Dive Brief:

• Wise CFO Matt Briers out-earned the company’s CEO for its fiscal full-year 2023 ended March 31, according to the money transfer service’s annual report released Monday.
• Briers, an eight-year veteran of the U.K-based fintech, received total compensation of £336,000 for the year, in comparison to CEO Kristo Käärmann’s total annual pay of £206,000, according to its annual report. 
• However, Käärmann’s substantial stock ownership is likely the biggest reason behind why Briers’ salary outstrips his own, Jack Castonguay, an accounting professor at New York’s Hofstra University, told CFO Dive in an emailed response to questions.

Dive Insight:

Combined, Käärmann holds approximately 372 million Class A and Class B shares in Wise according to the annual report, which were largely accumulated prior to the company going public in 2021. This compares to Briers’ 284,000 in Class A shares, according to the company’s annual report.

While CEOs typically out-earn their financial right hands, some have leaned on stock or other incentives rather than banking a higher cash amount. 

“This seems similar to how in years past Mark Zuckerberg (Facebook), Tim Cook (Apple), Larry Ellison (Oracle), and others took $1 salaries but had large stock options or stock awards in lieu of the salary,” Castonguay wrote. 

It is also difficult to draw a comparison here due to Käärmann’s status as CEO and founder of the company as well as his high stock ownership in the company, Shawn Cole, president of boutique executive search firm Cowen Partners said in an email in response to questions from CFO Dive. Käärmann “has a lot more upside potential, and his salary appears to be purely symbolic. Publicity stunt?” Cole said in an emailed response to questions regarding the CFO’s compensation.

However, Briers may also be receiving higher pay as he will be staying on in the company’s C-suite while Käärmann takes his planned sabbatical in September, Castonguay postulated. “This would be consistent with them paying him almost as acting CEO while Kristo is on sabbatical,” he wrote in an email. “In short, Kristo has so many shares he doesn’t need the salary and the CFO is likely being paid partly to act like a CEO while Kristo is on sabbatical.”

The U.K fintech announced Briers would step down from his role in late May, in order to fully recover from a cycling accident that took place in February of last year, CFO Dive sister publication Banking Dive reported. Käärmann, meanwhile, announced he would be going on paternity leave in September, with the company’s chief technology officer, Harsh Sinha, stepping in as interim CEO. The sabbatical announcement came after Wise disclosed the U.K. Financial Conduct Authority was investigating the CEO for failure to pay his taxes. The sabbatical was unrelated to the ongoing investigation, Wise told the Financial Times in May. 

Briers has served as the money transfer application’s finance chief for about 8 years, according to his LinkedIn profile. Before joining Wise, he logged a three-year tenure at Google as its head of sales finance for the U.K., and has also served as the head of strategy, asset finance for Lloyds Banking Group.

Wise noted that it would be increasing Briers’ salary for the full year of 2024 by 20%, the fintech said in this year’s report. The decision was made to bring the CFOs’ salary “more in line” with that of businesses of similar size, Wise said. Last year, Käärmann also decided to abstain from both the company’s long-term inventive plan and bonus, as well as requesting for his salary not to be reviewed, the company’s 2022 annual report said.   

Briers’ compensation is not tied to Käärmann’s sabbatical, a company spokesperson told CFO Dive via email, pointing to Käärmann’s request not to have his salary reviewed last year. As a result of this and the company’s choice to make Briers’ salary more in line with that of other technology companies, the CFO’s salary is now higher than that of the CEOs, the spokesperson said.

When deciding upon Briers increase, its Remuneration Committee also took into account Briers’ “commitment and his choice to continue in his role throughout FY2024, exceeding his notice period, to ensure a smooth transition period and provide critical support during our CEO’s upcoming sabbatical,” the company said Monday in its annual report.

It is “certainly a possibility” that Briers’ compensation is tied to his helping to support Sinha in his role as interim CEO, Castonguay said in a follow-up email in response to questions.

“Paying him more to stay can act as a way to stabilize leadership during the CEO’s sabbatical,” he wrote. “Few firms happy with their direction would want to lose their CEO and CFO simultaneously, even if one is only temporary.”

Wise reported a 34% jump in active customers year-over-year to 10 million, according to its preliminary full-year earnings report. The rise in active customers contributed to a 37% increase in payment volumes for the year ended March 31, 2023, growing to £104.5 billion.