How does an executive reward themselves for a job well done? When you don’t take a salary, the only option is to sell off bits of the company you made successful. So is the case of Spotify CEO Daniel Ek, who has treated himself to a significant payday this year in the form of share sales.
And the Spotify co-founder isn’t the only one at the company who has been reaping the rewards from the group’s share price explosion this year.
Spotify execs cashing in
According to SEC filings analyzed by Fortune, executives at the company are starting to cash in on the streaming group’s resurgent share price.
Five current members of Spotify’s C-suite and Paul Vogel, the recently departed ex-chief financial officer, have sold $254.4 million worth of shares since the beginning of 2024.
The bulk of that withdrawal has come from Ek, who cashed out $118.9 million in shares following the group’s Q2 results, which followed a $59.9 million sale in February.
The Spotify CEO hasn’t taken a salary since 2017, according to company filings. He was probably one of the worst-paid major tech CEOs last year, as the boss held off on selling any shares in the company. He received $1.4 million in “other compensation.”
Gustav Söderström, Spotify’s chief technical officer and chief people officer, has sold a total of $40.7 million worth of shares since the start of the year. He vested around $30 million of that in two tranches on Wednesday and Thursday.
Alex Norstrom, the group’s chief business officer, has banked a comparatively modest $12 million from stock sales this year. Dustee Jenkins, Spotify’s chief public affairs officer, cashed in $343,000 in March.
Katrina Berg, Spotify’s chief human resources officer, vested $7.7 million worth of shares in February.
Former CFO Paul Vogel, meanwhile, took home $14 million, also in February.
Vogel was booted from his role as Spotify CEO in December when the company laid off 1,500 employees. Around the time of the announcement, Vogel sold $9.4 million worth of shares.
A spokesperson for Spotify said: “As part of his long-term financial planning, Daniel Ek has sold some of his Spotify shares. These sales account for a limited amount of Mr. Ek’s holdings in the company.”
Spotify’s payday
It’s not clear what exactly motivated Ek and his colleagues to make such large withdrawals to start the year. For the 2023 financial year, the top five execs at Spotify cashed in a combined meager $6.3 million worth of shares.
But it probably has something to do with Spotify’s excellent start to 2024.
Shares in the group have increased more than 60% since the start of the year, adding more than $20 billion to the group’s valuation.
Speaking after the company announced record quarterly profits Tuesday, Ek hailed a new era of monetization at the company, which has been able to increase subscription prices while adding new members. It has also refined its previously expensive podcast division to bulk up its margins.
But Spotify’s return to near-record valuations has been a rocky road, and not without its fair share of departures.
The group laid off 1,500 employees in December as part of a massive efficiency drive, with Ek arguing his staffers were doing too much “work around the work.” Shares in the group have continued to rise since the layoffs.
However, during the company’s latest earnings call, Ek acknowledged that the layoffs, equivalent to 17% of staff, had impacted day-to-day operations more than he had anticipated. That surprise adjustment was even partly responsible for the group failing to hit its lofty targets for monthly active users and quarterly profits.