Reaffirms Commitment to Adding a U.S.-Based Director with Relevant Experience and Making Further Disclosure Enhancements

Board Urges Shareholders to Vote Today “For” Chairman Earl Shanks and CEO Elad Sharon, and “For” the Proposal to Approve the Amendments to Cognyte’s CEO Compensation Plan

Cognyte Software Ltd. (NASDAQ: CGNT) (the “Company” or “Cognyte”), a global leader in investigative analytics software, today publicized a letter to shareholders highlighting the actions the Board and leadership team have taken to strengthen and reposition the business. In the letter, the Board of Directors also reaffirmed the Company’s commitment to enhance its disclosures of key performance indicators and to identify a new independent director with relevant experience in the United States.

The full text of the letter follows:

Dear Fellow Shareholders:

This year’s Annual Meeting of Shareholders (the “Annual Meeting”) of Cognyte Software Ltd. (“Cognyte” or the “Company”) is fast approaching. The meeting will be held on September 4, 2024. To help ensure Cognyte’s momentum and progress continues, the Board of Directors (the “Board”) urges shareholders to vote “FOR” Earl Shanks and Elad Sharon, and “FOR” the proposal to approve the amendments to Cognyte’s CEO’s compensation plan.

Both Mr. Shanks, who was appointed independent Chairman of the Board in 2023, and Mr. Sharon, Cognyte’s CEO, are key leaders who have been instrumental in driving Cognyte’s business repositioning and improved execution. These efforts have helped Cognyte return to growth, delivering sustained and expanding profitability. Investors are recognizing our improvement, and over the last 12 months, we have delivered a total shareholder return of 55%, significantly outperforming our peers and the broader market.¹ We also recently raised guidance for fiscal year 2025, reflecting increased confidence in our business prospects.

Despite our recent progress, one of Cognyte’s shareholders, Value Base Fund (“Value Base”), is demanding a seat on our Board and is seeking to replace Mr. Shanks with one of its investment managers, Tal Yaacobi.

Value Base’s motives are unclear; to date, it has not offered any meaningful suggestions for improving our strategy, operations or governance, nor has Mr. Yaacobi been able to articulate how his brief experience as an associate at a consulting firm or his knowledge of Israeli-focused investment management would improve Cognyte’s business. He has no experience in software, defense, intelligence, or any other relevant industry, and we believe electing Mr. Yaacobi in place of Mr. Shanks – an engaged and experienced independent director – would disrupt the Company’s momentum and unquestionably weaken our Board.

We Are Pleased to Have the Support of a Leading Proxy Advisory Firm

We are very pleased with the support we have received from Institutional Shareholder Services (“ISS”), one of the leading proxy advisory firms, who has recommended Cognyte shareholders vote for the reelection of Mr. Shanks and Mr. Sharon and for the CEO compensation plan. After carefully reviewing our improved performance and the strength of the Company’s director candidates, ISS concluded that Value Base "has failed to provide a compelling rationale in support of the proposed candidate or to establish that board change is warranted."

In its report, ISS commented on the strength of Cognyte’s nominees, noting that Mr. Shanks “brings to the board… significant public company experience as director and as officer,” and that Mr. Sharon has extensive “experience and knowledge regarding the company’s business and significant experience in the intelligence and security industry.”

That is not to say that we are satisfied with the status quo.

We Are Taking Action to Support Our Continued Progress

To deliver on Cognyte’s full potential, the Board is committed to identifying a new independent director over the coming months with relevant software or security-related experience and strong relationships in the United States.

We are also committed to evolving our disclosures over time to provide current and prospective shareholders with even more transparency.

Our Compensation Program Is Aligned with Shareholders

The Board is committed to ensuring that our compensation program supports the Company’s strategy and is aligned with the interests of our shareholders. To that end, the Board has developed a compensation program that is approximately 80% at-risk, with the vast majority of our CEO’s compensation dependent (either as a condition of vesting or as a determinant of value) on key business drivers of our stock price.

The Board has also taken action to improve transparency, introducing several new compensation disclosures in this year’s proxy statement, including a detailed description of executive compensation plan design, with short- and long-term incentive metrics and their weightings. Our Chairman, Mr. Shanks, has played a key role in that effort, engaging extensively with shareholders to gather their feedback on disclosures and other important topics.

In making its recommendation that shareholders vote “FOR” the proposal to approve the amended employment terms of CEO Elad Sharon, ISS highlighted the alignment of our pay with business performance and shareholder interests, stating that “short-term incentives are linked to improved performance” and that the CEO’s performance-based stock grants support “improved alignment between the interests of officers and those of shareholders.”

We Ask for Your Support

We encourage you to review the information on our website https://www.cognyte.com/investors/ that describes our progress and results. We welcome your thoughts for continued improvement and ask that you support Mr. Shanks, Mr. Sharon and the proposal to approve the amended CEO compensation plan, which we believe will support our objective of protecting and enhancing value at Cognyte.

Shareholders who have any questions or need assistance voting their shares should contact the Company’s proxy solicitor, Saratoga Proxy Consulting, at +1 (888) 368-0379 or +1 (212) 257-1311 or by email at info@saratogaproxy.com.

We thank you in advance.

The Cognyte Board of Directors

Advisors

Spotlight Advisors is serving as financial advisor, Paul Hastings LLP and Meitar are serving as legal advisors, Saratoga Proxy Consulting, LLC is serving as proxy advisor and FNK IR is serving as communications advisor to Cognyte Software.

About Cognyte Software Ltd.

Cognyte Software Ltd. is a global leader in investigative analytics software that empowers a variety of government and other organizations with Actionable Intelligence for a Safer World™. Our open interface software is designed to help customers accelerate and improve the effectiveness of investigations and decision-making. Hundreds of customers rely on our solutions to accelerate and conduct investigations and derive insights, with which they identify, neutralize, and tackle threats to national security and address different forms of criminal and terror activities. Learn more at www.cognyte.com.

Cautionary Statement Regarding Forward-Looking Statements

Any statements contained in this press release that do not describe historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are identified by use of the words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “should,” “views,” and similar expressions.

Any forward-looking statements contained herein are based on current expectations, but are subject to risks and uncertainties that could cause actual results to differ materially from those indicated, including, but not limited to, the impact and contributions of the slate of director nominees Cognyte has nominated, the projected growth of Cognyte’s business, and Cognyte’s ability to achieve its financial and business plans, goals and objectives and drive shareholder value, including with respect to its ability to successfully implement its strategy, and other risk factors discussed from time to time in Cognyte’s filings with the SEC, including those factors discussed under the caption “Risk Factors” in its most recent annual report on Form 20-F, filed with the Securities and Exchange Commission (“SEC”) on April 9, 2024, as amended on April 19, 2024 and in subsequent reports filed with or furnished to the SEC. Cognyte assumes no obligation and does not intend to update these forward-looking statements, except as required by law, to reflect events or circumstances occurring after today’s date.

¹ Source: FactSet. Data as of August 23, 2024. “Peers” refer to the companies disclosed in Cognyte’s Notice and Proxy Statement for the Fiscal 2025 Annual Meeting of Shareholders and include AvePoint, BigCommerce Holdings, C3.ai, Cellebrite DI, Consensus Cloud Solutions, Domo, Enfusion, Everbridge, Kaltura, MeridianLink, Rapid7, Rimini Street, Riskified, SecureWorks, SimilarWeb, WalkMe and Zuora. Peer data refers to median. “Broader market” refers to Nasdaq Composite Index.

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