UPDATE: Top Ginkgo execs each nab $364M pay packages thanks to 2021 SPAC deal

Ginkgo Bioworks, the synthetic biology company that was last year referred to by short sellers as "a hoax for the ages," rewarded CEO Jason Kelly and President and COO Reshma Shetty more than $364 million in compensation for 2021—each—but mostly in stock.

The pay packages were revealed in an SEC filing (PDF) Wednesday, as the company reported fourth quarter and full year earnings. Both Kelly and Shetty received a $250,000 base salary, then the majority of the remaining sum in the form of stock awards.

This marks an enormous jump for the pair over 2020, when each brought home $10.5 million total. The packages included the $250,000 base, then about $9.9 million in stock awards.

Ginkgo attributed the sky-high compensation packages to its 2021 combination with special purpose acquisition company Soaring Eagle Acquisition Corp. That deal, which brought Ginkgo to the public markets with a high-flying value of $2.5 billion, resulted in a catch-up compensation adjustment of approximately $1.7 billion for the fourth quarter of the year, the company said.

Before becoming a public company, Ginkgo granted restricted stock units based on service and company performance, which included a change in control or an initial public offering. The SPAC deal, which raised $1.6 billion in proceeds for Ginkgo's cell programming platform, triggered these awards for the first time in the company’s history.

So while the compensation number is eye-popping, Kelly and Shetty didn’t exactly walk out Ginkgo’s front doors with giant checks.

In a statement provided to Fierce Biotech, Ginkgo said the founders' compensation packages are structured similarly to those seen with tech companies. The founders receive a majority of their compensation in equity instead of salary. Kelly and Shetty each received about 5% of the company's shares in earlier financing rounds, according to the spokesperson.

The stock plan detailed in the earnings report this week was put in place by the board and investors in January 2020, granting Kelly and Shetty each about 21.5 million shares when the company was valued at around $4 billion. The $364 million number represents the price of Ginkgo's stock on November 17, 2021, when shares were trading at $13.59 apiece and the value exceeded $20 billion. 

When Ginkgo officially merged with Soaring Eagle in September, shares were worth around $12. The company was trading at $4.30 apiece Wednesday morning.

The spokesperson said the $364 million value also includes earnout shares that will not vest unless the price rises back up to certain thresholds starting at $15. 

While the company's share price decline has followed the general downturn seen across the biotech markets, Gingko, which trades under the symbol DNA, has had its own turmoil contributing to the decline. In October, activist short-seller firm Scorpion Capital called Ginkgo out for claiming its platform is revolutionary when it actually differs little from decades-old practices. The company claims to harness living organisms to produce industrial and biopharmaceutical chemicals through genetic editing.

The large pay package calls to mind Regeneron, whose founders CEO Leonard Schleifer and CSO George Yancopoulos raked in $270 million together in 2020. The hefty pay packages drew the ire of shareholder advisory firms last year, who called on shareholders to oust a board member over the “excessive” payouts. 

But Regeneron is an established company with billions in revenue, and it developed a COVID-fighting antibody during the pandemic. Shleifer and Yancopoulos' awards vested over a period of five years.

In contrast, Gingko's execs will see their massive stock awards vest October 1 if they're still with the company. Kelly and Shetty each earned 21,458,317 restricted stock units with the transaction.

Scorpion called the business model “hocus pocus” and “a colossal scam” in a 175-page report, sending shares down 20%.

Ginkgo reported $314 million in total revenue for 2021, or a 309% increase over 2020, according to the earnings report. The company also has a cash balance of $1.5 billion, leaving a multi-year runway “as we drive towards profitability.”

Editor's note: This story was updated at 12 p.m. ET on March 31, 2022, to include comments from Ginkgo.