Money-losing exercise bike maker Peloton dangled a $168 million compensation package to coax Barry McCarthy out of retirement and into the hot seat as its CEO, a proxy filing shows.
The eye-popping payout is 2,299 times greater than the median $73,117 salary at Peloton, according to Tuesday’s filing.
The payout would make McCarthy one of the highest-paid chief executives in the US, but the vast majority of his compensation is tied to Peloton’s stock performance.
Peloton’s shares, once north of $150 during the height of the pandemic, traded Wednesday below $8. The stock would have to rise to $38.77 before he can exercise the options on his 8 million shares.
McCarthy was given an annual salary of $357,692, but it was increased to $1 million in June, according to the filing.
The former finance executive at Netflix and Spotify took over the company in February after the ouster of Peloton’s founder John Foley.
Foley, who was forced out as CEO after investors accused him of mismanagement and stepped down from the board last month, cashed out stock worth $97 million in the 12 months ending in June 2022, the filing showed.
His wife, Jill, was also on the payroll as the company’ vice president of boutique and apparel, pulling down a salary of $334,750 and $457,688 in equity compensation in fiscal 2022, according to the filing. In addition, she received $334,750 in severance.
Nonetheless, Foley’s fortune sank as Peloton’s value collapsed from roughly $50 billion to less than $8 billion. The couple have put their ocean-front Hampton’s mansion on the block and also sold a smaller home in the Hamptons.
The company’s financial peril has persisted despite Foley’s departure, falling to a valuation of just $2.5 billion.
McCarthy instituted a series of layoffs after taking over, including eliminating 500 jobs, or 12% of its workforce, just a few weeks ago.
“The bulk of our restructuring work is complete,” McCarthy said earlier this month. “We are eliminating these positions and reducing other operating expenses, in order to reach break-even cash flow by year-end FY23.”
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