Roblox’s CEO Enters the $200 Million Club, Why You Should Care

RBLX stock - Roblox’s CEO Enters the $200 Million Club, Why You Should Care

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Last year, metaverse pioneer Roblox (NYSE:RBLX) had a horrendous run at the stock market, but it didn’t stop the board from handsomely rewarding its CEO David Baszucki. He’ll bag a whopping $234 million windfall over the next five years, while Roblox looks to turn a profit.

More than $232 million of the compensation is linked to restricted stock units tied to the company’s long-term performance. According to the relevant Securities and Exchange Commission (SEC) filing, it will require “substantial share price growth over a five-year performance period” to vest. Baszuki is not the only CEO who received a nine-figure payout last year. Discovery’s (NASDAQ:DISCA) CEO, David Zaslav, made $246 million for his efforts last year. Amazon’s  (NASDAQ:AMZN) Andy Jassy raked in a massive $212 million pay package. Additionally, Activision Blizzard’s (NASDAQ:ATVI) CEO Bobby Kotick will also be receiving roughly $200 million in total compensation for his work in 2021.

The announcement is perhaps puzzling, considering how RBLX stock shed more than 30% of its value last year. Growth stocks, in general, have sold off of late, though. However, the stock struggled for many months before the market pullback.

With around just $550 million in the bank, such a colossal payout should severely impact Roblox’s financial position. It will naturally result in massive cash outflows, weighing down its long-term financial flexibility. Therefore, it seems that profitability will elude the business for the foreseeable future. The development is likely to feed into the bear case for Roblox.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.


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