Pay Watch: The stock of SPS Commerce had a total return from 2019 to 2021 that far exceeded the return of the Russell 2000 Index. As a result, CEO Archie Black earned the maximum payouts on his restricted stock during that time and his compensation increased 6% last year.
- Total compensation for the year ended Dec. 31: $15,365,411
- Salary: $523,000
- Non-equity incentive pay: $920,480
- Other compensation: $8,550
- Exercised stock options: $5,759,906
- Value realized on vesting shares: $8,153,475
- Median employee pay: $86,682
- CEO pay ratio: 77 to 1
- Total 2021 shareholder return: 31.1%
Note: Black became CEO of the Minneapolis-based provider of software that connects retail trading partners in 2001. His total compensation increased 6% from his $14.5 million total in 2020. His salary was unchanged from 2020, but his annual cash incentive increased 138% over the prior year to $920,480.
The bulk of Black's compensation in 2021, and in prior years, was from previously issued long-term equity awards that vested or he exercised during the year. His restricted stock awards are a combination of time-based and performance based stock units.
About 45% of the equity awards each year are in time-based restricted stock that vest after four years and 55% from performance stock units vest based on total shareholder return relative to the Russell 2000 Index.
From 2019 to 2021, SPS Commerce's total shareholder return was 242%, compared with the Russell 2000 Index's 58% return. That overperformance earned Black the maximum award for that period.
The combined value of the restricted stock units and performance stock units was $8.1 million, up from $2.5 million from restricted stock that vested in 2020.
In addition, Black during 2021 exercised 51,052 stock options that were granted in previous years for $5.8 million.
Black's bonus from the firm's annual management incentive plan, based on revenue and earnings, was one of the largest of his tenure. For 2021, SPS Commerce's adjusted net income was $107 million, well above the threshold for an award and just below the maximum incentive target of $108.2 million. Annual revenue was $385 million, above the maximum target for the plan in 2021.
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