The top lawyer at social media message platform Snapchat earned nearly $9.1 million in total compensation in 2019, nearly 10 times more than in the previous year.
Snap Inc.'s Michael O’Sullivan earned the same annual salary of $500,000 as in 2018, but $8.57 million in stock awards caused his overall compensation to spike, according to a Wednesday securities filing.
Snap, which earlier this week reported fourth quarter earnings of $561 million that felt slightly short of expectations, declined to discuss details of O’Sullivan’s compensation. O’Sullivan himself was not immediately available to discuss the matter, although a source briefed on Snap’s filing told Bloomberg Law that his sizable stock award is a grant that vests over four years, not annual compensation.
The Securities and Exchange Commission’s 10-K rules state that Snap must disclose the full grant value within one year, the source said. The 10-K filed by Snap shows that O’Sullivan received $426,415 in stock awards for 2018, a drop from the more than $16.3 million in stock awards he received when he joined Snap in July 2017. Those awards made up the bulk of the $16.75 million in total compensation that O’Sullivan received from the Santa Monica, Calif.-based company that year.
Bloomberg data shows that O’Sullivan owns Snap stock valued at $26.96 million. In mid-January he sold 18,500 shares of company stock at an average price of $19.09 for a total transaction value of $353,165. In 2019, securities filings show that O’Sullivan divested more than 200,000 other Snap shares to reap roughly $3.46 million.
O’Sullivan replaced Snap’s first general counsel Christopher Handman, who joined the company in 2014 and left following a $3.4 billion initial public offering in 2017. The listing generated $1.8 million in legal fees and expenses for Snap’s lawyers at Cooley, according to a securities filing at the time, and ultimately led to Handman receiving an allotment of 2.2 million company shares valued at $53.8 million in May 2017 that will vest over 10 years.
Handman, a former partner at Hogan Lovells, is now a co-founder and COO of security startup TerraTrue Inc., which in December secured $4.5 million in seed funding.
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Bloomberg Law data shows that Cooley has handled more than 40% of Snap’s litigation work over the past three years, followed by Wilson Sonsini Goodrich & Rosati at 18.9%, Delaware’s Morris Nichols Arsht & Tunnell at 10.8%, and Paul Hastings at 5.4%. Other law firms that have done work for Snap within the past year include Gibson Dunn & Crutcher and Munger Tolles & Olson.
In its 10-K filed this week, Snap disclosed that it paid $953,569 to Gibson Dunn and $134,888 to Munger Tolles in 2019.
Gibson Dunn is home to Los Angeles-based partner Debra Wong Yang, a former chair of the firm’s white-collar defense and investigations practice group. She is also the stepmother of Snap co-founder and CEO Evan Spiegel, whose father is Munger Tolles litigation partner John Spiegel. Munger Tolles is also the firm where O’Sullivan spent 21 years before joining Snap three years ago.
Snap said in its most recent 10-K that while the elder Spiegel has personally provided no services to the company, it has turned to Wong Yang to handle some legal work.
The company also disclosed this week the pay of another lawyer it hired for non-legal work.
Jared Grusd, a former general counsel and head of corporate development at audio services platform Spotify Technology SA and CEO of The Huffington Post, earned a $500,000 annual base salary from Snap as of Dec. 31, 2019, according to the company’s 10-K. Snap hired Grusd, who began his career as an associate at Skadden Arps Slate Meagher & Flom, to be its chief strategy officer in late 2018.