Opendoor Technologies recently appointed Kaz Nejatian as its new CEO. Kaz was the COO of Shopify, one of the most revered tech commerce platforms, and before that, the founder of a payment technology company, Kash, which was sold in 2017.
This comes less than three months after the stock soared on a meme stock rally that began with an argument that the company could be the next Carvana, an online used car retailer based in Tempe, Arizona. The company, which buys and sells residential real estate online, has overhauled its leadership team about a month after CEO Carrie Wheeler stepped down. It has also decided that co-founders Keith Rabois and Eric Wu will serve on the board of directors.
Opendoor will provide Nejatian with a compensation package worth USD 2.78 billion, apart from letting the new CEO own nearly 12% of the company. Nejatian will also have the guidance of Eric Wu and Keith Rabois from the company’s board. Wu served as Opendoor’s CEO from 2013 to 2022 and chaired the board from 2020 to 2022.
Rabois, who served on the boards of Reddit and Yelp and currently serves on the board of Ramp, was appointed chairman. Both are returning to Opendoor to bring back “founder DNA and energy,” the company announced. The duo will also inject capital. It is worth mentioning that Khosla Ventures and Wu invested USD 40 million of equity capital into Opendoor through a private purchase.
Kaz Nejatian’s pay package will see Opendoor turn away from its traditional CEO compensation plans in favour of a return to massive equity awards associated entirely with stock price performance. Nejatian left his role as chief operating officer at Shopify to join Opendoor, and as per the reports, he will receive two “make-whole” awards from his new bosses. The first will be a USD 15 million cash award, followed by the second, a USD 15 million restricted-stock unit award.
Nejatian will also receive two performance-based awards. The first, consisting of 40.9 million shares, has been designed to ensure that shareholder value isn’t eroded, according to Farient Advisors vice president Eric Hoffmann.
“The shares vest in installments over five years with a stock price gate of USD 6.24, which means the stock must maintain an average closing price of USD 6.24 or higher over a 60-day period for vesting to occur. Opendoor’s stock surged more than 78% on Thursday following Nejatian’s appointment to $10.49, but in June, the stock hovered around 56 cents a share. The second performance award is designed like a moonshot with seven stock price hurdles ranging from USD 9 to USD 33. The tranches only vest when the stock hits price milestones of USD 9, USD 13, USD 17, USD 21, USD 25, and USD 33,” reported Fortune.com.
Upon hitting the above-mentioned price targets, Nejatian will receive compensation valued at USD 2.78 billion, apart from owning 11.6% of the company, double the stake Wu held when Opendoor went public through a SPAC in 2020.
“What I find interesting is that they clearly believe this guy, who was the COO at Shopify, is going to make or break this company. They are willing to make a very large bet and put a lot of power and money into his pocket to get him on board and motivated to grow and drive the company forward,” Hoffmann told Fortune.com.
Meet Kaz Nejatian
Before entering the tech world, Kaz Nejatian began his career as an associate at Ropes & Gray LLP, where he focused on compliance, privacy, and data security for banking and payments clients, an important skill set for the real estate market. He also served as the Director of Strategic Planning for Citizenship and Immigration Canada, where he developed and executed the “Startup Visa” programme, a policy designed to bring global entrepreneurs into the country, which CNN called “the most successful set of immigration policies in the world.”
In the beginning, Nejatian founded the payment technology company Kash in his basement with a vision for a new, safer payment system and grew the company before it was acquired by a publicly traded financial services firm. Nejatian also held leadership responsibilities like product lead for payment platforms at Meta, where he oversaw payment products for WhatsApp and Instagram. He has extensive experience in building systems that operate at a global scale.
In three years, Kaz Nejatian became COO of Shopify and spearheaded the development of its financial products, such as payments, capital, and banking products. His goal was clear: “Our job is to take the things that suck for entrepreneurs and make those things not suck.”
Keith Rabois, Opendoor’s new chairman, said Nejatian is the right leader to make Opendoor an “AI-first company,” and he is an “AI-native executive” who led Shopify’s recent push into generative AI tools. Nejatian said he wants to use AI to make buying and selling a home “radically simpler, faster, and more certain.”
On X (formerly Twitter), Kaz Nejatian described the need to make homeownership easier. He wants to do for homebuyers and sellers what Shopify did for entrepreneurs: create a platform that fits their needs and then scale it up.
He said, “This is a once-in-a-lifetime chance to redefine the possibilities in real estate.”