From Adweek · Kendra Barnett · · 1m 30s
Trade Desk reprices options to stop talent drain
The ad-tech company is lowering stock option prices to retain employees as its share price has collapsed.
In brief
The ad-tech company is lowering stock option prices to retain employees as its share price has collapsed. When stock options become worthless, companies can reset them to current prices to keep employees from leaving, though this shifts value from public investors to staff. Originally reported by Adweek.
Ad-tech giant faces stock collapse
The Trade Desk, once valued at $69 billion, has seen its stock plummet 90% since late 2024 amid competition from Amazon, executive turnover, and a public dispute with major client Publicis.
Company cuts 15% of workforce
The Trade Desk laid off 15% of its headcount earlier this month as it grapples with mounting business pressures and the need to stabilize operations.
Stock options become worthless
Most employees hold options with exercise prices far above current stock levels, making them financially meaningless and threatening to drive talent away.
“the underwater stock options may be perceived by their holders as having little or no incentive and retention effect”
Company reprices 15.6 million options
The Trade Desk is seeking to reset stock option exercise prices to current market levels, with 80% of eligible options held by rank-and-file employees and 10% each for CEO Jeff Green and other executives.
CEO controls the vote outcome
Jeff Green's super-voting shares give him 50.2% of total voting power, meaning the repricing proposal will almost certainly pass when shareholders vote on October 19.
Repricing shifts value, not creates it
Analysts note that repricing simply transfers wealth from public shareholders to employees and executives without improving the company's underlying business or value.
“any changes like this don't change the value of the company”
The big picture
When stock options become worthless, companies can reset them to current prices to keep employees from leaving, though this shifts value from public investors to staff.
