Matthew Kalish
DraftKingsAbout Matthew Kalish
Co-founder of DraftKings (2011), currently President, DraftKings North America, and a director since April 2020; age 43. He oversees Sportsbook, iGaming, and DFS performance as well as operations, marketing, and customer experience; prior roles include Chief Revenue Officer (2014–2019). Education: MBA from Boston College; BA in Computer Science and Economics from Columbia University. Company performance in 2024: revenue grew 30% year-over-year to $4,768 million and Adjusted EBITDA was $181 million; cumulative TSR value of an initial $100 investment reached $348 by 2024.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| DraftKings | Chief Revenue Officer | 2014–Dec 2019 | Drove offerings and promotions, contributing to significant customer growth and leadership in U.S. real-money gaming. |
| DraftKings | President, DraftKings North America | Dec 2019–present | Oversees Sportsbook, iGaming, DFS; led innovation in in-house content and live betting, supporting growth and structural margin improvement. |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Drive by DraftKings (DBDK) Venture Funds I & II | Special Advisor (carried interest 0.5% at GP level) | 2024–2025 | Personal capital commitments: $0.25 million to each fund; related-party arrangement overseen by company policies. |
Fixed Compensation
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary ($) | $1 | $1 | $1; voluntary reduction to $1 for FY2024 and again for FY2025 per letter agreements |
| Target Bonus (%) | 125% of base salary per employment agreement | 125% of base salary per employment agreement | 125% of base salary per employment agreement; annual target $531,250 |
| Actual Bonus Paid ($) | $776,156 | $1,062,500 | $0 (thresholds not met) |
| Stock Awards – Grant Date Fair Value ($) | $39,984,506 | $9,494,113 | $11,221,725 |
| All Other Compensation ($) | $104,169 | $421,223 | $912,146 (includes $882,147 personal security program costs) |
Performance Compensation
Annual Cash Incentive (2024)
| Metric | Weighting | Threshold | Target | Maximum | Actual | Payout |
|---|---|---|---|---|---|---|
| Revenue ($mm) | 50% | $5,005 | $5,081 | $5,455 | $4,768 | 0% |
| Adjusted EBITDA ($mm) | 50% | $422 | $452 | $602 | $181 | 0% |
| Total | 100% | — | — | — | — | 0% |
Equity Incentives (2024 refresh grants)
| Award Type | Grant Date | Target/Amount | Vesting | Performance Metrics |
|---|---|---|---|---|
| Time-Based RSUs | 2/12/2024 | 154,392 RSUs | Vests quarterly over 4 years | — |
| PSUs – FY2025 tranche | 2/12/2024 | 51,464 target PSUs | Earned based on FY2025 results; pays early 2026 | Normalized Net Revenue (50%) and Normalized Adjusted EBITDA (50%), same-state basis with defined adjustments |
| PSUs – FY2027 tranche | 2/12/2024 | 51,464 target PSUs | Earned based on FY2027 results; pays early 2028 | Same metrics and normalization framework; focus on margin expansion and revenue growth |
PSU Outcomes (prior programs with 2024 performance)
| Program | Performance Metrics | Threshold | Target | Max | Actual | Payout |
|---|---|---|---|---|---|---|
| 2022 PSUs (portion tied to 2024) | 2024 Normalized Adj. EBITDA ($mm) | (19) | 16 | 51 | 150 | 200% |
| 2022 PSUs (portion tied to 2024) | 2024 Normalized Net Revenue ($mm) | 3,590 | 3,805 | 4,020 | 4,358 | 200% |
| 2023 PSUs (portion tied to 2024) | Same as above | See above | See above | See above | See above | 200% |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Total Beneficial Ownership | 6,585,591 Class A shares (1.3% of Class A outstanding) |
| Ownership Breakdown | 4,339,756 Class A shares held outright; 2,217,526 vested options; 28,309 shares underlying unvested options/RSUs vesting within 60 days |
| Options – Exercisable | 242,101 @ $3.29 exp. 4/18/2028; 1,133,561 @ $3.29 exp. 5/3/2028; 684,038 @ $4.70 exp. 6/4/2029; 157,826 @ $3.82 exp. 5/3/2027. All in-the-money at $37.20 closing price on 12/31/2024. |
| Approximate Intrinsic Value (illustrative) | Using $37.20 close: total intrinsic value approximates to ~$74 million; computed from per-series counts and strikes above with $37.20 price. Inputs: option counts/strikes and price . |
| Pledging / Forward Contracts | 875,000 shares pledged under prepaid variable forward (dated 9/12/2023; matures 9/2/2026); 1,150,000 shares pledged under variable prepaid forward (dated 2/28/2024; matures 3/8/2027); 785,000 shares pledged under variable prepaid forward (dated 11/14/2024; matures 11/17/2027). |
| Ownership Guidelines | Founders required ownership: $5,000,000; all NEOs met guidelines as of 12/31/2024. |
| Insider Trading Policy | Prohibits hedging, short sales, and pledging for margin loans; derivative transactions require CLO pre-clearance; all director/officer trades require pre-clearance. |
Employment Terms
| Term | Detail |
|---|---|
| Employment Agreement | Founder agreements executed with business combination dated 12/22/2019, amended 4/7/2020. |
| Base Salary & Target Bonus | Base salary set at $425,000 with annual review; target bonus 125% of base. Voluntary reductions to $1 base salary for FY2024 and FY2025. |
| Minimum Annual Equity | Annual equity incentive minimum target value $3,500,000, split 50% time-based RSUs (quarterly vest over 4 years) and 50% PSUs (min 2-year performance period; max opportunity up to 300% of half the minimum target). |
| Severance (no CIC) | If terminated without cause or for good reason (absent CIC window): cash severance equal to 2x salary; pro-rata annual bonus based on actual performance; 24 months benefits; pro-rata vesting of time-based and performance awards (performance based on actual results). |
| Severance (with CIC; double-trigger) | If terminated without cause or for good reason within 18 months after or 3 months before CIC: cash severance equal to 2x (salary + target bonus); 24 months benefits; equity vests at termination/change in control with performance awards deemed at target (for uncompleted periods). |
| Restrictive Covenants | Non-compete and non-solicit covenants for 12 months post-termination, subject to Massachusetts Noncompetition Agreement Act provisions. |
| Perquisites | Personal security program costs: $882,147 in 2024; modest tax reimbursements for transportation-related costs ($3,724); 401(k) match $10,350; financial planning services $15,925. |
Board Governance
- Board Service: Director since April 2020; employee director (not independent).
- Committee Roles: Not listed as a member of Audit, Compensation, Nominating & Corporate Governance, Compliance & Risk, or Transaction committees; employee directors do not receive separate board compensation.
- Structure: Combined CEO/Chairman; no Lead Independent Director; controlled company under NASDAQ with majority independent board (Kalish not independent).
- Board Process: Each director attended ≥75% of board/committee meetings; non-employee directors held four executive sessions in 2024.
Director Compensation (employee director)
| Item | 2024 Program |
|---|---|
| Employee Directors | No director compensation is paid to DraftKings employees serving on the Board. |
Compensation Structure Analysis
- Mix shift: Founders continue $1 base salary, reinforcing equity-heavy, performance-oriented pay; annual equity refresh in 2024 was ~60% time-based RSUs and ~40% PSUs; revised to 50%/50% in 2025 to increase at-risk pay.
- Annual Bonus Discipline: 2024 cash bonus paid 0% as revenue and Adjusted EBITDA fell below thresholds despite strong YoY revenue growth—underscores adherence to pay-for-performance.
- PSU Outcomes: 2022/2023 PSU tranches tied to 2024 performance paid at 200% based on significant outperformance of normalized metrics; remaining 2026 tranches still at risk.
- Peer Benchmarking: Compensation reviewed against a defined peer set (Chegg, PENN, EA, etc.) with 2025 peer group adjustments adding AppLovin, Fortinet, Wayfair and removing Peloton/Chegg/Etsy.
Risk Indicators & Red Flags
- Pledging/Forward Sales: Three sizable prepaid/variable forward contracts covering 2.81 million pledged shares with maturities in 2026–2027, implying potential future share delivery/selling pressure and collateralization risk.
- Controlled Company & Dual Roles: CEO is Chairman; no Lead Independent Director; Kalish is an executive and director (not independent), elevating governance scrutiny.
- Related Party Interests: Special advisor roles and carried interest in DBDK venture funds; oversight via related party transaction policy and audit committee review.
- Perquisites: Significant personal security costs approved by the Board due to identified threats; disclosed and justified by role criticality.
Equity Award Detail (select outstanding at 12/31/2024)
| Series | Quantity | Strike | Expiration | Status |
|---|---|---|---|---|
| Stock Options | 242,101 | $3.29 | 4/18/2028 | Exercisable; in-the-money vs $37.20 close |
| Stock Options | 1,133,561 | $3.29 | 5/3/2028 | Exercisable; in-the-money vs $37.20 close |
| Stock Options | 684,038 | $4.70 | 6/4/2029 | Exercisable; in-the-money vs $37.20 close |
| Stock Options | 157,826 | $3.82 | 5/3/2027 | Exercisable; in-the-money vs $37.20 close |
| Unvested RSUs | 470,833 | — | — | Time-based RSUs outstanding; total at year-end |
Investment Implications
- Alignment: Founders’ $1 salary and equity-heavy grants maintain strong alignment; stock ownership guidelines met, with meaningful vested options and RSU holdings supporting long-term focus.
- Near-term selling pressure: The pledged prepaid/variable forward contracts maturing in 2026–2027 represent potential share delivery/supply overhang and financing-related constraints.
- Pay-for-performance integrity: Zero cash bonus for 2024 despite revenue growth signals discipline; however, outsized 200% PSU vesting reflects normalized metrics that significantly exceeded pre-set targets.
- Governance watchpoints: Executive-director dual role in a controlled company without a Lead Independent Director may limit independent challenge; committee memberships exclude executives, partly mitigating.
- Retention economics: Double-trigger CIC severance and target-level acceleration of PSUs, plus substantial unvested equity, provide retention but increase change-of-control costs for shareholders.
References
All information cited from DraftKings Inc. DEF 14A (Proxy Statement) filed March 26, 2025: