DraftKings Invests $2M on Private Jet and Security for CEO Robins Amid Stock Decline

Last year, DraftKings (NASDAQ: DKNG) allocated almost $2 million for private jet and security costs for their co-founder and CEO Jason Robins, while also dramatically increasing his equity-based compensation even as the shares plummeted.

In a recently published Schedule 14A filing to the Securities and Exchange Commission (SEC), the gaming company revealed they spent $968,900 on security for Robins and his family and $975,191 on private jet expenses.

The Boston-based sportsbook operator also granted Robins $14.32 million in restricted stock and more than $29 million in performance-based equity grants. Robins’ total compensation skyrocketed by 238% from 2021 to 2022, despite the fact that the stock dropped 58.54% of its value last year — much faster than the 33.61% decrease experienced by the Nasdaq-100 Index.

One interpretation of that lavish compensation package is that the $1 annual salary earned by Robins and co-founders Matthew Kalish and Paul Liberman is nothing more than a public relations ploy. Last year, Kalish and Liberman each received roughly $40 million in equity-based remuneration,” according to the regulatory document.

DraftKings Reimbursed Robins for Super Bowl Expenses

Further provoking public opinion was the fact that the SEC filing showed DraftKings reimbursed Robins $131,607 for “the purchase of game day tickets, special events, travel and accommodations for Mr. Robins’ family members during the week’s activities” incurred at the 2022 Super Bowl.

The security benefits Robins receives may also be a source of unease among market participants. While DraftKings is undoubtedly his “baby,” it’s debatable that financial markets regard his importance to the gaming company as similar to Warren Buffett at Berkshire Hathaway, Mark Zuckerberg at Facebook or the late Steve Jobs at Apple.

To address considerable safety concerns, including as a result of specific threats, the Board has approved personal security measures for Mr. Robins and his family pursuant to an independent security study undertaken by a third-party consultant. We require these security measures for Mr. Robins and his family, and, given his importance to the Company, believe that the scope and costs of these measures are appropriate and necessary. The Board will continue to evaluate these measures annually,” according to the filing.

The ‘significant safety concerns’ were not detailed in the SEC document.

Other DraftKings Compensation Issues

DraftKings’ compensation committee is comprised of Ryan Moore, Shalom Meckenzie and Steven Moore. Although Meckenzie isn’t on the list of directors up for reelection this year, the Israeli billionaire is the founder of SBTech – the company that was part of DraftKings’ 2020 reverse merger. He’s also been an active seller of DraftKings equity in recent years.

DraftKings’ compensation committee delegated a study of pay comparables to independent consultant Frederic W. Cook & Co., which compared pay and benefits at the sportsbook operator to a group of 19 companies with emerging growth profiles.

However, only one company in the original group — Churchill Downs — is a gaming operator. Second, it appears Light & Wonder and Penn Entertainment were only added to the group after Slack and Twitter were acquired and ceased being publicly traded entities. Still, meticulous investors might claim that using companies such as Etsy, Roku and Lyft, though not Uber, as measures for DraftKings executive pay isn’t relevant.