The CEO of Lyft, Logan Green, and the president, John Zimmer, are leaving their positions by the middle of April, the firm announced on Wednesday. They will represent the board of Lyft as chair and vice chair, respectively.
Former Amazon retail executive David Risher will succeed Logan Green as CEO of Lyft. Sean Aggarwal, the current chairman of Lyft, will leave his position but continue to serve on the board.
In 2012, Green and Zimmer started Lyft. Back then, Lyft’s main point of distinction from Uber was its pink mustaches on its cars. Zimmer revealed to TechCrunch at the time that Lyft had first considered offering the service exclusively to women, “as a safety kind of service and a very particular clientele.”
In 2016, Lyft got rid of his mustache, and three years later he went public. When it first launched, Lyft priced its shares at $72 each and raised more than $2 billion in a single afternoon. Today, Lyft closed at $9.60 per share, however the stock price did increase by almost 6% after-hours on the announcement of Risher’s appointment as CEO.
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As the organization’s first vice president of product and store development, Risher joined Amazon in 1997. With Amazon’s founder and executive chairman Jeff Bezos, he rose through the ranks, serving as SVP of marketing and merchandising before departing the company in 2002. According to a statement from Lyft, he contributed to the company’s transformation from an online bookseller with $15 million in yearly sales to the “everything store” with over $4 billion in sales.
Currently, Risher serves as the CEO and co-founder of Worldreader, a nonprofit organization that promotes reading among kids. Perhaps it is this commitment to the local community that fits in well with Lyft’s original business objectives. According to a LinkedIn post, he will leave his position as CEO there but continue in his role as board president.
On April 17, Risher, who joined the Lyft board of directors in 2021, will assume full leadership responsibility for the business’s operations.
The company’s previously disclosed first-quarter revenue, contribution margin, and adjusted EBITDA projections would not change, according to Lyft. In February, Lyft released financial results for the fourth quarter and the entire year 2022. At that time, the business cut its Q1 2023 revenue forecast to $975 million, a decrease of nearly $200 million. Analysts had anticipated the firm to forecast $1.09 billion in sales. Shares fell 25% in after-hours trading to $12.13 as a result of that guidance, and they have since proceeded to fall.
Compensation
According to SEC filings, Risher receives a $725,000 yearly compensation from Lyft, with the possibility of a 100% annual target bonus for each fiscal year he works there, contingent upon the accomplishment of specific performance targets. Nonetheless, as long as he is employed by the company through mid-March 2024, his annual bonus for this year will be $1 million. Risher will also receive a $3.25 million signing bonus. A performance-based restricted stock unit award totaling 12.25 million shares, which Risher can vest in upon reaching specific stock price targets, is part of the incoming CEO’s remuneration package.
Each of Green and Zimmer will receive $450,000 in cash for their board seats. As long as they continue to be service providers to the organization, they will each keep their initial award agreements according to a predetermined schedule. They will be able to obtain their equity awards as outlined in Lyft’s 2019 equity incentive plan if they are fired, which will hasten that schedule. Also, as on the date of the company’s annual meeting of stockholders, they will each receive a grant of restricted stock units covering a number of shares of Lyft’s stock valued at $260,000.
In addition, Lyft’s dual-class structure empowers Green and Zimmer long after they leave the firm, despite the separation from day-to-day operations. Until both of them pass away, they both still have high-voting shares that give them each 20 votes. Lyft’s sunset provision allows the surviving co-founder to control the votes of the deceased or incompetent co-founder in the event of either of them passing away or becoming unable. And after their passing, a trustee will have the last surviving co-full founder’s vote rights for a nine to 18-month transition period.
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