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Senior Spotify executives and board members have sold $1.25bn worth of the company’s stock in 2024 — including $900mn in payouts for its two co-founders — as they capitalise on the music streamer’s soaring share price.
The sum of $1.25bn was cashed out by about 20 executives and board members during the year, with stock sales ramping up in November and December, according to a Financial Times analysis of filings to the US Securities and Exchange Commission.
Shares of Spotify, which is listed on the New York Stock Exchange, have nearly tripled in 2024, hovering near a $100bn market capitalisation. It is a sharp turnaround from 2022 and 2023 when the group’s share price dropped to its lowest ever, trading at a market capitalisation of less than $20bn.
Longtime employees and top executives are now reaping the financial rewards. Combined, the co-founders’ transactions have vaulted their stock earnings into the upper echelon of corporate leadership. Palantir founder Alex Karp and computer scion Michael Dell have also sold more than $1bn this year, SEC filings show.
Some of the Spotify share sales were executed pursuant to pre-arranged divestiture plans common among chief executives compensated in company stock, while others were not, securities filings show. “As part of their long-term financial planning, several Spotify executives have sold some of their Spotify shares,” a company spokeswoman said.
Chief executive Daniel Ek, who founded Spotify in Sweden in 2006 with Martin Lorentzon, has sold nearly $350mn worth of stock in 2024. He has sold shares as recently as December 11, when he cashed out $28mn. Bloomberg estimates Ek’s net worth at more than $7bn.
Lorentzon, who remains on Spotify’s board, has sold more than $550mn worth of stock in 2024, per SEC filings.
Gustav Söderström, Spotify’s chief product and technology officer, who has been with the company since 2009, sold more than $106mn in stock in 2024.
Chief human resources officer Katarina Berg has sold $38mn worth of stock, while chief business officer Alex Norström reaped $63mn from stock sales during the year.
Dustee Jenkins, Spotify’s head of public relations, who joined the company from retailer Target in 2017, has sold more than $6mn in stock this year.
Netflix chief executive Ted Sarandos, who has sat on Spotify’s board since 2016, made $6mn from selling his Spotify stock this year.
Spotify and Netflix have leapt ahead of their competition in music and television, emerging as the undeniable winners of the “streaming wars”.
Wall Street has rewarded Ek for a newfound focus on profitability. After firing a quarter of its staff in 2023 and rising subscription prices, Spotify has made a profit in each quarter of 2024. It has done so without sacrificing subscriber growth. The streaming group continued to add customers at a blistering pace, even as it raised prices in dozens of countries.
Bank of America analysts in November raised their stock forecast for Spotify, noting “incredible” profit margin performance this year.
“Spotify has long had a uniquely strong product offering and growth opportunity,” wrote Morgan Stanley analysts. “In 2024, we have begun to see the profit opportunity emerge.”