Peter Stern
PELOTON INTERACTIVEAbout Peter Stern
Peter Stern (age 53) is Peloton’s Chief Executive Officer and President and a director since January 2025. He previously led subscription and services businesses at Ford and Apple, with deep experience in digital product, media, and recurring revenue models; Stern holds a BA from Harvard and a JD from Yale . Under his tenure, Peloton emphasized profitability and cash generation in FY2025, delivering $333.0M cash from operations, $323.7M Free Cash Flow, and a $400M improvement in adjusted EBITDA, while revenue declined 7.8% amid subscriber churn normalization .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| Ford Motor Company | President, Integrated Services | Aug 2023–Dec 2024 | Led portfolio of subscription services (BlueCruise, Ford Pro Intelligence), connectivity/security, and digital product team . |
| Apple Inc. | VP, Services | Sep 2016–Jan 2023 | Managed Apple TV+, Sports, iCloud, News, Books, Arcade, Fitness+, Apple One; led services marketing and oversaw advertising businesses during rapid growth . |
| Time Warner Cable | EVP & Chief Product, People and Strategy Officer | Prior to 2016 | Product and strategy leadership for cable services . |
| McKinsey & Co. | Associate Principal | Early career | Strategy consulting foundation . |
External Roles
| Organization | Role | Years |
|---|---|---|
| Reader’s Digest Association | Director (prior) | Prior to Apple tenure |
| Current public boards | None | — |
Fixed Compensation
| Component | FY2025 Amount/Term |
|---|---|
| Base salary | $1,250,000 (annual rate; partial year paid $615,385) . |
| Target annual bonus | 100% of base salary (per offer letter) . |
| Bonus paid (FY2025) | $1,625,000 (includes $1,000,000 signing bonus and other cash bonus amounts) . |
| Sign-on bonus | $1,000,000 (discretionary) . |
| Other comp (security/relocation/benefits) | $204,073 (FY2025) . |
Performance Compensation
| Metric | Weighting | Target | Actual | Payout | Vesting |
|---|---|---|---|---|---|
| Free Cash Flow (FY2025) | Not disclosed | $190M (100% payout); Threshold $150M (50%); Max $300M (200%) | $323.7M | 200% of target | PSUs vested Sep 15, 2025; Stern earned 282,486 PSUs . |
| FY2026 LTI mix | RSUs/PSUs mix | 50% RSUs / 50% PSUs for CEO | — | — | Future PSUs include stock price goals . |
FY2025 equity grant details (grant date: Jan 16, 2025)
- RSUs: grant-date fair value $9,593,225; 1,129,944 units, vest 25% each Jan 1, 2026/2027/2028/2029, service-based .
- Options: $5,000,000 grant-date fair value; 781,250 options, $8.49 strike, expire 12/31/2034; vest 25% annually on Jan 1, 2026/2027/2028/2029 .
- PSUs (FY2025 tranche): target 141,243 units; payout 200% based on FCF → 282,486 vested Sep 15, 2025 .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership (as of Sep 30, 2025) | 189,934 Class A shares; plus 59,713 RSUs vesting within 60 days; <1% voting power . |
| Outstanding/unvested equity (Jun 30, 2025) | RSUs: 1,129,944 unvested ($7.84M mkt value); PSUs: 141,243 unvested ($0.98M mkt value); Options: 781,250 unexercisable at $8.49 . |
| Vested vs unvested breakdown | PSUs 282,486 vested on Sep 15, 2025 (200% of target) . RSUs/options vest 25% annually (2026–2029) . |
| Ownership guidelines | CEO must hold stock worth 5x salary; 5-year compliance period . |
| Hedging/pledging | Prohibited by Insider Trading Policy (alignment positive) . |
Employment Terms
| Provision | Terms |
|---|---|
| Employment status | At-will per offer letter . |
| Severance (non-CIC) | Tier 1: cash equal to 2x base + 2x target bonus (prorated in year of termination); healthcare continuation; 24 months of additional vesting service on time-based awards . |
| Severance (CIC, double-trigger) | Cash equal to 2x base + 2x target bonus; accelerated vesting of awards per plan; “good reason” includes ceasing to report solely to Board/ultimate parent board . |
| Equity treatment | Double-trigger change-in-control protections; performance awards per award agreements . |
| Clawback | Policy complies with and exceeds Rule 10D-1; covers restatements and allows recovery for fraud/intentional misconduct . |
| Non-compete/non-solicit | Required as condition to severance (release and restrictive covenants) . |
| Tax gross-ups | None on CIC arrangements (shareholder-friendly) . |
| Retirement/deferred comp | No executive-only pension/SERP or deferred comp; standard 401(k) with match up to lesser of 4% or $14,000 in 2025 . |
| Perquisites | Limited; security arrangements and standard employee benefits . |
Board Governance
- Role: CEO and director since Jan 2025; not an independent director; no committee memberships .
- Board structure: Independent Chair (Jay Hoag); majority independent (6 of 7); all committees composed solely of independent directors; regular executive sessions .
- Committees: Audit (Mendez–chair, Comonte, Thomas‑Graham); Compensation (Boone–chair, Hoag); Nominating, Governance & Corporate Responsibility (Bruzzo–chair, Hoag) .
- Attendance: Board met 7 times FY2025; directors attended ≥75% of aggregate meetings; annual meeting attendance policy (virtual meeting 2024, all directors attended) .
- Director compensation: Employee directors receive no additional pay; non-employee directors receive cash retainer and RSUs per policy .
Director Compensation (Stern)
| Component | Detail |
|---|---|
| Cash retainer | Not applicable; no additional compensation for board service as CEO . |
| Equity for directors | Not applicable to Stern; policy applies to non-employee directors . |
Compensation Structure Analysis
- Strong shift to performance-based pay: Introduction of PSUs in FY2025 tied to Free Cash Flow; increased PSU mix in FY2026 (CEO 50/50 RSU/PSU) .
- Cash comp redesign: For broader leadership (not CEO), base salary reduced to $850k (FY2026) with new annual bonus targeted at 20% (FY2026) and 60% (FY2027) to reinforce pay-for-performance; CEO remains at 100% target bonus .
- Independent consultants: Compensia and F.W. Cook engaged; peer group recalibrated to align with revenue/market cap and model; peer adds include Duolingo, Garmin, GoPro, Lyft; removes include EA, Twilio, Zoom .
- Say-on-pay support: 82.3% approval at 2024 annual meeting; triennial say-on-pay cadence through 2026 .
Risk Indicators & Red Flags
- Alignment positives: Clawback policy; stock ownership guidelines; double-trigger CIC; no gross‑ups; hedging/pledging ban .
- Insider selling pressure: Large scheduled RSU/option vesting tranches annually (2026–2029) and PSUs awarded each year may create sellable share supply around vest dates; actual selling activity not disclosed here .
- Governance mitigants: Independent Chair, independent committees, regular executive sessions .
Investment Implications
- Pay-for-performance strengthened: CEO equity heavily tied to PSUs (50/50 mix) and FCF/stock price goals, aligning incentives with cash generation and shareholder value; FY2025 PSU max payout reflects execution on FCF but underscores sensitivity to metric selection .
- Retention risk moderate: Robust severance, 4-year time-based vesting for RSUs/options, and multi-year PSU cadence support retention; stock ownership guidelines elevate alignment but may limit near-term liquidity .
- Trading signals: Anticipate potential supply near annual RSU/option vest dates (Jan 1 of 2026–2029) and PSU vest events; monitor Form 4 activity for actual sales behavior around these windows and any PSU targets linked to stock price .
Appendix: Key FY2025 Company Performance Metrics
| Metric | FY2025 Result |
|---|---|
| Revenue | $2,490.8M (−7.8% YoY) . |
| Cash from operations | $333.0M (+$399.1M YoY) . |
| Free Cash Flow | $323.7M (+$409.4M YoY) . |
| Net loss | $(118.9)M (improved by $433.0M YoY) . |
| Adjusted EBITDA | $403.6M (+$400.0M YoY) . |