Double-dipping
Fiserv - NASDAQ: FISV
Imagine a scenario where you accept the CEO role at Fiserv in January 2025. The board grants you ~$15MM of cash compensation for the awards you forfeited from your previous job, and ~$25MM in RSUs and PSUs to ensure your retention going forward. Over the next year the stock craters ~73%, and the value of your grants along with it.
This is a challenging conundrum for boards. You’re likely not to blame for the precipitous stock decline, but the board can’t go back in time and fix that mistake. Or can they…
On February 18th, Fiserv’s board approved a supplemental equity award to its CEO, Michael Lyons. It comprises:
$18MM in PSUs
Cliff vest after three years, subject to achievement of performance goals tied to relative total shareholder return and the One Fiserv action plan
Performance metrics for the One Fiserv action plan will be set in connection with Company’s 2026 investor day
$12MM in RSUs
Vesting over three years
In addition, Lyons is eligible for his annual equity grant, which the board decided to grant on the exact same date.
$11.2MM in PSUs
Cliff vest after three years subject to achievement of performance goals tied to relative total shareholder return, adjusted revenue growth, adjusted earnings per share, and free cash flow conversion
$7.5MM in RSUs
Vesting over three years
Although the board could technically just issue supplemental equity next year if the stock craters again, I would think that large shareholders, ISS, and Glass Lewis would have something to say about it the second time around.
There’s a lot riding on this award. The board granted nearly $50MM all at once, and didn’t even try to diversify over a certain time period. They better hope that they got the timing right.
“♡ Like” this piece if we should cue the world’s tiniest violin for Michael Lyons.