- Dropbox filed to go public on Friday, revealing CEO Drew Houston’s salary for the first time.
- Houston took home about $US110 million in cash and stock in 2017.
- He stands to make a lot more, thanks to an incentive system tied to Dropbox’s share price: If Dropbox shares hit $US60, his total stock hoard will be worth $US930 million.
Cloud storage company Dropbox is going public – and its CEO, Drew Houston, is due to make a whole lot of money.
On Friday, the well-known cloud storage company filed the paperwork for its long-awaited IPO. The S-1 revealed that CEO and cofounder Drew Houston made about $US110 million in cash and stock in 2017.
The breakdown: Houston made $US400,000 in base salary, plus a $US260,000 cash bonus. But the bulk of his salary came in the form of a restricted stock grant.
Dropbox valued that grant – 15.5 million shares, all in all – at $US109.6 million, figuring each share was worth about $US7.07. It will vest over the next four to 10 years, depending on the company’s stock hitting certain price targets under Houston’s stewardship.
He could begin reaping some of the rewards from the grant as early as next year. After January 1 – and the lock-up period passes on insider selling – some 3.1 million of Houston’s shares will vest if Dropbox’s shares hit $US20. Just that batch would be worth $US62 million at that price.
If Dropbox’s stock hits the highest price target specified in the grant – $US60 a share – and Houston holds on to all of the shares he was granted as a part of it, the actual value of the stock granted to him by the company as part of this plan would be $US930 million.
In addition to the restricted stock grant, Houston also owns 127 million shares of Dropbox’s Class B stock, which offers greater voting power than the Class A shares it plans to sell to the public. The company valued those shares at $US7.01 a piece at the end of 2017, per the filing. That’s worth about $US891 million on its own, at that price.
In other words, there’s a lot of upside for Houston if he can keep things rolling. But he already stands to rake it in.
Getting those bonuses will be contingent on continuing to improve the business: While the filing shows that Dropbox has seen its losses narrow from 2015 to the present, it’s still not profitable – it lost about $US111 million on revenues of approximately $US1.1 billion in 2017.