Key Highlights
- Aneel Bhusri is back as CEO of Workday with a $138.8 million pay package.
- The move reflects the belief that only founders can steer companies through difficult transitions.
- Bhusri’s compensation package includes stock targets and restricted shares, highlighting investor skepticism.
- Workday has lost over half its market value in recent weeks due to AI concerns.
The Return of the Founder
Workday, a human resources software company that’s been feeling the AI squeeze, is turning to a classic Silicon Valley tradition: bringing back the founder. Aneel Bhusri, who left his CEO position two years ago, is now stepping back into the top job with a hefty $138.8 million compensation package.
“AI is reshaping how work gets done and represents an even bigger transformation than the shift to cloud 20 years ago,” Bhusri wrote on LinkedIn. “Just as we helped redefine enterprise software when we founded Workday, I believe we can once again lead the way in this AI era.”
The timing of Bhusri’s return is telling. Since his departure, Workday has seen its stock value plummet by 51% to around $150 a share from an intraday peak of $311.28 less than two years ago. This year alone, the stock is down 29%, reflecting broader concerns in the SaaS industry.
A Complex Compensation Package
Bhusri’s compensation package includes a mix of cash and performance-based awards. More than half the $138.8 million ($75 million) is tied to hitting undisclosed stock price targets over the next five years. The other half, about $60 million in restricted stock, vests only if Bhusri sticks around for four years with no additional performance requirements.
“The numbers are far more complex than the optimism,” one analyst commented. “It’s a clear sign that investors have lost faith.”
Dual-Class Share Structure and Cofounder Control
The company operates on a dual-class share structure, which means shares carried by the public carry a single vote each, while Bhusri and his cofounder, Dave Duffield, hold Class B shares worth 10 votes apiece. Between them, they control 68% of the voting power through their ownership stake.
Bhusri’s return is not just about leadership; it’s also about maintaining control over key decisions. With a push-out score that suggests he may have felt pressure to leave his previous role, Bhusri now faces an uphill battle to restore investor confidence and lead Workday into the AI age.
Workday’s Challenges in the AI Age
The day of Bhusri’s return saw the stock drop more than 6%, underscoring investors’ anxiety. Despite growing revenue, subscription growth has slowed, and the unknown impact of AI on SaaS companies casts a brutal shadow over the sector.
“The opportunity ahead is always greater,” wrote Workday’s outgoing CEO Carl Eschenbach in his LinkedIn post. “Aneel will be instrumental in driving our vision forward.”
The dual-class structure, set to expire in 2032, gives Bhusri a solid chunk of time to see if a cofounder in the CEO seat can have an impact on the stock price. For now, Workday is betting that its founder-savior can navigate the choppy waters of AI-driven disruption.
