Zoom shares slipped on Friday after the video communications firm popularized by the pandemic ousted President Greg Tomb, who joined the company less than a year ago, "without cause."
- Stock extends a pre-market dip on Friday.
- “Hard to read this in a positive light," an analyst said.
- The move comes days after Zoom's quarterly earnings estimates.
Without Cause But With Benefits
Zoom, which beat earnings estimates this week, didn't release further information about the decision.
"Hard to read this in a positive light," Citigroup analyst Tyler Radke wrote in a note to clients, Blooomberg reported.
The departure of Tomb, a former Google executive, came after Zoom cut about 15% of its workers. He'll get severance benefits in accordance with arrangements that are payable upon a “termination without cause.”
Zoom said in a June SEC filing that Tomb would be paid an annual base salary of $400,000, with a yearly bonus target of 8%. His compensation included a $45 million stock grant that would vest over four years.
Yuan Takes Responsibility and Action
Zoom (ZM) CEO Eric Yuan said last month that he'd take a 98% salary cut, following major firms such as Apple (AAPL), Intel (INTC), and Goldman Sachs (GS) in response to an uncertain economic outlook. Yuan's salary of $300,000 is part of his total $1.1 million in compensation. Other members of the executive leadership team will also reduce their base salaries by 20% this year, according to Yuan.
His stake in Zoom had made him one of the world’s wealthiest people in 2020 as the pandemic pushed more workers into virtual meetings.