The Trade Desk, Worried Stock Slide Could 'Substantially Harm' Retention, Moves to Reprice Employee Options

The Trade Desk, the independent ad-buying platform created as an alternative to walled-garden platforms like Google and Meta, is looking to reprice up to roughly 15.6 million stock options, most of which are held by rank-and-file employees, according to a recent SEC filing. If approved, the move would lower the price that employees pay to buy company stock, turning their underwater stock options—whose exercise prices are pegged well above the rate at which the stock now trades—into meaningful financial incentives. It’s a retention tactic for the company, which said in the filing it was concerned that “adverse changes” to its stock price “could substantially harm” its retention of staffers who hold these options. “Although we continue to believe that stock options are an important component of our compensation program, the underwater stock options may be perceived by their holders as having little or no incentive and retention effect due to the difference between the exercise prices and our current stock price,” the company wrote. The board of directors determined that repricing would be “in the best interests of the company and its stockholders” by helping to “restore the incentive and retention benefits of the eligible options.” The Trade Desk declined to comment beyond the filing. The company has faced significant headwinds over the last year-plus, seeing intensifying competition from Amazon, high executive turnover, blowback over product features, and a public fallout with one of its biggest clients, the French agency holding company Publicis. Once a Wall Street darling with a market cap of $69 billion, The Trade Desk has seen its stock slide about 90% since its peak in late 2024. Earlier this month, the company trimmed 15% of its headcount. Of the stock options eligible for repricing under the new proposal, some 80% are held by rank-and-file employees, while roughly 10% belong to CEO Jeff Green, and another 10% to other executives. The company acknowledged that repricing “may benefit” execs. Green's performance-based stock awards, including a new one granted this month, aren't eligible for repricing. The new award lets him buy up to 7 million shares if the stock hits targets ranging from $18 to $105. One former adtech-focused hedge fund analyst called it "the Elon Musk package." The proposal will go to a stockholder vote on Oct. 19. If it passes, eligible options will reset to the stock’s closing price on that date. However, Green is effectively able to make the call himself, as his holdings, including Class B super-voting shares, give him 50.2% of total voting power. For that reason, it will almost certainly pass, said Dan Salmon, partner at equity research firm New Street Research. The push “could certainly be counted as part of a turnaround strategy,” Salmon said. After layoffs and a C-suite reshuffle, the repricing could make the more than 2,300 employees who hold eligible options “a little bit happier.” But he added that “any changes like this don't change the value of the company,” because at the end of the day, it’s simply "shifting value from public institutional and retail investors to executives [and] employees.” He noted that his firm, a tech-focused sell-side boutique, is “generally bearish” on The Trade Desk.

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The Trade Desk, Worried Stock Slide Could 'Substantially Harm' Retention, Moves to Reprice Employee Options

The move could help the beleaguered adtech company keep staffers whose stock options have lost most of their value

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