Vonage Hires a CFO, Dilutes Its Shareholders

Holmdel, N.J.-based Vonage has a new Chief Financial Officer.

On Friday, Vonage closed out the trading week with an announcement that it's hired away David T. Pearson from Deutsche Bank to become its new Treasurer and CFO. At Deutsche, Pearson spent nine years working as a managing director and head of the bank's Global Media & Telecom Group. Before that, he worked in Goldman Sachs' Technology, Media & Telecommunications group.

So he's got impeccable investment banking credentials ... for which Vonage is paying through the nose. In an SEC filing today, Vonage revealed that it's paying Pearson $475,000 in base salary, plus:

  • an annual cash bonus targeting 100% of base salary
  • and two million stock options -- an equity award equal to nearly 1% of Vonage's shares outstanding

That last number is pretty staggering in size, and Vonage's share price is looking a little wobbly today, perhaps because of it. In fact, as of this writing Vonage's share price is down almost precisely in line with the size of the stock dilution expected from Pearson's hiring -- 1%.

The article Vonage Hires a CFO, Dilutes Its Shareholders originally appeared on Fool.com.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


Increase your money and finance knowledge from home

Investor’s Toolbox

Improve your investing savvy with the right financial toolset.

View Course »

What are Penny Stocks

The lucrative and dangerous world of penny stocks.

View Course »

Add a Comment

*0 / 3000 Character Maximum