To become the next CEO of Uber, Expedia’s Dara Khosrowshahi may need to leave a lot of money behind.
In 2015, Khosrowshahi was the highest paid CEO in the S&P 500, with compensation totaling $94.6 million, according to a report compiled by Equilar and the Associated Press. The bulk of that came from a stock award worth nearly $91 million at the time, which was scheduled to vest over the next five-and-a-half years. Khosrowshahi made a mere fraction of that, about $2.5 million, the following year.
In March 2015, online travel company Expedia entered into a new employment agreement with Khosrowshahi, who had been its chief executive since a 2005 spinoff from then-parent IAC. Under the terms of that agreement, Khosrowshahi earned a $1 million base salary as well as “long-term” equity awards that could take years to vest.
For example, 1.1 million stock options awarded to Khosrowshahi hinged on both his continued employment with Expedia and the company achieving a “stock price goal” of $170 by September 2020, according to a company filing. Another 1.6 million of his stock options were subject to his continued employment and vested on the third and fifth anniversaries of the date of their grant.
Expedia’s stock has climbed more than 500% since the 2005 spinoff. It reached a high of $159.50 in late July, and most recently closed at $149.26 on Aug. 25.
It is unclear how much of Khosrowshahi’s 2015 stock award has vested, and by extension how much money he might leave on the table were he to accept the CEO job at Uber. But the stock grant was deliberately structured to encourage Khosrowshahi to remain at Expedia for the long term. “This really is just an example of pay for performance,” a company spokeswoman told the Wall Street Journal (paywall) last year. “We want him to stick around.”