The Lightspeed Commerce boss’s compensation falls below the million mark after a “one-time” retention program granted last year failed to win the support of the Caisse de depot et placement du Quebec, its largest shareholder.
The cloud commerce specialist’s CEO, Jean Paul Chauvet, received total compensation of US$691,951 (approximately $914,000) for the 2023 fiscal year ending March 31, according to regulatory filings sent to shareholders.
Last year, the company awarded Mr. Chauvet a total compensation of US$22.1 million. The difference is mainly explained by the “one-time” payment of call options, with an estimated value of US$20.2 million, aimed at retaining the company’s most senior executives.
The long-term incentive program, which brought the total compensation awarded to the company’s six top executives to US$70 million last year, 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 depot, the main shareholder with 16% of the shares, had voted against the compensation of senior executives. The institution had indicated that it had “reluctance” with respect to the compensation program, in particular with respect to the stock option program.
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 strike price, the manager makes a profit. In theory, the value of options granted last year could be different from the initial estimate by the company.
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 US$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 position.
In May, Chauvet said achieving earnings before interest, taxes, depreciation and amortization (EBITDA) in fiscal year 2024 was “non-negotiable,” even though 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 […] than historically because we will concentrate the activities of the company to bring our customers back to 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 peak in August 2021, amid rising interest rates putting pressure on valuations of tech companies. The stock has lost 18% over the past year.