Paul Gu
Upstart HoldingsAbout Paul Gu
Paul Gu is Upstart’s co-founder and Chief Technology Officer and has served in various roles since April 2012; he has been a director since April 2015 and is age 34 . He studied economics and computer science at Yale University, joined the Thiel Fellowship, worked in risk analysis at D.E. Shaw Group in 2011, built algorithmic trading strategies on the Interactive Brokers API at age 20, and led underwriting for two U.S. non-profit microlenders during college . Under his leadership, Upstart’s 2024 results included revenue of $637 million (+24% YoY), fee revenue of $635 million (+13%), adjusted EBITDA of $10.6 million (2% margin), and a narrowed GAAP net loss of ($129) million; a $100 investment in UPST at IPO was worth $208.92 at 2024 year-end versus $220.25 for its peer group . Gu’s expertise spans machine learning and data science applied to credit risk, and he is a continuing Class II director nominated to serve through 2028 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| D.E. Shaw Group | Risk analysis | 2011 | Quantitative risk analysis experience relevant to credit modeling |
| Non-profit microlenders (U.S.) | Led underwriting | During college | Practical underwriting exposure |
| Self-directed (Interactive Brokers API) | Built algorithmic trading strategies | Age 20 | Early quantitative trading system development |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| None disclosed | — | — | No additional public company directorships or committee roles disclosed for Gu |
Fixed Compensation
- Base salary: $450,000 in 2024 .
- 401(k) match: Up to $4,500 per participant in 2024 .
- Perquisites: None exceeding $10,000 in 2024; executives generally receive standard employee benefits .
- Director pay: As an employee director, Gu receives no additional board compensation (director fees apply only to non-employee directors) .
Performance Compensation
2024 Annual Cash Bonus Plan (H2’24 focus)
- Structure: Corporate performance drives 100% of bonus funding using H2’24 Adjusted EBITDA before bonus, with scale selection by H2’24 revenue from fees; non-CEO NEOs also have individual performance multipliers .
- Scale and targets:
| Metric | Threshold | Target | Maximum | Scale Selection | Actual | Payout Basis |
|---|---|---|---|---|---|---|
| H2’24 Revenue from Fees ($M) | <305 | ≥305 | — | High scale used (actual $367M) | $367 | High scale applies |
| H2’24 Adjusted EBITDA before bonus ($M) | 0.0 | 34.9 | 116.3+ | High scale funding | $84.0 | 161.3% achievement; adjusted company-wide to 149.0% for pool calibration |
- Gu’s bonus outcome: Target bonus 75% of salary; actual eligible earnings $447,917; bonus paid $749,694; payout 222% of target (reflecting company multiplier and individual performance) .
2024 Equity Awards (refresh)
| Executive | RSUs (intended target annual $ value) | Options (intended target annual $ value) | Grant date | RSU vesting | Option shares | Option strike | Option vesting |
|---|---|---|---|---|---|---|---|
| Paul Gu | $2.0 million | $2.0 million | Feb 29, 2024 | 61,201 RSUs; 1/16 quarterly from May 20, 2024 | 116,281 | $25.75 | 1/48 monthly from Mar 20, 2024 |
- Program design: CEO awards delivered entirely in options to maximize stock price alignment; other NEOs receive equal mix of RSUs and options (valued about 1.9:1 shares options-to-RSUs) for performance and retention .
Multi-year Compensation (Summary Compensation Table)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | $80,833 | $425,000 | $450,000 |
| Bonus ($) | — | — | — |
| Option Awards ($) | — | $2,548,468 | $1,623,064 |
| Stock Awards ($) | $51,760,676 (performance RSU later canceled in 2023) | $2,552,518 | $1,575,926 |
| Non-Equity Incentive ($) | — | $194,195 | $749,694 |
| All Other Comp ($) | $4,500 | $4,500 | $4,500 |
| Total ($) | $51,846,009 | $5,724,681 | $4,403,184 |
Equity Ownership & Alignment
Beneficial Ownership (as of March 1, 2025)
| Holder | Shares Beneficially Owned | % Outstanding | Breakdown |
|---|---|---|---|
| Paul Gu | 1,399,261 | 1.46% | 842,445 shares held of record; 556,816 options exercisable within 60 days |
Outstanding Equity (as of Dec 31, 2024)
| Award | Quantity Unvested | Market Value at 12/31/24 | Vesting Terms |
|---|---|---|---|
| RSUs (2/29/2024) | 49,726 | $3,061,630 | 1/16 quarterly from May 20, 2024 |
| RSUs (3/17/2023) | 94,274 | $5,804,450 | 1/16 quarterly from May 20, 2023 |
| RSUs (11/30/2022) | 45,938 | $2,828,403 | Quarterly tranche schedule across 2023–2025 |
| Options | Exercisable | Unexercisable | Strike | Expiration |
|---|---|---|---|---|
| 12/18/2017 | 80,792 | — | $2.15 | 12/18/2027 |
| 3/29/2019 | 137,500 | — | $3.80 | 3/29/2029 |
| 1/31/2020 | 183,836 | — | $8.88 | 1/31/2030 |
| 3/20/2021 | 50,824 | — | $125.28 | 3/20/2031 |
| 3/17/2023 | 145,949 | 172,487 | $15.23 | 3/17/2033 |
| 2/29/2024 | 24,225 | 92,056 | $25.75 | 2/28/2034 |
- Insider selling/pressure: In 2024, Gu exercised 826,164 options for $39,706,614 of value realized and had 138,849 RSUs vest for $5,645,986; “less than all shares received upon exercise have been sold,” indicating some share retention alongside liquidity .
Ownership Guidelines, Hedging/Pledging
- Executive stock ownership guideline: 2x annual base salary, with a five-year compliance window running through the later of Jan 1, 2028 or five-year anniversary; retain ≥50% of net shares until guideline met .
- Hedging/pledging: Prohibited for executives and directors (pledging only with a waiver and proof of capacity to repay without resorting to pledged shares) .
Employment Terms
Change-in-Control and Severance (standardized, double-trigger)
- Double-trigger CoC: If terminated without cause or resigns for good reason within 3 months before or 12 months after a change in control, lump-sum salary (12 months), lump-sum target bonus (100%), up to 12 months COBRA, and 100% acceleration of unvested equity (performance awards at target if applicable) .
| Scenario (hypothetical as of 12/31/24) | Salary Severance ($) | Bonus Severance ($) | COBRA ($) | Equity Acceleration ($) | Total ($) |
|---|---|---|---|---|---|
| Outside CoC period | $450,000 | — | $33,436 | — | $483,436 |
| Within CoC period | $450,000 | $337,500 | $33,436 | $22,984,976 | $23,805,912 |
- Clawback policy: Adopted Dec 1, 2023; applies to executive compensation upon accounting restatements per SEC/Nasdaq rules .
- Tax gross-ups: None provided for change-in-control payments; 280G/4999 “best net” cutback applies .
Board Governance
- Board service: Director since April 2015; Class II nominee in 2025 to serve until 2028 . Not independent (executive), while the Board maintains a majority of independent directors .
- Committees: Gu is not listed on Audit, Compensation, or Nominating & Corporate Governance committees; those committees are composed solely of independent directors .
- Leadership: CEO Dave Girouard serves as Board Chair; Kerry W. Cooper is Lead Independent Director to provide independent oversight and executive session leadership .
- Attendance: Board held five meetings in 2024; each director attended ≥75% of meetings/committees served .
- Director compensation: Employee directors (Girouard, Gu) receive no additional board fees; non-employee director compensation described separately .
Compensation Committee Analysis
- Members: Kerry W. Cooper (Chair), Sukhinder Singh Cassidy (through end of term), Peter Bernard; all independent .
- Advisor: Compensia, independent consultant; no conflicts; scope includes peer group and market analyses .
- Peer group (21 companies) includes Affirm, Flywire, Intapp, LendingClub, Marqeta, Shift4, Smartsheet, SoFi, SPS Commerce, etc. . Upstart market cap percentile vs peers: 57% at selection and ~70% by Dec 2024; revenue percentile ~30% .
Related Party Transactions and Policies
- No related party transactions >$120,000 since Jan 1, 2024 beyond indemnification/severance agreements .
- Audit committee reviews and approves related party transactions per policy .
Performance & Track Record
- 2024 execution: Revenue $637M (+24% YoY), fee revenue $635M (+13%), loans originated 697,092 totaling $5.9B (+28%), conversion rate 16.5% (vs 9.7% prior year), adjusted EBITDA $10.6M (2% margin), GAAP net loss improved to ($129)M .
- 2024 bonus funding context: High-scale revenue hurdle achieved ($367M H2’24 fees); H2’24 Adjusted EBITDA before bonus ~$84.0M; achievement 161.3% then pool-calibrated to 149.0% .
- CTO impact narrative: Acceleration of model development, process streamlining, team strengthening, and cross-functional decision support cited in 2024 evaluations .
Director Compensation (for directors)
- Gu: No separate board retainer; his compensation is reported as an executive in the Summary Compensation Table .
Risk Indicators & Red Flags
- Hedging/pledging prohibited (pledging only via waiver with financial capacity) .
- Option repricing prohibited without shareholder approval .
- No excise tax gross-ups; best-net cutback applies .
- Clawback policy in place .
- Dual-role (CTO+Director) mitigated by majority independent board, independent committees, and Lead Independent Director structure .
Equity Award Vesting Schedules (detail)
| Award | Vesting Start | Schedule |
|---|---|---|
| 2024 RSUs (61,201) | May 20, 2024 | 1/16 quarterly thereafter |
| 2024 Options (116,281) | Mar 20, 2024 | 1/48 monthly thereafter |
| 2023 RSUs (94,274) | May 20, 2023 | 1/16 quarterly thereafter |
| 2023 Options | Mar 20, 2023 | 1/48 monthly thereafter |
| 2022 RSUs (45,938) | Feb 20, 2023 (initial tranche timing) | Quarterly tranches across 2023–2025 |
| 2022 Performance RSU (canceled) | Granted Feb 2022; canceled in 2023 | No payouts |
Investment Implications
- Pay-for-performance alignment: Gu’s 2024 pay was heavily variable (target variable 90.6%) with bonus funding tied 100% to corporate performance (Adjusted EBITDA and revenue from fees) and equity tilted to RSUs/options, supporting alignment with long-term stock value .
- Retention and selling pressure: Large unvested RSU/option overhang plus deep-in-the-money legacy options suggest ongoing liquidity needs; significant 2024 option exercises indicate potential selling pressure against vesting calendars, though some shares were retained .
- Governance and change-in-control: Double-trigger CoC with full equity acceleration and substantial payout could lower retention risk during strategic transactions; robust clawback and no hedging/pledging policies mitigate governance risk, while dual-role independence concerns are tempered by board structure and independent leadership .
- Execution risk: 2022 performance RSU cancellation underscores macro sensitivity; 2024 turnaround in fees and adjusted EBITDA, plus CTO-driven model/process improvements, support improving fundamentals, but bonus calibration highlights reliance on profitable growth delivery .