How Management Gets Paid — Owners First, Targets Never

How Management Gets Paid — Owners First, Targets Never

The cleanest way to test whether you can trust a founder-run company is to read how its founders are paid. monday.com's answer is unusually disciplined: its two co-CEOs draw a $316,000 salary and a capped cash bonus, take roughly nine-tenths of their package in time-vested equity, and operate inside a shareholder-approved Israeli compensation policy that caps variable pay and carries a clawback [1]. But that same design has a sharp edge for the report's central question. No executive's equity vests on hitting a revenue or margin number [2] — so when management withdrew the $1.8B FY2027 target in February 2026 (the broken promise dissected in /chapter-7), it forfeited nothing in pay. The alignment that should reassure a cold investor runs almost entirely through the founders' half-billion-dollar shareholding, not through the incentive plan.

The packages: tiny cash, equity-heavy, capped

monday.com is a foreign private issuer and is exempt from U.S. proxy pay disclosure, but Israeli law forces it to name its five highest-paid officers individually [3]. For FY2025 the table is striking less for its size than for its shape.

Sources: FY2025 20-F Compensation [4] and Major Shareholders [5]; founder stake valued at the recent ~$75 share price (derived).

Each co-CEO — Roy Mann and Eran Zinman — recorded about $7.36M of total cost-to-company in FY2025: a $316,000 salary, a $340,000 cash bonus, and roughly $6.64M of equity expense [6]. Cash — salary plus bonus — is under a tenth of the package; equity is the other ninety percent. CFO Eliran Glazer and the two other named officers sit in the same mold, each taking 85% or more of pay in equity.

Source: FY2025 20-F, Compensation of directors and executive officers [7]; salary and bonus also at [8].

The cash is not just small — it is structurally capped. The compensation policy limits every cash bonus to a maximum linked to base salary, limits the ratio of variable to total pay, and imposes minimum vesting periods on equity — explicitly to "reduce the executive officer's incentives to take excessive risks" [9]. A co-CEO bonus of $340,000 against a $316,000 salary is the policy working as written: variable cash cannot balloon, no matter how the stock performs.

The trajectory: restraint as the company tripled

Read across four years — the discipline holds even as the business scaled from $0.5B to $1.2B of revenue. Aggregate compensation to all directors and executive officers, including stock comp, climbed from $17.5M in FY2022 to $31.2M in FY2024, then flattened at $31.1M in FY2025 despite another 27% revenue year [10][11][12].

Sources: aggregate D&O compensation incl. SBC and per-co-CEO equity expense, FY2022–FY2025 20-Fs [13][14][15][16].

The cash side is even more telling. The co-CEOs took no cash bonus at all in FY2023 — that year's bonus pool went only to the CFO and two operating officers [17]. Mann and Zinman first drew a meaningful cash bonus in FY2024, at $316,000 each, rising to $340,000 in FY2025 [18]. A skeptic will note that the founders began paying themselves performance bonuses precisely as growth decelerated; the more important fact is the order of magnitude — a few hundred thousand dollars of cash inside a $7M package and a company generating $323M of free cash flow.

The load-bearing detail: equity vests on time, not on targets

Here is the finding that matters most for the investment case. Every year's filing repeats the same clause: executive equity "is subject to a time-based vesting schedule" [19]. monday.com runs no performance-share plan — there are no RSUs that pay out only if revenue reaches $1.8B or operating margin hits 20%. Equity rewards staying, not hitting.

That cuts two ways, and an honest reader has to hold both.

The cash bonus does run off "predetermined performance parameters" and "measurable performance objectives" set annually by the compensation committee [20]. But the specific metrics are not disclosed — a genuine limitation of foreign-private-issuer reporting — and the sums are too small to move behavior. The center of gravity is equity, and equity is unconditioned on the targets management gives investors.

Where the alignment actually lives: ~$500M of founder skin

If the pay plan does not bind management to the long-range case, ownership does — overwhelmingly. As of December 31, 2025, Roy Mann beneficially owned 9.6% of the company and Eran Zinman 3.4%, roughly 6.7 million shares between them; all directors and officers as a group held 13.9% [21]. At the recent ~$75 share price that founder stake is worth about $500M — and at the June 2021 IPO price of $155 it was worth more than $1B.

That comparison is the alignment. The roughly $500M of value the founders' shares lost in the 2026 de-rating dwarfs, by a factor of more than thirty, the ~$15M of combined annual pay the two of them receive. No bonus design could make a founder care about the share price more than owning a tenth of the company already does. This is the deepening /chapter-4 flagged: monday.com pays its founders like owners because they are the owners, and there is no dual-class structure inflating their control beyond their economics — every ordinary share carries one vote [22].

The hired executives are a different and instructive case. CFO Glazer beneficially owned about 30,000 shares — under $2.5M [23]. For officers without a founder's legacy stake, the annual equity grant is the alignment mechanism, accumulating an ownership position over years of time-vesting. The design is internally consistent: build ownership in those who lack it, and let the founders' existing ownership do the work for those who have it.

The process is real governance, not a rubber stamp

One reason to take this structure at face value: the approval machinery is unusually robust for a founder-controlled tech company. Under Israel's Companies Law the compensation policy must be approved by shareholders — and re-approved at least every three years — by a special majority that excludes the votes of controlling and interested holders [24]. The founders cannot simply vote their own pay policy through. A three-person compensation committee of independent directors — Gili Iohan (chair), Ronen Faier and Aviad Eyal — sets it [25], and the policy carries compensation-recovery (clawback) provisions allowing the company to recover bonuses paid in excess [26].

Non-employee director pay is similarly modest and formula-driven: $30,000 cash (the chair $60,000) plus committee fees, a one-time $300,000 equity grant on joining, and $175,000 of equity annually [27]. There is no entrenchment premium here, no related-party pay grab. The governance overlay does not by itself make the business better, but it removes a category of risk a cold investor in a founder-led, Tel-Aviv-headquartered FPI would reasonably worry about first.

What this settles for the thesis

The report's through-line asks whether this is a high-quality compounder de-rated to a sane price or a structurally impaired one. Compensation does not resolve that question — but it removes two ways the bear case could have been worse. There is no looting: pay is small, capped, equity-weighted, and independently approved. And there is no perverse incentive: because nothing vests on the targets management publishes, the withdrawn FY2027 goal was never a number executives were paid to manufacture.

What it leaves behind is a clarifying asymmetry. The comp plan neither indicts nor exonerates management on the broken promise of /chapter-7, because no pay was ever at stake in it. The decisive vote of management confidence is therefore not in how they are paid but in what they bought — $553M of their own stock at ~$76, against a $500M personal stake already in the ground. For a company whose founders stand to lose far more as shareholders than they can ever earn as employees, that is the alignment a professional investor should weight most.