Investors need to give CEOs better comp packages

Transcript

We went public in 21. In the first year, the stock went up to about $40 billion market cap. In 2022, we fell about 92% to a little bit under $4 billion market cap. I, for the life of the company, had only taken equity that was my founder's stock and based on the money that I originally put in the company. So I had taken no compensation. I was taking the bare minimum to have benefits. At the bottom in 22, I made a decision, and that was, for the first time, to ask for compensation. And the reason I did that is because I felt like I'm public, turning this company around is a big task, and I'd like to align myself with investors to say, I'm going to get paid, but I'm only going to get paid if the stock recovers. So the thresholds of compensation that the comp committee on the board granted me were at a minimum, the stock was $9. We had to get to the first threshold, I think was about $38 to $40. And in order for me to get paid anything, the stock had to clear that and then keep going up from there for me to get any sort of compensation. And then there were, I think, five or six levels from there, so all the way up to a return to $80, which was our IPO price. And I had a term to go achieve it. I feel like CEOs who are founders originally started a business taking really big risk. If the belief is that the CEO should then never get compensation ever again, it's completely flawed logic. You want to give people who chase really big upside by creating really big things the potential to continuously have that really big upside, because it allows them to, in a way, just mentally stay motivated on what they're doing versus start drifting to other things. Because any founder, even at the low point I was worth quite a bit of money on paper, at least with my equity, could have walked away and started something else. I've now had three successful businesses, so I believe I could have a fourth. But I really wanted to stay committed to the company and stay aligned with investors. I feel like CEOs who are founders originally started a business taking really big risk. If the belief is that the CEO should then never get compensation ever again, it's completely flawed logic. You want to give people who chase really big upside by creating really big things the potential to continuously have that really big upside, because it allows them to, in a way, just mentally stay motivated on what they're doing versus start drifting to other things. Because any founder, even at the low point I was worth quite a bit of money on paper, at least with my equity, could have walked away and started something else. I've now had three successful businesses, so I believe I could have a fourth. But I really wanted to stay committed to the company and stay aligned with investors.