Rackspace Technology Reports Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)

Rhea-AI Summary

Rackspace Technology (NASDAQ: RXT) has granted inducement equity awards to its new Chief Executive Officer, Gajen Kandiah. The compensation package includes 4,000,000 restricted stock units (RSUs) and options to purchase 6,000,000 shares at $1.30 per share.

The stock options have a ten-year term, and both RSUs and options will vest equally over four years from 2026 to 2029, contingent on Kandiah's continued employment. The awards were granted outside the company's standard equity incentive plan and were approved by independent board members in compliance with Nasdaq Listing Rule 5635(c)(4).

Positive

• New CEO appointment signals leadership transition and potential strategic shifts
• Substantial equity package aligns CEO interests with shareholders

Negative

• Significant potential dilution from 10 million total shares in awards

SAN ANTONIO, Sept. 05, 2025 (GLOBE NEWSWIRE) -- Rackspace Technology® (NASDAQ: RXT), a global provider of hybrid cloud and AI solutions, today announced that on September 4, 2025, the Company granted inducement equity awards to Gajen Kandiah in connection with his appointment as the Company’s new Chief Executive Officer.

Mr. Kandiah received 4,000,000 restricted stock units (RSUs) and non-qualified stock options to purchase 6,000,000 shares of the Company’s common stock. The stock options have an exercise price of $1.30 per share, which is equal to the closing price of the Company’s common stock on the grant date, and a maximum ten-year term. The RSUs and stock options vest in equal annual installments on each of September 3, 2026, 2027, 2028 and 2029, generally subject to Mr. Kandiah’s continued employment through the respective vesting dates.

In accordance with Nasdaq Listing Rule 5635(c)(4), the equity awards were an inducement material to Mr. Kandiah’s entering into employment with the Company. The awards were approved by a majority of the independent members of the Company’s board of directors outside of the Company’s shareholder-approved equity incentive plan.

About Rackspace Technology

Rackspace Technology is a leading provider of end-to-end hybrid multicloud technology services and AI solutions company. We design, build, and operate our customers’ cloud environments across all major technology platforms, irrespective of technology stack or deployment model. We partner with our customers at every stage of their cloud journey, enabling them to modernize applications, build new products, and adopt innovative technologies.

IR Contact
Sagar Hebbar
ir@rackspace.com

PR Contact
Cheryl Amerine
publicrelations@rackspace.com

FAQ

What equity compensation did Rackspace Technology (RXT) grant to new CEO Gajen Kandiah?

Kandiah received 4,000,000 RSUs and options to purchase 6,000,000 shares at $1.30 per share, vesting over four years from 2026 to 2029.

When will Gajen Kandiah's RXT stock options and RSUs vest?

The awards will vest in equal annual installments on September 3rd of 2026, 2027, 2028, and 2029, subject to continued employment.

What is the exercise price of RXT's new CEO stock options?

The stock options have an exercise price of $1.30 per share, equal to Rackspace's closing stock price on September 4, 2025.

Why did Rackspace Technology grant these equity awards outside their regular plan?

The awards were granted as an inducement material to Kandiah's employment agreement, approved by independent board members under Nasdaq Rule 5635(c)(4).