David Baszucki, CEO and founder of Roblox (RBLX -3.58%), has a compensation package that puts him among the top CEOs in the S&P 500. In this Motley Fool Live segment from "The Virtual Opportunities Show," recorded on April 5, Fool.com contributors Demitri Kalogeropoulos, Travis Hoium, Rachel Warren, and Jose Najarro take a closer look Baszucki's pay and stock options, and what this may say about the future of the company.
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Demitri Kalogeropoulos: CEO David Baszucki, CEO and founder of Roblox. Roblox is the gaming company that's very in-depth. It's got a very engaged user base and it's growing. It's got some really interesting opportunities expand in the metaverse. But his compensation package is valued at over $230 million for last year, which turns some heads because that would put him among the top in the S&P 500 CEOs. Let me share the SEC filing because it's interesting to look at it this way because it's important to understand this is a pay package. It's not a salary, number 1, because CEOs like this get paid mostly by restricted stock units, stock options, they're called and they're very incentivized to think in the long term in that way. Let me show you what that slide looks like from the SEC. Coming across full screen for you guys, hopefully. You can see here that his base salary actually went down last year. It was over 500,000 the year before in 2020 and last year was 136,000.
Travis Hoium: Seems like a fair trade.
Demitri Kalogeropoulos: I know. I'll take a little bit less that and then stock awards, that's the big number right there, $232 million in stock awards, which as I mentioned, they're basically different vesting schedules for the company hitting certain performance numbers and obviously, some of those numbers were just off the charts in 2021 in terms of engagement, user growth like hours of engagement. The stock performance itself, Roblox's stock was up, I think 45 percent last year, even after that slight decline late in the year. I saw this as interesting and just wanted to point out that idea that he's not getting paid that $232 million in a salary, but it is still. It does, we've been talking a bit about the metaverse. It is another point there that tells us board of directors are very excited about it and they're trying to reward the CEO and its founder for what he's doing in that area.
Travis Hoium: I think one thing that's really important to note in this case, specifically is that Baszucki owns about 13 percent of Roblox already. He's only the CEO, but he's a founder and that's what I found a little bit bizarre and concerning. I guess this isn't surprising when companies go public, they just start to siphon off as much stock as they can, which is harder to do in you are private. But it isn't like he doesn't have an incentive to grow the company that's aligned with shareholders. I'm going to guess we've seen Elon Musk do this as well. I always question, does an extra $250 million in stock move the needle for you when you're worth $4.2 billion in the same stock already?
Rachel Warren: Every little bit counts value. [laughs]
Jose Najarro: I think I noticed from that small slide that last year he was paid in options. I don't think those options, they don't show the full true value of the stock. I wonder how much that option was worth compared to what that stock-based compensation is worth today.
Travis Hoium: I wonder if the options go down and then they're worth nothing. If the stock goes down, then the options are worth nothing. Good point.
Demitri Kalogeropoulos: Go ahead.
Rachel Warren: I was just going to say it was interesting. There was an article on Fortune that was talking about this and it was saying the median pay for CEOs in the US in 2021, based on the numbers that are now coming out, is set to have risen about 20 percent year over year. Which is compared to a five percent increase in average hourly earnings for Americans last year. For anyone wondering why the great resignation or the great reshuffling is still happening, that's one metric to look at.