Vonage Hires a CFO, Dilutes Its Shareholders

Rich Smith, The Motley Fool
Updated

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.

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