Gotta love a man who tells folks he’s going to “literally be sitting on a beach” after spending years cramming fees on his customers to meet the quarter.
But that doesn’t mean Jeff Sloan is a dummy.
Far from it.
He knows how much to crank, and when, to get the numbers just right, but not so high that he’d miss the next quarter.
That’s the type of spreadsheet wizardry you can only master on – but not before – your 11th birthday.
Jeff knows what’s really happening though:
Software is eating everything, and Global has no real software to report about.
Sure, like Shift4, Global buys struggling software and rams through fees, but these aren’t market-leading software, and the people left to run the software are 8th tier at best.
And Jeff sees the cliff approaching.
Just look at FIS spinning out Worldpay: without software, you’re waiting to be acquired by someone with software.
Because the legacy processors are just too far behind Adyen and Stripe in building pure-play payments companies.
Technical debt.
Personnel.
Culture.
It’s all just terrible.
Think about it like this.
If you’re running a software company, it’s a lot easier for you to get payments (become a payfac, etc.) than it is for the payments company to get software.
In fact, the payments company lacks the culture to do any R&D, so they’re never going to build a software company.
They instead have to acquire.
And the ones they acquire are mostly run by management who are tired and don’t want to spend any more time on the business, because adding a payfac these days isn’t a ton of work.
Jeff knows this.
Global reported 7% growth year over year.
That’s with inflation up 10% and all the fee cramming.
In other words, Global is bleeding market share.
Well duh: software is eating it all.
Toast is repping $90B of processing volume.
The list of software companies goes on and on.
And it’s only growing.
Now, can Jeff find another job that pays $22M a year?
Doubtful.
There just aren’t that many companies left where an interviewer can say they’ll ram through fees without the customer noticing to make the quarter.
Facebook: So tell us Jeff, how would you improve Facebook?
Jeff: Does ROI matter to your customers?
Facebook: Yes.
Jeff: Fuck.
Conversely, filling Jeff’s shoes will be easy: there’s no shortage of people willing to make $22M a year to stomp on customers you never have to deal with.
As software companies eat everything growth comes from features and value.
That’s a cultural 180 from where Jeff came from.
So maybe Jeff was fired.
Either way, he get an insane payout, which in itself may have contributed to the timing.
Based upon the last nine proxies, Global took Jeff’s total payout award from 200% to 400% in 2018, and kept it there until 2023. It is no coincidence that his pay also went up 85% YoY in 2018 as a result.
His total comp has since averaged $19.7M (2018-2022) versus $9.5M (2013-2017).
The grant date value and ‘total value at highest performance’ is provided in each proxy.
Divide the ‘highest performance’ by grant date value at the target to see the multiplier for maximum payout. For 2023, assume the grant date would be average to the last three years ($8.3M) and then insert the new reduced multiplier that we know went from 400% to 200%.
We can see his total potential pay comes down -53% in 2023 as a result.
In other words, Jeff’s pay was headed back to where it was when the multiplier was 200% in 2018 (potentially aided by Silver Lake joining the Compensation Committee), which brings his pay down -53%.
So he might have used the “Good Reason” clause to collect $34.4M.
“Good reason” for resignation is defined under the ‘Amended and Restated Employment Agreement’ – with one of the reasons being a ‘reduction by the company in Executive’s Bonus Target’.
This makes it so Jeff is eligible to receive $34.4M in ‘post-employment payments’ versus leaving ‘without good reason.’
Global stated in the 8K that he “left with good reason” so he gets the $34.4M payday.
But let’s not get distracted by the tens of millions: we are now on the downward slide for legacy processors.
I think he left because of your bullying. 😉
I don’t think he’s necessarily a bad guy, just has no moral compass. That’s the job at these payments companies. But ultimately they win: they have the capital, buy influence, and grind their heels on everyone else