Opendoor Technologies has appointed Kaz Nejatian, former COO of 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 in an effort to infuse "founder DNA and energy" and has secured $40 million in new equity capital.
Key Takeaways
- Kaz Nejatian, formerly Shopify's COO, is the new CEO of Opendoor.
- Nejatian's compensation package is heavily weighted towards stock performance, with a potential payout of $2.78 billion.
- Founders Eric Wu and Keith Rabois are returning to the board, with Rabois appointed chairman.
- Khosla Ventures and Eric Wu have invested $40 million in equity capital.
- Two directors, Pueo Keffer and Glenn Solomon, have stepped down.
A Bold Bet on New Leadership
Opendoor's decision to appoint Kaz Nejatian as CEO comes with a compensation structure designed to heavily incentivize stock performance. Nejatian's package includes a $15 million cash award and a $15 million restricted-stock unit award, both vesting in nine months. More significantly, he is eligible for two performance-based awards totaling 40.9 million shares. The first award has a vesting gate of $6.24, requiring the stock to maintain this average closing price for 60 days. The second 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 stock price milestones, his total compensation could reach $2.78 billion, and he would own 11.6% of the company. This aggressive strategy signals a strong belief from the company's leadership in Nejatian's ability to drive substantial growth. Keith Rabois, now chairman, stated, "Literally there was only one choice for the job: Kaz."
Founders Return, "Founder Mode" Activated
In conjunction with Nejatian's appointment, Opendoor is re-engaging its founders, Eric Wu and Keith Rabois. Wu, who previously served as CEO from 2013 to 2022, and Rabois, a notable venture capitalist, are returning to the board. Rabois has been appointed chairman. This strategic move is described by the company as entering "founder mode," aiming to recapture the innovative spirit and drive that characterized the company's early stages. The founders' return is also backed by a $40 million equity investment from Khosla Ventures and Wu.
This leadership overhaul also includes the departure of two directors, Pueo Keffer and Glenn Solomon. The company's press release emphasized that Nejatian's appointment, alongside the founders' return and new financing, signifies a renewed focus on growth and innovation.
Shifting Compensation Philosophy
Nejatian's compensation package represents a significant departure from traditional CEO pay. He will receive a nominal base salary of $1 and no bonus. Instead, his earnings are almost entirely tied to the company's stock performance, a model that has been seen at other tech companies like DoorDash and Airbnb post-IPO. This contrasts sharply with the previous CEO, Carrie Wheeler, whose package included a $750,000 base salary, a $250,000 bonus, and $25 million in restricted stock. Former CEO Eric Wu also had a compensation structure tied to stock price milestones, though his targets were higher than Nejatian's initial hurdles.
