Snapchat maker Snap Inc. held the biggest initial public offering ever for a Los Angeles company this week pricing its shares at $17 apiece. The company made its debut on the New York Stock Exchange on Thursday, where it quickly leaped to close at $24.48.
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In late 2014, the company then known simply as Snapchat announced it had hired a star banker away from Credit Suisse to be its chief strategy officer.
Imran Khan had deep connections in the technology industry, links that helped Snapchat score a $200 million investment from Chinese Internet giant Alibaba months after he was hired.
But luring and retaining executive talent like Khan did not come cheap for the Venice social media firm, which was building critical momentum at the time of the hire.
Khan’s compensation last year, including salary and bonus, amounted to $5.5 million, according to its Thursday IPO filing. Not only that, Khan received over 7 million restricted shares valued at $145.3 million.
“They had to pay a ton to keep him there,” said Josh Stomel, founder of Neohire South, a tech employment agency. “Snap needed smart, senior executives in order to scale. So they gave substantial money that these people wouldn’t find anywhere else.”
Stomel said Snap’s executive salaries were about double what other tech companies are paying in the Los Angeles area.
Among the company’s other well-paid executives is Timothy Sehn, Snap’s senior vice president of engineering. Sehn’s compensation last year was $1.4 million and he owns 2.6 million restricted shares valued at $40 million.
Andrew Vollero, Snap’s chief financial officer and a former Mattel executive, earned a base salary of $300,000 in 2016. And Chris Handman, Snap’s head attorney, earned $475,000 in base salary.
Snap co-founder and Chief Executive Evan Spiegel made about $1.5 million in salary and bonus last year. Co-founder and Chief Technology Officer Bobby Murphy took in about $250,000.
Once Snap completes its IPO, Spiegel’s annual salary will drop to $1 -- a move that puts him in the same league as other dollar-salary honchos such as Facebook Chief Executive Mark Zuckerberg, Google co-founders Sergey Brin and Larry Page and President Trump.
Spiegel won’t need the paycheck since he and Murphy each own about 22% of Snap’s Class A common stock. If the IPO values Snap at $25 billion, as sources familiar with the company predict, the pair stand to gain over $5 billion each.