Opendoor brings again its founders and welcomes a brand new CEO from Shopify—who might earn $2.8 billion if he sends the inventory hovering | Fortune

Opendoor Applied sciences goes all in on new CEO Kaz Nejatian with an aggressive compensation package deal that might see him clear $2.78 billion and personal practically 12% of the corporate. However he’ll should do greater than triple the share worth of an actual property know-how firm some have deemed a buzzy meme inventory.

Within the meantime, Nejatian can have Opendoor’s founders—Eric Wu and Khosla Ventures’ Keith Rabois—overseeing him on the board. Wu served as Opendoor’s CEO from 2013 to 2022 and chaired the board from 2020 to 2022. Rabois, who served on the boards of Reddit and Yelp and at the moment serves on the board of Ramp, was appointed chairman. Each are returning to Opendoor to convey again “founder DNA and energy,” the corporate introduced. They’ll additionally inject capital; Khosla Ventures and Wu invested $40 million of fairness capital into Opendoor by way of a non-public buy. In the meantime, two different administrators, Pueo Keffer and Glenn Solomon, have stepped down in a big management shuffle. 

In a press launch, Opendoor mentioned it was “going into founder mode” with Nejatian’s appointment and in luring Rabois and Wu again with seats on the board and new financing. 

“Literally there was only one choice for the job: Kaz,” mentioned Rabois in an announcement. “I am thrilled that he will be serving as CEO of Opendoor.”

Nejatian’s pay package deal will see Opendoor flip away from conventional CEO compensation plans in favor of a return to large fairness awards tied fully to inventory worth efficiency, based on his provide. Nejatian left his position as chief working officer at Shopify to hitch Opendoor, and he’ll get two “make-whole” awards from his new bosses. The primary is a $15 million money award, and the second is a $15 million restricted-stock unit award. Each vest in 9 months. 

Nejatian, who beforehand cofounded a fee tech firm known as Kash, will even get two performance-based awards. The primary award of 40.9 million shares is principally designed round guaranteeing that shareholder worth isn’t eroded, mentioned Farient Advisors vice chairman Eric Hoffmann. The shares vest in installments over 5 years with a inventory worth gate of $6.24, which suggests the inventory has to take care of a median closing worth of $6.24 or increased over a 60-day interval for vesting to happen. Opendoor’s inventory surged greater than 78% on Thursday following Nejatian’s appointment to $10.49, however in June, the inventory hovered round 56 cents a share. 

The second efficiency award is designed like a moonshot with seven inventory worth hurdles starting from $9 to $33. The tranches solely vest when the inventory hits worth milestones of $9, $13, $17, $21, $25, and $33.

If Nejatian can hit all these worth targets, he’ll be rewarded with compensation valued at $2.78 billion—and he’ll personal 11.6% of the corporate, double the stake Wu held when Opendoor went public by way of a SPAC in 2020, Hoffmann advised Fortune. 

“What I find interesting is that they clearly believe that this guy, who was the COO at Shopify, is going to make or break this company,” mentioned Hoffmann. “They are willing to make a very large bet and put a lot of power and money into his pocket to get him on board and motivated to grow and drive the company forward.”

Nejatian’s package deal is just like that of different CEOs at tech corporations with hefty inventory worth development targets, mentioned Farient’s senior information analyst, Claire Kamas. Comparable plans have been in place at on-line supply platform DoorDash and Airbnb after they went public, she added.

When Wu served as CEO, the corporate had the same construction, famous Hoffmann, though Wu’s worth milestones have been increased at $18.11, $23.54, $30.60, $39.78, $51.71, and $67.23. He hit the primary milestone earlier than resigning in 2022. The Opendoor board changed him with Carrie Wheeler, who had been the chief monetary officer. Wheeler stepped down on Aug. 15.

Wheeler’s pay package deal included a base wage of $750,000 plus a money bonus of $250,000, and she or he was awarded restricted inventory valued at $25 million. 

Nejatian, conversely, can have a base wage of $1 and no bonus. 

“It’s a privilege to become Opendoor’s leader,” mentioned Nejatian. “Few life events are as important as buying or selling a home. With AI, we have the tools to make that experience radically simpler, faster, and more certain. That’s the future we’re building.”

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