{
  "docId": "019dd923-622c-750b-8b99-74af5c9e9edb",
  "docSlug": "de028a1085e6",
  "documentTitle": "Zillow Group, Inc. (Z)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2024-03-05 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 86,
  "pageCount": 103,
  "prevPage": 85,
  "nextPage": 87,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 9,
  "notes": "Uses a quote-vs-data structure to highlight management's lack of transparency.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "quote_block",
    "kpi_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-74af5c9e9edb/86",
  "deckHref": "/decks/019dd923-622c-750b-8b99-74af5c9e9edb",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-74af5c9e9edb.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-74af5c9e9edb#slide-86",
  "components": [
    {
      "bbox": {
        "h": 0.03,
        "w": 0.98,
        "x": 0.01,
        "y": 0.36
      },
      "kind": "callout",
      "text": "CFO Comments Q2’22 Earnings Call",
      "attrs": null,
      "subkind": "primary",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "91d625af-e9fa-43a3-9e23-a7813a560cc9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "callout",
      "text": "In August 2022, Zillow positioned the higher stock-based compensation as a one-time/off-cycle “retention action”. However, we believe Zillow has few options but to continue to grow stock-based compensation as it now makes up a significant piece of its employee compensation structure.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-536f-7579-baa8-59d6d9001ece",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Capitalized Stock Comp: $73 million",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd953-536f-7579-baa8-605a67d54f04",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.18,
        "w": 0.96,
        "x": 0.02,
        "y": 0.17
      },
      "kind": "paragraph",
      "text": "In August 2022, Zillow positioned the higher stock-based compensation as a one-time/off-cycle “retention action”. However, we believe Zillow has few options but to continue to grow stock-based compensation as it now makes up a significant piece of its employee compensation structure. Further, Zillow is increasingly capitalizing some stock-based compensation to mitigate the extent of the dilution. Capitalized stock comp. was $73 million in 2023, which is up 4.3x from $17 million in 2020. These capitalization actions are disclosed at the bottom of the cash flow statement as “supplemental” disclosures and don’t provide any commentary as to what is driving the increase.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "93ab12a3-8ce9-4d29-b3c7-6573b5e85aa9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.96,
        "x": 0.02,
        "y": 0.4
      },
      "kind": "quote",
      "text": "“Lastly, I want to take a moment to briefly discuss some additional details regarding the employee retention plan that was also announced today, and that will take effect on August 8. We expect this action will be dilutive on a net basis by about 2%, resulting in the issuance of an estimated 4.5 million to 6.5 million RSUs. We will also reprice approximately 7.5 million stock options. We estimate that this retention action will result in the recognition of an incremental $180 million to $190 million in share-based compensation expense in total.” “With that considered, we have made the decision to issue an off-cycle RSU grant to partially top up total compensation, particularly for those in the most competitive job categories. We will also reprice a small portion of the total outstanding stock options, those that are far out of the money.”",
      "attrs": null,
      "subkind": "pull-quote",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "95e26b86-8f61-41a8-b337-ef3d48b6a9ab",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "With that considered, we have made the decision to issue an off-cycle RSU grant to partially top up total compensation, particularly for those in the most competitive job categories. We will also reprice a small portion of the total outstanding stock options, those that are far out of the money. — CFO Comments Q2'22 Earnings Call",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-536f-7579-baa8-5e8b3d3dd5af",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.2,
        "x": 0.01,
        "y": 0.97
      },
      "kind": "source-note",
      "text": "Source: Q2'22 Conference Call",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f3654fc4-1f37-47ab-bdeb-02d7cdc11016",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.25,
        "w": 0.98,
        "x": 0.01,
        "y": 0.7
      },
      "kind": "table",
      "text": "Capitalized Share-Based Compensation table showing 2019-2023 values and Y/Y growth percentages.",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5a35770b-6171-4a1f-822a-91942563ac4b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.65,
        "x": 0.33,
        "y": 0.03
      },
      "kind": "title",
      "text": "We Don't Believe Zillow Has Been Transparent About Drivers of Increasing Stock-Based Compensation",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "2a1cfd28-fd91-4993-b6d4-74ec71270501",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "ceo-quote-contradiction",
      "slug": null,
      "matchId": "25cab9e0-172d-446e-871e-9338300fecab",
      "evidence": "Contrasts management's stated 'one-time' retention claim with historical data showing persistent growth.",
      "confidence": 0.95
    }
  ],
  "arcBeats": [],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}