DraftKings CEO 2021 Pay Slides, Still 137 Times in Excess of Median Employee

Posted on: March 1, 2022, 12:28h. 

Last updated on: March 1, 2022, 01:13h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

DraftKings (NASDAQ:DKNG) cofounder and CEO Jason Robins saw his 2021 total compensation tumble, as shares of the sports betting operator did the same.

Jason Robins
DraftKings CEO Jason Robins in a CNBC interview. His 2021 pay dropped as the stock did the same. (Image: CNBC)

His total pay declined to $14.03 million in 2021 from a staggering $236.83 million the prior year. However, no one should cry for Robins, as he received $11.3 million in equity awards last year, non-equity incentive plan compensation of $1.95 million, and “all other” compensation of $666,650, up from $75,275 in 2020, according to a Schedule 14A filing with the Securities and Exchange Commission (SEC).

Mr. Robins’ personal security program includes background checks for relevant individuals, armed security services at the office and his personal residence, and a requirement that Mr. Robins and his family only fly on private aircraft. For 2021, the cost for these measures was $642,950,” according to the filing.

While no one should cry for Robins, the sorrow is reserved for DraftKings investors. With the online sportsbook operator struggling to attain profitability and the investment community growing impatient on that front, the once high-flying stock lost two-thirds of its value last year.

Other Founders See 2021 Pay Decline, Too

Mathew Kalish and Paul Liberman are the other DraftKings founders, and their 2021 pay also dropped, though neither are hurting.

Last year, Kalish’s total compensation fell to $11.42 million from $197.24 million, while Liberman’s slid to $11.43 million from $197.22 million. A regulatory document filed on March 1, 2021 indicated that from that date through the end of the year, the three founders were taking base salaries of $1 apiece.

Each “is entitled to an annual equity incentive award, which will be granted within the first three months of each fiscal year with a minimum annual target value of $6,500,000 for Mr. Robins and $3,500,000 for each of Messrs. Kalish and Liberman,” according to the Schedule 14A.

As of Jan. 23, 2021, Robbins, Kalish, and Liberman combined to own approximately 9.5 million shares of the daily fantasy sports (DFS) provider’s common stock equity. Robbins also owns more than 90% of the company’s Class B stock, which carries with it 10 votes per share compared to the single vote assigned to each of the more common Class A equity.

Staggering Ratio

Regardless of industry, chief executive officers and other high-ranking executives often come under fire from policymakers and shareholder groups for lavish compensation. That’s particularly true when it significantly outpaces that of the average employee at the company in question.

While the DraftKings founders currently aren’t being criticized — at least not publicly — for their 2021 pay, Robins earned $14,028,724 last year while the median DraftKings employee earned $102,098. That’s good for a jaw-dropping CEO/median staffer ratio of 137-to-1.

“The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions and to make reasonable estimates and assumptions that reflect their compensation practices,” according to the SEC filing.