- Peloton just gave the public a first look at its financials, including executive pay, as its IPO paperwork became public on Tuesday.
- It shows revenues that doubled, losses that quadrupled and skyrocketing executive pay over the last year.
- John Foley, Peloton's founder and CEO, has also already cashed out of $24.5 million of his previous stock holdings.
- And his wife, Jill, holds an executive title at Peloton as a vice president, making nearly $200,000 a year with a hefty stock option bonus as well.
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In yet another hotly-anticipated IPO for the year, connected-fitness startup Peloton just filed its first-draft S-1 IPO paperwork, giving the public its first glance at its financials.
There's some good indications for IPO-loving investors in analyzing the books. In its last fiscal year, the seven-year-old company brought in revenue of $915 million, just about doubling from the $435 million it booked the year prior. And the company has overall gross profit margins of 42%, in an encouraging sign for its future financial health.
But when adding in all the rest of its expenses, including the cost of the stock it issues to employees, the numbers were less rosy: Peloton saw its losses nearly quadruple over the course of a single fiscal year, from a $47.9 million net loss in 2018 to a $245.7 million in net loss in fiscal 2019, even as its revenues doubled.
It's not hard to see where a chunk of that stock went: Peloton paid its two top named corporate officers about $21.4 million each in 2019, according to the IPO paperwork.
John Foley, cofounder, CEO and chairman of Peloton, was paid a $500,000 salary, a $750,000 bonus and a stock option package worth $20.1 million, for a total compensation package worth about $21.4 million. In 2018, Peloton paid Foley cash and stock worth $5.5 million. So, that's a hefty raise that nearly quadrupled his total pay package.
It also paid its president, William Lynch, about the same as Foley: $500,000 salary, a $750,000 bonus and stock options valued at $20.1 million. In 2018, it paid him just under $9 million, with a bit more stock than Foley. That means his pay package just about tripled from 2018.
Lynch joined the company in January 2017. He's probably best known as the former CEO of Barnes & Noble, where helped birth the Nook e-reader into the world. He never relocated from his home in Virginia to Peloton's New York headquarters so the company has paid a good $50,000 a year for his airline commute, it said.
Peloton also helped Lynch cover his $4.4 million tax bill, loaning him the money to pay it, which he paid back in full, the filing said.
Foley, as a cofounder of Peloton, owns a 6% stake in the company — double the shares of Lynch, the company's president, according to the filing.
Family connections
Also of note is that Foley's wife, Jill Foley, also works for the company. She's the vice president of boutique with a base salary of $191,250, plus her own stock awards. The filing doesn't disclose all the stock she owns, but does say she's got a grant of 150,000 Class B shares that are about to vest.
By the way, taking a page from WeWork, Peloton's Class B votes are super-voting shares, entitled to 20 votes per share. The previous standard for super voting shares that maintained power in the hands of founders and investors was 10 votes per share.
The S-1 doesn't disclose exactly who will get how many Class B shares as part of the IPO, but as it stands all the named executives and major investors will have them. So these shares won't put control solely in Foley's hands.
However, Peloton has already been good to Foley's pocketbook. John Foley cashed out of a chunk of his shares in 2018. He sold about 1.8 million shares in a secondary offering, netting himself $24.5 million. Lynch sold some shares then, too, netting himself $3.3 million.
And a few other execs, like cofounder and head of product Thomas Cortese sold $10 million's worth at that time.
The only other named officer that Peloton discloses, CFO Jill Woodworth, had total pay about half of the other two: $10 million total, with the same $500,000 salary and $750,000 cash bonus, but less stock.
As for the $21 million a year pay, it lands Peloton on the about the middle of the AFL-CIO's highest paid CEO's list, near the CEOs of General Motors, Lockheed Martin, and Cisco.
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