In a major shake-up at fitness equipment company Peloton, outgoing CEO Barry McCarthy has entered into a "transition agreement" with the company, which will see him serving in an advisory role until the end of the calendar year on December 31, 2024. The details of the agreement include a monthly payment of $50,000 for the first three months (May through July) and $5,000 for the remaining five months (August through December), amounting to $175,000 for the remainder of the year.

The news of McCarthy's transition comes just a day after Peloton announced his decision to step down as CEO, President, and board member. In addition to McCarthy's departure, the company also revealed plans to lay off approximately 400 employees, which represents about 15% of their workforce.

Yesterday's FY Q3 2024 earnings call shed more light on Peloton's financial situation. Furthermore, a regulatory filing submitted to the Securities and Exchange Commission (SEC) provides additional insight into McCarthy's compensation package during the transition period.

According to the filing, McCarthy will also receive a stock option award worth $3 million, allowing him to purchase shares of Class A common stock. These options will vest in equal monthly increments until the transition date. Additionally, at the end of the transition period, McCarthy will be entitled to a payment of $1.25 million, along with the cash equivalent of a year's worth of healthcare, contingent upon the timely execution of a release of claims. It's worth noting that this payment is equal to McCarthy's annual salary, as he received a pay raise around the same time last year.

The filing also specifies that McCarthy will benefit from accelerated vesting on all outstanding stock options, apart from the Advisor Award. These options will remain exercisable until December 31, 2027.

Peloton has appointed Karen Boone and Chris Bruzzo as interim CEOs during the search for a new CEO. Each will receive a monthly salary of $150,000, amounting to an annual salary of $1.8 million. In addition, they will be granted an award of $450,000 in restricted stock units, which will vest over a three-month period. However, neither Boone nor Bruzzo will receive compensation for their board member roles while serving as interim CEOs.

Peloton enthusiasts can stay updated on all the latest information regarding the CEO change, layoffs, and Q3 earnings call by visiting the company's website. The site also provides an option for supporting the platform through one-time or monthly donations.

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