Blend Labs Co-Founder Nima Ghamsari Receives Potential $ 10.9 Billion Incentive Compensation Package

0


Blend Labs co-founder Nima Ghamsari releases Elon Musk’s compensation manual as the valuable mortgage software company prepares to go public.

In 2018, the board of directors of Musk and Tesla unveiled a 10-year, $ 55 billion incentive compensation package that left jaws on the floor on Wall Street and corporate America. Ghamsari, a 35-year-old Stanford-educated Iranian immigrant who was one of Palantir’s first employees and then co-founded Blend in 2011, is expected to receive a potential muskian salary of $ 10.9 billion as part the imminent listing of the company’s shares.

Blend’s board of directors has granted Ghamsari 78.2 million stock options at a price of $ 2.86 per share which vest over a 10-year period, depending on whether the shares of the company skyrocket after its IPO. Ghamsari’s so-called “Blend Founder’s and Director’s Long-Term Performance Award”, revealed in Blend’s S-1 dossier on Monday, will begin vesting 15 months after Blend’s IPO without a price barrier . It will then be allocated in installments based on increasingly demanding stock price hurdles, which could be worth billions to Ghamsari.

The first tranche will contain 5.8 million options granted 15 months after their grant date in March 2021. In March 2025, Ghamsari will be granted 17.5 million shares provided the company is trading above $ 13.97 for a period of 90 days and 30 days immediately before the grant date.

In March 2027, Ghamsari will be awarded an additional 13.7 million shares if Blend maintains a price of $ 27.94 or more for the same length of time. The final two tranches – 17.6 million shares and 23.5 million shares – will be awarded in 2029 and 2031 provided Blend is trading at $ 69.85 and $ 139.70.

Overall, assuming Ghamsari hits each milestone and Blend hits $ 139.70, his option grants will be worth $ 10.9 billion (pre-tax) after factoring in their exercise cost of 2, $ 86 per share. That’s roughly equal to the $ 11 billion Elon Musk received in 2020 due to his stratospheric subsidy.

“The Blend Long-Term Performance Award Founder and Manager is intended to support our transition to a public company while providing a significant incentive to Mr. Ghamsari with sustained long-term value creation for our shareholders, and to minimize dilution if returns are lower than expected, ”Blend said in its S-1 file, released Monday night.

“The board of directors intended to establish an award that would encourage a sustained long-term valuation of shareholders by including a long vesting schedule with post-acquisition holding requirements,” adds Blend.

Sarah Rall, a spokesperson for Blend, did not immediately respond to an email requesting comment sent after normal business hours.

The incentive bonus has a term of 15 years and is subject to certain conditions. If inflation increases by more than 5% per year for a consecutive three-year period during the award period, the barriers in Ghamsari’s stock price will increase by 20%. Other features, such as a change in control of the company, could lead to an acceleration of the award. Ghamsari will have to keep its vested shares for two years after the exercise of its powers.

If Ghamsari is unintentionally removed from the company, his reward will be subject to forfeiture. Under certain conditions, such as a change in his role, up to 50% of the price will be retained. If he leaves the company, or is terminated under certain conditions, he can keep up to 25% of the compensation. After the first trance, the rewards will be forfeited if Blend does not hit its market barriers within the predetermined dates.

To underscore the aggressive nature of the performance awards, Blend currently estimates the award to be worth $ 87.6 million.

In Blend’s S-1, Ghamsari is also revealed to be the owner of 54 million class B shares, or 100% of his class B shares, which will entitle him to 40 votes per share. The dual-class share structure will allow Ghamsari to control the company after its IPO. Company chairman Timothy Mayopoulos, former CEO of Fannie Mae, owns 11 million Class A shares, according to Blend’s prospectus.

Prior to its IPO process, Blend raised $ 300 million from investors led by Coatue and Tiger Global at a valuation of $ 3.3 billion, nearly doubling the company’s private valuation. Ghamsari, however, is betting there’s a lot more room to show up for Blend.

Blend’s software is used by mortgage lenders like Wells Fargo and US Bancorp to digitally grant and close loans. In 2020, $ 1.4 trillion in mortgages were processed using Blend’s software, or roughly a third of the overall market. The company’s revenue rose 90% to $ 96 million in 2020, according to its prospectus.

To learn more about Blend, read Forbes’ June 8 on the bill of the company and its co-founder Ghamsari.

How a former semi-pro poker player bet big and won the $ 4.3 trillion mortgage market


Leave A Reply

Your email address will not be published.