Janice R. Andrews
Recently, Dara Khosrowshahi, the CEO of Uber, discovered a huge treasure: a cache of stock options worth over $130 million. This windfall results from Khosrowshahi exceeding the performance targets that Uber’s equity incentive scheme had established.
A recent filing with the Securities and Exchange Commission states that Khosrowshahi’s sale of stock was conditional on Uber reaching a $120 billion value within a ninety-day trading window. The achievement of this milestone on February 6th gave Khosrowshahi the chance to buy 1.75 million Uber shares at $33.65 a share during the exercise period.
Uber is presently selling at about $78 a share, meaning that Khosrowshahi’s stock options are worth about $136.5 million. Khosrowshahi has stated that he does not plan to execute his stock options over the next ninety days, despite this lucrative possibility.
The aforementioned performance objectives were set in advance of Uber’s 2019 IPO. Over the course of the last year, Khosrowshahi has led Uber through an incredible recovery, despite early difficulties following its IPO. Cost-cutting initiatives, the exit from non-core ventures like self-driving vehicles, and the discovery of new income streams—most notably advertising—have all been a part of this transition.
Under Khosrowshahi’s direction, there have been noticeable improvements; Uber just declared its first-ever $1.1 billion annual operational profit. Confidence in the company’s financial health and future prospects was further reinforced when it revealed a $7 billion share repurchase plan for investors.
Remarkably, Khosrowshahi is not the only high-ranking IT CEO to profit from stock incentives. In recent years, CEOs of Amazon and Alphabet, Sundar Pichai, and Andy Jassy, have also benefited greatly from stock awards. When Jassy took over as CEO of Amazon when Jeff Bezos left, she was given $200 million in shares, whereas Pichai earned $226 million in 2022.
It’s crucial to remember that Khosrowshahi’s stock package is representative of a larger trend among executives in the IT sector, where stock incentives are being used more often to match CEO remuneration with the goals of the firm and its shareholders.
The fact that Uber CEO Dara Khosrowshahi was able to unlock a sizeable stock award demonstrates both the rising importance of performance-based incentives in executive remuneration within the digital industry and his critical role in the company’s revival.
