Nubank says executives will only earn BRL 800 million if ambitious goals are met

Nubank is expected to pay up to BRL 816 million in compensation to its top executives and members of the board of directors in 2022, according to a regulatory document published by the digital bank.

According to the reference form, a document that companies send to B3 and the CVM (Brazilian Securities and Exchange Commission), around R$804 million will be distributed among the eight members of Nubank’s statutory board.

Another US$ 11 million will be shared by eight paid members among the nine that make up the board of directors of the digital bank created in 2013 and which today has more than 54 million customers.

The information on the Nubank form generated discussions on social media on Wednesday (27), as the bank, which made its debut on the New York Stock Exchange in December with an initial public offering (IPO) of US$ 2.6 billion (R$ 13 billion)—which valued it at US$ 48 billion (R$ 240.7 billion) at the time— had a net loss of US$ 165.3 million (R$ 829.1 million) in 2021.

Sought the day before, Nubank said this Thursday (28) that it should only pay compensation to its directors this year if ambitious targets for the price of its shares are reached.

“More than 85% of Nu Holdings’ statutory board of directors’ 2022 equity compensation forecast depends on the achievement of ambitious, specific and sustained share price targets aligned with the long-term interests of our stakeholders,” the bank said. digital in a statement to Reuters.

According to the bank, this remuneration will only occur “if predetermined levels of the share price are reached, in accordance with a contingent share agreement approved by the board of directors in November and disclosed in the registration documents of the IPO process in 2021”.

The conditions for this remuneration to materialize include that the average class A common share price never falls below US$ 18.69 (R$ 93) for a period of 60 consecutive days on the market. The second condition is that the average Class A common share price is at or above US$35.30 (R$177) for a period of 60 consecutive days. Currently, Nubank’s share price is at the level of US$ 6.33 (R$ 31).

The total amount of compensation provided by Nubank to its executives is much higher than the R$185.3 million paid by the bank last year. The amount is also greater than the R$46.6 million in compensation paid to officers and directors.

Itaú Unibanco, the largest bank in Latin America and which at one point had a market value below that of Nubank at the time of the digital bank’s IPO, paid its managers R$444 million last year, including stock options and fixed compensation, according to your referral form. The compensation was divided among 45 members of the board of directors, statutory board and fiscal council.

Bradesco, on the other hand, paid around R$880 million in compensation to members of the board of directors and supervisory boards in 2021. The digital bank Inter paid R$26.2 million to 27 executives last year.

Also according to the Nubank form, 96% of the amounts paid to the company’s management members in 2021 came from variable compensation. This usually refers to stock options, an instrument widely used by high-growth companies to incentivize their main partners.