Business

Shopify to let staff decide cash-stock mix in pay as shares dive

Canadian ecommerce firm’s shares have plunged 75% this year

Shopify will allow staff to decide what proportion of their pay comes in cash and shares Photograph: Getty Images

Fri Sep 16 2022 - 14:53

Shopify is changing its compensation practices to let staff decide how much of their pay will be cash versus shares, as volatility continues to buffet shares of technology companies.

The Canadian ecommerce firm, which has seen its share price fall 75 per cent this year, will allow employees to choose a mix of cash, restricted stock units and stock options, with the ability to withdraw equity immediately.

Under the previous structure, management determined the mix of cash and stock that staff would receive. Equity was locked in for the first year of employment.

“The ongoing industry-wide realities in which we had to operate were not uncomplicated: compensation tied to market value; geographic salary disparities for a global workforce; and the few making choices for the many,” the company said in a blog post.

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Shopify stressed that the shift will provide flexibility to employees who may opt to receive more cash when saving for a house, for example. That said, staff will receive a 5 per cent bonus if they allocate more money to equity than is required under minimum “guardrails”. These vary from country to country, based on legal requirements, the company said.

The move is the latest in a string of changes Shopify has enacted over the past year. In July, it cut about 10 per cent of its workforce, with chief executive Tobi Lutke acknowledging he overestimated how much ecommerce would grow after the pandemic compared to physical retail.

In June, the company completed a 10-for-one split of its common stock in a bid to spark interest among retail investors. But it appears to have had little impact.

– Bloomberg

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