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The move from Credit Suisse Group AG to Snap Inc. is about to pay off big for Chief Strategy Officer Imran Khan. Khan received 7.09 million restricted shares valued at $145.3 million in 2015 after joining Snapchat’s parent company, according to the company’s registration statement for an initial public offering filed Thursday. The shares will be fully vested by January 2019 if Khan remains on the job and Snap either goes public or undergoes a change of control, such as a sale.
His move mirrors a pattern that’s emerged in recent years: leave an established Wall Street firm that pays millions of dollars to join a technology venture offering a pile of equity awards. Their value could slide—or yield a fortune.
“It’s a calculated risk in the sense that the lucrative cash compensation they’re leaving on the table will be matched and multiplied by the equity they get when coming on board,” said Aalap Shah, a managing director at executive compensation consulting firm Pearl Meyer.
Ultimately, the size of such payouts depends on how successfully a company transitions to trading publicly and improves earnings to please investors. Like many other tech businesses, Snap has relied heavily on equity to compensate employees.