Welcome to the Annual Meeting for Adobe Inc. Our host for today's call is Shantanu Narayen, Chair and CEO. I will now turn the call over to your host. Mr. Narayen, you may begin, sir.
Thank you. Hello, everyone, and welcome to Adobe's 2026 Annual Meeting of Shareholders. I'm Shantanu Narayen, Chair and CEO of Adobe, and Chair of this Annual Meeting of Stockholders. As a global technology leader, Adobe's mission is to empower everyone to create. We build innovative platforms and tools that unleash creativity, productivity, and personalized customer experiences. Over the past year, we've seen extraordinary change across industries, technologies, and the global economy. Through it all, one thing has remained constant. Creativity and innovation are more essential than ever. At Adobe, our mission has always been empowering people to create, and that mission continues to guide every decision we make. We're executing on our customer-focused strategy to anticipate and serve the needs of our large and expanding audiences, including business professionals and consumers, creators and creative professionals, and marketing professionals as they navigate this exciting new era.
With creativity at the core, we're expanding innovation in all our flagship applications to deliver differentiated AI-infused and AI-first product offerings across various routes to market and different monetization models. We believe that Adobe's continued success in AI will be underpinned by our deep understanding of creativity domains, customer intent, and complex workflows, along with a great brand, customer base, and decades of proprietary data to deliver proven value for individuals, small and medium businesses, and enterprises. As we continue to transform the business to capitalize on the AI opportunity, we believe our customer-focused strategy, rich product roadmap, innovation momentum, and early success across all routes to market position us well to empower everyone to create. For a comprehensive strategy, addressable market opportunity, and business information, please visit our Investor Relations website. Today's meeting is focused on our annual meeting agenda items. I will now call the meeting to order.
Based on the affidavit of mailing from Broadridge, notice of this meeting was duly given and sent beginning on February 27th. All Adobe stockholders of record as of the close of business on February 17th are entitled to vote at this meeting. Voting is open and stockholders may submit questions at any time during the meeting on the virtual meeting website. You may also submit your vote by clicking on the voting button on the virtual meeting website and following the instructions. The polls will close immediately after the presentation of Proposal eight. You can also find the meeting materials and Rules of Conduct for the meeting on the virtual meeting website. In order to conduct an orderly meeting, we ask that participants follow these Rules of Conduct. Louise Pentland, Chief Legal Officer and Corporate Secretary, is the Secretary of this meeting, and she will record the minutes.
Also, based on an appointment by our Board, Kathy Wheadon from Broadridge joins us today as our Inspector of Elections. I would like to recognize the members of Adobe's Board of Directors and Executive Team that are in attendance today, including Dan Durn, Chief Financial Officer, and Doug Clark, Head of Investor Relations. Also with us today are representatives from KPMG. I will now turn the meeting over to Louise.
Good morning, everyone. We will now cover the formalities required for this meeting. After voting on the agenda items, we will adjourn the formal portion of the meeting and proceed to any questions. As Shantanu mentioned, questions may be submitted on the virtual meeting website and will be addressed pursuant to the meeting rules of conduct. Our records show that on the record date, there were 407,636,918 shares of common stock outstanding and entitled to vote at this meeting. Ms. Wheadon tells me that signed proxies for 336,445,698 shares of common stock, or approximately 82.5% of the total outstanding shares entitled to vote on the record date, are represented at this meeting.
This constitutes a quorum for the transaction of business, and this meeting is duly constituted. I also want to remind you that if you have already voted by proxy, you do not need to vote in this virtual meeting unless you want to change your vote. The proxy holders will vote your shares according to the proxy. It is 9:05 A.M. and the polls are now open to consider the four management proposals and four stockholder proposals as described in our proxy statement. Proposal one, the election of 11 members of our Board of Directors to serve for a one-year term. Proposal two, approval of the 2019 Equity Incentive Plan as amended to increase the available share reserve by 12 million shares. Proposal three, ratification of the appointment of KPMG as Adobe's independent registered public accounting firm for fiscal year 2026.
Proposal four, approval on an advisory basis of the compensation of our Named Executive Officers. Proposal five, a vote upon a stockholder proposal concerning a vote on golden parachutes. Proposal six, a vote upon a stockholder proposal concerning a board matrix. Proposal seven, a vote upon a stockholder proposal concerning a report on civil liberties in digital services. Proposal eight, a vote upon a stockholder proposal concerning retirement plan climate risk. The Board recommends a vote for each of the nominees in Proposal one, for Proposals two, three, and four, and against Proposals five, six, seven, and eight. Proposal five is a stockholder proposal submitted by John Chevedden, which is set forth in the proxy statement, along with the proponent's supporting statement and Adobe's statement in opposition. I will now turn it over to Mr. Chevedden for up to three minutes to speak to Proposal five.
Hello, this is John Chevedden. Proposal five, shareholder approval requirement for excessive golden parachutes. Shareholders request that the Board seek shareholder approval of any senior manager's new or renewed pay package that provides for severance or termination payments with an estimated value exceeding 2.99x the sum of the executive's base salary plus target short-term bonus. This proposal only applies to the named executive officers. This provision shall at least be included in the governance guidelines of the company. The Board shall retain the option to seek shareholder approval after material terms are agreed upon. This proposal received 47% support at the 2025 Adobe Annual Meeting without any special effort by the proponent. This could mean more than 60% support from the Adobe shares who have access to independent proxy voting advice.
According to the Adobe statement next to this proposal, Adobe did shareholder engagement with Adobe shareholders after this 47% vote in 2025, which could translate into a 60% vote, and Adobe shareholders purportedly said they wanted no change regarding golden parachutes, even after voting at least 47% in favor of a change. This seems to indicate a rigged form of shareholder engagement. There must be something seriously inaccurate with Adobe shareholder engagement when it purportedly contradicts a strong shareholder vote. Apparently Adobe did not even trust its own so-called shareholder engagement and then partially adopted this proposal in January 2026. Thus, this proposal is at least a partial success already. On a related executive pay issue, Adobe shareholders expressed a 20% rejection of Adobe executive pay at the 2025 Annual Meeting. By comparison, well-performing companies often receive a 5% rejection of executive pay.
It would be helpful to shareholders for Adobe to announce the say on pay voting results today as a percent figure. Please vote yes. Shareholder approval requirement for excessive golden parachutes, Proposal five.
Thank you, Mr. Chevedden. As indicated in our proxy statement, the Board of Directors recommends that stockholders vote against Proposal five. Proposal six is a stockholder proposal submitted by the Comptroller of the City of New York, which is set forth in the proxy statement along with the proponent's supporting statement and Adobe's statement in opposition. I will now turn it over to the representative for the Comptroller of the City of New York, Amna Khan, for up to three minutes to speak to Proposal six.
Good morning, Mr. Chairman, members of the board, and fellow shareholders. I'm presenting proposal six on behalf of New York City Comptroller Mark Levine and several New York City pension funds, which hold a substantial number of Adobe shares valued at over $126 million. Proposal six asks the company to disclose in its annual proxy statement each director's self-identified gender, race, and/or ethnicity as part of their existing board skills and experience table. Investors believe that a diverse board in terms of relevant skills, gender, and race or ethnicity is an indicator of a well-functioning board. Among other benefits, a diverse board can better manage risk by avoiding groupthink. You, as directors, set the tone from the top. The disclosure of an individualized board matrix would signal to Adobe's employees, customers, suppliers, and investors that the directors themselves are practicing diversity and inclusion in Adobe's boardroom.
In its 2025 and 2026 Proxy Statement, Adobe provides an individual skills matrix that discloses the attributes of each director. However, the company no longer discloses the gender and ethnicity of these directors in aggregate form, as previously provided in their 2024 Proxy Statement. We commend the Board's statement that it believes in having a diverse Board across multiple dimensions. However, we respectfully disagree that this proposal is highly prescriptive, as Proposal six does not prescribe any particular Board Matrix. It neither prevents nor discourage Adobe from disclosing any other data or information that the Board believes is relevant. Investors elect directors and individuals who are accountable to act as fiduciaries in the Boardroom of a public company and should provide reasonable disclosure instead of shielding themselves in aggregate, ambiguous, and unusable information.
Shareholders need information on diversity of individual directors to assess the quality of each nominee and make informed voting decisions. This is particularly important in the era of universal proxy cards. Therefore, we urge shareholders to vote for Proposal six. Thank you.
Thank you, Ms. Khan. As indicated in our proxy statement, the Board of Directors recommends that stockholders vote against Proposal six. Proposal seven is a stockholder proposal submitted by Ridgeline Research, which is set forth in the proxy statement, along with the proponent's supporting statement and Adobe's statement in opposition. Please play the audio representing the stockholder proposal.
Good morning, shareholders and board members. My name is William Flaig, Founder and CEO of Ridgeline Research, the investment advisor to the American Conservative Values ETF, ticker symbol ACVF, speaking on behalf of its shareholders. I'm here to present Proposal number seven, which asks Adobe to evaluate how it oversees risks related to discrimination against users based on their viewpoints. This proposal is fundamentally about protecting shareholder value. Adobe is a major digital service provider, and your policies determine who can access essential creative and communication tools. Digital platforms now face growing pressure from governments, advocacy groups, and internal constituents to restrict lawful speech. When enforcement relies on unclear standards, companies face legal exposure, regulatory scrutiny, and reputational damage, all of which directly affect long-term shareholder value.
The 2025 Viewpoint Diversity Score found that 100% of major DSPs, including Adobe, maintain problematic terms of service, and 92% maintain acceptable use policies that could be used to deny service based on viewpoint. This places Adobe in a high-risk environment where unclear policies can lead to accusations of discrimination and costly litigation. We've already seen the consequences across the industry, lawsuits, congressional inquiries, public backlash, and new regulatory pressure under the E.U.'s Digital Services Act. Adobe's own policies prohibit content that is hateful, insensitive, or socially offensive. While the intention is understandable, the lack of clear definitions means these standards can be enforced unevenly. Even well-intentioned rules can and often do produce harmful, unintended outcomes, undermining customer trust and exposing the company to legal and reputational risk. Management's opposition statements argue that a report is unnecessary because existing policies ensure fairness.
Transparency pages and non-discrimination statements do not address how these vague terms are interpreted or enforced. By evaluating how these policies are applied and how vague terms may affect civil rights, customer trust, and long-term value creation, Adobe can improve clarity and reduce exposure. This is a reasonable request that strengthens oversight and reduces shareholder risk. For these reasons, I urge your support for Proposal number seven. Thank you.
Thank you, Ridgeline Research. As indicated in our proxy statement, the board of directors recommends that stockholders vote against Proposal seven. Proposal eight is a stockholder proposal submitted by As You Sow, which is set forth in the proxy statement, along with the proponents' supporting statement and Adobe's statement in opposition. Please play the audio representing the stockholder proposal.
Good morning. Thank you for the opportunity to present this proposal. I'm Grant Bradski, here to represent As You Sow. This shareholder resolution is of the utmost importance as it asks the critical question, how will Adobe protect its employees' life savings from the economic consequences of climate change? Climate change poses material risk to retirement plan beneficiaries. The CDP reports that 215 companies, including Adobe, have almost $1 trillion at risk from climate impacts, with many losses expected within the next five years. Nearly half of Adobe's retirement plan assets are invested in the company's Vanguard default target date option, which is heavily exposed to high carbon and deforestation-intensive industries. These investments contribute to climate change, create systemic portfolio risk, and are poor long-term investments, particularly for younger beneficiaries whose retirement benefits are likely to be harmed due to climate-related financial losses.
Adobe knows we must address climate risk head-on. It's why shareholders are proud of our company's climate goals. Yet how will we meet these goals if Adobe is at the same time directing almost $244 million of our employee 401k savings into fossil fuels and burning down the Amazon? These investments undermine the company climate goals, expose employee savings to financial risk, harm the company's reputation on climate, and could expose the company to litigation risk over the company's fiduciary duty to plan participants. Just as Adobe has taken operational climate action, shareholders ask that Adobe now begin to address its target date funds and the millions of dollars of our employee retirement plan funds invested in fossil fuels. This will not only protect our company from the economic impacts of climate change, but also protect our employees' life savings. Thank you.
Thank you, As You Sow. As indicated in our proxy statement, the Board of Directors recommends that stockholders vote against Proposal eight. We will now pause for voting. It is now 9:19 A.M., and the polls are now closed. Will Ms. Wheadon please tally the results? The report of our Inspector of Elections states that the preliminary results of today's meeting are as follows. All 11 directors were reelected as members of our Board of Directors to serve for a one-year term. The stockholders approved the 2019 Equity Incentive Plan as amended to increase the available share reserve by 12 million shares. The stockholders ratified the appointment of KPMG as Adobe's independent registered public accounting firm for the 2026 fiscal year. The stockholders approved on an advisory basis the compensation of our named executive officers. The stockholders did not approve a stockholder proposal concerning a vote on golden parachutes.
The stockholders did not approve a stockholder proposal concerning a board matrix. The stockholders did not approve a stockholder proposal concerning a report on civil liberties in digital services. The stockholders did not approve a stockholder proposal concerning retirement plan climate risk. We will report the final voting results on a Form 8-K and file it with the SEC within four business days after this meeting. This concludes the formal business portion of the meeting, which is now adjourned. I would like to thank each of you for your attendance today. We appreciate your continued interest and support of Adobe. We will now turn to questions. Please remember that only stockholders are permitted to submit questions. Please limit yourself to one question. For questions applicable to Adobe's business that cannot be answered due to time constraints, we will provide responses on our Investor relations website after the meeting.
I will now turn it over to Doug Clark to address any questions.
Thank you, Louise. We will now address any questions properly submitted in accordance with the meeting rules of conduct. In response to questions from stockholders, we may make forward-looking statements based on current expectations. The information discussed is as of today, April 15th, and any forward-looking statements are subject to a number of significant risks, uncertainties, and assumptions. For a discussion of these risks, you should review the factors discussed in Adobe's SEC filings. Our first question is about Adobe's charitable giving and partnerships. Can you provide detail about Adobe's policy around these areas?
Thank you for your question. We're proud at Adobe that we've had a history of contributing to charitable causes around the globe that meet the policies as set forward, as well as supporting the communities in which we have an engagement. I think as it relates to any specific charitable organization, we continuously do due diligence to ensure that it meets the policies, and we're also constantly evolving our policies with changing criteria to ensure that we do this in accordance with both the law as well as the values of our company. Thank you.
Thank you. Our second question is about research and development, specifically the levels of R&D investment in 2025 and level and plans going forward.
Thank you for your question. In FY 2025, we invested almost $3.3 billion in R&D, which is up about 9% year-over-year. These investments support the incredible innovation that we're delivering across our entire product portfolio and drive the future growth prospects of the company. In fact, in the prior year, about 80% of our headcount adds at the company were in our R&D organizations. These investments are offset by efficiencies we're driving from a cloud compute standpoint and driving down our unit cost of compute to support customer activities, the innovations that we're delivering to market. All of that yields about 13.8% R&D as a percent of revenue, and I expect our approach in FY 2026 to be similar as a percent of revenue.
Thank you. There are no further questions at this time. I will now turn it over to Shantanu for closing remarks.
Thank you, Doug, and thank you all for joining us today. As previously announced, I will be stepping down as CEO after my successor has been named. Until then, I will continue to lead Adobe while working with the Board of Directors to identify my successor and to ensure a smooth transition. Adobe remains steadfast in its commitment to innovation and delivering value to our customers, partners, and shareholders. We are confident that our customer-centric approach, groundbreaking product innovations, passionate employees, and unwavering execution will continue to drive growth and create durable value. This concludes our meeting. Thank you for joining us today.
The meeting has now concluded. Thank you for joining, and have a pleasant day.