The compensation of the boss of Lightspeed Commerce falls below the million mark after a “unique” retention program granted last year did not obtain the support of the Caisse de depot et placement du Québec, its main shareholder.
The cloud commerce specialist’s chief executive, Jean Paul Chauvet, received total compensation of US$691,951 (about $914,000) for the 2023 fiscal year ended March 31, according to regulatory filings sent to shareholders.
Last year, the company had granted a total compensation of 22.1 million US to Mr. Chauvet. The difference is mainly explained by the “one-time” payment of call options, with an estimated value of 20.2 million US dollars, aimed at retaining the company’s top executives.
The long-term incentive program, which brought the total compensation granted to the six most senior executives of the company to 70 million US dollars last year, had received a lukewarm reception from several shareholders of the Montreal company.
Nearly a third of shareholders (30.74%) voted against the company’s compensation package at its annual meeting in August. This is a relatively high rate for this kind of exercise.
The Caisse de dépôt, the main shareholder with 16% of the shares, had voted against the remuneration of senior executives. The institution had indicated that it had “reluctance” with regard to the compensation program, in particular with regard to the program for the allocation of purchase options.
Prior to the shareholder vote, the board was already indicating that it did not expect to grant any further special awards in 2023. The program was adopted to reflect “the extremely competitive market” for senior executive positions in its sector.
Mr. Chauvet, chief financial officer Asha Hotchandani Bakshani and ex-chief operating officer Brandon Nussey did not receive long-term incentive awards in 2023.
Call options allow the holder to purchase shares of a company at a future date at a specified price. If the stock price is higher than the exercise prices, the manager makes a profit. In theory, the value of options granted last year could be different from the initial estimate by the company.
Highest paid
In total, the company’s five most senior executives shared total compensation of US$6.5 million in fiscal year 2023.
The highest-paid executive in 2023 is chief product and technology officer Ryan Tabone, with compensation of $3.7 million. Hired last October, this former Google executive received more generous compensation than his colleagues due to the allocation of shares and options linked to his hiring.
Lightspeed’s Board of Directors believes that the company’s most senior executives have achieved their key goals of earning their target annual bonus, which ranges from half or full base salary, depending on the role.
In May, Chauvet said achieving earnings before interest, taxes, depreciation and amortization (EBITDA) in fiscal 2024 was “non-negotiable,” although the company anticipates results will be under pressure in the future. during the first half of the year, following the integration of its payment services with the platforms of its existing customers.
“The first half of the year, there will be less growth […] that historically because we are going to concentrate the activities of the company to bring our customers back to the payments, he assured in an interview. The good news is that, if we do this well, the second half of the year, we will have very strong growth and we will see profitability on top of that. »
Lightspeed’s stock has lost 84% of its value from its August 2021 high, as rising interest rates put pressure on valuations of tech companies. The action has lost 18% over the past year.