By Peter Rudegeair
PayPal Holdings Inc. awarded Chief Executive Dan Schulman company shares worth $31.3 million this week, a sum that exceeds his annual compensation most years, after the company's stock price skyrocketed during the coronavirus pandemic.
The run-up in the financial-technology company's stock triggered the pay out of one-third of a special performance-based share package Mr. Schulman was granted in 2018, according to a securities filing late Friday and a PayPal spokeswoman.
San Jose, Calif.-based PayPal was one of the beneficiaries of the acceleration of e-commerce and digital payments last year, with the number of active PayPal accounts increasing 24% to 377 million and the total volume of payments processed on its platform in 2020 expanding 31% to $936 billion.
PayPal posted record revenue and profit on the back of those trends. Over the past 12 months, its shares more than doubled in price to $247.54, giving PayPal a bigger market value than most U.S. banks.
Mr. Schulman's stock award, the entirety of which was given a fair value of $16 million when it was granted in April 2018, was slated to start vesting this month if the company's average share price over 90 days exceeded certain thresholds, the highest of which was set at $125. The second and final portions of the award can vest in April 2022 and April 2023, respectively. Mr. Schulman is generally required not to sell these shares until 2023.
For 2019, the most recent year for which PayPal has disclosed executives' compensation, Mr. Schulman earned $25.8 million, or about 80% of what he received on Friday.
Shareholder advocates criticized PayPal's decision to give Mr. Schulman the special stock award in 2018. Proxy-advisory firm Glass Lewis & Co. recommended that investors vote against PayPal's executive compensation proposal that year because of "concerning pay practices." Around 55% of shareholders approved the award.
Write to Peter Rudegeair at Peter.Rudegeair@wsj.com
(END) Dow Jones Newswires