Tobi Lutke, CEO of Shopify, and his wife Fiona McKean walk to a morning session at the Allen & Company Sun Valley Conference on July 13, 2023, in Sun Valley, Idaho.granted stock awards to chief executive officer Tobi Lutke valued at close to $200-million, making it one of the largest compensation packages in Canadian history.
“There are some open questions remaining as to why this much, and why now? Why, when the marketplace share price has come down so much,” said Christopher Chen, managing partner of executive compensation advisory firm Compensation Governance Partners. Experts say the grant may be a multiyear award delivered in one chunk, in order to incentivize Mr. Lutke to raise the company’s stock price, which is still far below 2022 highs. The grant also reflects the company’s efforts to benchmark its executive compensation to the U.S. tech companies with which it compares itself.
Mr. Lutke’s disclosures of the 2024 stock grants say they vest, or become usable, over five years. But the disclosures do not say if Shopify considers them multiyear compensation. Some Canadian tech companies, such as BlackBerry Ltd.An option is the right to buy a company’s stock at a set price, called an “exercise price,” during a defined future period. There’s tremendous upside with options if the company’s stock price rises, but it also means that Mr.
Shopify’s share price is less than half of what it was at its peak in November of 2021, and the company posted a series of net losses until last year, including a $1-billion loss in the second quarter of 2023. In the last two years, the company laid off thousands of employees, prompting an apology from Mr. Lutke for overestimating e-commerce growth, and backtracked on its delivery business, which it paid $2-billion for in 2022.