GARDENA, CA - Faraday Future Intelligent Electric Inc. (NASDAQ:FFIE) announced significant changes to the compensation packages for two of its top executives, effective September 4, 2024. The adjustments were approved by the Board of Directors, following recommendations from the Compensation Committee.
Matthias Aydt, who was appointed as Global Chief Executive Officer and board member on September 29, 2023, will now receive an annual base salary of $700,000, a discretionary target bonus of the same amount, and a one-time recognition bonus of $500,000. Additionally, he will be granted annual time-based restricted stock units (RSUs) valued at $2.1 million and performance-based restricted stock units (PSUs) with a target value of $2.1 million.
Founder and Chief Product and User Ecosystem Officer, Yueting (YT) Jia, will see his annual base salary increased to $680,000, with a discretionary target bonus of $816,000, and a similar one-time recognition bonus of $500,000. His compensation also includes annual time-based RSUs and PSUs, each with a grant date fair value of $2.04 million.
Both Aydt and Jia have agreed to initially receive a reduced pro-rated base salary, starting in September 2024, with a significant portion of this salary being used to purchase the company's Class A common stock.
This arrangement is part of a broader salary deduction and stock purchase agreement and is in line with the company's cost-cutting measures which, since October 2023, have seen executives and employees receiving reduced base salaries.
The one-time recognition bonus will be paid out in increments, with a portion disbursed in September and October 2024, and the remainder on September 30, 2025, or upon the closing of a future financing round of at least $30 million. The company has also implemented clawback provisions should either executive resign voluntarily or be terminated for cause before the fourth anniversary of their current role appointment.
The RSUs will vest over four years, and the PSUs will vest based on the achievement of performance metrics, with both sets of units being granted once the company has sufficient shares registered under the 2021 Stock Incentive Plan.
In other recent news, Faraday Future Intelligent Electric Inc. has announced a series of significant corporate developments. The electric vehicle company declared a 1-for-40 reverse stock split, set to take effect after market close.
This action was approved by the Board of Directors following a stockholder vote, and will proportionally decrease the number of shares of common stock issuable upon conversion of the company's outstanding convertible securities.
In financial developments, Faraday Future reported a revenue of $0.8 million and a net loss of $432 million for fiscal year 2023, a decrease from the previous year's loss of $602 million. The company also raised approximately $300 million through convertible notes and other financing methods.
Additionally, Faraday Future has modified its debt agreements to ease cash obligations, entering into a Waiver Agreement with investors to adjust the terms of its convertible notes, promoting their conversion into common stock.
The company has seen a shift in its board of directors with the resignation of Li Han, who will continue to contribute in an advisory capacity. Furthermore, Faraday Future was granted an extension by the Nasdaq Hearings Panel to meet the stock exchange's listing requirements.
InvestingPro Insights
In light of Faraday Future's recent executive compensation adjustments, insights from InvestingPro offer valuable context for investors monitoring the company's financial health and market performance. Faraday Future (NASDAQ:FFIE) is currently grappling with a significant debt burden and analysts suggest that it may face challenges in making interest payments on its debt. This is particularly relevant as the company seeks to incentivize its executives amidst ongoing financial restructuring efforts.
From a market perspective, Faraday Future has a market capitalization of approximately $51.75 million and is trading at a low Price / Book multiple of 0.35, as of the last twelve months leading up to Q2 2024. Despite analysts anticipating sales growth in the current year, the company has not been profitable over the past twelve months and does not pay a dividend to shareholders. These data points, combined with the fact that the stock has experienced a significant return of 30.61% over the last week, underscore the volatility and the high-risk, high-reward nature of investing in Faraday Future.
Investors seeking more comprehensive analysis and additional InvestingPro Tips can find them at InvestingPro's dedicated page for Faraday Future, which includes a total of 21 tips that delve deeper into the company's financial metrics and market behavior.
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