Uber flies to the stock market and “unlocks” a super bonus in shares for CEO Khosrowshahi: it is worth 136 million
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MILAN – When Uber stock soared to give the ride-sharing company a valuation of $120 billion, it wasn’t just shareholders who celebrated. Even the architect of a recovery that some time ago seemed unthinkable, the CEO Dara Khosrowshahiwas able to uncork: he was in fact assigned a package of options for the purchase of securities worth approximately 136 million dollars.
The super-prize, revealed by Financial Times, had been set since before the listing on the stock exchange, which took place in 2019. Khosrowshahi had already been at the helm since 2017, having arrived from Expedia where he was one of the best paid CEOs of the S&P500, the reference index of companies listed on Wall Street. Leaving Expedia he had given up a 160 million package and to convince him Uber offered a similar maxi-remuneration.
The technicality included the objective of 120 billion capitalization, to be maintained for at least 90 consecutive trading days. On February 6, Khosrowshahi crossed that milestone and can therefore release options on 1.75 million stocks, which today are trading close to $78. Khosrowshahi’s options have an exercise price of $33.65 each, so they would cost him $59 million. They expire in September and Khosrowshahi plans to exercise them, although not “within the next 90 days,” according to a February document. Uber itself said that package was necessary, considering the challenges the company faced at the time. Other important managers also broke the deadlock, says the Ft.
For years, to tell the truth, the goal seemed unattainable. Since the IPO in 2019 it had disappointed its expectations of reaching a valuation of 100 billion, caught between budget losses and the ostracism of many national and local authorities. For a long time it remained below or just in line with the 45 dollar price (82 billion capitalisation). The CEO’s care then worked, at least from the point of view of the financial markets: costs were cut to increase margins, non-essential activities were cut (Uber Eats riders know this well in Italy, which opened a dispute for the sudden closure of activities) new revenue lines such as advertising. Earlier this month, Uber announced its first stock buyback.
The FT comments by recalling that Khosrowshahi’s remuneration is certainly not a white fly in the Big Tech panorama: Tim CookApple’s CEO, was paid nearly $100 million in 2021. The head of Alphabet, Sundar Pichai, he saw his total compensation rise to $226 million in 2022, again thanks to a large stock package. Andy Jassy of Amazon received more than $200 million in stock when he took over Jeff Bezos.
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