PayPal CEO Dan Schulman snared a 37% increase in total compensation last year even as the digital payments company cut its revenue expectations and abandoned a previous growth goal.
Schulman’s total pay package, including salary and stock awards, jumped to $32.1 million for last year, compared to $23.4 million for 2020, according to the company’s proxy statement filed with the Securities and Exchange Commission this week.
The lion’s share of his pay package's value last year derived from $29.9 million in stock awards, according to the April 19 proxy statement. Other than that, his $1.12 million salary rose just 8% over $1.04 million in 2020 and his "other compensation" increased about 10% to $402,857. His non-equity incentive plan compensation decreased to $625,000. In 2020, his compensation of $23.4 million was about 10% lower than in 2019, according to the proxy.
Schulman, 64, joined the San Jose, California-based company in 2014 from card company American Express and has led it as CEO since 2015, the proxy said.
The proxy specifically noted that during 2021 Schulman steered the company through the challenges presented by the COVID-19 pandemic; oversaw the addition of several new products, including the roll out of the company’s digital wallet globally; and the expansion of Venmo payment services, including adding cryptocurrency capabilities.
It also said compensation generally was based on a "strong financial and operational performance across key performance metrics following the prior year’s record setting performance." The company’s annual revenue for 2021 rose a whopping 18% to $25.4 billion, but its net income slipped.
PayPal also noted that it added 48.9 million net new active consumer and merchant accounts, ending the year with 426 million accounts, and increased its total payment volume to $1.25 trillion.
Despite that increase in new accounts, PayPal’s executives said in February that the company was abandoning a prior goal of reaching 750 million active users by 2025 to focus more on engaging its existing customers. It announced that shift in February as it also delivered lower-than-expected net income for the fourth quarter and reduced its revenue growth outlook for this year.
"A company in transition in more ways than one," is how RBC Capital Markets Analyst Daniel Perlin described PayPal in a note to his clients this week that also trimmed his earnings forecast for the company. "To say (PayPal) has lots of moving parts right now would be an understatement," he said in the April 21 note.
The company will report its first-quarter financial results next Wednesday.
Compensation for PayPal’s second-highest paid executive last year, Executive Vice President Louise Pentland, who is chief business affairs and legal officer, jumped 73% to $17.4 million, also bolstered by stock awards. Executive Vice President and Chief Product Officer Mark Britto earned at a similar pay level, landing a package last year worth $17.4 million (his prior salary wasn't disclosed).
Meanwhile, compensation for Chief Financial Officer John Rainey, the fourth-highest paid executive at the company, rose 22% last year to $12.3 million. He said this month that he’s leaving the company in May and will join retail behemoth Walmart in June.
PayPal’s stock has been trending down since last July, losing about 70% of its value during that nine-month period. If it doesn't start heading back up, it becomes harder for Schulman and the other executives to make their stock awards pay off.