Opendoor’s CEO Inducement Package Puts Heavy Emphasis on Long-Term Stock Performance
Equity Grants Feature Rigorous Stock Price Hurdles and Vesting Schedules
Opendoor Technologies (NASDAQ: OPEN) just made its biggest bet yet on shareholder alignment, unveiling a CEO equity compensation package packed with tough, market-based goals. As part of Kaz Nejatian’s appointment as CEO, Opendoor’s board has granted him a combination of restricted stock units (RSUs) and two distinct, performance-based RSU (PSU) awards. All told, the grants cover more than 83 million shares — but require significant, sustained company progress for most of them to vest.
Performance-Based Awards Require $9 to $33 Average Stock Prices to Unlock Tranches
The two PSU awards — each covering 40,886,344 shares — are tied to some of the highest bar stock price hurdles seen in recent real estate tech compensation packages. The second PSU, in particular, divides into seven tranches, with each portion only vesting if Opendoor’s 60-day average stock price climbs and holds at sharply higher levels (from $9 all the way to $33 per share). Notably, these tranches begin eligibility no earlier than one year from grant and are further gated by quarterly, multi-year time-based vesting conditions.
| Grant Type | Number of Shares | Vesting Conditions |
|---|---|---|
| Make-Whole RSU | 1,580,611 | Vests fully June 15, 2026 (or upon qualifying termination) |
| First PSU Award | 40,886,344 | Vests over 5 years if 60-day average share price hits at least $6.24, with quarterly installments after first year |
| Second PSU Award | 40,886,344 | Vests in 7 tranches if 60-day average share price reaches $9, $13, $17, $21, $25, $29, $33; also subject to time-based vesting over 5 years |
Strategic Takeaways: Double-Trigger Protection and Emphasis on Value Creation
The awards come with double-trigger change-in-control provisions, meaning Mr. Nejatian will only receive full acceleration of vesting if a change in control is paired with certain price targets — protecting shareholders against automatic windfalls in the event of a low-premium buyout. Termination for good reason or without cause before vesting will result in varying levels of acceleration, designed to strike a balance between executive retention and fair compensation if objectives are not achieved due to unforeseen events.
Why This Matters: Bold Incentives Align Interests for the Long Haul
For current and potential shareholders, Opendoor’s approach signals a focus on disciplined growth and durable share price appreciation, not quick wins. Most of the equity won’t vest unless management achieves substantial, sustained performance. If Opendoor’s leadership executes on its roadmap, these compensation milestones could serve as a powerful motivator to unlock value well above current trading levels. With targets as high as $33 per share for certain awards, investors can expect the new CEO’s interests to closely track their own in the coming years.
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