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> “ On February 28, 2017, the Compensation Committee of the Board of Directors of the Company (the “Board”) granted Mr. Hu a time-based stock option for 900,000

> “ On February 28, 2017, the Compensation Committee of the Board of Directors of the Company (the “Board”) granted Mr. Hu a time-based stock option for 900,000 shares of the Company’s Class A common stock vesting over four years, three performance-based stock options for an aggregate of 555,000 shares of the Company’s Class A common stock, each with a per share exercise price equal to the closing price of the Company’s Class A common stock on the date of grant, and a time-based restricted stock unit grant for 100,000 shares vesting over four years. Each equity grant is subject to the terms and conditions of the Company’s 2016 Stock Option and Incentive Plan (the “2016 Plan”) and the applicable form of award agreement thereunder.” [1] I’m surprised Twilio isn’t listed. Just there COO alone was issued ~1.5M shares. At today’s market price ($208) his shares alone are worth $312M. Their annualized revenue is ~1.4B. So just their COO alone was issued SBC of 22% of the companies revenue. And that doesn’t factor in the SBC of all of the other employees either. [1] https://www.sec.gov/Archives/edgar/data/1447669/000110465917014048/a17-7474_18k.htm https://www.sec.gov/Archives/edgar/data/1447669/000110465917...

otoburb 6y ago
Good catch about Twilio missing from the SBC as %revenue chart. Without digging into Twilio's 8-K's I feel compelled to note that options would be expensed as each tranche vests. So as a very rough estimate the COO being issued ~1.5M shares over 4 years wouldn't be 22% of annualized company revenue but perhaps something on the order of 6%, notwithstanding the vague language about the performance-based options conditions and vesting schedules. >>And that doesn’t factor in the SBC of all of the other employees either. You're right -- that probably pushes Twilio's SBC %revenue higher to the Salesforce line.
floor2 6y ago
You're misunderstanding options vs shares here. He was only given 100,000 shares ($5 million/year). The options only give him the right to purchase shares at today's price in the future. If the stock goes up substantially, he can profit on it, but the options could also be worthless if the stock price remains flat or goes negative. If the stock goes up 10%, the options would be worth ~$29 million (option to buy 1.4 million shares at a price of 208 then sell them at the future market price of 228)

otoburb 6y ago

Good catch about Twilio missing from the SBC as %revenue chart. Without digging into Twilio's 8-K's I feel compelled to note that options would be expensed as each tranche vests. So as a very rough estimate the COO being issued ~1.5M shares over 4 years wouldn't be 22% of annualized company revenue but perhaps something on the order of 6%, notwithstanding the vague language about the performance-based options conditions and vesting schedules. >>And that doesn’t factor in the SBC of all of the other employees either. You're right -- that probably pushes Twilio's SBC %revenue higher to the Salesforce line.

floor2 6y ago

You're misunderstanding options vs shares here. He was only given 100,000 shares ($5 million/year). The options only give him the right to purchase shares at today's price in the future. If the stock goes up substantially, he can profit on it, but the options could also be worthless if the stock price remains flat or goes negative. If the stock goes up 10%, the options would be worth ~$29 million (option to buy 1.4 million shares at a price of 208 then sell them at the future market price of 228)