Robinhood Markets, Inc. HOOD reporteddisappointing quarterly results last week,sending its beaten-down stock further down. Even as the stock languishes at depressed levels, its C-suite has pocketed handsome pay packages in the past year.
What Happened: Robinhood chief executive officer Vlad Tenev took home $796.12 million in total compensation in 2021, a proxy statement filed by the company late Monday showed. This represented a considerable increase from the $767,923 Tenev was paid in 2020.
A closer look at the 2021 compensation showsthat $244,125 was paid out as salary, $1.87 million was spent for his personal security services and $794.01 million was given as stock awards.
Related Link: Robinhood Not Going Away: Analysts Remain Bullish Long-Term With Lowered Price Targets Post Q1
SEC rules dictate that restricted stock units and performance-linked stock awards should be shown as compensation for the year in which they were granted or modified.
The filing showed that realized pay for Tenev in 2021 was $168.83 million, with realized stock awards being $166.72 million.
For Tenev to actually receive the full compensation, Robinhood stock would need to trade up to $300 per share over the next seven years, the company said in the filing.
Baiju Bhatt, the second-in-command and co-founder, received $593.96 million in compensation in 2021, up from $895,811 in 2020. His 2021 compensation included $244,125 in salary and $592.63 million in stock awards. He also received $1.08 million in personal security services.
Robinhoodsaid in the proxy filing due to PSU award, Tenev and Bhatt agreed to reduce their salaries to $34,248, reflecting the median wage for individuals in the U.S.
Related Link: Robinhood Review
Why It's Important: Robinhood, which democratized investing by pioneering zero-commission trades, went public in late-July 2021 by offering 55 million shares at $38 apiece. The shares closed the debut session at $34.82, below the offer price.
The post-IPO run took the stock to a high of $85 in the week following the debut. Since then, the stock has been going downhill. It ended 2021 at $17.76, a decline of about 49% from the closing price on the debut session. It has pulled back further in the year-to-date period, dragged by fundamental woes, and macro and geopolitical factors.
"The stock is bearing the brunt of a wind down from the stimulus-fueled retail frenzy we saw in 2021," Rosenblatt Securities analyst Sean Horgan said in a recent note reviewing the company's quarterly results.
Price Action: Robinhood stock closed Monday's session up 6.88%at $10.48, shares are trading 2.77% lowerduring Tuesday'spre-market session at $10.19according to Benzinga Pro.
Photo: Courtesy of robinhood.com
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FAQs
The filing showed that realized pay for Tenev in 2021 was $168.83 million, with realized stock awards being $166.72 million.
How much of Robinhood does Vlad Tenev own? ›
In July 2021, Robinhood went public on the Nasdaq exchange at a $32 billion valuation; shares fell precipitously in the following six months. Tenev owns around 8% of the company. The son of two World Bank staffers, Tenev was born in Bulgaria and grew up in Washington, D.C.
Why did Robinhood stock plummet? ›
Robinhood Stock Is Falling. Blame Disappointing Earnings and Stalling Growth. Robinhood Markets posted disappointing earnings after the close of trading on Thursday, as trading slowed dramatically from the GameStop frenzy a year ago.
How much did Robinhood make in 2021? ›
Robinhood made $1.81 billion revenue in 2021, primarily through options trading, although it also saw increases in crypto trading during the year.
How many users did Robinhood lose? ›
Robinhood's monthly active users plunged 34% to 14 million over the past year. Retail investors have stopped trading stocks on the platform as stocks and cryptocurrencies plummet. The trading app now plans to cut 23% of its staff, chief executive Vlad Tenev said.
How many shares of Robinhood does Vlad have? ›
What is Vladimir Tenev's Net Worth? The current estimated net worth of Robinhood Markets, Inc's Chief Executive Officer, Vladimir Tenev, is estimated to be about $586.02M . Vladimir Tenev owns about 821,384 units of Robinhood Markets, Inc common stock.
Who owns most of Robinhood stock? ›
The company's largest shareholder is Index Ventures SA, with ownership of 8.3%. With 7.5% and 6.8% of the shares outstanding respectively, Baiju Bhatt and Vladimir Tenev are the second and third largest shareholders.
Why is Robinhood losing so much money? ›
Robinhood is still losing money, posting a net loss of $511 million in the quarter. But most of that loss was because of an accounting change related to a decision by the company's founders to cancel a stock award.
Why are all stocks plummeting? ›
The most common reason is that the economy is slowing down, and investors are worried they won't be able to make money in the future. Other reasons include political uncertainty, inflation, rising interest rates, and unexpected events (like the pandemic).
What happens when stock prices plummet? ›
Drops in account value reflect dwindling investor interest and a change in investor perception of the stock. That's because stock prices are determined by supply and demand driven by investor perception of value and viability. As long as you don't sell your shares, you have a chance to regain lost value.
1 It's considered a safe option for investors' securities and cash for various reasons: Robinhood is a member of the Securities Investor Protection Corp. (SIPC).
How is Robinhood doing financially? ›
(“Robinhood”) (NASDAQ: HOOD) today announced financial results for the first quarter of 2023, which ended March 31, 2023. First Quarter Results: Total net revenues increased 16% sequentially to $441 million. Transaction-based revenues increased 11% sequentially to $207 million.
Has Robinhood ever made a profit? ›
Aug 2 (Reuters) - Robinhood Markets Inc (HOOD. O) reported higher second-quarter revenue on Wednesday as interest rates continued to buoy the online brokerage's interest income, achieving profitability for the first time as a public company even as it saw fewer users.
What percent of people lose money on Robinhood? ›
Here's a not-so-fun fact: 70-75% of today's retail traders lose money. That should be surprising, but it isn't: beloved brokers like Robinhood are designed to make their customers trade frequently, even if it means making them trade badly.
Do most Robinhood traders lose money? ›
From movies like The Wolf of Wall Street to Robinhood commercials, it's often advertised that you can make big money through trading the markets. It might sound as simple as “buy low” and “sell high,” but the reality is that the vast majority of traders end up losing money over time.
How many people still use Robinhood? ›
Robinhood's user base has grown rapidly over the past few years, from 0.5 million users in 2015 to over 23 million as of 2022.
Who owns Robinhood Investments? ›
Founded in 2013, California-based Robinhood Markets is a financial technology (fintech) firm that operates an online stock brokerage. Founders Vladimir Tenev and Baiju Bhatt had previously built high-frequency trading platforms for financial institutions.
How much of Robinhood does Sam Bankman-Fried own? ›
When Sam Bankman-Fried bought a nearly 7.6% stake in Robinhood, the popular stock-trading app, earlier this year, he financed the deal with more than half a billion dollars borrowed from his own hedge fund — the entity that prosecutors say was illegally funneling customer funds from its affiliated platform, FTX.
How many shares of Robinhood does FTX own? ›
The FTX co-founders bought 55 million shares of Robinhood stock — worth $578 million at current prices — in May through Emergent Fidelity Technologies by taking out loans directly from FTX's sister firm, Alameda Research.
Why did Vlad Tenev start Robinhood? ›
Tenev, who also had some technical experience, decided to design an app that would make the basis of their brokerage platform. The company's name comes from its co-founders' mission to "provide everyone with access to the financial markets, not just the wealthy".
