Philip Fayer, the Chief Executive Officer of Montreal payments-processing company Nuvei.Handout
Nuvei Corp. NVEI-T gave founder and CEO Philip Fayer total compensation in 2021 of US$112.3-million, one of the largest annual pay packages in Canadian history.
The compensation included share awards valued at US$46.5-million and stock options valued at US$63.9-million. Mr. Fayer received a salary of US$653,199 and a cash bonus of US$1.25-million.
In 2020, Mr. Fayer made US$3.26-million.
Nuvei, a payment processor considered a financial technology company, also gave president Yuval Ziv a US$25.8-million pay package and chief corporate development officer Neil Erlick compensation of US$13.0-million, largely composed of stock awards.
Few Canadian companies have ever reported that their chief executive officers received more than $100-million in a single year.
In the early days of compensation disclosure, companies did not attempt to place a value on stock awards when they granted them. Instead, the lists of best-paid executives were based on those who cash in past awards. In 2001, for example, Biovail Corp. CEO Eugene Melnyk cashed in stock options for a profit of $121-million.
After Biovail became Valeant Pharmaceuticals International Inc., it gave out another historically large pay package to CEO Michael Pearson: US$143.1-million in 2015, largely from stock grants. (Valeant shares subsequently crashed and Mr. Pearson left the following year.)
Nuvei’s governance, human resources and compensation committee, in a letter to shareholders in the company’s proxy circular, said the company had an “exceptional” year in 2021. It said the results “are a testament to the unparalleled talent and leadership of our executive team in driving and delivering continuous sustainable year-over-year growth, resulting in important shareholder value creation.”
The committee said its decisions were designed to “motivate our executives” and “also allow us to attract and retain top talent in an extremely competitive labour market.”
It is unclear that Mr. Fayer is going anywhere, however. He owns 27,857,328 Nuvei shares, all with multiple voting rights. That gives him 33.71-per-cent voting power and 19.66-per-cent economic ownership of the company.
At Nuvei’s peak of Oct. 7 of last year, those shares were worth US$3.9-billion. However, a critical short-seller report and a general crash in tech stocks have caused a cratering in Nuvei stock and Mr. Fayer’s worth. Nuvei stock traded on the Nasdaq stock exchange in the mid-US$60 range Thursday, less than half the peak.
Indeed, that decline allows Nuvei to tell shareholders “caution should be exercised” when looking at the numbers in the executive compensation disclosures. Nuvei gave Mr. Fayer the share and option awards on Oct. 6, the day before the stock’s peak, and their decline since would likely yield a much lower value for the awards today.
Mr. Fayer’s awards require significant gains for the shares to have value. The 665,000 performance stock units initially valued at US$46.5-million require Nuvei shares to climb 50 per cent from US$123.14, and stay there for 45 consecutive trading days, before Dec. 31, 2024.
The 2.2 million stock options valued at US$63.9-million are broken into two tranches, one requiring 100-per-cent and the other requiring 200-per-cent increases over the exercise price of US$123.14 for 45 consecutive trading days before the sixth anniversary of the grant date in October, 2027.
Nuvei said that if its stock reaches US$370 – up 200 per cent over the date of grant and 469 per cent over the share price at Dec. 31, 2021 – “Mr. Fayer and his leadership team will have contributed to the creation of close to US$35-billion in total shareholder value.”
Nuvei also said it gave Mr. Fayer and other executives a share award in March of this year “to reward the achievement of sustained long-term market performance, further align the interests of our executives with those of our shareholders, and to promote retention.”
The company did not value these awards in the circular, but insider ownership records show Mr. Fayer received 198,238 shares on March 11.
With reports from Stephanie Chambers and Sean Silcoff
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David Milstead