Snapchat creator Evan Spiegel’s pay hits $638m

Snapchat creator Evan Spiegel’s pay hits $638m

Evan Spiegel, the billionaire creator of Snapchat, is likely to be crowned the highest-paid US chief executive of 2017, after his total remuneration hit $638m.

When the photo-messaging app’s parent company Snap went public last March, Mr. Spiegel received a huge one-time stock award, valued at $637m at the end of last year, according to a regulatory filing published on Thursday. 

As well as the stock award, Mr Spiegel received more than $1m in additional compensation related to medical and life insurance premiums, legal fees and more than $500,000 in personal security costs.

According to Equilar, a research firm that tracks executive pay, Mr Spiegel’s payout is the largest “by a considerable margin” for several years, exceeding the award given to Tim Cook when he took over from Steve Jobs as Apple chief executive in 2011. Mr Cook’s restricted shares, which were set to vest over 10 years, were worth $376m at the time. 

“It is very rare for us to see an award that large,” said Dan Marcec, Equilar communications director, of Mr Spiegel’s compensation. “I would be surprised if we saw a larger one for 2017.” 

As originally disclosed in Snap’s prospectus last year, Mr Spiegel’s award comes in the form of restricted stock units that will vest every three months in the three years running up to November 2020. 

At the same time, the 27-year-old — whose net worth is estimated by Forbes at $3.8bn — cut his annual salary from $500,000 to $1. That followed similar moves to dollar salaries by other tech company founders who hold a significant portion of their wealth in their company’s stock, including Facebook’s Mark Zuckerberg and Alphabet’s Larry Page. 

A one-time stock award is not unusual for chiefs of a company upon its initial public offering. GoPro chief executive Nick Woodman received a similar package, worth $285m at the time, when the action camera maker went public in 2014. 

The award made Mr Woodman the highest-paid American executive that year but GoPro’s share price has since lost more than 90 per cent of its value. 

The timing and magnitude of Mr Spiegel’s payout could sit awkwardly with Snap shareholders, who this week have endured another slump in its stock price, and even some Snapchat users, who have been complaining about its recent redesign. 

Kylie Jenner, one of Snapchat’s most-followed celebrity users, joined that chorus of criticism on Wednesday. “Sooo does anyone else not open Snapchat any more? Or is it just me . . . ugh this is so sad,” she tweeted. Her post on Twitter — where she remains an active user — was blamed for an 8 per cent drop in Snap’s share price on Thursday morning, wiping $1bn from its market value and bringing its stock just a few cents above its $17 IPO price.

Earlier this week, Snap shares were hit by a downgrade by analysts at Citi, who cited the “significant jump in negative app reviews” following the redesign as a primary reason for moving their recommendation to sell. 

Snap acknowledged that the revamped appearance had “received negative attention in the press and in app store reviews”, in a new addition to the “risk factors” section of Thursday’s 10-K filing. 

Snap’s stock has had a volatile month. Earlier in February, its shares rose as much as 38 per cent in a single day after beating Wall Street’s forecasts for the first time since going public.