total revenue, improved our margins, and increased our cash flow. We also completed the integration of Fuze operations, extended the global coverage of our communications platform, and introduced platform-wide integration of generative AI from OpenAI. As we reflect on the past year, our progress delivering value to our customers, partners, and employees brings both pride for the hard work that has gone into making substantial changes, and enthusiasm for where we are headed. Although our stock price is not yet registering the strides we made in fiscal 2023, we believe our focused investments in innovation and commitment to increasing operating leverage and cash flow will be reflected in our valuation over time as investors become more familiar with the foundation we have established this year. We are well on the way to building an innovation engine capable of delivering durable long term growth and operating leverage. Nothing takes a higher priority than earning the trust of all our stakeholders. To that end we are leveraging our technology to enable an agile workplace, empower employees to deliver better customer experiences, and harness the power of artificial intelligence, all of which deliver value to our bottom line and to our shareholders.

In today's business landscape, organizations are recognizing the importance of customer retention alongside customer acquisition. The traditional view of the contact center as merely a cost center is shifting. After years of cost optimization, “customer-obsessed” organizations are allocating resources to improving their customers’ experiences as a means to drive higher satisfaction and loyalty, and ultimately revenue and profits. This shift presents a significant market opportunity for us.

Surveys of IT and contact center professionals reveal that the most challenging aspects to modernizing customer care are connecting user experiences across all channels – digital, human, and hybrid – and incorporating real-time data-derived insights into user facing apps. As a leader in both unified communications as a service (UCaaS) and contact center as a service (CCaaS), 8x8 is uniquely positioned to help our customers overcome these challenges.

As organizations chart their omnichannel, customer-centric experience strategy, they first need a scalable, high-availability communications infrastructure that spans all employees within an organization. We have honed our expertise in this area with tens of thousands of customers, millions of users, and an extensive portfolio of intellectual property.

They also need to extend contact center-like tools and data to all customer-facing employees. More than half of all customer interactions occur outside the traditional contact center. We are empowering these “crossover users” in areas such as billing, technical support, and sales with training, tools, and customer data that enable organizations to enhance customer satisfaction, increase employee productivity, and drive their revenue growth.

Finally, organizations must exploit the power of artificial intelligence and machine learning (AI/ML) for speedy, accurate responses to simple queries; intelligent routing of more complex issues; and effective, well-informed cost management.

We have dedicated our engineering resources to creating a unified, modern platform that allows our customers to successfully implement an AI-enhanced omnichannel customer experience strategy. With our unified UCaaS/CCaaS platform - which we brand as XCaaS – organizations can simplify administration, increase data security and governance, and most importantly tailor functionality based on users’ customer engagement profiles with ease and flexibility. Further, our microservices-based architecture enables deep integration of best-in-class, purpose-built AI solutions from our growing ecosystem of industry-leading technology partners.

The result for customers is a fully orchestrated customer experience with higher first contact resolution, improved customer and employee satisfaction, and increased return on investment through higher retention and increased sales. This is our mission, our vision, and our daily commitment because we firmly believe this is the future of customer engagement.

What follows is several financial highlights from the past year. Our service revenue experienced a substantial 18% increase, reaching $710 million. Overall, our total revenue increased by 17% to $744 million showcasing the resilience and strength of our business as the economy slowed. These results include revenue from Fuze customers, which we acquired in January 2022.

The acquisition of Fuze increased our engineering resources, expanded our enterprise customer base, and was accretive to our operating results in fiscal 2023. With the increased scale that resulted from the acquisition, combined with our continued focus on managing the cost of delivering our services, we improved our GAAP and non-GAAP gross margin by 6 percentage points. This resulted in a year-over-year increase in GAAP gross profit of 29%.

We made the decision in early 2023 to prioritize increased operating profits and cash flow by narrowing our focus to mid-market and enterprise customers who are most likely to realize value from our XCaaS solutions. This focus drove notable progress in optimizing our sales and marketing expenses during the year. The combined effect of increased gross profits and slower growth in operating expenses (compared to revenue growth) resulted in a significant 57% decline in reported GAAP operating loss, and an increase of nearly 500% in non-GAAP operating profit. Cash flow generated by operations increased 41% from fiscal 2022, even after absorbing restructuring, severance, and acquisition costs.

Our improved financial profile allowed us to successfully complete an exchange transaction that retired the majority of our 2024 Notes in August 2022. We subsequently repurchased an additional $33 million in aggregate principal value. We believe our cash and investments balance of $139 million at year-end, combined with anticipated cash flow from operations in fiscal 2024, will be more than sufficient to repay the remaining $63 million in 2024 Notes that will mature in February 2024, while maintaining our liquidity target of at least $100 million in cash and investments.

Looking ahead, we remain committed to delivering exceptional value to all our stakeholders. We will continue to innovate as our market evolves and strive to exceed expectations as we strengthen our position as a leader in the industry.

I am indebted to all the 8x8 employees who come to work every day intent on achieving our vision. They translate opportunity into action where it counts most, and I am inspired by their creativity, dedication and results. I also appreciate our 8x8 community of partners and customers whose continued trust and support transform our goals into reality. Now it’s time to make sure that being an 8x8 shareholder is as satisfying as being a team8, partner, and customer. Thank you to all of our investors - new, old, and potential - for your time today. We look forward to all the potential this partnership has for mutual success and hope it is clear that we are firmly on that path.

Samuel C. Wilson
Chief Executive Officer

RECORD DATE

Stockholders of record at the close of business on Friday, June 2, 2023 are entitled to notice of and to vote at the 2023 Annual Meeting or at any adjournments or postponements thereof.

A list of stockholders entitled to vote will be available for 10 days prior to the Annual Meeting at our headquarters, 675 Creekside Way, Campbell, California 95008. If you would like to view the stockholder list, please contact our Investor Relations department at (408) 495-2524 to schedule an appointment or for alternative arrangements to the extent office access is impracticable. In addition, a list of stockholders of record will be available during the Annual Meeting for inspection by stockholders of record for any legally valid purpose related to the Annual Meeting at www.virtualshareholdermeeting.com/8x82023.

By Order of the Board of Directors,
Jaswinder Pal Singh
Campbell, California
June 15, 2023

TABLE OF CONTENTS

This proxy statement contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Any statements that are not statements of historical fact may be deemed to be forward-looking statements. For example, words such as “may,” “will,” “should,” “estimates,” “predicts,” “potential,” “continue,” “strategy,” “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions are intended to identify forward-looking statements. These forward-looking statements include but are not limited to: changing industry trends, operational and economic impacts of the COVID-19 pandemic, new product innovations and integrations, market demand for our products, channel and e-commerce growth, sales and marketing activities, strategic partnerships, business strategies, improved customer acquisition and support costs, customer churn, future operating performance and efficiencies, financial outlook, revenue growth, and profitability, reducing unit costs and improving gross profit margin, driving sustainable growth and increasing profitability and cash flow, new debt and interest expense, hiring of employees, general and administrative expenses in future periods, and the impact of foreign currency exchange rate and interest rate fluctuations. You should not place undue reliance on such forward-looking statements. Actual results could differ materially from historical results and those projected in forward-looking statements depending on a variety of factors, including, but not limited to: the impact of economic downturns on us and our customers, including the impacts of the COVID-19 pandemic; the impact of cost increases and general inflationary pressures on our operating expenses, including for bandwidth and labor; the ongoing volatility and conflict in the political and economic environment, including the impact of Russia’s invasion of Ukraine and any macro-economic impact that may have; customer cancellations and rate of customer churn; customer acceptance and demand for our new and existing cloud communication and collaboration services and features, including voice, contact center, video, messaging, and communication application programming interfaces (“APIs”); competitive market pressures, and any changes in the competitive dynamics of the markets in which we compete; the quality and reliability of our services; our ability to scale our business; customer acquisition costs; our reliance on a network of channel partners to provide substantial new customer demand; timing and extent of improvements in operating results from increased spending in marketing, sales, and research and development; the amount and timing of costs associated with recruiting, training, and integrating new employees and retaining existing employees; our reliance on infrastructure of third-party network service providers; risk of failure in our physical infrastructure; risk of defects or bugs in our software; risk of cybersecurity breaches; our ability to maintain the compatibility of our software with third-party applications and mobile platforms; continued compliance with industry standards and regulatory and privacy requirements, globally; introduction and adoption of our cloud software solutions in markets outside of the United States; risks relating to the acquisition and integration of businesses we have acquired or may acquire in the future, including most recently, Fuze, Inc.; risks related to fluctuations in the value of the United States Dollar and other currencies that underlie our business transactions; risks related to our remaining convertible senior notes due 2024 and the related capped call transactions, including the timing of any future repayment; and potential future intellectual property infringement claims and other litigation that could adversely impact our business and operating results.

For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see “Risk Factors” in the Company’s report on Forms 10-K, as well as other reports that 8x8, Inc. files from time to time with the U.S. Securities and Exchange Commission (the “SEC”). All forward-looking statements are qualified in their entirety by this cautionary statement, and 8x8, Inc. undertakes no obligation to update publicly any forward-looking statement for any reason, except as required by law, even as new information becomes available or other events occur in the future.

The Gartner content described herein (the "Gartner Content") represent(s) research opinion or viewpoints published as part of a syndicated subscription service by Gartner, Inc. ("Gartner") and are not representations of fact. Gartner Content speaks as of its original publication date (and not as of the date of this proxy statement) and the opinions expressed in the Gartner Content are subject to change without notice.

Gartner does not endorse any vendor, product or service depicted in our research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

PROXY SUMMARY

You may vote using any one of the following methods. In all cases, you should have your 16-Digit Control Number from your proxy card available and follow the instructions. Voting will be accepted until 11:59 p.m. (EDT) on July 27, 2023:

VOTING MATTERS AND BOARD RECOMMENDATIONS

The table below includes a brief description of each matter to be voted upon at the Annual Meeting, along with the voting recommendation of our board of directors, or “Board.”

DIRECTOR NOMINEES

In Proposal One, our stockholders are asked to vote on the election of the seven individuals nominated by the Board, each of whom is currently serving as a director. The tables below set forth basic information concerning each nominee individually and highlight certain qualifications, areas of expertise and attributes of our nominees collectively.

BOARD OF DIRECTORS SNAPSHOT

Ensuring the Board is composed of directors who bring diverse perspectives, experience and backgrounds to effectively represent the long-term interests of stockholders is a key priority of our Board. In this regard, the Board believes that conducting regular, periodic assessments of its composition and size is an important aspect of an effective governance structure. The Board seeks a balance between retaining directors with deep knowledge of our Company and our industry, while adding directors who bring new perspectives. Since the beginning of fiscal 2019, we have added four new Board members while taking steps to increase the Board’s breadth and depth of experience and diversity. In fiscal 2021, we appointed Dr. Singh from Lead Independent Director to Chairman of the Board.

We are committed to the highest standards of corporate governance. Our Governance and Nominating Committee monitors new and changing trends and best practices in corporate governance, considers whether we should make changes in light of these trends, and makes recommendations to the Board. The table below sets forth some highlights of our corporate governance programs and policies.

FISCAL 2023 BUSINESS HIGHLIGHTS

Digital transformation continues to drive increased adoption of cloud-based technologies. The migration from on-premise to cloud-based solutions for telephony and contact center software creates a large and expanding market opportunity for 8x8. We address this opportunity with our XCaaS solution, combining enterprise-grade unified communications as a service (UCaaS) and CCaaS (contact center as a service) on a unified, cloud-native platform. We believe continued innovation on our platform and XCaaS solutions is crucial to generating durable growth and long-term value for our customers, employees and shareholders.

In fiscal 2023, we achieved record service and total revenue, completed the integration of Fuze operations, extended the global coverage of our communications platform, and introduced platform-wide integration of generative AI from Open AI.

Our commitment to improving margins and generating cash flow, while increasing our investment in innovation, led us to refine our XCaaS strategy in fiscal 2023. During the year, we restructured our business to target the market and customer segments where we believe we have the strongest competitive advantage. We also focused on improving efficiency in our operations, especially sales and marketing, and increasing customer retention. As a result, we reduced sales and marketing programs targeting small businesses, increased our investment in customer success initiatives, and centered our innovation investments on platform capabilities to enable AI-based contact center solutions and tailored user experiences. We also reduced our total headcount by approximately 14 percent in two separate actions in September and January.

We believe our discipline in focusing our investments and managing our costs sets the stage for durable growth and margin expansion in the future. Below are highlights of the year:

The graphs below illustrate our performance on key financial metrics:

We have designed our executive compensation program to:

As stated in our Corporate Governance Principles, our Board is the ultimate decision-making body of the Company, except with respect to matters reserved to the stockholders. The Board selects the Chief Executive Officer, who is charged with the conduct of the Company’s business. The Board acts as an advisor and counselor to senior management and ultimately monitors its performance. The fundamental objective of the Board is to build long-term sustainable growth in stockholder value for the Company.

In furtherance of this mission, we have adopted a comprehensive corporate governance framework designed to enable the Board, among other things, to:

The framework helps determine our policies and practices with respect to Board composition, Board independence, Board and committee evaluations, executive compensation, stockholder engagement, risk oversight and more.

While the Governance and Nominating Committee has not established specific minimum qualifications for directors, the committee believes that candidates and nominees must reflect a Board that is comprised of directors who:

As a matter of policy, the Board believes that a substantial majority of the directors should be independent within the meaning of the rules of the Nasdaq and the applicable independence requirements of the federal securities laws and regulations. The Board also believes that it is important to strike the right balance in its composition to ensure that there is an appropriate range and mix of expertise, diversity and knowledge.

Consistent with commitments we made to our stockholders in connection with our 2018 annual meeting, the Board has since added three female members and increased ethnic diversity.

The Board has not established term limits in the belief that compulsory retirement from the Board could cause the Board to lose the valuable contributions of directors who have developed unique perspectives and insight into the Company. As an alternative to term limits, the Governance and Nominating Committee reviews each director’s continuing contribution to the Board as part of the annual assessment process and whenever a director experiences a change in professional responsibilities. These regular reviews ensure that the collective skills and experience of our Board members continue to match the needs of the Company and best serve the interests of our diverse community of stakeholders. Every Board member is expected to ensure that he or she devotes the time necessary to discharge his or her duties as a director effectively and that other existing and planned future commitments do not materially interfere with his or her service.

The Governance and Nominating Committee reviews the composition of the Board at least annually with the Board as a whole and, if necessary, recommends measures to be taken so that the Board (a) reflects the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Board as a whole to continue to provide effective oversight and otherwise fulfill its fiduciary and other duties, and (b) contains at least the minimum number of independent directors and diversity requirements established by the Nasdaq and any other applicable law, rule or regulation.

In selecting individuals for nomination, the Governance and Nominating Committee seeks the input of the Chairman of the Board and other Board members and may use a third-party search firm to assist in identifying and contacting candidates who meet the expertise, personal integrity, and diversity criteria established by the Committee. The Governance and Nominating Committee will also consider individuals recommended for Board membership by our stockholders, in accordance with our bylaws and applicable law.

Prospective candidates are interviewed by our Chairman of the Board, our Chief Executive Officer, and at least one member of the Governance and Nominating Committee. During the selection process, the full Board is kept informed of progress. The Governance and Nominating Committee will consider the suitability of each candidate, including the current members of the Board, in light of the current size and composition of the Board. In evaluating the qualifications of the candidates, the Governance and Nominating Committee may consider many factors, as discussed above. The Governance and Nominating Committee does not intend to alter the manner in which it evaluates candidates, based on whether the candidate was recommended by a stockholder or not.

The Governance and Nominating Committee meets to consider and recommend final candidate(s) for approval by the Board. Once a candidate is selected for appointment to the Board, or to stand for election or re-election, as applicable, the Chairman extends the invitation to join the Board, or to stand for election or re-election, on the Board’s behalf.

Upon completion of its review and evaluation of the candidates in May 2023, our Governance and Nominating Committee recommended the candidates named in this Proxy Statement, which the full Board approved.

Stockholder Nominations and Recommendations

The Governance and Nominating Committee will consider any recommendations and nominations for candidates to the Board from stockholders, as required by its charter. When submitting candidates for nomination to be elected at an annual or special meeting of stockholders, stockholders must follow the notice procedures and provide the information required in our by-laws. The following is a partial summary of those procedures and requirements.

Stockholder recommendations for candidates to the Board must be sent in writing to our Secretary at the address of our principal executive offices, currently 675 Creekside Way, Campbell, CA 95008. To be timely, a stockholder’s notice proposing the nomination

of a director at an annual meeting must be delivered to or mailed and received at our principal executive offices not less than 90 calendar days nor more than 120 calendar days in advance of the first anniversary of the previous year’s annual meeting of stockholders. If no annual meeting was held in the previous year or the date of the annual meeting is more than 30 calendar days earlier than the date contemplated at the time of the previous year’s proxy statement, notice must be received not later than the close of business on the 10th day following the day on which the date of the annual meeting is publicly announced. A timely notice for the nomination of a director by a stockholder at a special meeting of stockholders must be delivered to or mailed and received at our principal executive offices not later than the close of business on the later of (a) the 90th day prior to the special meeting, and (b) the 10th day following the day on which public disclosure of the date of the special meeting is first made.

The stockholder’s notice must include certain information about the stockholder (and all persons participating with the stockholder in any proxy solicitation for the proposal) and certain information about the candidate, as set forth in our by-laws, including, but not limited to, the candidate’s name, age, business address and residence address, the candidate’s principal occupation or employment for the past 5 years, the stockholder’s name and address, the class and number of shares of our stock and other securities, including derivatives, beneficially owned by the proposing stockholder and by such candidate, any short interest in any of our securities held by the proposing stockholder, all voting rights with respect to our stock beneficially owned by the stockholder and others joining in the proposal, and a description of all arrangements or understandings between the stockholder making such recommendation and each candidate and any other person or persons (naming such person or persons) pursuant to which the recommendations are to be made by the stockholder, as well as any other information relating to such recommended candidate that is required to be disclosed in solicitations of proxies for elections of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act.

In addition, if requested, the proposed nominee must furnish additional information to determine whether he or she is eligible to serve as an independent director or that could be material to a reasonable stockholder’s understanding of the independence, or lack thereof, of the proposed nominee, as set forth in our by-laws.

We encourage stockholders to refer to our by-laws for complete information regarding the requirements for submitting stockholder proposals and nominating director candidates. You may contact us at 8x8, Inc., Attn: Secretary, 675 Creekside Way, Campbell, CA 95008, for a copy of the relevant by-law provisions on this topic. Our by-laws also can be found where our filed reports are located on the SEC’s website at http://www.sec.gov.

Dr. Singh, formerly our Lead Independent Director, was appointed to the Chairman role in December 2020, replacing Bryan Martin, who did not stand for reelection. With Dr. Singh’s appointment, it was no longer necessary to have a Lead Independent Director. While our Corporate Governance principles do not require that the roles of Chairman and Chief Executive Officer be held by different individuals, the Board believes that the separation of the offices of the Chairman and Chief Executive Officer is appropriate at this time because it allows our Chief Executive Officer to focus primarily on our business strategy, operations and corporate vision. In accordance with governance best practices, if, in the future, the Chairman role is held by a non-independent Director, then our Corporate Governance Principles require the appointment of a Lead Independent Director from among the independent members of the Board. These principles reflect our belief that it is important for the Board to retain flexibility to determine whether the two roles should be separate or combined, and whether the Chairman should be independent or not, based upon the Board’s assessment of the Company’s needs and leadership at a given point in time.

DIRECTOR INDEPENDENCE

For a director to be considered independent under the Nasdaq rules, our Board must affirmatively determine that the director:

Board has adopted a definition of independence which conforms to the above independence requirements of the Nasdaq and further requires a director not to have any relationship (material or otherwise, and including social relationships) that would reasonably be expected to impair his or her exercise of independent judgment in carrying out the responsibilities of a director.

We believe it is important that, in making a determination of independence, our Board broadly consider all relevant facts and circumstances. In particular, when assessing the materiality of a director’s relationship with us (whether commercial, consulting, charitable, familial or otherwise), our Board considers the issue not merely from the standpoint of the director, but also from that of persons or organizations with which the director has an affiliation.

In addition, in affirmatively determining the independence of any director who will serve on our Compensation Committee, our Board must consider all factors specifically relevant to determining whether the individual has a relationship to us which is material to that director’s ability to be independent from management in connection with the duties of a Compensation Committee member.

These factors include:

In this context, the Board assesses the sources of a director’s compensation, considering whether the director receives compensation from any person or entity that would impair their ability to make independent judgments about the Company’s executive compensation. Additionally, when evaluating an affiliate relationship a director has with the Company, a subsidiary of the Company, or an affiliate of a subsidiary of the Company for purposes of Compensation Committee service, the Board determines whether the affiliate relationship places the director under the direct or indirect control of 8x8 or our senior management or creates a direct relationship between the director and members of senior management that would impair the director’s ability to make independent judgments about the Company’s executive compensation.

Our Board has determined that six of its seven current nominees for re-election, who are all current members, are “independent directors” within the meaning of Rule 5605(a)(2) of the Nasdaq rules and under our own definition of independence:

In making these determinations, the Board affirmatively determined that there are no business relationships that are material or that would interfere with the exercise of independent judgment by any of the independent directors in their service on the Board or its committees.

In making this determination with respect to Ms. Gleeson, the Board considered, among other factors, that Zoominfo, Inc. (“Zoominfo”), of which Ms. Gleeson is a current member of its Board of Directors, is a vendor to the Company (in that we made payments of approximately $538,603 to Zoominfo during fiscal 2023). The Board considered the materiality of this arrangement from the perspective of both the Company and Zoominfo, and took into account the fact that Zoominfo was a vendor of the Company several years before Ms. Gleeson joined the Board in 2021 and before she joined the Board of Zoominfo in 2022, in making its determination regarding Ms. Gleeson’s independence.

Each of the Board’s Audit Committee, Compensation Committee and Governance and Nominating Committee is composed solely of independent directors in accordance with the Nasdaq listing rules.

The Board held a total of 13 meetings during fiscal 2023. None of the members of our Board standing for reelection attended less than 75% of the meetings of the Board during fiscal 2023.

Pursuant to our Corporate Governance Principles, members of the Board are encouraged, but are not required, to attend each annual meeting of stockholders. One of our directors attended last year’s annual meeting of stockholders held in July 2022.

COMMITTEES

The Board has four standing committees: an Audit Committee, a Compensation Committee, a Governance and Nominating Committee and a Technology & Cybersecurity Committee.

The Board has adopted charters for each of these committees that are available on the investor relations section of our website under “Corporate Governance”, which can be found at http://investors.8x8.com. Each committee reviews its charter on an annual basis and makes recommendations to the Board for any changes based on its review. The composition of each standing committee is indicated in the table below.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Board currently consists of Mr. Salzman, Mr. Ford, Dr. Singh and Ms. Gleeson. None of these individuals is currently an officer or employee of ours or was an officer or employee of ours at any time during fiscal 2023. None of our executive officers or directors served as a member of the board or compensation committee of any entity that had one or more executive officers serving as a member of the Board or our Compensation Committee at any time during fiscal 2023.

CODE OF BUSINESS CONDUCT AND ETHICS

We are committed to maintaining the highest standards of business conduct and ethics. Our Code of Ethics reflects the values and the business practices and principles of behavior that support this commitment. Our Board most recently updated our Code of Ethics in November 2022. The Code of Ethics is available on the investor relations section of our website under “Corporate Governance”, which can be found at https://8x8.gcs-web.com/corporate-governance/governance-overview. We will post any amendment to, or a waiver from, a provision of the Code of Ethics that are required to be disclosed by the rules of the SEC or the Nasdaq on our website at https://8x8.gcs-web.com/corporate-governance/governance-overview.

SHAREHOLDER ENGAGEMENT

We believe that effective corporate governance includes regular, constructive conversations with our stockholders on a broad range of governance and business topics, including our business strategy and execution, our executive compensation philosophy and approach, governance topics, and our culture and human capital management.

In fiscal 2023 (ended March 31, 2023), we participated in more than 200 in-person and virtual meetings with institutional stockholders representing approximately 40% of our total shares outstanding at year end. We met regularly with five of our top 10 stockholders (100% of non-index, non-broker holders in the top 10), who collectively represented approximately 31% of shares outstanding. Several of our large holders, including Sylebra Capital Management, Archon Capital Management, and Needham Asset Management, also met with members of our Board of Directors. The primary topics in these meetings were corporate performance (including revenue growth, profitability and cash flow), our capital structure (including the exchange transaction that resulted in retirement of the majority of our Convertible Senior Notes due in February 2024 and the issuance of new Convertible Senior Notes due in 2028 and a Term Loan due in 2027), executive compensation and retention, and the CEO and CFO transitions.

In Fiscal 2023, reflecting investor feedback and our own belief that increasing non-GAAP operating profit and cash flow was becoming a more significant driver of value in the near term than revenue growth, we prioritized operating profitability, cash flow generation and investment in innovation over incremental spending on sales and marketing programs. To reflect this shift, we added non-GAAP operating profit to the performance metrics to our first half cash employee bonus program. Targeted payouts were based on achievement of non-GAAP operating profit targets, service revenue and net new monthly recurring revenue (nnMRR) objectives.

In the second fiscal quarter, to reflect investors’ increased focus on profitability across our industry peer group and demonstrate our commitment to increasing non-GAAP operating profit, we adjusted the percentage weightings of the performance metrics to include a 10% weighting for achievement of the non-GAAP operating profit target for NEOs excluding our CEO. For the second half of the fiscal year, the weighting of non-GAAP operating profit target was increased to 60%, and achievement of service revenue and nnMRR targets were weighted at 20% each.

However, as stock prices for publicly traded companies in our industry declined in calendar 2022 and early 2023, several large investors conveyed their concern that the reduced compensation value of previously issued (but unvested) equity grants would impact employee retention. Many holders also voiced concern that new share issuance would accelerate and dilute the value of existing holdings as more shares were granted to offset the decline in price per share.

In response to these concerns, which we shared, we decided to fundamentally change our approach to equity compensation for non-executive employees. Beginning in fiscal 2024, the majority of our employees will be compensated entirely in cash and most new hires below the senior director level will receive a cash signing bonus instead of equity. Employees retain the opportunity to benefit from share price appreciation through our Employee Stock Purchase Plan. We believe this change will allow us to attract and retain talent across the organization, reduce new share issuance from employee equity programs over time, and maintain alignment of the long term objectives of management and investors.

technology, innovation, cybersecurity and data privacy. We also implemented a formal policy on the use of artificial intelligence by our employees and in our products.

Maintaining an active dialogue with our stockholders on these topics is consistent with our corporate values of transparency and accountability, and we intend to further expand our stockholder engagement efforts on ESG, as well as our financial performance, new product initiatives, and overall corporate strategy, in fiscal 2024.

CORPORATE GOVERNANCE PRINCIPLES

Our Board has adopted Corporate Governance Principles which address various matters relating to Board and Committee structure, composition, meetings and responsibilities. The Corporate Governance Principles are posted on our website at http://investors.8x8.com.

BOARD’S ROLE IN THE OVERSIGHT OF RISK

The full Board is involved in the oversight of our risk management program. The Board as a whole is consulted on any matters which might result in material financial changes, investments, or our strategic direction of the Company. The Board oversees these risks through its interaction with senior management, which occurs at formal Board meetings and committee meetings and through other periodic written and oral communications.

Additionally, the Board has delegated some of its risk oversight activities to its committees. For example, the Compensation Committee considers the risks associated with compensation for our named executive officers and directors, including whether any of our compensation policies has the potential to encourage excessive risk-taking. The Audit Committee oversees compliance with our Code of Ethics, our financial reporting process, and our systems of internal controls, and reviews with management our major risk exposures and the steps taken to control such exposures. In fiscal 2024, we established the Technology & Cybersecurity Committee to enhance the Board’s risk oversight by reviewing risk policies related to cybersecurity, data privacy, technology, information systems, and security procedures.

COMPENSATION RISK ASSESSMENT

The Compensation Committee has reviewed our compensation programs to ensure that our incentive and other motivational elements of compensation are aligned with long-term value creation, taking into consideration prudent risk management. We do not believe any of our compensation policies and practices create any risks that are reasonably likely to have a material adverse effect on us. In making this determination, the Compensation Committee considered the mix of fixed and variable compensation, our use of equity in our long-term incentive compensation arrangements, the time horizon of performance measurement in incentive opportunities, and the ability of the Compensation Committee and management to rely on judgment in determining compensation and assessing performance outcome.

COMMUNICATIONS WITH THE BOARD

The Board has implemented a process by which stockholders and other interested parties, including, without limitation, customers, vendors, and business partners, may send written communications directly to the attention of the Board, our non-management directors (as a group), our Chairman, or any other individual Board member. The process is explained on our website at http://investors.8x8.com in the Governance section under the heading “Contact the Board.”

SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY

We believe good corporate citizenship and sustainable business practices go hand-in-hand with our mission of enabling better customer and employee experiences through a unified communications platform and AI-enabled technology. As a leader and innovator in cloud-native UCaaS and CCaaS, we have embraced sustainable business practices from our inception and strive to have a positive impact on the environment and in our communities. We have embedded good corporate governance, diversity, equity and inclusion (DEI), and environmental awareness in the corporate values that define our culture and guide decision making within the organization.

In 2023, we took steps to create a structured corporate sustainability program and increase awareness internally and externally for our progress on ESG initiatives through enhanced disclosures. We formalized ESG oversight at the Board level under the Nominating and Governance Committee and appointed a Global ESG Coordinator to track our regional ESG initiatives. Board member Elizabeth Theophille helped drive numerous environmental and DEI initiatives while at Novartis and has agreed to serve as an expert advisor as we build out our program. We also engaged outside consultants to help us assess materiality and assist us in defining a multi-year roadmap.

To support enhanced disclosure on ESG issues, we evaluated and began implementation of software to collect, track, report, and audit ESG related metrics, including community engagement, DEI initiatives, and climate-related metrics. The software also allows us to align our disclosures to the most relevant global frameworks, including those from the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the EU Corporate Sustainability Reporting Directive (CSRD). A partial list of other actions during the past year includes:

We view corporate sustainability as a journey rather than a destination. Next steps, which are already underway, include the formation of a management-level ESG Committee, formalization of Company-wide ESG plans and policies, and increased visibility and disclosure through our website and publication of the Company’s first Corporate Responsibility Fact Sheet.

We recently launched our employee team identity, Team8s. The new internal Team8s website serves as a central information hub for employee related news, co-worker recognition, personal development opportunities and community involvement.

As important as these formal channels of communication are, we place equal value on the ad hoc communication and collaboration enabled by our 8x8 Work app. Company-wide discussion rooms encourage all employees to engage with co-workers and leadership on a wide range of topics, including DEI, sustainability, accessibility, work-life balance, and more.

We are also revamping our annual Employee Engagement Survey, dividing it into quarterly “chunks” addressing timely and more specific topics. The first survey under the new format is scheduled for June 2024.

We recognize that increasing diversity requires a proactive approach that eliminates unconscious biases in recruiting and hiring practices, emphasizes career development and training for women and under-represented groups, and supports early (and ongoing) STEM education at the local level. To support these goals in the community, we provide financial support to organizations like Girls Who Code and donate equipment and in-kind services to increase digital literacy. We have also revamped our internal recruiting processes to attract a more diverse candidate pool. In early fiscal 2024, we established a DEI Steering Committee to provide strategic guidance to our DEI Council on a broad range of topics, including resource allocation, influence and accountability, and communications.

Two major initiatives have been rolled out this year to support the growth of leaders and managers. A manager academy has been developed and will be rolled out beginning in Q2. The objective is to train managers on implementing the Company’s manager expectations, ensuring each employee has a productive relationship with their supervisor. For leadership development, all leaders will be included in behavioral assessments, coupled with a coach debrief. The objective is to enable leadership self-awareness and encourage personal growth.

Where possible, we have instituted similar programs in leased facilities around the world.

We also encourage employees to make a difference in their communities through volunteer activities. We offer employees paid time off to volunteer, and organize 8x8 sponsored events throughout the world. Social Value Committees in the U.K. and Romania

oversee efforts in those countries, and our proposals in the U.K. include a social value component. Activities have ranged from digital literacy training for seniors to the donation of Raspberry Pi single board computers to teach computer skills in schools.

The 8x8 service delivery platform conforms to stringent specifications for securing financial information, customer privacy, and computer networks. We are compliant with various frameworks, including Consumer Proprietary Network Information (CPNI), Secure Coding practices, including the Open Web Application Security Project (OWASP) and Common Weakness Enumeration (CWE) List, Fraud Detection and Secure Endpoint Provisioning. Our compliance is independently audited annually.

Our third-party verified security and compliance certifications include:

Internally, we have business continuity procedures and “run books” related to a variety of potential disruptions, including earthquakes, cyber attacks, and climate-related risk such as wildfires, flooding, and extreme temperatures. We conduct tests of the efficacy of our responses multiple times per year.

We use a combination of cash and equity-based compensation to attract and retain qualified candidates to serve on the Board. In setting director compensation, we consider the amount of time that our directors expend in fulfilling their duties, the skill-level required of members of the Board and the practices of our peers, among other factors. Compensation of non-employee directors is reviewed at least once every two years by our Compensation Committee, which then makes its recommendation to the full Board, in accordance with our Corporate Governance Principles.

The key terms of our director compensation program for fiscal 2023 are summarized below. The program was first adopted in July 2015. The Compensation Committee has reviewed the program every two years since then.

There were no changes to our compensation program for non-employee directors in fiscal 2023. In connection with each of its reviews, the Compensation Committee engaged Compensia, Inc. (“Compensia”) to provide advice on the non-executive director compensation program. Compensia delivered a report to the Compensation Committee which included a benchmark analysis of the program. The Compensation Committee considered, among other factors, the total cost of our non-employee director compensation relative to that of a peer group.

In fiscal 2024, in connection with the establishment of the new Technology & Cybersecurity Committee, the Board, upon the recommendation of the Compensation Committee and the advice of Compensia, approved the establishment of fees for the members and Chair of the new committee in line with the fees paid for the Governance and Nominating Committee.

Directors who are also employees of 8x8 do not receive any additional compensation for serving as members of the Board.

In the event a director serves on our Board for less than a full term, or serves in a particular capacity for which he or she would receive an additional fee for less than a full term, the fees payable to that director are prorated accordingly. A director may elect to defer payment of all or a portion of the annual stipend and meeting fees payable to him or her in order to postpone taxation on such amounts. In addition to the above payments, we also reimburse our non-employee directors for certain expenses in connection with attendance at Board meetings.

In fiscal 2024, non-employee directors will each be granted an award of RSUs valued at $175,000. The number of RSUs will be determined by dividing $175,000 by the greater of $5 or the trailing 20-trading-day average of our closing stock price prior to the grant date. The Board elected this formula to align its own compensation with the equity grants being made to executives in fiscal year 2024.

FISCAL 2023 DIRECTOR COMPENSATION TABLE

The table below sets forth summary information concerning the compensation paid to each of our non-employee directors for their services as directors during fiscal 2023:

The Board has adopted a policy requiring all non-employee directors to hold a number of shares of common stock with a value equal to $200,000, measured annually at the end of each fiscal year, beginning with the fiscal year end following the fifth anniversary of the director’s election to the Board. The shares counted towards satisfaction of the ownership requirement include shares held by the non-employee director and his or her immediate family members residing in the same household, and shares held in trust for the benefit of the non-employee director and his or her immediate family members residing in the same household.

Shares subject to vested RSUs that have not settled by the measurement date are counted for the purpose of this ownership requirement, but shares subject to unvested RSUs are excluded. For purposes of this requirement each share of common stock is valued based on the closing price of our common stock on the Nasdaq, as of the last trading day of the fiscal year. A non-employee director who has not met the applicable stock ownership guideline as of the specified measurement date will be required to retain an amount equal to 100% of the shares awarded to such director as compensation for service on the Board until the requirement has been met.

On March 31, 2023, two of our non-employee directors were subject to the minimum stock ownership requirement: Mr. Salzman and Dr. Singh. On March 31, 2023 (the last trading day of fiscal 2023), our stock price was $4.17, and, therefore, each non-employee director subject to the minimum stock ownership requirement was required to hold at least 47,962 shares of our common stock.

Based solely on our review of written representations from each non-employee director subject to the minimum stock ownership requirement, we believe that each such director complied with the minimum stock ownership requirement as of March 31, 2023.

PROPOSAL ONE — ELECTION OF DIRECTORS

NOMINEES

Our Board currently consists of seven directors, of whom seven have agreed to be named as nominees and stand for re-election at the 2023 Annual Meeting and serve as directors if elected. We believe that our director nominees, individually and together as a whole, possess the requisite skills, experience and qualifications necessary to carry out their duties and to serve the best interests of 8x8 and its stockholders. Set forth below is a brief biography of each nominee and a description of certain key attributes that the Board considered in recommending such nominee for election. All information is presented as of the date of this Proxy Statement.

Each of the directors elected at the 2023 Annual Meeting will hold office until the 2024 Annual Meeting of Stockholders and until his or her successor has been duly elected and qualified.

TRANSACTIONS WITH RELATED PERSONS AND CERTAIN CONTROL PERSONS

One or more of our Board members serve as directors or executive officers of other organizations, including organizations with which we have commercial relationships. We do not believe there were any transactions, or series of similar transactions, to which we were or are to be a party in which the amount involved exceeded $120,000, and in which any of our director, officer, beneficial owner of more than 5% of our common stock, or any of his, her, or its affiliates, or any member of the immediate family of any of the foregoing, had or will have a direct or indirect material interest during fiscal 2023, other than compensation described in the sections titled “Compensation of Non-Employee Directors” above and “Executive Compensation” below.

The Audit Committee is responsible for reviewing and approving all business transactions between us and any of the persons described above, whom we refer to as a “related person.” It is our policy to require that all transactions between us and a related person also be approved by our Board, including a majority of independent directors who are disinterested in the transactions to be approved. Our Corporate Governance Principles further require that the Board determine or delegate to the Audit Committee to determine, on a case by case basis, whether a conflict of interest exists. Each director will advise the Board of any situation that could potentially be a conflict of interest and will not vote on an issue in which he or she has an interest.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our officers and directors and persons who beneficially own more than ten percent of our common stock (collectively, the “Reporting Persons”) to file reports of beneficial ownership and changes in beneficial ownership with the SEC. The Reporting Persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of such reports furnished to us during the fiscal year ended March 31, 2023 or written representations provided by each of the Reporting Persons, we believe that none of the Reporting Persons failed to file timely reports under Section 16(a), except for one late report on Form 4 for each of Samuel Wilson, Hunter Middleton, Matthew Zinn and Stephanie Garcia.

REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS

The Audit Committee oversees our financial reporting process on behalf of the Board. Management is responsible for our internal controls, financial reporting process, and compliance with laws, regulations, and ethical business standards. Our independent registered public accounting firm is responsible for performing an integrated audit of our consolidated financial statements and of our internal control over financial reporting in accordance with standards of the public company accounting oversight board (United States) (the “PCAOB”), and to issue opinions thereon. The Audit Committee’s responsibility is to monitor and oversee these processes. In this capacity, the Audit Committee provides advice, counsel, and direction to management and the auditors on the basis of the information it receives, discussions with management and the auditors, and the experience of the Audit Committee’s members in business, financial, and accounting matters.

The Audit Committee reviewed and discussed our fiscal 2023 audited consolidated financial statements with our management and Moss Adams LLP, our independent registered public accounting firm for fiscal 2023. The Audit Committee reviewed and discussed with management and the independent auditor management’s assessment of the effectiveness of the Company’s internal control over financial reporting and the independent auditor’s opinion about the effectiveness of the Company’s internal control over financial reporting. The Audit Committee has discussed with Moss Adams LLP matters required to be discussed by Public Company Accounting Oversight Board Auditing Standard No. 16, “Communications with Audit Committees” and by the SEC, as currently in effect. The Audit Committee received written disclosures and a letter from the independent auditors pursuant to the applicable requirements of the PCAOB regarding the independent auditor’s communications with the Audit Committee concerning independence, and the Audit Committee discussed with the auditors their independence.

Based upon the Audit Committee’s discussions with management and the auditors and the Audit Committee’s review of the representations of management and the report of the auditors to the Audit Committee, the Audit Committee recommended to the Board, and the Board approved, the inclusion of our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended March 31, 2023.

PROPOSAL TWO — RATIFICATION OF INDEPENDENT PUBLIC ACCOUNTANTS

The Audit Committee of the Board is directly responsible for the appointment of our independent registered public accounting firm. The Audit Committee has appointed Moss Adams LLP, Independent Registered Accounting Firm, to audit our financial statements for the fiscal year ending March 31, 2024. The Board proposes that the stockholders ratify this appointment. The Audit Committee understands the need for Moss Adams LLP to maintain objectivity and independence in its audits of our financial statements.

The Audit Committee previously retained Moss Adams LLP to audit our consolidated financial statements for fiscal 2023 and also to provide other auditing and non-auditing services during fiscal 2023. The Audit Committee reviewed all non-audit services provided by Moss Adams LLP and concluded that the provision of such services was compatible with maintaining Moss Adams LLP’s independence in the conduct of its auditing functions.

To help ensure the independence of the independent registered public accounting firm, the Audit Committee has adopted a policy for the pre-approval of all audit and non-audit services to be performed for us by our independent registered public accounting firm. The Audit Committee may delegate to one or more of its members the authority to grant the required approvals, provided that any exercise of such authority is presented to the full Audit Committee at its next regularly scheduled meeting. All services rendered by Moss Adams LLP for our fiscal years ended March 31, 2023 and 2022 were pre-approved by our Audit Committee.

Representatives of Moss Adams LLP are expected to be present at the Annual Meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

EQUITY COMPENSATION PLAN INFORMATION

The tables below provide information as of March 31, 2023 and May 25, 2023, respectively, concerning shares of our common stock that may be issued upon the exercise of outstanding stock options, warrants and other rights, and that remain available for future issuance, under all of our equity compensation plans that were in force as of such dates, including:

For fiscal 2023, our NEOs included:

Digital transformation continues to drive increased adoption of cloud-based technologies. The migration from on-premise to cloud-based solutions for telephony and contact center software creates a large and expanding market opportunity for 8x8. We address this opportunity with our XCaaS solution, combining enterprise-grade unified communications as a service (UCaaS) and CCaaS (contact center as a service) on a unified, cloud-native platform. We believe continued innovation on our platform and XCaaS solutions is essential to generating durable growth and long-term value for our customers, employees and shareholders.

Our commitment to improving margins and generating cash flow, while increasing our investment innovation, led us to refine our XCaaS strategy in fiscal 2023. During the year, we restructured our business to target the market and customer segments where we believe we have the strongest competitive advantage. We also focused on improving efficiency in our operations, especially sales and marketing, and increasing customer retention. As a result, we reduced sales and marketing programs targeting small businesses, increased our investment in customer success initiatives, and centered our innovation investments on platform capabilities to enable tailored user experiences, AI-based features, enhanced data analytics, and high availability.

In fiscal 2023, we achieved record service and total revenue, completed the integration of Fuze operations, extended the global coverage of our communications platform, and introduced platform-wide integration of generative AI from Open AI.

The Compensation Committee believes that the combination of base salary and incentive awards, including PSUs, effectively supports our compensation objectives.

To succeed in the rapidly evolving market for cloud-based communications and contact center software, we must attract and retain a highly talented executive team. Effective pay-for-performance alignment is an important objective of our Compensation Committee in the design of our executive compensation program, particularly for the compensation of our CEO. To further this objective, in fiscal 2023 we weighted our compensation programs towards pay that is either “at risk” (PSUs and bonuses), or for which value is determined by stock price performance (RSUs and PSUs). In this way, we create a pay for performance environment that aligns the long-term interests of our executives with those of our stockholders, while remaining competitive with market values on a targeted total compensation basis.

These actions, such as issuing special cash awards and adjusting the focus of the bonus plan during the first half of fiscal 2023, enabled the Company to focus performance on the highest priorities and bolster the short-term holding power of our compensation plans during a period of volatility, while both the newly issued and historically outstanding PSU awards continued to provide significant upside incentive for market-beating performance. NEOs received approximately 25% of their annual long-term equity compensation awarded in PSUs, with final payouts realized based on Company performance over a two-year and three year period.

While we continued to meet or exceed guidance for the year, our stock price remained volatile, in line with the peers in our industry. Our reduced valuation has continued to impact the potential values of the outstanding PSUs and RSUs that our NEOs hold. As shown in the tables below, the decline in stock price has resulted in all TSR based PSUs tracking below the threshold required for payout and has reduced the cumulative value of outstanding RSU awards by 59% from their grant date fair value. This reduction in the realizable value of our long-term incentive awards, which continues to make up the majority of our NEOs’ compensation, is by design, reflecting alignment between the take-home pay of our executives, and the stockholder returns generated by the Company.

We will continue to structure our Employee Bonus Plan to align with our annual financial performance, and will continue to focus our long-term incentive awards on creating meaningful alignment between the interests of our NEOs and our stockholders. For fiscal 2024, we have made additional changes including:

The link between the compensation of our CEOs and the Company’s TSR is illustrated in the following graph, which shows how total targeted compensation for our CEO has varied over the past five years compared to the Company’s five-year TSR. The sharp rise in relative total targeted compensation in fiscal 2021 reflects new hire equity grants awarded to Mr. Sipes in December 2021, followed by a reversion to the approximate trend established from fiscal 2018 to fiscal 2020.

We endeavor to maintain sound governance standards consistent with our executive compensation policies and practices. The Compensation Committee evaluates our executive compensation program on an ongoing basis to ensure our compensation policies and practices are consistent with our short- term and long-term goals given the dynamic nature of our industry and the market in which we compete for executive talent. The following policies and practices were in effect during fiscal 2023:

We have designed our executive compensation program to achieve the following objectives:

To achieve these objectives, the Compensation Committee regularly evaluates our executive compensation program with the goal of setting compensation at levels it believes are aligned with our current financial and operational business objectives, as well as competitive with the pay of other companies with whom we compete for executive talent. A majority of the target total direct compensation opportunities of our named executive officers are equity incentive-based and the value realized from these awards will be primarily driven by 8x8’s stock price performance. In most years, compensation packages will also include an annual cash bonus opportunity that may be earned based on the level of achievement measured against pre-established performance goals related to the important financial objectives set forth in our annual operating plan. Target direct compensation opportunities also include long-term incentive compensation in the form of equity awards that are earned over time based on continued service or, in the case of PSUs, subject to achievement of performance goals and relative TSR performance over time. We believe the mix of time-based and performance-and-time based awards is important to retaining our named executive officers and aligning their interests with those of our stockholders.

The Compensation Committee is responsible for overseeing our executive compensation program and all related policies and practices. The Compensation Committee operates pursuant to a formal written charter approved by our Board, which is available on in the investor relations section on our website at https://investors.8x8.com/ under the “Governance” heading.

At least annually, the Compensation Committee reviews our executive compensation program and formulates recommendations for consideration and approval by the Board of the various elements of our named executive officers’ compensation, as well as any employment arrangements with our named executive officers. In doing so, the Compensation Committee is responsible for ensuring that the compensation of our named executive officers is consistent with our executive compensation philosophy and objectives. The Compensation Committee also determines whether each compensation element provides appropriate incentives and motivation to our named executive officers and whether each such element adequately compensates our named executive officers relative to individuals holding comparable positions at the principal companies with which we compete for executive talent.

The Compensation Committee meets regularly during the fiscal year with and without the presence of our CEO and other named executive officers. The Compensation Committee also discusses compensation issues with our CEO (except with respect to his own compensation) and other members of the Board between its formal meetings.

The Compensation Committee receives support from our human resources department and its compensation consultant in designing our executive compensation program and analyzing competitive market practices. Our CEO regularly participates in Compensation Committee meetings, providing management input on organizational structure, executive development and financial analysis of our performance. Our CEO also develops and provides recommendations (except with respect to his own compensation) to the Compensation Committee regarding the cash and equity compensation for our named executive officers and other executives, including recommendations on the use of incentive compensation to further our growth. Our CEO and other named executive officers are not present when their specific compensation arrangements are discussed.

In fulfilling its duties and responsibilities, the Compensation Committee has the authority to engage the services of outside advisers. In fiscal 2023, the Compensation Committee engaged Compensia to assist it with compensation matters. A representative of Compensia attended at least one meeting of the Compensation Committee during fiscal 2023, responded to inquiries from the Compensation Committee at meetings and throughout the fiscal year and provided its analysis with respect to these inquiries.

The nature and scope of services provided to the Compensation Committee by Compensia in fiscal 2023 were as follows:

Compensia does not provide any services to us other than the services provided to the Compensation Committee. The Compensation Committee has assessed the independence of Compensia taking into account, among other things, the factors set forth in Exchange Act Rule 10C-1 and the listing standards of the NYSE and Nasdaq, and has concluded that no conflict of interest exists with respect to the work that Compensia performs for the Compensation Committee.

To attract and retain executives with the abilities and experience necessary to deliver strong top-line growth and operating performance, we provide total direct compensation opportunities that are intended to be competitive with market practice. We generally target our compensation around market median values, though we do allow upper quartile positioning to reflect individual talent and/or criticality to the business or to address underlying retention concerns. In connection with its annual review of our executive compensation program for fiscal 2022, the Compensation Committee, with the assistance of Compensia, revised the compensation peer group to generate competitive market data appropriate for comparison with our current size and industry focus.

For fiscal 2023, the compensation peer group was updated to account for acquisitions and to reflect changes in the size and scope of the Company as well as the peer companies. The criteria used to identify peer companies was generally consistent with our approach in prior years, and targeted software companies falling within a revenue range of 0.5x to 2.0x of our rolling four quarter revenue for at the time of the review and a market capitalization range of 0.3x to 3.0x of our market capitalization at the time of the review. The relevance of each peer company was evaluated taking into consideration both industry comparability as well as financial metrics, and companies are not required to meet all selection criteria for inclusion in the peer group.

Our compensation peer group for fiscal 2023 was updated with assistance from Compensia to ensure that the companies in the peer group remained aligned to 8x8’s size and financial profile. Cornerstone OnDemand and Vonage were removed from the peer group to reflect the impact of acquisitions and Blackline, HubSpot, Paylocity Holding, Twilio and Zoom Video Communications were removed to align 8x8’s market capitalization with the peer group. We added Alteryx, Avaya Holdings, Blackbaud, Bottomline Technologies, Commvault Systems, Progress Software, Vertex and Zuora — all SaaS or companies comparable to 8x8’s size at the time of review — to provide the best possible insights into peer compensation programs. RingCentral, while outside the targeted revenue and market capitalization ranges, was included at the request of the Compensation Committee as it is a key direct competitor for both business and executive talent. The 2023 peer group consisted of the following companies:

For fiscal 2024, the compensation peer group was updated with the assistance of Compensia based on the same revenue and market capitalization criteria used in fiscal 2023. Bottomline Technologies was removed from the peer group to reflect the impact of an acquisition and Avaya Holdings, Box, New Relic, Progress Software, PROS Holdings, SPS Commerce and Vertex were removed to better align 8x8’s financial profile with the peer group. We added Domo, Edgio, Ooma, Rimini Street and Upland Software — all SaaS or companies comparable to 8x8’s size — to provide the best possible insights into peer compensation programs.

Our executive compensation benchmarking also included survey data provided by Radford Surveys and Consulting, a business unit of Aon Hewitt Consulting, Inc. (“Radford”), from publicly-traded software companies with revenue levels and market capitalization levels comparable to ours. Radford did not provide compensation consulting services to the Compensation Committee during fiscal 2023.

Stockholders are provided the opportunity to cast an annual advisory vote on executive compensation (commonly known as a “Say on Pay” vote). At our 2022 Annual Meeting of Stockholders held on July 12, 2022, our stockholders indicated their strong support for the compensation of our named executive officers, with approximately 97% of the votes cast in favor of the proposal.

We value the opinions of our stockholders and will continue to consider the outcome of future Say-on-Pay votes, as well as feedback received throughout the year, when making compensation decisions for our executive officers, including the named executive officers. As part of our stockholder engagement program, we continuously engage our shareholders in substantive discussions on executive compensation, corporate governance and corporate performance and strategy with our institutional stockholders, including the majority of our top 20 active stockholders.

The elements of our compensation program for our named executive officers during fiscal 2023 are summarized in the table below and discussed in more detail in the sections that follow.

We believe that the total compensation opportunities provided to named executive officers for fiscal 2023 achieved the overall objectives of our executive compensation program.

Generally, the Compensation Committee reviews the base salaries of our executives, including the named executive officers, as part of its annual review of our executive compensation program and makes recommendations to the Board for adjustments to base salaries to take into account competitive market practices, corporate and individual performance from the prior fiscal year and promotions or changes in responsibilities. Typically, the Board sets the base salaries of our named executive officers at levels that are competitive with the market as reflected in our compensation peer group, after taking into consideration each named executive officer’s role and the scope of his or her responsibilities, his or her experience, and the base salary levels of the other executives. In fiscal 2023, the Company increased the base salaries of Messrs. Wilson, Zinn and Middleton to align their salaries to market levels.

The following table sets forth each NEO’s base compensation for fiscal 2023, as compared to their compensation in fiscal 2022.

For fiscal 2022, the Board approved the continuation of a popular compensation program that allowed full-time employees and executive officers to elect to receive up to 20% (and up to 50% for our CEO, Mr. Sipes) of each individual’s base salary in the form of shares of the Company’s common stock. While the program continued to be popular with employees, executive management determined that the program should not be continued for fiscal 2023 in order to continue to manage the Company’s burn-rate and share pool effectively in a period of lower share prices.

We have historically used annual cash incentive awards to motivate and incentivize our named executive officers to achieve our short-term financial and operational objectives while making progress towards our longer-term growth and profitability goals. Consistent with our executive compensation philosophy, these annual cash incentive awards are targeted at a percentage of base salary and have historically constituted a significant percentage of the target cash compensation opportunity for our named executive officers. Typically, the Compensation Committee awards annual cash incentive bonuses based on achievement of our corporate financial objectives and an evaluation of individual performance during the fiscal year. Our plan is designed to pay above-target amounts when we exceed our financial objectives and below-target amounts when we do not achieve these objectives.

The objective of the EBP is to incentivize eligible employees to contribute to our overall success and achieve corporate and individual performance goals. The performance goals established under the EBP are designed to focus participants on current goals and strategies identified by the Board and senior management (such as revenue growth and profitability), and to complete individual objectives that support our overall business strategy.

Under the EBP, each of our NEOs is eligible to receive cash bonus awards during each fiscal year tied to the Company’s achievement of predetermined financial targets and, in certain cases, the NEO’s achievement of individual goals. Performance is evaluated, and bonuses are payable, on a semi-annual basis, based on performance over two discrete six-month performance periods. The maximum payout in any period is 200% of the targeted percentage. In the event the Company does not achieve minimum financial performance objectives for the relevant payout period, the incentive EBP awards for that period would be zero.

The target annual cash incentive award opportunity for each of the named executive officers under the EBP is developed by the Compensation Committee for each fiscal year and expressed as a percentage of his or her annual base salary. The Compensation Committee sets the target annual cash incentive award opportunities for our named executive officers, other than our CEO’s target annual cash incentive award opportunity (which is approved by the full Board), after considering the job function of each named executive officer, his or her expected contributions to us for the upcoming fiscal year, the recommendations of our CEO (other than with respect to his own compensation) and the competitive market.

The table below shows the annual target bonus opportunity for each NEO as a percentage of his or her base salary:

For fiscal 2023, the Company’s EBP payouts were based on predetermined financial targets. The performance objectives for the EBP were developed by the Compensation Committee, in coordination with the Company’s compensation consultant, after taking into consideration the feedback from our large institutional holders and the recommendations of our CEO and CFO. The performance measurements for the fiscal 2023 EBP incorporated a mix of semi-annual performance measures tied to revenue and non-GAAP pre-tax income. For NEOs other than the CEO and CFO, individual performance was also considered in determining the final payout, but no payments were adjusted to reflect individual performance.

Reflecting the uncertain economic environment at the start of the fiscal year and our increased emphasis on profitability, the Compensation Committee elected to set first half fiscal 2023 goals at the beginning of the fiscal year and add a minimum non-GAAP operating profit threshold to be reached before any payout could be earned. Final payouts remained focused on top line performance, based 50% on service revenue and 50% on net new monthly recurring revenue (nnMRR), excluding the impact of the

Fuze acquisition. Net new monthly recurring revenue (nnMRR) is an internal operating metric that represents performance of important parts of our business, but is not a direct representation of our entire business. For example, nnMRR excludes usage revenue, revenue from acquired customers, and revenue from professional services and endpoint hardware.

During the first fiscal quarter of the year, the Federal Reserve began an aggressive program to increase interest rates in an effort to curb inflation. Given the rising rate environment, uncertain economic conditions, and our need to refinance convertible debt maturing in early calendar 2024, we determined operating profit and cash flow generation were the highest priority for the Company. In light of this, for executives other than the CEO, the committee approved adjusted performance goals for the second quarter of fiscal 2023. The committee retained the service revenue and nnMRR metrics, but increased the emphasis on non-GAAP operating profit by shifting from a threshold requirement to an achievement metric weighted at 10%. The remainder of the second quarter achievement payouts were weighted 45% on achievement of service revenue goals and 45% on achievement of nnMRR goals. The increased focus on profitability and cash flow generation reflected investor feedback, as well as our internal assessment of our cost structure and sales and marketing investments in the uncertain economic environment.

In the second half of the fiscal year, we reduced our cost structure through two actions that reduced our total headcount by approximately 14%. In establishing achievement metrics for the second half of the year, the committee sought to reflect the rationale and impact of these actions. For the second half of the year, the committee continued to use service revenue and nnMRR achievement metrics, but adjusted the weightings to 60% non-GAAP operating profit, 20% service revenue and 20% nnMRR, as we continued to prioritize efficiency and profitability.

The table below illustrates performance target and weightings under each semi-annual period of the fiscal 2023 EBP.

For the first half of fiscal 2023, the payouts under non-GAAP operating profit, service revenue and nnMRR metrics were set at 0% of target at threshold achievement, 100% of target at target achievement, and 200% of target at maximum achievement. For the second half payouts, nnMRR payout percentages remained the same, but the non-GAAP operating profit and service revenue metrics were adjusted so that they paid out 25% of target at threshold achievement, 100% of target at target achievement and 200% of target at maximum achievement. This resulted in potential payouts of 0% to 200% of targeted payout during each semi-annual EBP performance period. Payouts under all metrics are prorated on a linear basis for outcomes that fall between threshold, target and maximum.

The outcome of the fiscal 2023 EBP program is summarized in the chart below. Mr. Sipes’ EBP bonus paid out at 34% of target for the first half of fiscal 2023. Mr. Sipes’ service with 8x8 terminated before he was eligible for an EBP bonus during the second half of fiscal 2023. For executives other than Mr. Sipes, performance under the EBP resulted in payouts of 61% of target in the first half of fiscal 2023 and 144% of target in the second half of fiscal 2023.

At the close of fiscal 2023, Mr. Wilson requested that the Compensation Committee exercise its negative discretion to reduce bonus payouts to 110% of target. The committee approved of the recommendation, and final payouts for the second half of fiscal 2023 were made at 110% of target, resulting in an annual payout of 86% of target.

Net new monthly recurring revenue (nnMRR) is an internal operating metric that represents performance of important parts of our business, but is not a direct representation of all our business. For example, nnMRR excludes usage revenue, revenue from acquired customers, and revenue from professional services and endpoint hardware.

In fiscal 2022, NEOs, along with other EBP participants, were permitted to elect to receive their semi-annual bonus payments in the form of fully-vested shares equal to the cash value of the bonus, calculated based on the closing stock price on the day prior to issuance. For fiscal 2023, in order to manage the Company’s burn rate and share usage during a period of low stock price, all employees received their EBP payments entirely in cash.

Our long-term incentive compensation consists of equity awards in the form of time-based RSU awards and performance-based PSU awards to ensure that named executive officers have a continuing stake in our long-term success.

Typically, we grant these equity awards to our named executive officers during the second or third fiscal quarter of the fiscal year in connection with our annual performance reviews. In determining the size of the long-term incentive compensation awards, the CEO makes recommendations for the other NEOs based on each NEO’s experience, performance, current equity holdings, retention risk and the operational complexity, strategic impact, and scope of responsibilities of their role, within the context of the Peer Group and broader market survey data comparisons. The Compensation Committee considers similar factors when determining the CEO’s long-term incentive compensation awards, which it then recommends to the Board for approval. The target award opportunities for each participant are expressed as a U.S. dollar value, with the final number of shares issued calculated based on the trailing 20 trading day average closing price. Further, the target award opportunity is structured to align pay and performance, as outlined in more detail under “Fiscal 2023-Executive Performance Plan (Total Shareholder Return),” and to drive shareholder value by placing a significant percentage of compensation “at risk” and dependent on achievement of predetermined performance.

To continue to incentivize above market shareholder returns, while also recognizing that the drop in share price had resulted in low retentive value of unvested RSUs and PSUs, we made adjustments to the design of our long-term incentive program to better reflect the Company’s position and ensure that we maintained the strong executive talent necessary to deliver on our long-term plan. As part of these changes, the portion of the long-term incentive award made up of RSUs was increased from 50% to 75% of target value for the grants to continuing NEOs made on June 15, 2022. For the 25% of the target award granted as PSUs, we also made three key changes: 1) We removed the gross profit margin metric we used in fiscal 2022 to allow the long-term awards to focus entirely on market performance, 2) we switched from three performance periods, covering one-year, two-year and three-year performance to two performance periods covering two-year and three-year performance, and 3) performance is measured by relative TSR percentile achievement against the S&P Software and Services Index, rather than how our absolute TSR performed against the index as a whole. These changes are intended to keep our executives focused on the Company’s long-term strategy while also aligning to more industry standard design.

During fiscal 2023, the Board approved awards of RSUs and PSUs to our named executive officers as set forth in the following table. Unless otherwise noted in the footnotes to the table, these equity awards were granted on June 15, 2022. These awards were determined based on the Board’s and Compensation Committee’s consideration of the above-described factors, in consultation with Compensia.

In fiscal 2023, each of our ongoing NEOs received a grant of performance stock units (PSUs) grant as part of the Executive Performance Plan (the “2023 EPP”). The Compensation Committee believes performance-based grants are important to balance shareholder value creation with core financial performance when building long-term value. Similar to PSUs issued in prior years, the 2022 EPP ties the payout of the PSUs to the Company’s TSR relative to the S&P Software & Services Index. We believe that measurement against the S&P Software and Services Index is a meaningful and challenging point of comparison when measuring our success against our competitors, and reflects the companies with which we compete for investor dollars. Any PSUs granted under the 2023 EPP are subject to be earned over a two-year and three-year period.

2023 PSU achievement is measured based on the following performance criteria:

During fiscal 2023, Messrs. Wilson, Middleton, Sipes and Zinn were eligible to earn shares from PSU awards granted during earlier fiscal years, based on the achievement of internal financial targets, or the performance of our stock relative to a benchmark during a period that ended during fiscal 2023, as set forth in the table below. Please note that achievement numbers in the table are rounded for clarity.

As captured in the table above, PSU awards granted in fiscal 2020 and 2021 are eligible to be earned 33% on each of the first, second and third-year anniversaries of the performance period’s start date, in each case subject to the applicable performance metrics. For the listed awards, the TSR portion of PSU performance is measured against the S&P Software & Services index.

For PSUs granted in fiscal 2022, the first tranche was eligible to vest based on achievement on Non-GAAP Gross Profit compared to internal targets. Based on 8x8’s Non-GAAP Gross Profit achievement of $395,300 in fiscal 2022, the first tranche of the PSUs granted during fiscal 2022 was earned at 111% of target. These awards vested on June 15, 2022. The remaining tranches of these PSU awards are eligible to earned based on relative TSR performance measured against the S&P Software & Services index over a two-year and three-year period.