GRPN
Groupon, INC
NASDAQ
8-K: Groupon Appoints Dusan Senkypl as Permanent CEO, Announces Executive Compensation Plans
Sentiment:
Executive Appointment and Compensation Announcement
7 May 2024 9:26 AM
Groupon has named Dusan Senkypl as its permanent CEO, effective May 1, 2024, and has also outlined new compensation plans for both the CEO and CFO.
Capital raise
The company is seeking stockholder approval to increase the number of shares available under the 2011 Incentive Plan by 7,000,000 shares.
This increase is necessary to cover the PSU awards granted to the CEO and CFO, as well as future awards to other employees.
Summary
- Groupon has appointed Dusan Senkypl as its permanent Chief Executive Officer, effective May 1, 2024.
- Mr. Senkypl had been serving as Interim CEO since March 30, 2023, and has been a board member since June 2022.
- He will receive an annual base salary of $150,000, a target bonus of up to 150% of his base salary, and 1,393,948 performance share units (PSUs).
- The PSU award is contingent on stockholder approval of an amendment to the 2011 Incentive Plan at the annual meeting on June 12, 2024.
- The PSUs vest based on achieving stock price hurdles of $14.86, $20.14, $31.01, and $68.82 over a three-year performance period, and also require continued service.
- The company also announced amended compensation arrangements for CFO Jiri Ponrt, including a $450,000 annual base salary, a $150,000 target bonus, and 522,731 PSUs.
- Mr. Ponrt's PSU award is also subject to stockholder approval of the plan amendment and has similar vesting conditions to the CEO's award.
- Both executives are expected to enter into updated Severance Benefit Agreements, details of which will be provided in a future filing.
Sentiment
Score: 7
Explanation: The document is generally positive, highlighting the appointment of a permanent CEO and new compensation plans. However, there are some risks and uncertainties, such as the need for shareholder approval and the potential reduction in PSUs due to unremediated material weakness.
Positives
- The appointment of a permanent CEO provides stability and direction for the company.
- The performance-based equity program is designed to incentivize the executive team to create sustained value for stockholders.
- The stock price hurdles for PSU vesting are designed to be challenging and reflect ambitious growth rates.
- The company is working to remediate its material weakness in internal control over financial reporting.
- The company is aligning management incentives with shareholder value creation.
Negatives
- The PSU awards are contingent on stockholder approval of a share increase amendment, which may not be guaranteed.
- If the material weakness in internal controls is not remediated, the PSU awards may be reduced by 20%.
- The company's stock price must reach ambitious targets for the executives to fully realize the value of their PSU awards.
- The company has a history of material weakness in internal control over financial reporting.
Risks
- Failure to obtain stockholder approval for the share increase amendment would nullify the PSU awards.
- The company's stock price may not reach the required hurdles for the PSUs to fully vest.
- The company's material weakness in internal control over financial reporting could impact the vesting of PSUs.
- There is a risk that the company may not be able to retain the executives if the performance targets are not met.
- The company's business is subject to various risks and uncertainties as detailed in their 10-K filing.
Future Outlook
The company aims to bring Groupon to a sustainable growth trajectory and build a motivated, performance-driven management team. They are focused on becoming the ultimate destination for local experiences and services.
Management Comments
- Dusan Senkypl stated, 'I see a massive opportunity for Groupon to become the ultimate destination for local experiences and services.'
- Dusan Senkypl also said, 'My aim is to bring Groupon to a sustainable growth trajectory and build a motivated performance driven management team that can push Groupon to new levels.'
- Theodore Leonsis, Chairman of the Board, said, 'The Board is very pleased to be able to appoint Dusan as permanent CEO.'
Industry Context
This announcement reflects a trend of companies using performance-based equity compensation to align executive incentives with shareholder value creation. The focus on growth and transformation is also common in the tech and e-commerce sectors.
Comparison to Industry Standards
- The use of performance share units (PSUs) with stock price hurdles is a common practice in executive compensation, particularly in growth-oriented companies.
- The specific stock price hurdles of $14.86, $20.14, $31.01, and $68.82 are ambitious and suggest a high level of confidence in the company's future growth potential.
- Companies like Amazon, Google, and Microsoft also use performance-based equity awards, but their specific metrics and hurdles vary based on their business models and strategic goals.
- The vesting schedule of 33%, 33%, and 34% over three years is fairly standard for PSU awards.
- The potential 20% reduction in PSUs due to unremediated material weakness is a unique feature, highlighting the company's focus on internal controls.
Stakeholder Impact
- Shareholders will be impacted by the potential dilution from the share increase amendment.
- Employees will be impacted by the new compensation plans and the potential for future equity awards.
- The appointment of a permanent CEO may provide stability and confidence for all stakeholders.
- The company's focus on growth and transformation may benefit customers and merchants.
Next Steps
- The company will seek stockholder approval for the share increase amendment at the annual meeting on June 12, 2024.
- The company expects to finalize and execute Severance Benefit Agreements with both the CEO and CFO.
- The company will provide a full description of the Severance Benefit Agreements in an amended 8-K filing with its Quarterly Report for the quarter ended March 31, 2024.
Related Party Transactions
- In 2022, the Company entered into an agreement with Internet Ventures s.r.o (IV) to provide certain technology consulting services to the Company.
- Mr. Senkypl's spouse, Katerina Hanusova, is an owner of IV.
- IV received payments of approximately $122,000 for its services under the agreement for the year ended December 31, 2023.
Key Dates
- March 30, 2023: Dusan Senkypl began serving as Interim CEO.
- May 1, 2024: Dusan Senkypl's appointment as permanent CEO and the effective date of his employment agreement and PSU award, as well as the effective date of Jiri Ponrt's PSU award.
- May 6, 2024: Jiri Ponrt executed his Merit Letter outlining his compensation arrangements.
- May 7, 2024: The company announced Dusan Senkypl as permanent CEO.
- June 12, 2024: The date of the company's annual meeting of stockholders where the share increase amendment will be voted on.
Keywords
CEO, Chief Executive Officer, Dusan Senkypl, CFO, Chief Financial Officer, Jiri Ponrt, performance share units, PSUs, stock options, executive compensation, incentive plan, shareholder approval, stock price hurdles, vesting, material weakness, severance agreement
GRPN
Groupon, INC
NASDAQ
Sector: Communication Services
Filings with Classifications
Capital raise
18 June 2025 7:29 AM
Financing Transaction Announcement
- The company is issuing $244,071,000 aggregate principal amount of new 4.875% Convertible Senior Notes due 2030 in exchange for existing notes. While it's an exchange and not a cash raise, it is a form of capital restructuring that impacts the company's debt capital.
Delay expected
17 June 2025 3:40 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Delay expected
17 June 2025 3:39 PM
Insider Transaction Report
- The Form 4 was filed late due to an inadvertent administrative oversight.
Delay expected
16 June 2025 3:48 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an "inadvertent administrative oversight."
Delay expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 filing itself was delayed, submitted late due to an inadvertent administrative oversight.
Worse than expected
5 June 2025 1:29 PM
Insider Transaction Report
- The Form 4 was filed late, indicating a lapse in regulatory compliance due to an inadvertent administrative oversight.
Delay expected
4 June 2025 5:36 PM
Insider Transaction Report
- The Form 4 filing was submitted late due to an inadvertent administrative oversight, as stated in the filing.
Better than expected
27 May 2025 1:31 PM
Insider Transaction Report Amendment
- The vesting of 109,250 Performance Share Units indicates that Groupon successfully met a pre-established stock price hurdle, which is a positive performance indicator for the company's stock.
Worse than expected
7 May 2025 4:11 PM
Earnings Press Release
- Global revenue decreased by 5% year-over-year, indicating a decline in overall sales performance.
- Adjusted EBITDA decreased from $19.5 million to $15.3 million, suggesting a decrease in profitability.
Worse than expected
7 May 2025 4:11 PM
Quarterly Report
- Revenue decreased from $123.08 million to $117.19 million, indicating a worse than expected performance.
- Adjusted EBITDA decreased from $19.52 million to $15.33 million, indicating a worse than expected performance.
Worse than expected
28 April 2025 4:07 PM
Proxy Statement
- The company reported a net loss of $57 million in 2024.
- The adjusted EBITDA goal for the 2024 Annual Bonus Plan remained below threshold.
Worse than expected
11 March 2025 4:13 PM
Earnings Release
- While North America Local billings showed positive growth, overall revenue, gross billings, and unit sales decreased year-over-year, and the company reported a net loss for both the quarter and the full year.
Worse than expected
11 March 2025 4:12 PM
Annual Results
- Gross billings, units, revenue, and gross profit all decreased year-over-year, indicating a decline in overall business activity.
Capital raise
19 November 2024 4:10 PM
Debt Issuance Announcement
- The document details a capital raise of $20 million through the issuance of convertible senior secured notes.
- The total issuance was $197.26 million, with the majority being an exchange of existing debt.
Capital raise
12 November 2024 4:51 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The company entered into exchange and subscription agreements for $197.3 million of new convertible senior secured notes due 2027.
Worse than expected
12 November 2024 4:51 PM
Quarterly Report
- The company's revenue, gross profit, and adjusted EBITDA all decreased compared to the same period last year, indicating worse than expected results.
Delay expected
12 November 2024 4:51 PM
SEC Form 4 Filing
- The Form 4 filing was submitted late due to an inadvertent administrative oversight.
Capital raise
12 November 2024 4:50 PM
Financing Announcement
- Groupon is raising $20 million in gross cash proceeds through the issuance of new 2027 convertible secured notes.
- The company is also exchanging $176.26 million of existing 2026 notes for new 2027 notes, which is a form of capital restructuring.
Better than expected
30 July 2024 4:19 PM
Quarterly Report
- The company reported a smaller net loss compared to the same quarter last year.
- The company achieved positive operating and free cash flow.
- North America local revenue grew by 7% year-over-year.
Worse than expected
30 July 2024 4:18 PM
Quarterly Report
- The company's revenue decreased slightly year-over-year, indicating a worse performance than expected in terms of top-line growth.
Better than expected
9 May 2024 4:09 PM
Quarterly Report
- The company's results were better than expected as they exceeded the high end of guidance.
- The company achieved its first consolidated revenue growth since 2016.
- Adjusted EBITDA turned positive, a significant improvement from the previous year.
Worse than expected
9 May 2024 4:06 PM
Quarterly Report
- While the net loss improved, the company still reported a loss and gross billings decreased, indicating worse than expected performance.
Capital raise
9 May 2024 4:06 PM
Quarterly Report
- The company completed an $80 million fully backstopped rights offering in January 2024.
- The rights offering was fully backstopped by Pale Fire Capital SICAV a.s.
Capital raise
7 May 2024 9:26 AM
Executive Appointment and Compensation Announcement
- The company is seeking stockholder approval to increase the number of shares available under the 2011 Incentive Plan by 7,000,000 shares.
- This increase is necessary to cover the PSU awards granted to the CEO and CFO, as well as future awards to other employees.
Capital raise
29 April 2024 5:25 PM
Proxy Statement
- The Pale Fire Parties amended and restated the Standstill Agreement to (a) modify the termination date from the earlier to occur of forty-five days following the date on which Mr.
- Senkypl shall cease to serve for any reason as Interim Chief Executive Officer or Chief Executive Officer of the Company to December 31, 2024; and (b) exclude any and all shares of common stock purchased by the Pale Fire Parties in connection with (i) their exercise of basic subscription rights prior to the expiration of the Rights Offering, (ii) fully purchasing any and all unsubscribed shares in the Rights Offering following its expiration, and (iii) the exercise of their over-subscription privileges, if applicable, from the Pale Fire Parties existing 25% beneficial ownership limitation.
Better than expected
15 March 2024 7:05 AM
Quarterly Report
- The company's Q4 results were better than expected, with positive net income and adjusted EBITDA, which is a significant improvement from previous quarters.
- The company also resolved its going concern issue, which was a major concern in previous periods.
Capital raise
15 March 2024 7:05 AM
Quarterly Report
- In January 2024, Groupon closed a fully backstopped Rights Offering that was oversubscribed and raised $80.0 million.
Worse than expected
15 March 2024 6:58 AM
Annual Results
- The document outlines numerous risks and challenges, suggesting that the company's future performance may be worse than expected.
Capital raise
14 February 2024 7:29 PM
Debt Repayment Announcement
- Groupon conducted an $80 million fully backstopped rights offering.
- The rights offering was made available to all holders of record of the company's common stock.
- The proceeds from the rights offering were used to repay debt and for general corporate purposes.
Capital raise
22 January 2024 8:30 AM
Capital Raise Announcement
- Groupon completed an $80 million rights offering.
- The offering was fully backstopped and significantly oversubscribed.
- The company issued 7,079,646 shares at $11.30 per share.
Better than expected
12 January 2024 8:41 AM
Business Update
- The company expects Q4 2023 results to be at or above the high end of guidance, indicating better than expected performance.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.