Speed ​​of Light | $70 million for senior management

Point-of-sale and e-commerce payment software provider Lightspeed has been generous to its top executives.

Posted at 6:00 am

Andre Dubuc

Andre Dubuc
The press

The six most senior executives received total compensation of $70 million for the fiscal year ended March 31, 2022. This is no different than in the case of the CEO of Quebec company Nuvei, Philip Fayer, whose compensation last year totaled 112 million US.

The Caisse de depot et placement du Quebec is Lightspeed’s largest shareholder and holds 16% of the outstanding shares. The institution reserves its comment until the date of the shareholder vote scheduled for August 4th.

“These high compensation levels show the importance of having a very sound compensation policy. It is important that the compensation scenarios take into account all eventualities in order to set up the necessary mechanisms to avoid excessive differences,” says Professor Yan Cimon from Laval University The press asked for comment on the Lightspeed and Nuvei cases.

The information comes from the Executive Compensation Report contained in the management circular that the two companies recently filed with the stock exchange authorities.

At Lightspeed, most of the money comes from options granted to executives during the fiscal year. The past year has been marked by a chair game at the top, which has led to a renegotiation of compensation for promoted executives.

The aim of these generous option allocations is to “motivate and retain” the affected executives in key positions, the company explains in the circular.

The options granted cannot be exercised immediately.

An option is a right to purchase a stock at a predetermined price. Most of the options granted over the past fiscal year have an exercise price above Lightspeed’s current stock price, which has lost nearly 44% of its value since early 2022 and is down 83% from its 52-week high of $165.87. The stock traded at $28.84 in Toronto and $22.29 in New York on Thursday.

An option with a distant expiry date retains its value even if the strike price is higher than the current price because the holder continues to hope that the stock price will exceed the strike price before the expiration date.

Up to 1.5 million shares

In February 2022, the new CEO, Jean Paul Chauvet, received a total of $22 million in compensation for the most recent fiscal year, including $20 million in options. He received options entitling him to purchase up to 1.5 million shares of Lightspeed at an exercise price of $31.47. These options will vest incrementally over a five-year period based on stock performance and the achievement of growth targets. This performance option package will be the only one granted until 2025.

As for the other executives, Dax Dasilva, chairman and director of the board, is entitled to total compensation of $8.7 million, including $7.6 million in options. Brandon Nussey, Chief Financial and Operating Officer, expects compensation of $12 million, including $11.3 million in options.

“The amounts disclosed herein in the board circular represent the accounting valuation of these bonuses, not the actual value these executives have earned or could earn,” said Amber van Moessner, Lightspeed’s chief communications officer, in an email. The actual value depends on the development of the company’s share price over the next five years. »

“The details of these awards have been discussed at length with Lightspeed’s major shareholders, who have generally been supportive and appreciated that the executives’ interests are aligned with those of the shareholders,” she adds.

Jean-David Saint-Martin, Asha Bakshani and Michael DeSimone have compensation of $6.1 million, $8.3 million and $12.3 million, respectively. The vast majority of the amounts are in the form of option or stock-based awards.

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