ServiceNow (NYSE: NOW) extends CEO tenure and revises severance policy

Rhea-AI Filing Summary

ServiceNow, Inc. reported that it amended the employment agreement with Chairman and CEO William R. McDermott, effective January 1, 2026, confirming he will remain in service to the company through at least December 31, 2030. Over this period he may serve as CEO, co-CEO, Executive Chairman or Non-Executive Chairman, at the Board’s discretion and with his agreement, with compensation aligned to company performance and his responsibilities.

The company also amended its Executive Severance Policy for the CEO, effective January 1, 2026. Following a qualifying termination in connection with a change in control, the CEO becomes eligible for cash severance based on salary and target bonus, extended COBRA benefit payments, and full vesting of unvested RSUs and PRSUs based on actual performance. For qualifying terminations not tied to a change in control, the policy provides reduced cash severance, a current-year bonus, a shorter COBRA benefit period, and partial or pro-rata vesting of equity awards. The policy further details equity treatment upon retirement (subject to conditions), death, or disability.

Insights

Corporate governance analyst

ServiceNow locks in CEO tenure through 2030 and formalizes richer change-in-control and severance protections.

The company has extended William R. McDermott’s commitment to remain in leadership roles through at least December 31, 2030, with flexibility for him to serve as CEO, co-CEO, Executive Chairman or Non-Executive Chairman. His compensation is described as commensurate with company performance versus a peer group when serving as CEO or co-CEO, and with his responsibilities if he transitions to Executive Chairman. This structure emphasizes continuity at the top while allowing the Board to adjust his role over time.

The amended Executive Severance Policy clarifies benefits in several scenarios. Following a qualifying termination around a change in control, the CEO becomes entitled to a lump-sum cash payment based on a multiple of base salary and target bonus, 24 months of COBRA-related benefits, and full vesting of all unvested RSUs and PRSUs based on actual performance. For qualifying terminations not linked to a change in control, the package is smaller but still includes one year of salary, an actual bonus for the current year, 12 months of COBRA coverage, and partial or pro-rata vesting of equity awards.

The policy also sets specific equity treatment for retirement (subject to not taking another full-time operating role), death and disability, generally preserving or continuing vesting of RSUs and PRSUs based on time and performance conditions. Overall, these changes codify CEO retention and exit economics in more detail, which may aid succession planning and clarify potential costs in different departure or transaction scenarios.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_____________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): December 23, 2025

___________

SERVICENOW, INC.

(Exact name of registrant as specified in its charter)

___________

Delaware

001-35580

20-2056195

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(I.R.S. Employer Identification Number)

2225 Lawson Lane

Santa Clara, California 95054

(Address of principal executive offices and Zip Code)

(408) 501-8550

(Registrant's telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2 below):

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $0.001 per share

NOW

The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On December 23, 2025, ServiceNow, Inc. (“ServiceNow” or the “Company”) entered into an amendment to the previously filed employment agreement with William R. McDermott, Chairman and Chief Executive Officer (“CEO”) of the Company. The amendment, to become effective January 1, 2026, sets forth the agreement between the Company and Mr. McDermott that he will remain in service to the Company through at least December 31, 2030, during which time he will serve in the role of CEO, co-CEO, Executive Chairman or Non-Executive Chairman, at the discretion of the Company’s Board of Directors (the “Board”) and with the mutual understanding of Mr. McDermott and the Board. The amendment further provides that in Mr. McDermott’s role as CEO or co-CEO, his total compensation will be commensurate with the performance of the Company against its compensation peer group and, should he move into the role of Executive Chairman, his compensation will be commensurate with the level of responsibilities he is performing in the role.

In addition, the Company amended its Executive Severance Policy (the “Policy”), to become effective January 1, 2026, to update certain severance payments and benefits the CEO may become eligible to receive upon a Qualifying Termination (as defined in the Policy).

The Policy provides that the CEO is entitled to the following benefits upon a Qualifying Termination within three months before or 12 months following a Change in Control: (i) a lump sum equal to 2 times the sum of the CEO’s then-current annual base salary, plus the CEO’s Target Bonus for the then-current fiscal year, with the Target Bonus amount becoming payable when such bonus would otherwise have been paid absent the Qualifying Termination, but in all events no later than March 15th of the year following the then-current fiscal year; (ii) an additional lump sum equal to the cost of COBRA medical, vision and dental benefits coverage for a period of 24 months; (iii) immediate vesting of 100% of then-unvested RSUs; and (iv) immediate vesting of 100% of then-unvested PRSUs, based on actual performance.

If the CEO incurs a Qualifying Termination not in connection with a Change in Control, the Policy provides for the following benefits: (i) cash severance equal to the CEO’s then-current annual base salary, payable in a lump sum; (ii) the CEO’s Actual Bonus for the then-current fiscal year, payable when such bonus would otherwise have been paid absent the Qualifying Termination, but in all events no later than March 15th of the year following the then-current fiscal year; (iii) an additional lump sum equal to the cost of COBRA medical, vision and dental benefits coverage for a period of 12 months; (iv) immediate vesting of the number of then-unvested RSUs that would have vested during the 18-month period following the CEO’s termination date had the CEO remained employed with the Company through such period; and (v) immediate pro-rata vesting based on actual performance of then-unvested PRSUs, in addition to the number of such PRSUs that would have vested during the 18-month period following the CEO’s termination date based on actual performance.

Further, the Policy provides that if the CEO retires and does not take a full-time operating role for another company, for equity awards made after he has turned 65, he will be entitled to receive (i) pro-rata vesting of the then-unvested shares subject to solely time-based vesting RSUs granted at least one year prior to his retirement, which will be settled in installments following termination upon retirement in accordance with the vesting schedule set forth in the applicable award agreement and (ii) the then-unvested PRSUs granted at least one year prior to his retirement, which will vest at the end of the applicable performance period in accordance with their terms based upon actual achievement of the applicable performance objectives and subject to the Company’s certification of performance metric attainment

Additionally, a CEO who incurs a termination of employment upon death is entitled under the Policy to immediate vesting of 100% of then-unvested RSUs and immediate vesting of then-unvested PRSUs at the target level of performance.

Finally, the Policy provides that a CEO who incurs a termination of employment for Disability (as defined in the Policy) is entitled to continued vesting of RSUs and PRSUs based on actual level of performance.

The foregoing description of the employment agreement amendment and the Policy is only a summary and is qualified in its entirety by reference to the full text of the employment agreement amendment and the Policy, copies of which are filed as exhibits hereto and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)			Exhibits.
			10.1			Amendment No. 3 to Employment Agreement between the Registrant and William R. McDermott
			10.2			ServiceNow, Inc. Executive Severance Policy, as amended
			104			Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

SERVICENOW, INC.

By:

/s/ Russell S. Elmer

Russell S. Elmer General Counsel

Date: December 23, 2025

FAQ

What did ServiceNow (NOW) change in William McDermott’s employment terms?

ServiceNow amended William R. McDermott’s employment agreement, effective January 1, 2026, confirming that he will remain in service to the company through at least December 31, 2030. During that time he may serve as CEO, co-CEO, Executive Chairman or Non-Executive Chairman, as determined by the Board with his agreement, and his compensation will be aligned with company performance and his responsibilities in the role.

How will William McDermott’s compensation be determined under the amended agreement?

When serving as CEO or co-CEO, William McDermott’s total compensation will be commensurate with ServiceNow’s performance against its compensation peer group. If he serves as Executive Chairman, his compensation will be commensurate with the level of responsibilities he performs in that role.

What severance benefits does the ServiceNow (NOW) CEO receive if terminated in connection with a change in control?

Under the amended Executive Severance Policy, if the CEO has a Qualifying Termination within three months before or 12 months after a change in control, he is entitled to a lump sum cash payment equal to two times the sum of his then-current annual base salary and target bonus, an additional lump sum equal to 24 months of COBRA medical, vision and dental coverage costs, and immediate vesting of 100% of then-unvested RSUs and PRSUs, with PRSUs vesting based on actual performance.

What happens if the ServiceNow CEO has a Qualifying Termination not tied to a change in control?

For a Qualifying Termination that is not in connection with a change in control, the CEO is eligible for a lump-sum cash severance equal to his then-current annual base salary, his actual bonus for the then-current fiscal year, a lump sum equal to 12 months of COBRA coverage costs, immediate vesting of the RSUs that would have vested over the 18 months following termination, and pro-rata plus additional vesting of PRSUs based on actual performance over that same 18-month period.

How does ServiceNow’s policy treat the CEO’s equity upon retirement?

If the CEO retires and does not take a full-time operating role at another company, equity awards granted after he turns 65 receive special treatment. Then-unvested RSUs granted at least one year before retirement and subject only to time-based vesting will vest pro-rata and settle on their existing schedule, and PRSUs granted at least one year before retirement will continue to vest at the end of their performance period based on actual achievement of performance objectives, subject to certification of results.

What equity vesting applies to the ServiceNow CEO in the event of death or disability?

If the CEO’s employment ends due to death, unvested RSUs vest in full and unvested PRSUs vest at the target performance level. If employment ends due to Disability, the policy provides for continued vesting of RSUs and PRSUs based on actual performance levels.