Peloton Co-Founder Maxed Out Pledged Shares to Cover Margin Calls
John Foley,
the former CEO of
Peloton Interactive Inc.,
PTON 1.56%
nearly doubled the amount of shares that he has pledged to cover personal loans taken out against his stake in the fitness-equipment maker.
Mr. Foley pledged as collateral more than 6.7 million Class A and Class B shares, or 41% of his 16.4 million holdings, as of Oct. 4, a securities filing shows. Peloton’s policy limits such pledges to 40% of an executive’s or board member’s holdings.
The Peloton co-founder faced repeated margin calls from
Goldman Sachs Group
over the past year as the company’s shares tumbled, the Journal reported. A year ago, he had pledged 3.5 million shares as collateral. “This was not a fun personal balance-sheet reset,” he said earlier this month.
Mr. Foley resigned as executive chairman and as a board member in September. That gave him flexibility to sell or pledge more Peloton shares, though he said the margin calls weren’t the reason he left the company.
The stock’s collapse has also left his successor, CEO
Barry McCarthy,
underwater on an options grant initially valued by Peloton at $167.6 million when he joined the company in February. The shares have fallen about 80% since he took over and got that award.
John Foley stepped down as Peloton’s executive chairman in September.
Photo:
Christopher Goodney/Bloomberg News
Peloton gave Mr. McCarthy options to purchase 8 million shares with 1/48 vesting each month over four years that he stays in the job. The award has an exercise price of $38.77, meaning Mr. McCarthy would pay far more to buy the shares than the current stock price of $7.81. Like Mr. Foley did, the new CEO receives an annual base salary of $1 million, the filing shows.
Mr. Foley wasn’t the only Peloton officer to borrow against his holdings. Co-founders Thomas Cortese and
Hisao Kushi
have each pledged about 25% of their holdings as collateral for personal loans, according to the filing. Mr. Cortese is Peloton’s chief product officer; Mr. Kushi resigned in September as chief legal officer.
Mr. Foley stepped down as CEO in February. His stake in the company, worth $1.5 billion a year ago, is currently worth less than $130 million. He holds 33.8% of voting power in the company through Class B shares worth 20 votes apiece, down from 39.6% a year ago.
Peloton declined to comment and Mr. Foley didn’t immediately respond to a request for comment.
Write to Sharon Terlep at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
John Foley,
the former CEO of
Peloton Interactive Inc.,
PTON 1.56%
nearly doubled the amount of shares that he has pledged to cover personal loans taken out against his stake in the fitness-equipment maker.
Mr. Foley pledged as collateral more than 6.7 million Class A and Class B shares, or 41% of his 16.4 million holdings, as of Oct. 4, a securities filing shows. Peloton’s policy limits such pledges to 40% of an executive’s or board member’s holdings.
The Peloton co-founder faced repeated margin calls from
Goldman Sachs Group
over the past year as the company’s shares tumbled, the Journal reported. A year ago, he had pledged 3.5 million shares as collateral. “This was not a fun personal balance-sheet reset,” he said earlier this month.
Mr. Foley resigned as executive chairman and as a board member in September. That gave him flexibility to sell or pledge more Peloton shares, though he said the margin calls weren’t the reason he left the company.
The stock’s collapse has also left his successor, CEO
Barry McCarthy,
underwater on an options grant initially valued by Peloton at $167.6 million when he joined the company in February. The shares have fallen about 80% since he took over and got that award.
John Foley stepped down as Peloton’s executive chairman in September.
Photo:
Christopher Goodney/Bloomberg News
Peloton gave Mr. McCarthy options to purchase 8 million shares with 1/48 vesting each month over four years that he stays in the job. The award has an exercise price of $38.77, meaning Mr. McCarthy would pay far more to buy the shares than the current stock price of $7.81. Like Mr. Foley did, the new CEO receives an annual base salary of $1 million, the filing shows.
Mr. Foley wasn’t the only Peloton officer to borrow against his holdings. Co-founders Thomas Cortese and
Hisao Kushi
have each pledged about 25% of their holdings as collateral for personal loans, according to the filing. Mr. Cortese is Peloton’s chief product officer; Mr. Kushi resigned in September as chief legal officer.
Mr. Foley stepped down as CEO in February. His stake in the company, worth $1.5 billion a year ago, is currently worth less than $130 million. He holds 33.8% of voting power in the company through Class B shares worth 20 votes apiece, down from 39.6% a year ago.
Peloton declined to comment and Mr. Foley didn’t immediately respond to a request for comment.
Write to Sharon Terlep at [email protected]
Copyright ©2022 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
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