Spotify sold $1.25 billion stocks in 2024, including $900 million payouts for co-founders

NEW YORK: In 2024, senior executives and board members at Spotify have sold a total of $1.25 billion in company stock, including $900 million from its co-founders, as they take advantage of the platform’s surging share price, according to a report by the Financial Times.

Around 20 executives and board members have cashed out during the year, with stock sales significantly increasing in November and December, as revealed by an analysis of filings with the US Securities and Exchange Commission (SEC). Spotify’s shares, which trade on the New York Stock Exchange, have nearly tripled in value, approaching a $100 billion market capitalization. This marks a remarkable recovery from 2022 and 2023, when the company’s value plummeted to under $20 billion.

As the stock price rises, long-time employees and top executives are enjoying substantial financial gains. The sales by the co-founders have positioned them among the highest earners in corporate America, alongside figures like Palantir founder Alex Karp and tech mogul Michael Dell, who also sold over $1 billion each this year, according to SEC filings.

Some Spotify executives sold their shares as part of predetermined divestiture plans commonly used by CEOs compensated with stock, while others did not. A company spokesperson noted that “as part of their long-term financial planning, several Spotify executives have sold some of their Spotify shares.”

Chief Executive Officer Daniel Ek, who co-founded Spotify in Sweden in 2006 with Martin Lorentzon, has sold nearly $350 million worth of stock this year, including a recent $28 million sale on December 11. Bloomberg estimates Ek’s net worth to exceed $7 billion. Lorentzon, who remains on the board, has sold over $550 million in stock during 2024.

Other notable stock sales include Gustav Söderström, Spotify’s Chief Product and Technology Officer, with more than $106 million sold; Chief Human Resources Officer Katarina Berg, with $38 million; and Chief Business Officer Alex Norström, who cashed in $63 million. Additionally, Dustee Jenkins, the head of public relations, sold over $6 million, while Netflix CEO Ted Sarandos, a board member since 2016, also made $6 million from selling Spotify shares this year.

Both Spotify and Netflix have positioned themselves ahead of competitors in the ongoing “streaming wars,” emerging as leading players in music and television. Wall Street has responded positively to Ek’s renewed emphasis on profitability, which has followed the layoffs of a quarter of Spotify’s workforce in 2023 and a series of subscription price increases. The company has reported profits in every quarter of 2024 while maintaining strong subscriber growth, even amid price hikes in multiple countries.

Bank of America analysts recognized Spotify’s performance in November, highlighting “incredible” profit margins this year. Morgan Stanley analysts also acknowledged the company’s robust product offering and growth potential, noting the emergence of profit opportunities in 2024.