Yext CEO: Walrath Option Grant Has 14 Hurdles to $88.08

Yext's board gave chief executive Michael Walrath options on 11 million shares on Sunday, Oct. 11, and none of them can be earned until the stock's average closing price holds at or above $21.00 for 180 consecutive calendar days. That target is about three times the $6.93 close on Friday, Oct. 9, the last trading day before the grant. The shares equal 11.1% of the 98,978,704 Yext had outstanding on Aug. 18, according to its 10-Q filed Sept. 1 (TradeFlock's math: 11 million divided by 98,978,704). The 8-K says the grant is "currently intended" to be his only new equity for ten years.

What the Board Approved on Sunday

In a Form 8-K filed Wednesday, Oct. 14, Yext said its board, on the compensation committee's recommendation, granted Walrath a nonstatutory stock option on 11,000,000 shares. The exercise price is $7.00, "a premium to the $6.93 closing price" on Oct. 9, and the term is ten years. The option agreement puts the total exercise price at $77,000,000.

"No portion of the Option vests based on the passage of time alone," the filing says. The shares sit in 14 tranches, and each is earned only if the average closing price holds at or above its target for 180 consecutive calendar days while Walrath is still CEO. The grant was made outside Yext's equity plan and needs stockholder approval within twelve months. Until then, "no portion of the Option may be exercised," and the whole option is forfeited if approval does not come. The filing does not say when the vote will be held.

The Price Hurdles, Tranche by Tranche

The first tranche covers 750,000 shares at $21.00 and must be earned within five years. Tranches two through six have targets from $23.45 to $36.45 and a seven-year window, and with the first tranche they cover 4.0 million shares. The last eight tranches run from $40.70 to $88.08 and have ten years.

• Tranche 1: 750,000 shares at $21.00.
• Tranche 6: 1,000,000 shares at $36.45.
• Tranche 10: 1,000,000 shares at $56.66.
• Tranche 14: 500,000 shares at $88.08.

Per the option agreement, a target counts only if the average closing price holds at or above it for 180 consecutive calendar days. A second test, a 30-day average at or above the target within the following three years, must also be met. Earned shares are then released in three installments, and Walrath must still be CEO on each release date.

What the Hurdles Mean for the Stock

Yext closed at $6.97 on Wednesday, Oct. 14, according to Yahoo Finance data. The $88.08 top target is 12.7 times the $6.93 Friday close (TradeFlock's math: 88.08 divided by 6.93).

Using the 98,978,704 shares outstanding and ignoring any new issuance, TradeFlock estimates Yext's market value at about $690 million at $6.97, about $2.08 billion at $21.00 and about $8.72 billion at $88.08. Those are TradeFlock estimates, not company figures.

What the Option Could Pay

The filing does not state a grant-date value for the option. TradeFlock's estimate of the gain if each tranche's target were met, before taxes, is the target price minus $7.00, times the tranche's shares:

• Tranche 1 alone: about $10.5 million.
• Tranches 1 through 6, 4.0 million shares: about $89.6 million.
• All 14 tranches: about $451.6 million.

These are TradeFlock estimates, and they assume every share is held to its target. The company has not valued the grant.

Walrath's Earlier Pay and Stake

The proxy statement filed April 27 shows Walrath's stock awards were $7,675,000 in fiscal 2026 and $7,587,500 in fiscal 2024, measured at grant-date value, with none in fiscal 2025. His fiscal 2026 total pay was $8,693,973, which reflects a $550,000 annual base salary the compensation committee approved in March 2025. It lists him as owning 3,713,571 shares, or 3.7%, as of March 31, including 64,987 shares held by trusts tied to his spouse and family members.

The proxy says Walrath has been a director since November 2009, chairman since March 2011 and CEO since March 2022, so it lists him as both CEO and chairman of the board that approved the grant.

Yext's stock has risen since the proxy was filed on April 27. The proxy put the closing price at $3.77 on April 23, so $6.97 is up about 85% (TradeFlock's math: 6.97 divided by 3.77, minus 1).

If Walrath Leaves or Yext Is Sold

In a change of control, targets for unearned tranches are measured against the per-share price paid to stockholders. Earned shares vest, and unearned shares are forfeited. If Yext fires him without cause, or he resigns for good reason, the highest 30-day closing price sets what has been earned. He would also earn 250,000 more shares if the stock has compounded at 15% a year from $7.00, or 1,000,000 more at 25%. These terms depend on a mutual release of claims.

What to Watch Next

Watch for the proxy statement or special meeting that puts the grant to a vote, and for how large holders react. The proxy also showed 20,436,164 outstanding equity awards on April 16, so the new option adds 11.0 million shares, about 54% on top of that pool (TradeFlock's math: 11.0 million divided by 20.44 million).

Who Holds Yext

Lynrock Lake reported 19.0% in a Schedule 13D filed July 9, and its chief investment officer, Cynthia Paul, was elected to the board on July 7. The 13D supersedes a Schedule 13G/A filed April 7 that showed 18.4%; the proxy's 18.2% is its own calculation from the same 18,188,607 shares. The 13D reports 19,015,087 shares bought between March 2022 and June 15, 2026 for about $122 million. It says Yext invited Paul to the board on July 1 and the board approved her appointment on July 7.

Lead Edge Capital reported 7,843,296 shares, or 7.9%, in a Schedule 13D/A filed March 25, and the proxy lists the same shares as 7.8%. Its partner Evan Skorpen is a Yext director.

For more on leadership changes, read how Harmony Biosciences picked its COO as CEO, how CSX left its COO job open and how Bausch + Lomb's contract shaped its CEO exit.

Cover image: Mighty peak above clouds, by Cédric Servay via Wikimedia Commons, CC0 1.0 (cropped).