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Work nine months, get $30m at Zoom

Like a lot of people, I spent a good chunk of the pandemic on Zoom, between my son’s online classes, my own meetings and just catching up with family and friends. Indeed, Zoom stock soared to over $550 a share by October 2020, roughly six months after everything shut down.

Since then, however, the stock has fallen pretty dramatically and is currently trading at around $64 a share. Not that stock price is the only measure of how a company is doing. But still, it’s never a good look when a stock is falling, the company is laying off thousands of people, and yet, the CEO and other top executives are doing better than ever. Executives at Zoom clearly understood that because in most of the coverage announcing the 15% reduction in employees back in February, it was also noted that CEO Eric Yuan would be cutting their own salaries. CNN even went as far as to call it a “massive pay cut“.

According to the proxy that Zoom filed after 5 pm on Friday, Yuan’s pay cut was indeed massive. His salary for fiscal 2024 will be reduced by 98% to $10,000. But as with most tech companies (see Meta and Mark Zuckerberg’s $1 salary, just for a start), the real money is in the stock options and the proxy shows that Yuan’s total compensation last year was $76m, almost all of it due to stock options. Equally interesting is how Yuan’s security costs, while nowhere near Zuckerberg’s, have doubled over the past two years to $1.2m.

The proxy also provides some more details on the very short employment of Greg Tomb, the former Google executive, who was named President of Zoom in June 2022 and lasted around nine months. According to the proxy, Tomb’s total compensation was just over $51m FOR NINE MONTHS. Like Yuan, most of that was tied to stock, specifically a $45m sign-on bonus that he received when he was hired. As the proxy helpfully notes, Tomb had to forfeit around 60% of those options, meaning his total compensation was probably closer to $30m FOR NINE MONTHS.

The bottom line here is that unlike many companies, Zoom was clearly sensitive about the optics of laying off lots of people. They just had an interesting way of showing that concern.