Trade Desk reprices executive stock options after 66% share price slump

what happened

Trade Desk shares have fallen 66% so far this year, and this week CEO Jeff Green got a chance to reset the terms of his stock options. According to WSJ, the company lowered the exercise price on 1.6 million options held by Green, another 1.6 million held by other senior executives, and millions more held by more than 2,000 employees. The exercise price dropped as much as 85%, to $12.26, which moved the options from deeply underwater to slightly in the money at Friday's close of $13 a share.

The company said in a securities filing that the share price drop could substantially harm its ability to retain staff. Shareholders approved the change in a nearly 2-to-1 vote, but Green's own shares supplied about 98% of the yes votes. VerityData analyst Amy Pessetto called the repricing a significant giveaway to executives.

VerityData found that U.S. public companies have repriced options around 220 times since 2021, and such moves are often opposed by investors.

why it matters

For the market the signal is mixed: the change weakens the incentive for management when the stock falls and raises governance questions. The options still require employees to stay and wait until at least April 19 before exercising, which the company says ties their outcome to shareholders.

market impact

TTD shares: repricing weakens management incentives and raises governance concerns among investors

tags

instruments