Zscaler founder and CEO Jay Chaudhry tells Yahoo Finance Live he has been able to hire one-third of his company’s 3,153 workers during the super competitive environment for talent this past year.
How is he doing it at the nearly $40 billion market cap cloud security company? The power of the mighty stock option.
“It’s higher compensation than it was a year ago. But what attracts employees at Zscaler is also equity. We have done well as a company. Our stock has done well. So employees they look for upside, and that is probably the biggest factor attracting people to us. Though I will say there has been uptick on the compensation side, but being a high growth company has helped us tremendously,” Chaudhry explains.
Zscaler’s stock is up 81% over the past year, trouncing the Nasdaq Composite’s 29% gain. The company has seen strong demand for its cloud security offerings throughout the COVID-19 pandemic, supporting an even higher stock price.
Chaudhry says business remains very solid despite the recent downtick in economic growth — leaving in a good position to keep shelling out those stock options to attract talent.
“Demand is very solid because the COVID digital transformation has accelerated. CIOs need to make sure employees could work from anywhere. They need collaboration tools. They need to go direct to applications. That’s the situation Zscaler was designed in,” Chaudhry says.
Newly minted U.S. public company — digital payments player Nuvei —has also found success in securing workers by handing out stock options worth around $100,000.
“We offered stock options to our employees last year, which is life changing. We’re fortunate that Nuvei is an interesting possibility to build a career. We offer a platform for growth. It’s fun and exciting. We have not seen that [labor shortage] as a major hurdle so far,” Nuvei CEO Philip Fayer said on Yahoo Finance Live.
Dissecting the latest jobs report, one take away is that growing companies may be best served giving out some stock options to get the talent they need.
Non-farm payrolls rose by a lackluster 194,000 in September, badly missing estimates (for the second straight month) for an increase of 500,000. The unemployment rate ticked down to 4.8% from 5.2% in August. Payrolls for July and August saw a modest 169,000 total upward revision to previously reported numbers.
“The September jobs report certainly was not a knockout,” JPMorgan economist Daniel Silver said in a note to clients.
Non-farm payrolls were expected to pick up from August’s much weaker-than-expected print, when renewed fears over the coronavirus Delta variant deterred more workers from reentering the labor market. Economists envisioned the return to in-person learning this fall and the expiration of enhanced unemployment benefits as key drivers of a potentially better than expected jobs report.
But, the hype didn’t live up the reality in the month, where numerous economic indicators weakened.