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by led76 2508 days ago
Based on the filing the company awarded 42M stock options to the CEO earlier this year. The filing mentions a share price of $110 per share, so that's over $4B.

That can't be normal, right? That's 10% of the entire company. It's more than Elon Musk got for Tesla by a long shot, and that was already controversial.
1 comments
ec109685 2508 days ago
Options require the stock to go up to be worth anything. So if the stock price increases ten percent, that would be $420M (120-110) * 42M shares. Still seems like an awful lot.
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led76 2508 days ago
That's actually not quite how it works: "The options awarded had a per-share exercise price equal to the fair market value of our Class B common stock on the applicable grant date"

Common stock is usually way less expensive than preferred, so while currently the company may be 'valued' at $110 per share, the common stock is probably in the $30s or $40s.

He's likely already up $2B on the stock options (pending vesting), assuming the company does IPO at $47B and all common stock converts at the $110 valuation.

Personally I think this is unheard of -- anyone else know of examples of CEO compensation like this prior to an IPO?

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trimbo 2508 days ago
> anyone else know of examples of CEO compensation like this prior to an IPO?

Snapchat

https://fortune.com/2018/02/23/snapchat-evan-spiegel-ipo/

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TimPC 2508 days ago
4.2M not 420M. 10% of 42M in options.
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led76 2508 days ago
It's not $42M in options. It's 42M options, possibly valued at $110 each at the IPO. Hence $4B
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ex_ex_nihilo 2508 days ago
That's not how option valuation works. They're worth the difference of their strike price to the price of the underlying intrinsically. So if his strike is $110 (which it's not for reasons others have pointed out - he was issued options on common stock), he gets the appreciation of the stock after IPO once he exercises. If the stock plummets after IPO, his options will expire worthless. Though they are probably LEAPs, and it's weird to denominate options per-share like that. Normally contracts are for 100 shares and it always confuses me the way companies award options.
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