FTX gets approval of revised key employee incentive plan

By Sarah Lizee

Olympia, Wash., June 8 – FTX Trading Ltd. received approval of a revised key employee incentive plan, according an order filed Thursday with the U.S. Bankruptcy Court for the Southern District of Delaware.

In the revision, participants may earn up to two payments.

The first payment would be earned on Dec. 31, 2023 if the company has maintained its operative licenses as a crypto-asset exchange service provider, the company has resumed its exchange operations, and the participant has remained continuously employed by the company. The incentive would be paid within 60 days after it has been awarded.

The second payment would be awarded upon the earlier of a consummation of a transaction or a reorganization of the debtor.

In the case of a transaction, participants would be rewarded based on a progressive scale tied to the transaction proceeds.

The scale would be 1% for the first $25 million of transaction proceeds, plus 2% for proceeds between $25 million and $87.5 million, plus 5% for proceeds between $87.5 million and $125 million, plus 4% for proceeds between $125 million and $150 million, plus 3% for proceeds in excess of $150 million.

In the case of a reorganization, the incentive compensation would be a flat reward.

The chief operating officer payments would be $450,000 each, or 34.7% of any transaction pool.

The chief product officer would receive $231,000 for each reward, or 17.8% of any transaction pool.

The chief compliance officer would receive $200,000 for each event, or a 15.4% share of the transaction pool.

The chief financial officer would receive $124,000 for each award, or 9.6% of any transaction pool.

The data scientist and head of operations would each receive $107,000 in each instance, or 8.3% of any transaction pool.

The front end engineer would be entitled to $78,000 in each instance, or 6% of the transaction award pool.

To summarize, participants would be eligible for the first payment as a license and restart award and then the second award would either be the flat payment or the percentage payment based on whether there was a transaction or reorganization.

FTX has headquarters in the Bahamas. The company filed Chapter 11 bankruptcy on Nov. 11, 2022 under case number 22-11068.

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