Expedia's CEO Gets $84 Million in Options Meant For Five Yearsby
Khosrowshahi got top job in 2004, awarded 2.7 million options
No further equity compensation planned for vesting period
Expedia Inc. paid Chief Executive Officer Dara Khosrowshahi $94.6 million in 2015.
Most of Khosrowshahi’s compensation is in the form of 2.7 million stock options valued at $83.6 million that vest over five-and-a-half years, the company reported in its summary compensation table disclosed in a Friday annual report. He’s "not expected to receive additional equity compensation" during that time, Expedia said in the filing.
"Dara Khosrowshahi has been a transformational CEO," said Sarah Gavin, a company spokeswoman. "His leadership has elevated the company into a global leader in the online-travel market, and he continues to guide the organization along a growth trajectory that provides extraordinary value to investors and suppliers, as well as to customers and employees and the wider travel marketplace."
Expedia, based in Bellevue, Washington, operates travel businesses including Hotels.com, Orbitz, Trivago and Travelocity. While 1.6 million of the options will vest so long as Khosrowshahi is employed with Expedia, he’ll need to get Expedia’s stock price up to $170 prior to September 2020 to receive the other 1.1 million, the filing shows. Expedia closed at $115.77 on Friday.
Other U.S. technology companies have also ‘front-loaded’ awards for executives. In 2011, Apple Inc. disclosed $378 million in compensation for new CEO Tim Cook, mostly in stock meant for ten years. In 2012, Tesla Motors Inc. granted founder Elon Musk stock options worth $78.1 million at the time, tied to a variety of goals, also meant for a decade. He’s well on his way to transforming that into a $1.6 billion pay day.
Khosrowshahi’s 2015 compensation also included a $1 million salary and $2.75 million bonus. A smaller tranche of options that vests over four years was valued at $7.28 million in the document. He was named to run Expedia in 2004, when it was closely held by Barry Diller’s IAC/InterActiveCorp.