Snapchat’s then-private owners really wanted CEO Evan Spiegel to take their photo-based social media company public.
In mid-2015, Snap’s board of director’s agreed to award the 26-year-old entrepreneur another 3% of the company, or 37.4 million shares, if he took the business public. That means upon the closure of Snap’s public offer Thursday, those shares became available to Spiegel, according to a Tuesday filing with the Securities and Exchange Commission. At Snap’s current share price of nearly $22, that stake is worth some $822 million.
“Our board of directors approved the award to Mr. Spiegel in July 2015 to motivate him to continue growing our business and improving our financial results so that we could undertake an initial public offering,” Snap’s IPO filing revealed. “Which we regard as an important milestone that will provide liquidity to our stockholders and employees.”
Wealth wasn’t the only incentive the board members provided. Those shares also include voting shares with 10-to-1 voting power. Spiegel and Snap’s co-founder Bobby Murphy currently have equal voting power over Snapchat, each controlling about 44.4% of the company.
But unlike Spiegel, Murphy did not receive an award for taking the company public. Once the stock award is delivered to Spiegel, he “alone may be able to exercise voting control over our outstanding capital stock,” the IPO filing stated.
Investors have already voiced displeasure over Snap’s corporate governance structure: A professor at the University of Delaware, Charles Elson, noted to Reuters that the lack of voting shares available to investors means they are “completely hostage to the actions of [Snap’s] management.”
Spiegel won’t receive the shares immediately. Instead, the shares will be delivered in equal quarterly installments over the next three years, starting from the third full quarter from the IPO.