PayPal chief Dan Schulman takes a pay cut in challenging year
PayPal's board continues to search for a new CEO.
Retiring PayPal CEO Dan Schulman is taking a pay cut of nearly one-third for last year’s performance. Schulman’s 2022 pay sank 32 per cent to $22m as a result of missing the mark on key financial targets set by a board committee, an SEC filing reveals.
Over $20m of his total pay comes in the way of stock awards. In the prior year, his executive compensation came in at $32m.
Schulman was docked for failing to meet certain thresholds outlined by the PayPal board's compensation committee across metrics like revenue, margin and new active users.
Last year, revenue came in at $27.5bn, falling short of a minimum threshold of $28.8bn. The non-GAAP operating margin came in at 21.3 per cent compared vs. a minimum threshold of 22 per cent. And net new active users less than 9m compared with a maximum threshold of 18m for a 200 per cent payout.
PayPal acknowledged the tough conditions that Schulman faced, saying that he “led the Company through a challenging period of macroeconomic uncertainty, geopolitical instability, slowing e-commerce growth and a return to pre-pandemic consumer behaviors.”
Last year, PayPal’s stock was slashed by more than two-thirds. So far in 2023, PYPL shares are up almost 3 per cent.
PayPal reportedly holds its 2023 annual meeting in May, at which time shareholders will vote on issues like executive compensation. Among the other issues that investors will influence include risks surrounding discriminatory behavior. PayPal had sought to remove this issue from a shareholder vote.
In a letter dated early 2023, PayPal requested that the SEC agree with its determination that it may exclude a proxy proposal on how it handles discriminatory risks against individuals. However, the regulator disagreed with PayPal’s assessment of the matter, saying instead that “the Proposal transcends ordinary business matters.”
The proposal comes from the National Center for Public Policy Research, which wants greater transparency from PayPal on how it handles discriminatory risks against individuals as they relate to race, color, religion and other areas. The US think tank's proposal requests that PayPal perform an evaluation on this issue and publish a report on its findings within a year.
Meanwhile, Schulman in February revealed plans to retire from PayPal after a tenure with the company of almost 10 years. The board is in the process of searching for Schulman’s successor. Schulman plans to remain on the board following his departure as CEO.