I assumed this compensation was in the form of options which could be said to incentivize management, but that is not the case. They are being compensated in Restricted Stock Units (RSUs), meaning units that could be converted to stock at market value after a certain period, without management having achieved anything. This compensation is in addition to their equity, existing options, and salaries, all of which are substantial. The board essentially gave them free money, no strings attached. I don't know how this could be seen to benefit shareholders. If you know, please tell me
NVEI’s compensation consists of annual bonus and share-based awards: Annual Bonus was based on achievement of certain metrics including Revenue and Adjusted EBITDA. While Long-term incentives include:
_Restricted Stock Unit - RSU (25% of total grants, in 2022) is to retain executives and managers, a common practice at tech companies
_Performance Stock Unit - PSU (75% of total grants, in 2022) is only being vested if achieved revenue growth target for the year, payout was 0% in 2022 due to weak growth
_Stock Options: no options awarded in 2022. The majority of options are currently underwater with the average exercise price of about $56.
In 2021, the CEO’s total compensation was quite excessive for a company of this size, totalling around $112M. This compensation was achieved as the share price soared, hitting all targets for the share price performance of PSU and options in 2021. On the other hand, there was also a strong alignment of interest, CEO is required to share ownership of at least 5x base salary but currently holds shares worth around 228x base salary.
Overall, compensation is quite large for a company of this size if performance is achieved. However, those were mostly achieved based on performance metrics, not just free money. The bright spot is the majority of PSU and options in 2021 were based on share price, which has been updated to operational metrics in 2022.