May 20, 2022
Loading...
You are here:  Home  >  Banking & Finance  >  Current Article

Trade Desk CEO made $835M in 2021, region’s biggest payday ever

IN THIS ARTICLE

Trade Desk CEO Jeff Green (file photo)

Jeff Green, the CEO and co-founder of The Trade Desk, received $835 million in total compensation in 2021, the biggest pay package in Central Coast history and likely the biggest of any CEO in the United States last year.

The Ventura-based online advertising company disclosed its executive pay for 2021 in an April 12 filing with the U.S. Securities and Exchange Commission.  

Most of Green’s pay was stock options: 19.2 million shares, with an estimated value of $828.4 million. That money would only become exercisable in eight tranches, or portions, over a 10-year term, if the company meets certain goals.

Green accepted the options on Oct. 6, according to the SEC filing.

For those stock options to become exercisable, The Trade Desk’s stock would need to hit successively higher price targets, ranging from $90 a share to $340 a share, as well as other goals, such as beating most other companies on the Nasdaq 100. Should he ever exercise his stock options, Green must hold the shares for at least one year.

Green could have exercised 2.4 million of the 19.2 million shares awarded to him in 2021, as The Trade Desk’s share price averaged above the target price of $90 for 30 straight trading days ending in mid-January, but he did not.

According to the Wall Street Journal, had he exercised those options when they vested, Green would have received about $34 million in new shares.

If the stock ever reaches the high end of that range, $340 a share, Green could receive more than a $5 billion payout if he exercises his options.

The aggregate current fair value for the stock options of $828.4 million was based on the Black-Scholes valuation methodology, which is standard for publicly traded companies.

This model, created by economist Fischer Black, Myron Scholes and Robert Merton in the 1970s, gives a theoretical estimate of the price of options based on the risk of the security of those options and their expected return.

The Trade Desk noted in its SEC filing that Green and other executives “may never realize any value from their equity rewards,” and the dollar amounts attached to them are “theoretical” number to this point.

Regardless, the stock options awarded to Green, in addition to his base salary, bonus and other compensation in 2021, add up to $835 million in value, makes him the highest paid CEO across the 358 firms in the S&P 500 that have disclosed their 2021 executive pay packages so far, according to the Wall Street Journal.

Green took home a salary of $965,000 and received a discretionary bonus of $1 million. He also earned non-equity incentive compensation of roughly $2.7 million, and other compensation totaling about $1.9 million.

Green is among the richest people in the tri-county region, with an estimated net worth of $3.9 billion, according to an estimate by Forbes based on The Trade Desk’s April 20 share price.

Green has signed the Giving Pledge, an effort started by Bill Gates and Warren Buffett to persuade billionaires to give away most of their wealth. Green’s pledge is to donate at least 90% of his wealth before or at the time of his death.  

The 45-year-old owns 1.1% of the company’s class A shares and 97.7% of its Class B shares, which carry extra voting rights. That equates to 49.3% of the company’s voting power.

The Trade Desk’s stock closed at $66.89 on April 19, up 7.5% from the prior day’s close. The company has gained more than 2,000% in value since it debuted on the Nasdaq in 2016.

Other notable Trade Desk executives include CFO Blake Grayson, who took home a salary of $535,000 and was awarded about $2.6 million in stock options last year, and co-founder and chief technical officer David Pickles, who also received a salary of $535,000 and about $2.6 million in stock options.

Chief data officer Michelle Hulst received a salary of $531,000 and about $2.6 million in stock options, while chief legal officer Jay Grant was given a salary of $535,000 and about $2.6 million in stock options.