Snap is a notoriously private company, because Evan Spiegel doesn’t like to tell people — even his employees — what he’s doing.
Now Snap is going public, so Spiegel will have tell lots of people lots of things about what he’s doing.
So why is Spiegel taking his company public now?
One reason, people close to the company tell me, is that Spiegel thinks that running a private company isn’t ambitious enough. He thinks that running a public company is what you do if you want to be a real Titan of Industry, like IAC’s Barry Diller.
And now we can see another reason: Spiegel’s investors have given him a huge incentive to go public. Once Snap finishes its IPO, the company will give him another 3 percent of its shares.
If Snap goes out at a value of $25 billion, those shares will be worth $750 million; assuming the company gets a “pop” in valuation when it actually starts trading, the shares will be worth even more.
A $750 million bonus is a very nice payday for a normal person, but Spiegel isn’t a normal person: Even without the bonus, his 22 percent stake in Snap would be worth about $5.5 billion. Adding in the extra shares will get him to about $6.25 billion.
Why do you need to give a billionaire a bonus? Here’s Snap’s official explanation, from its S-1 filing: It will “motivate him to continue growing our business and improving our financial results so that we could undertake an initial public offering, which we regard as an important milestone that will provide liquidity to our stockholders and employees.”
Here’s the full description of Spiegel’s bonus:
“Under the terms of his offer letter, Mr. Spiegel will be granted an award of RSUs for shares of Series FP preferred stock representing 3.0% of our outstanding capital stock on an as-converted basis on the closing of this offering, which will be fully vested on the closing of this offering and such shares will be delivered to Mr. Spiegel in equal quarterly installments over three years beginning in the third full calendar quarter following this offering. For the purposes of Mr. Spiegel’s offer letter, outstanding capital stock includes shares sold by us in this offering and all shares subject to outstanding restricted stock units that, on the closing of this offering, have met the performance condition and service-based vesting condition. Our board of directors approved the award to Mr. Spiegel in July 2015 to motivate him to continue growing our business and improving our financial results so that we could undertake an initial public offering, which we regard as an important milestone that will provide liquidity to our stockholders and employees.”
This article originally appeared on Recode.net.