Robinhood Markets, Inc. HOOD reported disappointing quarterly results last week, sending its beaten-down stock further down. Even as the stock languishes at depressed levels, its C-suite has pocketed handsome pay packages in the past year.
What Happened: Robinhood chief executive officer Vlad Tenev took home $796.12 million in total compensation in 2021, a proxy statement filed by the company late Monday showed. This represented a considerable increase from the $767,923 Tenev was paid in 2020.
A closer look at the 2021 compensation shows that $244,125 was paid out as salary, $1.87 million was spent for his personal security services and $794.01 million was given as stock awards.
Related Link: Robinhood Not Going Away: Analysts Remain Bullish Long-Term With Lowered Price Targets Post Q1
SEC rules dictate that restricted stock units and performance-linked stock awards should be shown as compensation for the year in which they were granted or modified.
The filing showed that realized pay for Tenev in 2021 was $168.83 million, with realized stock awards being $166.72 million.
For Tenev to actually receive the full compensation, Robinhood stock would need to trade up to $300 per share over the next seven years, the company said in the filing.
Baiju Bhatt, the second-in-command and co-founder, received $593.96 million in compensation in 2021, up from $895,811 in 2020. His 2021 compensation included $244,125 in salary and $592.63 million in stock awards. He also received $1.08 million in personal security services.
Robinhood said in the proxy filing due to PSU award, Tenev and Bhatt agreed to reduce their salaries to $34,248, reflecting the median wage for individuals in the U.S.
Related Link: Robinhood Review
Why It's Important: Robinhood, which democratized investing by pioneering zero-commission trades, went public in late-July 2021 by offering 55 million shares at $38 apiece. The shares closed the debut session at $34.82, below the offer price.
The post-IPO run took the stock to a high of $85 in the week following the debut. Since then, the stock has been going downhill. It ended 2021 at $17.76, a decline of about 49% from the closing price on the debut session. It has pulled back further in the year-to-date period, dragged by fundamental woes, and macro and geopolitical factors.
"The stock is bearing the brunt of a wind down from the stimulus-fueled retail frenzy we saw in 2021," Rosenblatt Securities analyst Sean Horgan said in a recent note reviewing the company's quarterly results.
Price Action: Robinhood stock closed Monday's session up 6.88% at $10.48, shares are trading 2.77% lower during Tuesday's pre-market session at $10.19 according to Benzinga Pro.
Photo: Courtesy of robinhood.com
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