Criteo CEO Megan Clarken’s tenure: a monetary evaluation

Criteo is going through a major management transition: Megan Clarken, who has served as the corporate’s Chief Govt Officer since November 25, 2019, is about to depart from her function. This growth prompts a complete evaluation of her tenure, monetary transactions, and the corporate’s efficiency underneath her management.

In response to SEC filings, Clarken’s journey with Criteo started on November 25, 2019, when she assumed the place of CEO. Her preliminary assertion of helpful possession, filed on November 27, 2019, revealed that she held no securities on the time of her appointment. This clear slate set the stage for a collection of strategic strikes and compensation packages that might unfold over the following 5 years.

On December 11, 2019, simply weeks into her tenure, Clarken obtained a considerable grant of 143,308 atypical shares and 375,467 inventory choices. The shares have been topic to a time-based vesting schedule, with 50% vesting after two years and the rest vesting quarterly over the following two years. The inventory choices, priced at $17.35 per share, adopted a unique vesting sample: 25% after one yr, with the remaining vesting quarterly over the next three years.

This preliminary grant set the tone for Criteo’s method to government compensation underneath Clarken’s management. The corporate continued to make use of a mixture of restricted inventory models (RSUs) and performance-based inventory models (PSUs) to align government pursuits with these of shareholders. As an illustration, on February 25, 2021, Clarken obtained 110,200 PSUs, which have been eligible for vesting primarily based on efficiency targets.

All through her tenure, Clarken engaged in a collection of inventory transactions, each acquisitions and disposals. These transactions, meticulously documented in Kind 4 filings, present perception into her monetary methods and the corporate’s efficiency. Let’s break down the main transactions:

1. Preliminary Grant (December 11, 2019):
   • 143,308 atypical shares
   • 375,467 inventory choices at $17.35 per share
2. Efficiency Inventory Items (February 25, 2021):
3. Important Possibility Workouts and Gross sales:
   • Could 13, 2021: Exercised 44,988 choices at $18.90, offered at $36.1315
     Revenue: (36.1315 – 18.90) * 44,988 = $774,793.80
   • December 14, 2021: Exercised 135,108 choices at $17.7313, offered at $40.5079
     Revenue: (40.5079 – 17.7313) * 135,108 = $3,079,526.46
4. Extra Fairness Grants:
   • February 24, 2022: 93,492 RSUs and 110,200 PSUs (vested)
   • February 23, 2023: 114,774 RSUs
   • March 1, 2024: 80,781 RSUs
5. Notable Gross sales (2023-2024):
   • February 27, 2023: 38,484 shares at $33.465 (Whole: $1,287,866.46)
   • Could 25, 2023: 5,496 shares at $31.8163 (Whole: $174,860.38)
   • August 25, 2023: 5,496 shares at $28.5 (Whole: $156,636)
   • February 22, 2024: 23,331 shares at $33.04 (Whole: $770,856.24)
   • August 26, 2024: 9,283 shares at $49.17 (Whole: $456,465.11)

To calculate the full inventory compensation Clarken obtained throughout her tenure, we have to sum up the worth of all fairness grants on the time they have been awarded:

1. Preliminary Grant (2019):
   143,308 shares * $17.35 = $2,486,393.80
   375,467 choices * ($17.35 – $17.35) = $0 (intrinsic worth at grant)
2. PSUs (2021):
   110,200 PSUs * $37.39 (closing worth on 02/25/2021) = $4,120,378
3. RSUs and PSUs (2022):
   93,492 RSUs * $32.54 (closing worth on 02/24/2022) = $3,042,230.68
   110,200 PSUs * $32.54 = $3,585,908
4. RSUs (2023):
   114,774 RSUs * $32.69 (closing worth on 02/23/2023) = $3,751,962.06
5. RSUs (2024):
   80,781 RSUs * $33.46 (closing worth on 03/01/2024) = $2,702,932.26

Whole Inventory Compensation: $19M

This sum represents the full worth of inventory compensation awarded to Clarken throughout her tenure, primarily based on the inventory costs on the time of grant. It is essential to notice that the precise realized worth might differ attributable to vesting situations, efficiency standards, and modifications in inventory worth over time.

These monetary strikes coincided with a number of public occasions and firm milestones. In 2020, Criteo confronted challenges because of the international COVID-19 pandemic, which impacted the promoting trade. Nonetheless, underneath Clarken’s management, the corporate pivoted to give attention to e-commerce promoting options, capitalizing on the surge in on-line purchasing.

In 2021, Criteo introduced a major rebranding effort, positioning itself as a “Commerce Media Platform.” This strategic shift aimed to diversify the corporate’s income streams past its conventional retargeting enterprise. The transfer was well-received by traders, as evidenced by the inventory’s efficiency in subsequent years.

The corporate additionally made a number of key acquisitions throughout Clarken’s tenure. In 2021, Criteo acquired Mabaya, a retail media know-how firm, to reinforce its e-commerce promoting capabilities. In 2022, the corporate additional expanded its retail media choices by buying IPONWEB, a deal valued at $380 million.

Monetary evaluation of Clarken’s fairness transactions reveals a sample of regular accumulation adopted by strategic disposals. Her preliminary grants in 2019 and 2020 vested over time, offering her with a rising stake within the firm. As these awards vested, Clarken engaged in varied gross sales transactions, which have been reported in Kind 4 filings with the SEC.

The timing and pricing of those transactions provide insights into Criteo’s monetary well being:

1. The train worth of Clarken’s preliminary choices ($17.35) serves as a baseline for the corporate’s valuation initially of her tenure.
2. Subsequent gross sales at progressively greater costs ($36.13 in Could 2021, $40.51 in December 2021, and $49.17 in August 2024) recommend a constant enhance in Criteo’s market worth underneath her management.
3. The frequency and quantity of fairness grants point out the board’s confidence in Clarken’s efficiency and their want to retain her providers.
4. The combination of time-based and performance-based fairness awards demonstrates a balanced method to government compensation, aligning Clarken’s pursuits with long-term firm efficiency.

It is essential to notice that whereas these transactions present invaluable insights, they symbolize solely a partial view of Criteo’s general monetary efficiency. The corporate’s public monetary statements, quarterly earnings experiences, and market evaluation ought to be consulted for a complete understanding of its fiscal well being.

As Clarken prepares to depart from her function as CEO, her legacy at Criteo seems to be considered one of strategic transformation and monetary progress. The corporate she leaves behind is considerably completely different from the one she joined in 2019, having weathered the challenges of a worldwide pandemic and emerged with a renewed give attention to commerce media.

To quantify the influence of Clarken’s management on Criteo’s inventory worth, let’s analyze the inventory worth at key factors throughout her tenure:

1. Begin of tenure (December 11, 2019): $17.35 (primarily based on her preliminary inventory choice grant worth)
2. Finish of tenure (August 26, 2024): $49.17 (primarily based on her most up-to-date reported inventory sale)

This represents a inventory worth enhance of $31.82 per share over the course of her management. To calculate the proportion enhance:

Proportion enhance = (Finish worth – Begin worth) / Begin worth * 100 = ($49.17 – $17.35) / $17.35 * 100 = 183.40%

Subsequently, throughout Megan Clarken’s tenure as CEO, Criteo’s inventory worth elevated by roughly 183.40%. This important progress outperformed the broader market throughout the identical interval. For context, from December 11, 2019, to August 26, 2024:

• The S&P 500 index elevated by roughly 65% (estimated primarily based on historic traits)
• The NASDAQ Composite index, which incorporates many tech firms, elevated by round 90% (estimated)

Criteo’s inventory efficiency underneath Clarken’s management notably outpaced these main indices, suggesting that her strategic initiatives and the corporate’s pivot to a Commerce Media Platform have been well-received by traders.

It is essential to notice that inventory worth is influenced by quite a few components past a CEO’s management, together with general market situations, trade traits, and macroeconomic components. Nonetheless, the substantial outperformance relative to main indices signifies that Clarken’s management seemingly performed a major function in Criteo’s worth creation throughout this era.

This inventory worth appreciation not solely benefited shareholders but in addition elevated the worth of Clarken’s personal fairness compensation. The entire inventory compensation awarded to her throughout her tenure, valued at $19,689,804.80 on the time of the grants, would have appreciated significantly given this inventory worth enhance.

As Criteo transitions to new management, the incoming CEO will face the problem of sustaining this progress trajectory and persevering with to innovate within the quickly evolving digital promoting panorama. The corporate’s efficiency underneath Clarken’s tenure units a excessive bar for future management and positions Criteo as a major participant within the commerce media sector.

Key details

• Megan Clarken joined Criteo as CEO on November 25, 2019.
• Whole inventory compensation awarded throughout tenure: $19M
• Preliminary fairness grant: 143,308 atypical shares and 375,467 inventory choices on December 11, 2019.
• Important choice workout routines and inventory gross sales occurred in Could and December 2021, leading to income of $3.9M
• Criteo rebranded as a “Commerce Media Platform” in 2021.
• Key acquisitions: Mabaya (2021) and IPONWEB (2022 for $380 million).
• Inventory worth elevated from $17.35 (December 2019) to $49.17 (August 2024).