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.
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?
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.
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?