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Stock options are widely used as incentives in the growing Swedish technology sector. Employees can appreciate the increase in value in companies such as Spotify or Izettle.
The taxation of employee stock options is also a priority issue for the industry, where the founders of the largest companies in the sector advocate lower taxes. The case Klarna, the company of payment and credit valued at about 20 billion Swedish kroner, the gains of the internal options programs have largely fallen in the pockets of the three foundations.
Di Digital showed how that happened.
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In the summer of 2015, the value of the Klarnas business increases sharply, with three venture capital companies buying a larger number of shares. The valuation of just over 19 billion Swedish crowns is twice as high as the year before. In this respect, the three founders of Klarnas will be richer in hundreds of millions of crowns.
Between June and August, Sebastian Siemiatkowski, Niklas Adalberth and Viktor Jacobson buy out stock options that they signed five years earlier
. documents registered with the Swedish Registration Office. To pay the deal, Di Digital borrowed money from several external financiers, according to Di Digital's calculations.
When Klaren's estimate rushes that summer, the same courier will be worth more than a billion crowns. The founders earn about $ 700 million by getting their options.
The following month, in September 2015, Niklas Adalberth Klarna leaves for charity technology with his new project Norrsken.
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A short year later, just before the middle of summer 2016, a brief email is sent by more than 60 Klarna executives.
The message is brief, according to five independent sources with transparency in Klarna.
The redemption price of the option is higher than what the market is willing to pay. Therefore, there are no buyers.
The options are not only worthless but also a loss for employees who have paid tens of thousands of dollars to subscribe, according to Di Digital's data. The disappointment spreads quickly.
Doing it with more heart does not take longer
Heads on their options have already been reported by Breakit, but now there are several details about how the process was handled internally. According to several Di Digital sources, option programs have been used for several years to encourage managers to improve the performance of their teams. Many wish that Klaren's CEO, Sebastian Siemiatkowski himself, left the message on expired options
"Making more heart does not take longer and it's also less effective," says L & # 39, one of the sources of Di Digital. Klarna employees should have been encouraged to abstain from salary increases rather than subscribe to options, giving one of the sources.
In addition, many people know that the founders themselves have made significant sums of money the year before. Prior to this sale, according to several sources, Sebastian Siemiatkowski has made business trips to find buyers for the share and raise the price. The following year, no effort is made to ensure employee performance, says the source.
But not all Klarnas executives return to their options.
A dozen people have subscribed to more expensive options that do not require an equally large increase in the stock to generate returns. According to Di Digital sources, these are offered to an increasingly small staff. In 2016, these people purchase options for a total of 74 million Swedish kronor, which represents a profit of nearly 100 million Swedish kroner according to the current market price
Read more: Klarna is developing strongly
In addition, the key staff of the Israeli company Analyzd, acquired by Klarna in 2011, can acquire shares for a total of 117 million Swedish crowns in 2015 as part of its program. # 39; option. This is evidenced by documents at the Swedish Registry of Companies. At the same time, the market value of these is about half a billion.
But for the more than 60 middle managers who signed the cheapest option, it will be a matter of loss.
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all return. In the case of Klarna executives, the share price had to be multiplied by three between 2011 and 2016 in order to come up with a bonus. The program called it "3X".
However, several Di Digital sources testify to great dissatisfaction over the way Klingen's top executives – mainly Sebastian Siemiatkowski and Vice President Niklas Adalberth – communicated about options programs
]. and he argues that Klarna would have no problem to increase significantly in value – and that employees would thus earn more money on success.
It was seldom mentioned that the price of Klarnas stock rose almost five times between 2010 and 2011 a triple increase from there was a high target.
"People were in charge of the internal dialogue They assumed that the programs of options would be more."
According to one of Di Digital's sources, Klarna sent an excel sheet to the employees who reviewed or already signed options. There, it was possible to calculate how much the profit would be if the value of Klarna's business increased a number of times before the options expired. The original value of the Excel file was that the price of the Klarnas stock would be tenfold. In fact, the value of the company has increased by 2.6 times between 2011 and 2016.
Read more: Klarna cleans the leader: "Gullar ikke med personalen"
There are mixed opinions about how the oppressed atmosphere was internal around programs of options. Several sources come back to a meeting at Stockholm's waterfront sometime before the options expire. Some left the meeting with the impression that the program says "3X" looked promising, while others understood that it would be difficult to recover money.
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The year after expiry of the program of options Some executives who have returned to their options have special bonuses. Klarna will pay SEK 6 million in 2017 to 14 people in 2017. The sum is twice the premium paid in 2016.
But many of the 60 people who have signed options in the 3X program will be exempt from bonuses, according to several sources of Di Digital
The year following the expiration of the options, a dozen Klarna executives leave the company for new assignments. Several sources indicate that the option error is an important reason for expulsion.
Klaren's CEO, Sebastian Siemiatkowski, did not want to ask for an interview on the program of options. Nor does the company comment on new information emerging on how management has handled the situation.
"We have no other comments than those we made more than a year ago when Breakit did the same. We encourage anyone with questions to contact us directly because we are always available to answer questions about it, "Klarnas spokesperson Aoife Houlihan said in an email.
Di Digital searched for Niklas Adalberth without result
Izettles CEO: Personal stock options are payroll
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