How does an government reward themselves for a job nicely performed? While you don’t take a wage, the one possibility is to unload bits of the corporate you made profitable. So is the case of Spotify CEO Daniel Ek, who has handled himself to a major payday this yr within the type of share gross sales.
And the Spotify co-founder isn’t the one one on the firm who has been reaping the rewards from the group’s share value explosion this yr.
Spotify execs cashing in
In keeping with SEC filings analyzed by Fortune, executives on the firm are beginning to money in on the streaming group’s resurgent share value.
5 present members of Spotify’s C-suite and Paul Vogel, the lately departed ex-chief monetary officer, have offered $254.4 million price of shares because the starting of 2024.
The majority of that withdrawal has come from Ek, who cashed out $118.9 million in shares following the group’s Q2 outcomes, which adopted a $59.9 million sale in February.
The Spotify CEO hasn’t taken a wage since 2017, based on firm filings. He was most likely one of many worst-paid main tech CEOs final yr, because the boss held off on promoting any shares within the firm. He acquired $1.4 million in “different compensation.”
Gustav Söderström, Spotify’s chief technical officer and chief folks officer, has offered a complete of $40.7 million price of shares because the begin of the yr. He vested round $30 million of that in two tranches on Wednesday and Thursday.
Alex Norstrom, the group’s chief enterprise officer, has banked a relatively modest $12 million from inventory gross sales this yr. Dustee Jenkins, Spotify’s chief public affairs officer, cashed in $343,000 in March.
Katrina Berg, Spotify’s chief human sources officer, vested $7.7 million price of shares in February.
Former CFO Paul Vogel, in the meantime, took dwelling $14 million, additionally in February.
Vogel was booted from his function as Spotify CEO in December when the corporate laid off 1,500 staff. Across the time of the announcement, Vogel offered $9.4 million price of shares.
A spokesperson for Spotify mentioned: “As a part of his long-term monetary planning, Daniel Ek has offered a few of his Spotify shares. These gross sales account for a restricted quantity of Mr. Ek’s holdings within the firm.”
Spotify’s payday
It’s not clear what precisely motivated Ek and his colleagues to make such massive withdrawals to begin the yr. For the 2023 monetary yr, the highest 5 execs at Spotify cashed in a mixed meager $6.3 million price of shares.
Nevertheless it most likely has one thing to do with Spotify’s wonderful begin to 2024.
Shares within the group have elevated greater than 60% because the begin of the yr, including greater than $20 billion to the group’s valuation.
Talking after the corporate introduced document quarterly earnings Tuesday, Ek hailed a brand new period of monetization on the firm, which has been capable of enhance subscription costs whereas including new members. It has additionally refined its beforehand costly podcast division to bulk up its margins.
However Spotify’s return to near-record valuations has been a rocky highway, and never with out its justifiable share of exits.
The group laid off 1,500 staff in December as a part of a large effectivity drive, with Ek arguing his staffers had been doing an excessive amount of “work across the work.” Shares within the group have continued to rise because the layoffs.
Nevertheless, in the course of the firm’s newest earnings name, Ek acknowledged that the layoffs, equal to 17% of workers, had impacted day-to-day operations greater than he had anticipated. That shock adjustment was even partly liable for the group failing to hit its lofty targets for month-to-month lively customers and quarterly earnings.
