Daniel Ek, the co-founder of Spotify Technology SA, has opted to sell off a portion of his shares in the audio-streaming giant after gross margin grew 27.6% in Q1, up 243 bps Year on Year.
Since the start of 2024, five current members of Spotify’s executive team, along with the former CFO, Paul Vogel, have sold shares totaling $254.4 million.
Notably, CEO Daniel Ek led the pack, selling $118.9 million in shares following the group’s Q2 results, preceded by a $59.9 million sale in February, Fortune first reported.
Reports indicate that Ek has initiated the sale of 650,000 shares through two separate transactions, a departure from his previous selling patterns observed since 2021, as disclosed in re Ek, who hasn’t taken a salary since 2017 and was one of the lowest-paid major tech CEOs last year, received $1.4 million in “other compensation.”
What we know
Gustav Söderström, Spotify’s chief technical officer and chief people officer, sold $40.7 million worth of shares, with $30 million vested in two tranches.
Meanwhile, Alex Norstrom, the chief business officer, garnered $12 million from stock sales, and Dustee Jenkins, the chief public affairs officer, cashed in $343,000 in March.
Katrina Berg, the chief human resources officer, vested $7.7 million in shares in February. gulatory according to Bloomberg.
Former CFO Paul Vogel, ousted from his role in December amid company layoffs, earned $14 million, with $9.4 million in share sales around the time of his departure.
A Spotify spokesperson stated that Ek’s share sales were part of his long-term financial planning and represent only a fraction of his holdings in the company.
What you should know
Spotify’s executives’ significant share sales at the beginning of the year may be linked to the company’s strong performance in 2024. Shares have risen over 60% since January, adding more than $20 billion to the company’s value, the executives capitalized on this growth.
Despite Spotify’s success, it faced challenges, including a massive layoff of 1,500 employees in December. Ek attributed the layoffs to the need to streamline operations, leading to an improvement in share performance.
During the latest earnings call, Ek acknowledged that the layoffs had a more significant impact on day-to-day operations than expected. This affected targets for monthly active users and quarterly profits.
The decision to divest shares underscores Ek’s confidence in Spotify’s current performance while also signaling his strategic intent to explore new investment opportunities.
By rebalancing his portfolio amid evolving market dynamics, Ek demonstrates a shrewd understanding of financial management principles and a proactive approach to wealth optimization.
