How does a manager reward himself for a job well done? When you don’t get paid, your only option is to sell parts of the company you made successful. Such is the case for Spotify CEO Daniel Ek, who treated himself to a sizable payday in the form of stock sales this year.
And the Spotify co-founder isn’t the only one at the company reaping the benefits of the group’s share price surge this year.
Spotify executives make money
According to SEC filings reviewed LuckCompany executives are starting to capitalize on the streaming group’s rising share price.
Five current members of Spotify’s senior management and Paul Vogel, the recently retired former CFO, have sold $254.4 million worth of shares since the start of 2024.
The bulk of that came from Ek, who cashed out $118.9 million worth of shares in the group’s second-quarter results, which followed a $59.9 million sale in February.
Spotify’s CEO has not received a salary since 2017. according to company documents. He was likely one of the lowest-paid executives at major tech companies last year as the boss refrained from selling any shares in the company. He received $1.4 million in “other compensation.”
Gustav Söderström, Spotify’s chief technology officer and chief human resources officer, has sold shares totaling $40.7 million since the beginning of the year. He invested about $30 million of that amount in two tranches on Wednesday and Thursday.
Alex Norstrom, the group’s chief commercial officer, earned a relatively modest $12 million this year from share sales. Dusty Jenkins, Spotify’s chief communications officer, earned $343,000 in March.
Katrina Berg, Spotify’s chief people officer, purchased $7.7 million worth of shares in February.
Meanwhile, former CFO Paul Vogel returned home. $14 millionalso in February.
Vogel was removed as Spotify’s CEO in December when the company laid off 1,500 employees. Around the time of the announcement, Vogel sold $9.4 million worth of shares.
A Spotify spokesperson said: “As part of his long-term financial planning, Daniel Ek has sold a portion of his shares in Spotify. These sales represent Mr. Ek’s limited ownership interest in the company.”
Spotify Payday
It is unclear what exactly prompted Ek and his colleagues to make such large payouts at the beginning of the year. Spotify’s top five executives cashed out shares totaling $6.3 million in fiscal 2023.
But it probably has something to do with Spotify’s great start to 2024.
The group’s shares are up more than 60% since the start of the year, increasing the group’s valuation by more than $20 billion.
Speaking after the company announced record quarterly profits on Tuesday, Ek hailed a new era of monetization at the company, which has been able to raise subscription prices while adding new members. The company has also improved its previously expensive podcast division to boost its profits.
But Spotify’s return to near-record valuations has been rocky and not without setbacks.
The group laid off 1,500 staff in December as part of a major efficiency drive, with Ek claiming his staff were doing too much “work around work”. The group’s shares continue to rise after the layoffs.
However, during the company’s most recent earnings call, Ek admitted that layoffs equivalent to 17% of the workforce impacted day-to-day operations more than he expected. This unexpected adjustment was even partially responsible for the group’s failure to meet its lofty targets for monthly active users and quarterly profits.