Endeavor CEO Ari Emanuel saw a huge paper windfall in 2021 as he was awarded stock grants valued at more than $293 million in the year that saw Endeavor complete its initial public offering on its second try.
Emanuel’s payday for last year was closer to $67.5 million in terms of “recognized compensation” that is not tied up in stock options that won’t vest for years to come. Endeavor’s annual report for 2021, filed Wednesday, included charts to demonstrate that while Emanuel’s total comp for 2021 hit an astounding $308.1 million on paper, his actaul take-home pay was far less. Emaneul’s haul included a base salary of $4 million and a bonus of $10 million.
Endeavor executive chairman Patrick Whitesell took in $123.1 million on paper but only $11 million of recognized compensation. Whitesell’s package included a base salary of $4 million and a bonus of $5 million. Both Emanuel and Whitesell are under contract to Endeavor through the end of 2028.
By law, companies have to estimate the value of stock options and stock awards on the day they are granted and factor into annual compensation packages, even though the individual may not receive the shares if the stock fails to achieve certain pre-determined price targets. Earlier this week, Discovery revealed that CEO David Zaslav’s compensation for 2021 including a whopping $203 million worth of stock awards.
Zaslav’s grant came in part because of his work in steering Discovery through the WarnerMedia merger process. Emanuel and Whitesell were rewarded for taking Endeavor through the difficult process of completing its IPO after pulling the previous attempt at the last minute in 2019.
Endeavor’s 2021 annual report details the high peaks that Endeavor’s stock price has to climb before Emanuel, Whitesell and other insiders will benefit from their options. Endeavor shares debuted at $24 on April 29, 2021. Shares have mostly held steady in the $25-$32 range.
On Wednesday, the stock closed at $29.80, up nearly 7% on the strength of Endeavor’s fourth-quarter and full-year earnings report, which indicated strong momentum ahead for Endeavor’s UFC and other assets. For the year to date, Endeavor shares are down about 15%.
“Both of Messrs. Emanuel’s and Whitesell’s awards require a sustained increase in our stock price in order for them to earn shares. More specifically, under Mr. Emanuel’s award, for every increase of our stock price by $4.50 starting from our initial offering price of $24.00, he earns a number of shares of Class A common stock equal to $26,500,000 divided by the achieved stock price milestone (e.g., 929,824 shares for the achievement of $28.50). The first stock price milestone of $28.50 required an 18.75% increase over our initial offering price, and was achieved during 2021.
For Whitesell, “for every increase of our stock price by $25.00 starting from our initial offering price of $24.00, he earns a number of shares of Class A common stock equal to $100,000,000 divided by the achieved stock price milestone (e.g., 2,040,816 shares for the achievement of $49.00). The first stock price milestone under this award is $49.00, which requires a 104.17% increase over our initial offering price.”
In addition to Emanuel and Whitesell, other Endeavor corporate officers also received stock grant windfalls. Chief financial officer Jason Lublin recognized $7.2 million on a total package of $18 million. Endeavor president Mark Shapiro recognized $17.4 million out of a total of $41.2 million. Christian Muirhead, chief communications officer, received $3.2 million out of total of $11.9 million.