Axon had 10 years to reach the 12 tranches, but achieved them all by May 2023. The stock price increased from about $US29 upon board approval of the pay plan to more than $US225 when the final tranche was met. Revenue grew to $US1.2 billion from $US343 million.
Axon’s stock has continued its rise this year, climbing 159 per cent and hitting a new high this week in New York trading. Last month, the company announced a deal to supply the Royal Canadian Mounted Police with more than 10,000 body-cams.
That stock bounce could further boost Smith’s fortune after shareholders approved a new pay package in May tied to performance tiers for the CEO and other employees. The shares awarded Smith in the most recent compensation package are currently worth about $US455 million, but aren’t included in Bloomberg’s net worth calculations since they’re unrealised.
Musk, meanwhile, has seen his multibillion-dollar pay deal tied up in court, with a Delaware judge on Tuesday again striking down his compensation package as excessive.
Tesla’s board said it will appeal the decision.
Garage start-up
The pay-off for Smith comes 31 years after he started the company with his brother Tom in a Tucson, Arizona, garage. They launched what became Taser International after acquiring the less-lethal weapon technology developed in the 1960s. Smith has claimed the firm was started after high school football teammates were killed in a shooting, although a Reuters investigation has cast doubt on the veracity of that account.
Smith, who declined to be interviewed for this story, has consistently said his goal is to end gun violence and thought starting a company was the best path.
The company makes a wide range of law enforcement products.Credit: AP
“I could have started a non-profit to work on gun violence,” he wrote on Reddit in June 2022. “But there are lots of those already, and I didn’t feel I could make a difference. I am a true optimist that conscious capitalism can work.”
After making its first sales to police departments in 1999, Taser International went public in 2001. The firm developed a unique corporate culture, one that involves tattoos or being shot with a Taser in front of other employees. Smith, by his own count, has been hit at least seven times.
The company rebranded to Axon in 2017 as it expanded into software, body cameras and other law enforcement products including license plate readers. Earlier this year, it acquired Dedrone to get into the air defence drone business.
‘They dominate the market. You think technology for cops and it’s Axon, and it’s not really anyone else.’
Trevor Walsh, an analyst at Citizens JMP.
Smith now owns a roughly 4 per cent stake in Axon and has exercised all but about 21,000 shares included in the initial 2018 pay package. He’s sold more than $US500 million of stock since 2021, regulatory filings show, and also owns a 6 per cent stake in OncoCyte, a diagnostic testing company.
Axon proposed another tranched pay package for Smith in 2023, which if met would have awarded him 3.8 million stock options, or another 5 per cent of the company. After investors and proxy firm Glass Lewis pushed back, Axon revised it down to its current level of roughly 679,000 shares.
‘Overpaid’ CEOs
Smith has said he’s proud that his pay package also extends to Axon’s employees, who are able to bet some of their compensation on the company’s growth and reap the rewards. They also have a chance to earn shares in the new plan as well.
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“I believe CEOs are overpaid,” Smith wrote in a Reddit post five years ago. “Especially when they suck and get fired and get some golden parachute. What makes me feel good about this plan is that I only get paid if we grow the company significantly.”
Smith’s passion for the cause behind the company is one of the drivers for Axon’s success over 31 years, Walsh said. But it’s also caused issues at times. Days after the 2022 school shooting in Uvalde, Texas, Smith unveiled a plan to equip drones with tasers and pitched it as a plan to save lives during mass shootings. The company quickly paused the plan after nine members of its ethics board resigned in protest.
In 2019, Smith wrote a book called The End of Killing that argued technology was going to make sanctioned killing and war obsolete. Given the recent violence in the Middle East and Ukraine, his prediction was “maybe too optimistic,” Smith conceded on a November 7 earnings call.
“The thesis was wrong in terms of timing, but I do think humanity can do better and we can find ways to deal with threats while minimising the loss of life,” he said. “And we’re going to stay true to that mission.”
Bloomberg
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