Etsy’s board of directors is giving its CEO Josh Silverman a $9 million equity award to retain and motivate him over the next four years.
According to Etsy’s filing with the SEC, the board of directors and the compensation committee received “advice and input” from an independent compensation consultant. It also took into account the CEO’s “critical role in leading the Company through a period of sustained growth.”
The grant of the special performance based equity award is being made “to retain, incentivize and motivate Mr. Silverman for the next four years, drive the long-term growth of the Company and promote the alignment of Mr. Silverman’s compensation with long-term shareholder value creation.”
It went on to describe the performance award:
“For 2021, Mr. Silverman’s annual equity grant will be made on or around March 15, 2021 and will have a grant date fair value of $9,000,000 of which 60% will be in the form of restricted stock units and 40% will be in the form of nonqualified stock options, with vesting over a period of four years from the grant date, subject to continuous employment. Upon certain qualifying terminations of employment, Mr. Silverman will be entitled to one year of additional vesting, and upon certain qualifying terminations of employment following a change of control, the 2021 annual equity award will fully vest. Mr. Silverman’s entitlements to cash severance and benefits continuation upon certain qualifying terminations of employment remain unchanged.”
In the Board’s offer letter to Silverman, Etsy Board Chair Fred Wilson noted Silverman’s current salary of $600,000 per year and other benefits, which are not changing as part of the offer.
Silverman led Etsy in transitioning from a policy of limiting sellers to listing only handmade and vintage goods (and supplies) to allowing sellers to list “handmade” items made with the help of manufacturers.
In 2020, Etsy performed well overall during the pandemic, getting off to a rocky start but then experiencing strong sales in part due to its decision to allow sellers to list face masks. The company will soon report fourth-quarter and full-year results for 2020.
You can find the filings on the Etsy Investor website or through SEC.gov.