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Airbnb Promises More Cash for Employees, Plots IPO by 2020

Airbnb CEO Brian Chesky told employees Thursday it will pay cash bonuses for the first time in years, a move apparently designed to address growing frustration that the hospitality startup had yet to go public. Mr. Chesky indicated that the company would aim to go public by late 2020, before some employee stock grants expire, a person close to the company said.

Under the revamped compensation plan, Airbnb also will accelerate the vesting schedule for some stock grants, according to the person.

The Takeaway
• Airbnb anticipates IPO by late 2020
• Company plans cash bonuses, changes to stock grants
• Changes aimed at quelling employee frustration

Airbnb employees increasingly have complained that they have been unable to regularly sell their shares. The company last allowed employees to sell stock to new investors in 2016.

In addition to paying cash bonuses, Mr. Chesky said that employees who get new grants can take some of the compensation in cash for the first time. The introduction of cash bonuses will bring Airbnb more in line with other companies in the industry, Mr. Chesky told employees in an all-hands meeting. The company also will allow employees who get additional equity to vest quarterly, rather than after a year.

Meanwhile, the timing of an IPO remains uncertain. The decade-old company earlier this year lost Chief Financial Officer Laurence Tosi, who had been hired to lead an IPO. Mr. Chesky told employees he was still looking to fill the CFO slot, as well as adding independent board members and hiring a chief marketing officer, a position that has been unfilled for nine months.

The IPO time frame he hinted at on Thursday was a little later than previously expected. At the Code Conference last month, Mr. Chesky said: “We will be ready to IPO next year, but I don’t know if we will.” Mr. Chesky on Thursday left open the possibility of an IPO as soon as mid-2019, the person close to the company said.

Airbnb, valued privately at $31 billion, is a hotly anticipated IPO. It expects to be profitable before interest, taxes and other accounting charges such as depreciation for the second year in a row. It expects to pull in $3.5 billion to $4 billion in revenue this year, The Information previously reported. It also faces several headwinds, such as increasing regulatory scrutiny, competition from Booking.com and the need to grow its nascent business in China.

This article has been updated with additional details about the company's IPO plans. In addition, an earlier version of the story incorrectly stated that only top-performing employees were eligible for new stock grants that vest quarterly. All employees will be eligible for that vesting structure.

Cory Weinberg has been a reporter at The Information since 2015. He covers technology, real estate, travel, transportation and venture capital. He can be found on Twitter @coryweinberg.