The Monday Method: Mass Layoffs and Doubling CEO Salaries
Monday's leadership initiated a wave of layoffs affecting 620 employees while simultaneously asking shareholders to approve a plan to double their own compensation packages to $14 million by 2029.
The late Apple founder Steve Jobs was once quoted as saying that startup entrepreneurs must be crazy enough to think they can change the world. To succeed, high-tech entrepreneurs must adopt extraordinary personality traits: demonstrate fearlessness toward obstacles, indifference toward failures, and an excess of self-confidence. Otherwise, it is doubtful they could fail again and again just to succeed in the end.
Perhaps detachment is an important trait in managing a growing startup, but when the company matures and reaches the stock market, things may resurface. Otherwise, it is difficult to explain the conduct of Monday founders, Roy Mann and Eran Zinman, who are trying to have their cake and eat it too.
Just days before the company's investor meeting this Thursday, it turns out that a month ago — two weeks before they initiated a wave of layoffs of about 620 employees and half a year after the stock crashed by 48% — Mann and Zinman requested a significant salary increase. They are asking shareholders to approve a plan that will gradually increase the compensation package of each of them from 7.3 million dollars last year to 14 million dollars a year by the end of 2029. Additionally, each co-CEO is entitled to a target bonus of 100% of the annual base salary, with a maximum payout of 200%.
Monday has taken another move that raises questions about its management culture. The company's 2025 reports reveal a 26% jump in headcount, totaling about 650 employees worldwide. This figure is infuriating when one realizes it is almost identical to the number recorded in the wave of layoffs just a few months later.
Everything is because of AI
During the last months, Monday's managers denied in conversations that a round of layoffs might occur, declaring that artificial intelligence was forcing them to hire more employees to grow. Zinman clarified that while the company would slow hiring from 30% to 15% annually, a stop or cut would miss the goal. However, two weeks ago, they issued an opposite statement: "We have entered a new era in which artificial intelligence is changing the role of software," they wrote, describing the need to fire middle managers and flatten teams.
This is not the only "zigzag." In early 2025, Monday announced it would rent 10 new floors in the Echo Tower in Tel Aviv. By May, it turned out the company would settle for three floors in the adjacent Sonol building, citing a "rethinking of real estate needs."
Negative sentiment despite good performance
On the face of it, Monday is a market leader that shatters analyst forecasts and presents profitability. Its adjusted net profit in the last quarter stood at 56 million dollars, and it holds a cash box of 1.2 billion dollars. Despite this, Monday is currently traded at a fairly low valuation multiple (18 for the coming year), compared to over 80 last year. The reason lies in negative sentiment toward the company, whose product is at the heart of the "software apocalypse" — the risk that language engines will replace the need for such tools.
"Material gap": explanations for the salary doubling
In the meeting invitation, Monday explains its request. According to the company, revenue growth is ranked in the 70th percentile and above, while CEO salaries are below the 25th percentile. The board believes this is a material gap and requests to raise compensation to the 50th percentile.
According to the proposal, in early 2027, the salary of both is expected to rise by 19% to 110,000 shekels per month each, reaching 120,000 shekels by 2029. Simultaneously, the equity compensation ceiling will rise to 13.65 million dollars in 2029. The mix of equity compensation will change from 70% performance-based and 30% time-based, to 60% and 40% respectively.
The excessive self-confidence from the request for a salary package increase will certainly convince some investors that the company is on the fast track to success, but it will probably not satisfy the hundreds of laid-off employees or the investors who have seen mostly bitterness from Monday's stock in recent years.
