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Greetings! How much motivation does a company founder need to make their company a success? In the case of Chime, a fintech firm whose mission is to offer banking services to lower-income people, quite a lot, it seems. When Chime filed paperwork to go public on Tuesday, it revealed that last month it awarded co-founders Chris Britt (who is also CEO) and Ryan King special stock grants totalling 4 million and 2.4 million shares, respectively. The grants were "designed to provide rewards to the co-founders if they lead us to achieve ambitious financial objectives and challenging stock price goals." That was on top of a few hundred thousand restricted stock units they each got the same month, which vest over time (assuming the company goes public). The bigger grants may not end up being worth anything, to be sure, as they require Chime to achieve various profit and revenue growth targets and stock price performance goals. But that's not the point. Chime's founders shouldn't need more stock to give them an incentive to run Chime well: They already have a big chunk of shares. We don't know precisely how much they already own, by the way, because that's not spelled out in the IPO filing, although it says the two own a special class of supervoting shares which give them control of the company. (To put the grants into perspective, the filing says all other executives and directors as a group held just 6.7 million shares.) In the filing, Chime said its board decided on the big grants to the co-founders based partly on "market data for similarly situated companies." We've got a vicious circle going on here. Giving founders big stock grants before their companies go public has become standard, as my colleague Cory Weinberg wrote here. And now companies are using that as justification to keep doing it! (Chime also notes that the grants it made to Britt and King were smaller than those made by comparable companies). The real reason for the grants, most likely, is to give the co-founders a way of cashing in shares without diluting their control. We've seen that happen at other companies. In a slightly different version of this scenario, Snap issued a special dividend of Class A shares (which held no voting power) to all of its shareholders a few months before it went public. Co-founders Evan Spiegel and Bobby Murphy each held 113 million of such Class A shares right before the IPO in early 2017, in addition to other supervoting stock that gave them voting control. By the end of 2021, Spiegel held only about 40 million Class A shares (and it's only a little lower today). He appears to have raised well north of $1 billion selling shares—without reducing his controlling stake. (Snap's other shareholders haven't been so lucky, as the stock today trades around half its 2017 IPO price.) The best approach for ordinary shareholders is the one used by Amazon: Its founder, Jeff Bezos, has never got any stock compensation. The company says "he believes he is appropriately incentivized" because of his original big shareholding. In general, widening the number of shares outstanding by handing out stock to employees puts a lid on the share price, particularly when a company isn't growing particularly fast. That's justifiable for employees who otherwise wouldn't have stock but it's a different story for founders. If Britt and King want to make Chime appealing to ordinary investors, they ought to pass up these special awards. One thing you can say about Warner Bros. Discovery CEO David Zaslav: He's willing to admit when he's wrong. WBD announced on Wednesday it was renaming its Max streaming service as HBO Max, reversing a decision it made two years ago to drop HBO from the name. Explaining the change of heart in language only a corporate communications specialist could love, WBD said the decision is "testament to WBD's willingness to keep boldly iterating its strategy and approach." Whatever. The name change seems to reflect a strategic shift in which WBD is trying to highlight the "quality" of its programming, rather than trying to compete with Netflix on volume of programming. Two years ago, when the company dropped HBO from the streaming service's name, executives claimed the HBO brand narrowed the service's appeal. HBO was "associated with edgy, adult programming that isn't suitable for children," as I wrote then. Now, WBD says adding HBO back "will further drive the service forward and amplify the uniqueness" of the service. Another way of saying it is that WBD folks have realized what was evident to everyone else two years ago: The Max brand name stood for nothing. It's better to take advantage of HBO's name, one of the most recognizable in TV. (Max had the good sense to have some fun with the name change on its X account). • Perplexity is adding PayPal and Venmo checkout buttons in its subscription artificial intelligence chatbot, the companies said on Wednesday, adding a new way for Perplexity users to pay for goods and services they find using AI tools. • Stock and crypto trading app eToro jumped 34% when it debuted on Nasdaq on Wednesday, a bullish sign for future IPOs following the tariff-induced market sell-off last month. • Waymo recalled software last December in more than of its 1,200 self-driving cars produced between spring of 2022 and last November after a bug caused collisions with chains, gates and other roadway barriers, according to a report made public Monday by the National Highway Traffic Safety Administration. • Databricks confirmed its acquisition of database startup Neon for around $1 billion, pitching it as a way for customers to build AI agents that need speedy and cost-effective access to cloud databases. • Microsoft is shutting down its ad-buying platform, the company said today, withdrawing from a sector of the ad market it has failed to make a dent in. Marketers use ad-buying platforms to buy ad space on independent websites, an ad technology business dominated by Google and smaller firms like The Trade Desk (more here). • Summer Mersinger, a pro-crypto Republican commissioner at the Commodity Futures Trading Commission, will resign at the end of this month to join trade group Blockchain Association as its new CEO. • Coreweave reported sharply higher revenue for the March quarter, the first since it went public, although its pre-tax loss more than doubled. More here. Dealmaker was named the "Best in Business" newsletter for its insightful coverage of private technology and the AI hype cycle. Start receiving the newsletter here. | 
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