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Schulman is set to retire by the end of the year as he announced back in February.
American multinational financial services and payment firm PayPal Holdings Inc (NASDAQ: PYPL) has slashed the cash remuneration for its Chief Executive Officer (CEO) Dan Schulman in a rare cost-cutting move. According to a filing lodged by the company, Schulman was paid a total of $22 million for the year, down by 32% from the $32 million he received from the firm last year.
The slash in remuneration for Schulman comes as a result of the poor performance of the company in the past financial year. PayPal was notably unable to meet its targets for the year amid the growing impact of the ongoing war in Ukraine on the global financial ecosystem.
Specifically, the company’s core targets for revenue, adjusted operating margin, and net new active users were not met, which also translates to reduced profit across the board. The reduced remuneration to Dan Schulman is a cost-cutting measure that the company hopes it will use to cushion its balance sheet.
The PayPal board’s compensation committee, despite the slash on Schulman’s pay still believes the veteran CEO is the best man to lead the company in its most trying times. The committee tipped Schulman to lead the firm “through a challenging period of macroeconomic uncertainty, geopolitical instability, slowing e-commerce growth, and a return to pre-pandemic consumer behaviors.”
The very high inflation around the world and particularly in the United States has largely reduced the earnings capabilities of citizens and also fueled a sharp drop in their spending powers. This impacted the payment receipt from merchants hosted on the PayPal platform and by default the company’s revenue.
PayPal CEO Exit and Other Uphill Battles
Schulman is set to retire by the end of the year as he announced back in February. While still at the helm of affairs, PayPal said it is set to contract the job of finding his replacement to a third-party firm.
Besides the core need to take PayPal away from the path of its slowing growth, the company is also battling some uphill battles especially as it relates to the decision encroachment from its shareholders.
Ahead of its shareholder’s meeting in May, the company has been rallying investors to vote against key proposals that have the tendency to shift the core landmarks in operation the company has already set.
One of these proposals will be to force the company to reveal its approach to account suspension and closures. This proposal is being sponsored in part because there has been claims that the company bans sex workers from its app, even for those who practice this business in a legitimate way.
“PayPal consistently employs objective, narrowly tailored policies to address account suspension and closure, and those policies are based on ensuring the safety of our customers and protecting PayPal’s legitimate business interests,” the company said in a statement imploring its key stakeholders to vote against the proposal.