GoodRx's co-CEOs stand to make millions as the company goes public. Here's how their compensation compare to leaders at CVS, Walgreens, and Teladoc.
- GoodRx is expected to IPO on Wednesday after pricing its shares at $33 just after midnight. At this price, co-CEOs Trevor Bezdek and Douglas Hirsch's stakes in the company would each be worth $148.5 million.
- The startup provides discount prescriptions and some telehealth services. According to the company's S-1 filing, it's been profitable since 2016.
- Compared to competitors, compensation for GoodRx's co-CEOs was low, mostly due to the absence of equity awards.
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Digital health startup GoodRx is already standing out among a busy IPO season as it prepares its own public offering.
The startup, which provides discount prescriptions and some telehealth services, is run by co-CEOs, Trevor Bezdek and Doug Hirsch. According to the company's S-1 filing, it has been profitable since 2016, making it an outlier among its newly public peers, such as Amwell or Oak Street Health, that are operating at a loss.
Hirsch and Bezdek will continue to evenly split CEO duties after GoodRx goes public on Wednesday, according to an amended S-1 filing Tuesday. Just after midnight on Wednesday, GoodRx priced its shares at $33 apiece, well above the initially set price range of $24 to $28. The pricing gives GoodRx a market cap of around $12.7 billion.
Co-CEOs Hirsch and Bezdek's total compensation is low compared to peers
In 2019, Hirsch and Bezdek each made about $1.1 million in reported total compensation, according to the company's most recent S-1. The compensation for each CEO is nearly identical. Their total reported compensation is made up primarily of salary of $500,000 each, and cash incentives, listed as non-equity incentive plan compensation in GoodRx's summary compensation table, which total $608,831 each. Hirsch and Bezdek also hold 63.9 million shares through Idea Men, a holding company that also includes cofounder Scott Marlette. It is not clear how ownership is divided among the three men, and that is not included in the calculations below.
This $1.1 million total compensation is lower than many of the company's peers. In its S-1, GoodRx lists Teladoc, Amwell, MDLIVE, and Doctor on Demand as competitors in the telehealth space and didn't disclose a direct competitor to its discount prescription business.
Of listed competitors, only Teladoc and Amwell had publicly available compensation data. While Amwell's c0-CEOs Roy and Ido Schoenberg earn only slightly more than the co-CEOs of GoodRx, at $1.3 million apiece in total reported compensation, Teladoc's CEO Jason Gorevic is paid almost $8 million.
Traditional pharmacies like CVS Health and Walgreens Boots Alliance paid their CEOs about $36 million and $19 million, respectively. According to a company spokesperson, the stock award for CVS Health CEO Larry Merlo is abnormally large in 2019 due to the acceleration of a 2020 grant and a change in the way they disclose compensation. The graphic below includes amounts as they appear in the most recent SEC filing.
Equity makes the difference
The key difference between Hirsch and Bezdek and their competitors' higher paid CEOs: equity. Equity awards are a type of compensation whereby employees are given shares of a company. The value of these shares will fluctuate as the company's stock price changes in the market, but equity grants typically make up large portions of executive compensation packages.
Teladoc, CVS, and Walgreens all gave their executives big equity grants in 2019. Teladoc's CEO salary and cash incentives are basically identical to GoodRx's, but Teladoc granted their CEO an equity award worth almost $7 million at the time of the grant whereas GoodRx's co-CEOs received no equity award.
The chart below shows the compensation split out by element: salary, bonus, NEIP (non-equity incentive plan), stock awards, option awards, and other compensation. By holding your cursor over the labels at the top of the chart, you can see how specific parts of compensation compare across listed executives.
Valuing the co-CEOs stake in their firm
While the total reported compensation is low for GoodRx's co-CEOs, the bulk of their wealth from GoodRx comes from their stake in the company they founded — Hirsch and Bezdek each own 4.5 million shares of the company's stock. On Tuesday night, GoodRx priced their shares at $33 apiece, meaning that Hirsch and Bezdek's stakes are each worth $148.5 million.
The next largest individual shareholder for GoodRx is Andrew Stutsky, who owns 3.9 million shares. These shares would be worth more than $130 million at GoodRx's announced share price.
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