How this executive got rich on California’s public charger system
It’s common knowledge in financial circles, but many people don’t know that a growing company doesn’t need to become profitable to make its top executives rich. It’s stock price that counts.
Consider Pasquale Romano, until November chief executive at EV charging company ChargePoint, based in Silicon Valley. The company has never made a profit, and its losses are mounting. Independent studies and abundant anecdotal evidence show that the company’s publicly available chargers, like many in the industry, are unreliable.
Yet Romano exited the company with accumulated compensation totaling more than $35 million from stock options, stock grants and salary, according to Securities and Exchange Commission filings, most of the money over the last two years. Plus, he holds stock options valued at $44.8 million that he can cash in on Jan. 31.
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California handed $48 million in grants and subsidies to ChargePoint under Romano. He didn’t pocket any of that directly. But the state’s backing, and the promise of more subsidies to come, and the anticipated growth in revenue did add momentum to ChargePoint stock at a time of low interest rates and clean energy enthusiasm.
Romano made most of his millions through a special stock deal in 2021. The company engaged in what’s known as a SPAC, or special purpose acquisition company. A SPAC allows private companies to sell public stock without the usual rules for financial disclosure.
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ChargePoint stock started trading at over $26 a share in early 2021, with EV stock mania at full bloom, when Tesla was reaching record highs. Several other EV-related companies did SPAC deals, enriching executives before their stock prices crashed.
Even though Romano left the company in November, he’ll continue to profit. Before the SPAC, Romano was granted options that would vest in January 2024 if the company had achieved operating profits by then. But the profit requirement was removed during the SPAC. In 2023, ChargePoint’s operating loss totaled $341,782. No matter. Romano’s options are valued by the company at $44.8 million.
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The company’s stock price is near or at record lows — from $26 at SPAC time to around $2 a share. This, as the S&P 500 hits record highs. Michael Green, chief strategist at Simplify Asset Management, said ChargePoint isn’t alone. With stock indexes soaring, “what we’re seeing is an incredible spread between high quality and junk.â€
Asked to comment, ChargePoint referred The Times to SEC documents, and Romano did not respond to requests for an interview.
