Indie Semiconductor experienced a significant downturn, with shares dropping 8.92% as the short trading week began on Tuesday. This decline was driven by investor reactions to news that the company’s top executives would face stringent pay reductions. Consequently, the stock ended the day nearly 9% lower, a much sharper decline compared to the 2.1% drop in the S&P 500 index.
Reduced Executive Compensation
In a regulatory filing, Indie Semiconductor revealed that several of its senior executives and founders would receive drastically reduced base salaries. CFO Thomas Schiller, along with two unnamed co-founders, will now earn a base salary of just $1 per year. This decision, according to the company, was made “at the initiation and request” of the individuals involved.
Meanwhile, Raja Bal, the chief accounting officer who is also serving as acting CFO, along with other unnamed senior managers, will see a less severe pay cut. Their annual salaries will be temporarily reduced by 20%, effective from September 1 of this year until March 31, 2025.
Base salaries typically form the core of an executive’s compensation package. In publicly traded companies, executives often receive additional rewards in the form of cash, stock, or both, which are generally tied to personal and/or company performance.
Adopting a Defensive Stance
This development was not entirely unexpected, as Indie Semiconductor has been preparing for the broader slowdown in the electric vehicle (EV) market anticipated in 2024. At the end of the previous month, the company initiated a workforce reduction plan aimed at “improving operational efficiencies while still investing in key growth areas of the business.” Approximately 50 employees were impacted by this decision, according to the company.
