Spotify co-founders reap $900 million inventory payout in 2024  

Spotify co-founders Daniel Ek and Martin Lorentzon have reaped a mixed $900 million in inventory payouts this yr, because the streaming big’s market worth soared to almost $100 billion.

The corporate’s meteoric rise in 2024 marks a surprising rebound from prior years when its valuation plunged beneath $20 billion.

Senior executives and board members bought a complete of $1.25 billion in inventory this yr, in response to filings with the U.S. Securities and Trade Fee.

The gross sales, concentrated in November and December, spotlight the monetary advantages flowing to Spotify’s management amid a tripling of its share worth.

Ek, Spotify’s CEO, cashed in practically $350 million price of shares, together with $28 million in a single December transaction. Bloomberg now estimates Ek’s internet price at over $7 billion. Lorentzon, who stays on the corporate’s board, bought greater than $550 million in inventory through the yr, cementing his place among the many world’s wealthiest company leaders.

Different high executives, together with Chief Product Officer Gustav Söderström and Chief Enterprise Officer Alex Norström, additionally capitalized on the corporate’s inventory surge, promoting shares price $106 million and $63 million, respectively.

What to know 

Spotify’s inventory resurgence stems from a renewed give attention to profitability. After important layoffs in 2023 and worth will increase throughout dozens of nations, the corporate reported income each quarter in 2024.

• Crucially, this was achieved with out sacrificing subscriber development, with Spotify persevering with so as to add customers at a speedy tempo.
• Wall Road has taken discover. Bank of America analysts lauded Spotify’s “unimaginable” revenue margin enhancements, whereas Morgan Stanley highlighted the corporate’s evolution from a growth-driven entity to 1 with “rising revenue alternatives.”
• Spotify’s turnaround has positioned it in the identical league as Netflix by way of streaming dominance. Each corporations have leveraged their positions to emerge as leaders of their respective markets, cementing their standing as winners of the so-called “streaming wars.”
• The inventory gross sales by Spotify insiders adopted a mixture of pre-arranged divestiture plans and advert hoc transactions. An organization spokeswoman famous that the gross sales have been a part of long-term monetary planning for executives compensated largely in firm inventory.

Spotify’s board members additionally joined within the windfall. Netflix CEO Ted Sarandos, a Spotify board member since 2016, bought $6 million price of shares this yr.

As Spotify rides its profitability wave, the payouts underscore the rewards of its leaders’ imaginative and prescient. Having steered the corporate by way of turbulent years, Ek and Lorentzon now discover themselves among the many higher echelons of tech’s monetary elite.