Opendoor Technologies has appointed Kaz Nejatian, formerly Chief Operating Officer at Shopify, as its new CEO. This move is accompanied by an aggressive compensation package that could see Nejatian earn up to $2.78 billion, contingent on significant stock price appreciation. The company is also bringing back its founders, Eric Wu and Keith Rabois, to the board as part of a strategic shift to "founder mode."
Key Takeaways
- Kaz Nejatian, ex-Shopify COO, appointed as Opendoor's new CEO.
- Nejatian's compensation package could reach $2.78 billion, tied to stock performance.
- Founders Eric Wu and Keith Rabois return to the board.
- Opendoor injects $40 million in equity capital.
- Leadership changes include two directors stepping down.
A Bold Bet on New Leadership
Opendoor's decision to appoint Kaz Nejatian as CEO comes with a compensation structure heavily weighted towards equity awards tied to stock price performance. This approach deviates from traditional CEO pay. Nejatian's package includes immediate awards totaling $30 million in cash and restricted stock units, both vesting within nine months. Additionally, he is eligible for two performance-based awards designed to incentivize substantial growth.
The first performance award consists of 40.9 million shares, vesting over five years, with a stock price gate of $6.24. This threshold requires the stock to maintain an average closing price above this level for 60 days. Opendoor's stock saw a significant surge of over 78% on Thursday, reaching $10.49, following the announcement, a notable increase from its June trading price of around 56 cents.
The second performance award is structured as a "moonshot," with seven stock price hurdles ranging from $9 to $33. If Nejatian successfully navigates Opendoor to achieve all these price milestones, his total compensation could reach an estimated $2.78 billion, and he would own 11.6% of the company.
Founders' Return and Strategic Shift
In conjunction with Nejatian's appointment, Opendoor is re-integrating its founders into key board roles. Eric Wu, the company's former CEO, and Keith Rabois, a venture capitalist from Khosla Ventures, are returning to the board. Rabois has been appointed chairman, and Wu will also serve on the board. This move is intended to infuse "founder DNA and energy" back into the company.
Khosla Ventures and Eric Wu are also providing financial backing, investing $40 million in equity capital through a private purchase. This strategic realignment, described by the company as entering "founder mode," signals a renewed focus on core principles and growth.
Leadership Transition and Compensation Comparison
Nejatian's compensation package is notably different from that of his predecessor, Carrie Wheeler. While Wheeler had a base salary of $750,000, a $250,000 cash bonus, and restricted stock valued at $25 million, Nejatian will receive a base salary of just $1 and no bonus. His compensation is almost entirely performance-driven.
Experts suggest that Nejatian's package is comparable to those offered to CEOs at other high-growth tech companies, particularly those with ambitious stock price targets post-IPO, such as DoorDash and Airbnb. The aggressive nature of the compensation highlights the board's strong belief in Nejatian's ability to significantly drive Opendoor's future success.
Nejatian expressed his enthusiasm for the role, stating, "It’s a privilege to become Opendoor’s leader. Few life events are as important as buying or selling a home. With AI, we have the tools to make that experience radically simpler, faster, and more certain. That’s the future we’re building."
