Shareholders approved cutting the strike price on up to 15.6 million underwater options to $12.26, by 441.1 million votes to 232.5 million. Jeff Green's shares alone carry about 428 million votes, and a month earlier the board had granted him a new 7 million-share option.
The Trade Desk's shareholders voted to reset the price of the company's underwater stock options. The more revealing number is how the vote was likely made.
At a special meeting on Oct. 19, the advertising-technology company's stockholders approved a one-time repricing of eligible options held by current employees and executive officers. The proposal passed with 441,097,211 votes for, 232,477,009 against and 299,747 abstentions. The exercise price of every eligible option above that day's closing price was cut to $12.26, the Oct. 19 close.
Up to 15,582,540 options were eligible, with original exercise prices ranging from $3.69 to $122.59. Some of the lowest-priced options were already below $12.26 and were not repriced, and the company has not said how many were actually reset.
The arithmetic of control
Trade Desk has two classes of stock. Class B shares carry 10 votes each. Chief Executive Jeff Green holds 97.6% of the Class B stock and 50.2% of total voting power, according to the company's proxy.
On the proxy's ownership figures, Green's holdings carry roughly 428 million votes. That is more than the 232.5 million votes cast against the repricing, and about 64% of the 673.9 million votes present at the meeting.
The company's filing does not say how any holder voted. The Wall Street Journal reported on Saturday that Green used his supervoting power to approve the repricing over opposition from outside investors. If all of Green's votes were cast in favor, the remaining votes for the proposal would total about 12.8 million, against 232.5 million opposed. On that assumption, about 95% of the other votes cast opposed the plan, and it would have failed without him.
The vote met the standard the company disclosed in advance, a majority of the votes cast, under a dual-class structure that has existed since the company went public.
The sequence
The board approved the repricing on Aug. 13, subject to the shareholder vote. On Sept. 14, with Green recused, it granted him a new performance option on up to 7 million shares at $14.97, vesting in seven tranches as the stock reaches 20-day price targets from $18 to $105. That option, and a performance option from October 2021, were excluded from the repricing.
Green's older time-based options were not excluded. A Form 4 filed on Oct. 21 shows his options cancelled and reissued at $12.26, with no change in the number of shares, expiration dates or vesting schedule. Based on the proxy, his eligible options cover 1,618,489 shares with a weighted average exercise price of about $43.25 before the reset.
At Friday's close of $13.00, those options are worth about $1.2 million in immediate exercise value. Before the reset, with every strike above $13, they had none.
Most of the options belong to employees
The beneficiary list is not mainly executives. Based on the proxy's eligibility table, 2,342 non-executive employees hold about 12.4 million of the eligible options, roughly four-fifths. Executive officers hold about 3.2 million, about half of them Green's.
The company's case rests on those employees. The board said the repricing "will help restore the incentive and retention benefits of the eligible options without increasing the Company's overhang of outstanding equity awards or incurring the additional costs and complexities of alternative compensation arrangements." Holders who exercise or leave the company, other than through a termination without cause, before April 19, 2027 revert to their original price.
The stock explains why the options needed help. Trade Desk closed 2025 at $37.96. It closed Friday at $13.00, down 65.8% this year, for a market value of about $6.1 billion.
Retention reset or controller's choice
The case for the repricing is that most of the benefit goes to rank-and-file staff whose options were deep underwater, that no new shares are added to the pool, and that the six-month reversion clause discourages anyone from taking the money and leaving. Even Boardroom Alpha, a governance research firm critical of the executive portion, called resetting staff options after the share-price collapse "defensible."
The case against is that executives, including the chief executive, received both new awards and a reset of old ones, with no new performance conditions and no reduction in option count. "What the board has not explained is why executives who received significant new awards last month should also have their old options reset without new vesting, performance conditions, fewer options or another give-back," Boardroom Alpha wrote before the vote. The accounting cost, which the company will record as additional stock-based compensation, has not been disclosed.
What to watch
Trade Desk's third-quarter report and 10-Q, which may disclose the incremental compensation expense and include the award agreement for Green's new performance option. Whether the stock closes below $12.26, which would put the repriced options back underwater. The April 19, 2027 end of the reversion period.