People

The People

Governance Grade: B+. Founder-CEO Kristo Käärmann has genuine skin in the game and has built a mission-driven culture, but the 2021 personal tax controversy and the dual-class voting structure limit the grade. The board has improved post-IPO with experienced independent directors, and the recent hiring of a CFO from Delivery Hero and a CCO from Spotify signals institutional maturation.

The People Running This Company

Kristo Käärmann is the key person. As co-founder and CEO since 2011, he has maintained a consistent mission (transparent pricing, lower fees) through 14 years of execution. His ~18% ownership stake (primarily through A-shares with enhanced voting rights) aligns him financially but also gives him effective control over corporate decisions. The personal tax controversy (HMRC penalty for late filing of UK tax on Estonian share options in 2021) was embarrassing but resolved — it was a compliance failure, not fraud.

Emmanuel Thomassin joined as CFO in 2024 from Delivery Hero. He brings public-company financial discipline and is leading the US dual-listing effort. His early tenure makes assessment premature, but the appointment was well-received.

David Wells (Chair, former Netflix CFO) provides genuine independent challenge and capital-markets sophistication. His presence on the board lends credibility to governance.

What They Get Paid

CEO pay is moderate for a £11B market cap tech company. Käärmann's total comp of ~£1.4M is well below UK CEO pay norms for this market cap tier. His real wealth is in his ~18% equity stake (~£2B at current prices), which dwarfs his salary. The CFO's higher total comp reflects the signing package common for new executive hires.

SBC is the dominant compensation vehicle. Total company SBC was £72.5M in FY2025 — roughly 5% of underlying income. The Employee Share Trust spent £73M buying shares to offset dilution. The announced expansion to cover ~25M historical SBC shares (~2.5% of issued capital) is a positive signal that management takes dilution seriously.

Are They Aligned?

Ownership and control. Käärmann's ~18% stake is the strongest alignment signal. However, the dual-class share structure (A-shares with enhanced voting) gives him effective control beyond his economic interest. Co-founder Taavet Hinrikus retains a smaller stake but has stepped back from operations.

Insider activity. No material insider selling detected in recent periods. The Employee Share Trust is the primary share activity — purchasing shares to offset SBC dilution.

Dilution. SBC of £72.5M annually creates dilutive pressure. The Trust's £73M in purchases approximately neutralizes in-year grants, but the company acknowledged that ~25M historical shares (~2.5% of issued capital) remain unvested — hence the expanded buyback program. Net dilution over the last 3 years has been modest (~1-2% per year).

Capital allocation. No dividends. No traditional buybacks. The company is reinvesting aggressively — planning to double annual investment and triple marketing. This is appropriate for a high-growth business operating in less than 0.5% of its addressable market.

Related-party transactions. No material related-party transactions detected. No insider loans or affiliated-party revenue.

Board Quality

The board is well-composed for a payments company. Key strengths: David Wells (Netflix CFO experience), Ingo Uytdehaage (Adyen COO — deep payments expertise), and Terri Duhon (risk management). The board has genuine payments and fintech expertise, not just generic corporate governance backgrounds. Independence is strong — 5 of 6 non-executive directors are classified as independent.

Missing expertise: no director with deep US regulatory experience, which is a gap given the dual-listing plans and the company's growing US operations.

The Verdict

Grade: B+.

Strongest positives: Founder-CEO alignment through large equity stake; moderate personal compensation; experienced, payments-savvy board; expanding anti-dilution program.

Real concerns: Dual-class voting structure gives Käärmann effective control; personal tax controversy (resolved but raised governance questions); no clear succession plan publicly articulated.

What would upgrade to A: Sunset clause on the dual-class structure; articulated succession plan; two years of clean regulatory record in all major markets. What would downgrade to B: Material insider selling; expansion of related-party transactions; departure of David Wells or another senior independent director without strong replacement.