Total compensation last year for Angie’s List CEO Bill Oesterle tripled to $2.9 million even as the contractor-review site reported its 18th consecutive annual loss.
But at this point, that compensation is more of a potential windfall for Oesterle than reality. Stock options accounted for the biggest chunk of his 2013 compensation. Their value is tied to future stock performance.
In its recently released proxy, Angie's List valued Oesterle's 2013 option grant at $2.1 million, using a formula from the Financial Accounting Standards Board.
Options give holders the right to buy shares in the future at the prices shares were trading on the date of grant. When Oesterle received his grant in March 2013, the shares were fetching $19.88 apiece—66-percent higher than where they are now. As a result, that grant is worthless at the moment and never will have any value unless the stock surpasses $19.88.
In the proxy, Angie’s List said Oesterle received the large grant in part because he had not received any new equity awards since before the company's 2011 initial public offering.
Excluding the option grant, Oesterle’s salary, incentive pay and other compensation rose 11 percent last year, to $817,231.
On top of his base salary of $418,881, Oesterle received other compensation including $374,084 in incentive pay because the company hit key performance targets including those for revenue and cash levels.
Angie’s List stock price finished 2013 at $15.15, up 26 percent from where it started the year.
The Indianapolis-based company posted a net loss for 2013 of $32.9 million, or 57 cents a share, compared with a loss of $52.9 million, or 92 cents, in 2012.
Even so, it finished 2013 with a rare profit in the fourth quarter of $2.8 million, or 5 cents a share.
Angie’s List could be more consistently profitable if not for its strategy of pouring tens of millions of dollars into advertising and marketing to grow its market share in cities around the country. Markets become more lucrative as members write reviews of service providers and contractors advertise on the List.
Angie’s List has more than 2.5 million members. The company wants to establish a solid national footprint ahead of its competitors in the online reviews space, which includes Yelp.