DraftKings Spent $2M on Jet, Security for CEO Robins, Boosted Pay as Stock Stumbled
Posted on: March 29, 2023, 05:38h.
Last updated on: March 29, 2023, 05:38h.
Last year, DraftKings (NASDAQ: DKNG) spent nearly $2 million on private jet and security expenses for co-founder and CEO Jason Robins while significantly boosting his equity-based compensation even as the shares plunged.
In a recently published Schedule 14A filing with the Securities and Exchange Commission (SEC), the gaming company reveals it spent $968,900 last year on security for Robins and his family and $975,191 on private jet costs.
The Boston-based sportsbook operator also granted Robins $14.32 million in restricted stock and more than $29 million in performance-based equity grants. Robins’ total compensation surged 238% from 2021 to 2022 despite the fact that the stock shed 58.54% of its value last year — far outpacing the 33.61% decline endured by the Nasdaq-100 Index.
One interpretation of that lavish compensation package is that the $1 annual salary drawn by Robins and co-founders Matthew Kalish and Paul Liberman is no more than a public relations mirage. Last year, Kalish and Liberman each received roughly $40 million in equity-based pay,” according to the regulatory document.
DraftKings Reimbursed Robins for Super Bowl Expenses
Creating an online kerfuffle was the following nugget from the SEC filing: DraftKings reimbursed Robins $131,607 for “the purchase of game day tickets, special events, travel and accommodations for Mr. Robins’ family members during the week’s activities” incurred at the 2022 Super Bowl.
The security benefits Robins receives may also be a source of consternation among market participants. While DraftKings is undoubtedly his “baby,” it’s debatable that financial markets perceive his importance to the gaming company as on par with Warren Buffett at Berkshire Hathaway, Mark Zuckerberg at Facebook or the late Steve Jobs at Apple.
To address significant safety concerns, including as a result of specific threats, the Board has approved personal security measures for Mr. Robins and his family pursuant to an independent security study undertaken by a third-party consultant. We require these security measures for Mr. Robins and his family, and, given his importance to the Company, believe that the scope and costs of these measures are appropriate and necessary. The Board will continue to evaluate these measures annually,” according to the filing.
The ‘significant safety concerns’ weren’t detailed in the SEC document.
Other DraftKings Compensation Issues
DraftKings’ compensation committee is comprised of Ryan Moore, Shalom Meckenzie and Steven Moore. Although Meckenzie isn’t on the slate of directors up for reelection this year, the Israeli billionaire is the founder of SBTech – the company that was part of DraftKings’ 2020 reverse merger. He’s also been an avid seller of DraftKings equity in recent years.
DraftKings’ compensation committee outsourced a study of pay comparables to independent consultant Frederic W. Cook & Co., which benchmarked pay and benefits at the sportsbook operator to a basket of 19 companies with emerging growth profiles.
Thing is, just one company in the original basket — Churchill Downs — is a gaming operator. Second, it appears Light & Wonder and Penn Entertainment were only added to the group after Slack and Twitter were acquired and ceased being publicly traded entities. Still, persnickety investors might argue that using companies such as Etsy, Roku and Lyft, though not Uber, as gauges for DraftKings executive pay isn’t germane.
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Source: casino.org
