Roblox awards CEO pay package valued at more than $US230 million

David Baszucki received one of the highest compensation packages in the US last year.

David Baszucki, founder and CEO of Roblox. Picture: Getty Images

The boss of Roblox received a pay package that the video game company valued at $US233m ($306m) last year, instantly putting him in the ranks of the country’s top-paid CEOs, a Monday Securities filing showed.

David Baszucki, co-founder and chief executive officer of Roblox, had received just $US6.8m in 2020. Most of his 2021 package is made up of restricted stock dependent on the company meeting certain milestones, a common retention tool that underscores how some executives can end up with big payouts.

Mr Baszucki’s compensation approaches that of the biggest pay package so far disclosed for 2021 for S&P 500 companies, that of Discovery CEO David Zaslav, at $US247m. At least two other public companies have reported bigger pay packages for their CEOs: more than $US500m each for KKR’s co-CEOs, and $US308m for Endeavor Group’s Ari Emanuel. Like Roblox, KKR and Endeavor aren’t in the S&P 500.

Roblox shares were first traded in March last year at about $US65 when they were first ­offered on the market through a direct listing. They almost doubled in price by November amid the hope the company would benefit from rising interest in the metaverse. Its shares have slid since then.

Mr Baszucki’s equity award is designed to vest – or become fully his – over seven years if Roblox shares average at or above a series of target prices for at least 90 days, starting at $US165 after early March 2023 and continuing through to $US375 a share, the company’s annual proxy statement says. If the initial price target isn’t reached by March 2028, he would ultimately receive no shares under the grant. Roblox shares have traded as high as $US141.60 and closed at $US50.02 on Monday.

Last month Intel disclosed in a regulatory filing that its chief executive, Pat Gelsinger, received compensation last year valued at almost $US180m, pegged to performance targets intended to dramatically improve its stock price.

Overall pay increases for US CEOs have been gaining momentum. Median pay rose to $US14.2m last year for the leaders of S&P 500 companies from a record $US13.4m for the same companies a year earlier, based on disclosures through to Friday evening, according to a Wall Street Journal analysis of pay data for more than half the index from MyLogIQ.

Roblox operates a free online platform with millions of games made by its own users. Mr Baszucki started building it in the early 2000s with fellow programmer Erik Cassel and it launched in 2006. Mr Cassel died from cancer in 2013.

The company, which went public last year, was a big beneficiary of the pandemic’s sheltering restrictions. It has said that the health crisis had an outsize positive impact on its business and that it is working to drive growth by appealing to older and untapped demographics.

Equity awards like Mr Baszucki’s can fluctuate considerably in value, especially over multiyear performance periods. The award valued at $US232.2m when he received it in February last year had risen to $US1.2bn by year’s end, with the company’s share price at $US103, Roblox said in its securities filing.

The Wall Street Journal