Bakkt’s Executive Incentive Gamble: A Stock Price Hurdle for Crypto’s Future?

Bakkt Holdings, the crypto infrastructure firm, has placed an unusual bet on its own stock price by granting its new co-CEO, Akshay Naheta, a complex equity package tied directly to Bakkt’s ability to push its shares higher. The inducement grant, disclosed in April 2025, combines performance-based restricted stock units (PSUs) and standard RSUs in a structure that could either reward shareholders handsomely—or prove costly if targets aren’t met.

The deal, structured under New York Stock Exchange (NYSE) Rule 303A.08, allows Bakkt to bypass shareholder approval for material compensation tied to executive recruitment. But the terms are aggressive: Naheta’s PSU vesting hinges on Bakkt’s stock price surging by 100% from a $9.33 “reference price” within three years. If the stock hits $18.66 at any point before March 2026, one-third of his 1.6 million PSUs unlock. Each subsequent 25% price gain above the reference price—up to eight tranches—could trigger another 134,000+ shares.

This isn’t just a bonus—it’s a high-stakes incentive to drive investor confidence in Bakkt’s vision. The company, which provides custody and trading infrastructure for institutional crypto investors, has long struggled with valuation. Its stock price has been volatile, reflecting broader market skepticism about crypto’s long-term viability.

The PSU structure demands a sharp upward move. Let’s break down the math:
- To hit the first PSU trigger ($18.66), Bakkt’s stock must double from its $9.33 reference price.
- Each subsequent 25% gain (e.g., to $23.33, $29.16, etc.) would unlock another tranche.
- The 90-day volume-weighted average price (VWAP) requirement adds a buffer against short-term spikes, ensuring sustained momentum.

But here’s the catch: If the stock doesn’t hit $18.66 by March 2026, the first tranche’s vesting is delayed until March 2028—or not at all. The grant’s terms effectively create a “cliff” for investors: Either Bakkt’s stock takes off, rewarding both Naheta and shareholders, or the PSUs languish.

The RSU component—11,426 shares vesting in March 2026—provides a baseline incentive to stay, but the real action is in the PSUs. The structure mirrors “accelerated vesting” mechanisms used in high-risk startups, where executives are rewarded for hitting moonshot targets. For Bakkt, this bet underscores its belief that institutional adoption of crypto can finally move the needle on valuation.

Regulatory compliance is another layer. The NYSE’s inducement rule (Rule 303A.08) requires such grants to be material to the executive’s decision to join, and Bakkt’s press release explicitly cites this as the rationale. The SEC filing (Form 8-K) further clarifies the terms, ensuring transparency—a critical step in avoiding governance scrutiny.

Investors should weigh two questions:
1. Can Bakkt deliver the stock price growth needed? The reference price of $9.33 is already above Bakkt’s 52-week lows, suggesting the company is starting from a position of relative stability. But crypto markets remain volatile; a Bitcoin price crash (Bakkt’s success is indirectly tied to broader crypto trends) could derail the stock.
2. What does this say about management’s confidence? By tying his compensation to stock performance, Naheta is aligning his incentives with long-term shareholder value—a positive sign—but it also shifts risk onto his shoulders. If the PSUs don’t vest, his pay could fall far below market rates for a co-CEO role.

The structure’s boldness is its defining feature. For comparison, consider Coinbase (COIN), which has used equity incentives but with less aggressive price triggers. Bakkt’s approach is a gamble that its infrastructure business—which charges fees for custody and trading—can finally turn a profit while crypto adoption matures.

In conclusion, Bakkt’s inducement grant is a high-risk, high-reward move that hinges on its ability to execute against two fronts: growing institutional crypto adoption and stabilizing its stock price. The PSU terms create a clear path for upside—if the stock hits targets—but also a stark downside if it falters. With 1.6 million shares on the line, Naheta’s performance will be judged not just by strategic wins, but by a cold, hard number: $18.66. For investors, this is a call option on Bakkt’s vision—one that’s priced in the market today, but whose payoff depends on execution in a rapidly evolving sector.

The stakes are clear: If Bakkt can push its stock above the $18.66 threshold, it validates its model and rewards shareholders. If not, the grant becomes a reminder of the risks inherent in betting on crypto’s mainstream acceptance. The next three years will reveal whether this gamble pays off.