Dive Brief:

• Online marketplace Etsy approved an inducement award comprised of 45,064 shares of common stock to its CFO Lanny Baker, the company said in a Wednesday press release. The award of performance stock units is meant to serve as a “material inducement” to Baker, who became the Brooklyn, New York-based company’s CFO effective Jan. 1.
• The award appears to be part of a “New Hire” grant to Baker by the company, according to a December securities filing announcing his appointment as CFO. Etsy detailed its intent to provide Baker with a sign-on equity award with an aggregate fair value of $7.7 million, comprised of 70% restricted stock units and 30% performance-based RSUs, according to the filing.  
• The approved grant comes as the marketplace targets an improved browsing experience and customer experience strategy to boost wobbling sales and reverse an ongoing trend of declining active seller figures.

Dive Insight:

The performance stock units are earned based on “Etsy's achievement of certain performance targets set by Etsy's Compensation Committee,” according to the Wednesday release, and are set to vest over a three-year period, subject to continued employment with the marketplace over each vesting date.  

As CFO, Baker’s compensation also includes an annual base salary of $525,000, and the finance chief is eligible for an annual target bonus of 90% of his base salary, according to the December filing. Baker is also set to receive a one-time sign-on bonus of $140,000, the company said.  

Prior to joining Etsy, Baker previously served as chief operating and financial officer for online event platform Eventbrite, according to the filing. His previous roles also include a stint as CFO for online review site Yelp.  

Baker succeeded finance chief Rachel Glaser — who is set to remain with Etsy as a strategic advisory until June 30 — and was part of several executive leadership shifts made by the marketplace at the tail end of a rocky 2024.

As well as its CFO shift, Etsy also announced in December that Kruti Patel Goyal, head of its Depop subsidiary, would be moving to the role of president and chief growth officer of Etsy, CFO Dive previously reported. The company’s chief brand officer, Brad Minor, moved to the role of chief marketing officer, meanwhile, and Etsy is conducting a search for a new chief technology officer.

Last month, the company posted disappointing fourth quarter earnings results, with a continued decline of active sellers across its various marketplaces. Consolidated active sellers — those across Etsy, Depop, and Reverb — totaled $8.1 million for the quarter ended Dec. 31, 2024 a 10% drop from the 9 million consolidated active sellers in the prior year period, according to its earnings report.

The company also saw a slump in gross merchandise sales, with GMS totaling $7 billion for the quarter, a 6.8% decline year-over-year. Net income, meanwhile, fell to $303 million for the 12 months ended Dec. 31 from $307.5 million in the prior year period. 

However, the marketplace has already seen some “bright spots” in its first quarter of 2025 following its gloomy fourth quarter, executives said last month, including encouraging Valentine’s Day sales. Additionally, “one thing we've seen is that the percentage of sellers who have made a sale successfully has grown as the volume of sellers has come down a little bit,” Baker said in response to an analyst question on active seller count during the company’s earnings call, according to a transcript.

“That reflects some purposeful friction that we've put in the seller sign-up and seller acquisition process to make sure that the sellers on the market really have the will and the skill to be successful in the Etsy marketplace,” he said.

As part of its strategy to improve GMS, Etsy is looking to create a “stickier” app experience,” more akin to the browsing experience of social media platforms, CEO Josh Silverman said during the earnings call — with app penetration representing a $1 billion GMS opportunity, he said.

“We can take Etsy and turn it into a really personalized experience and this is not a work that's never been done before,” Silverman said. “We have a lot to learn from folks like TikTok and Instagram and Pinterest and others on this, but there's been a lot published on how to do this well that we think we can learn from and really accelerate our growth.”

Etsy did not immediately respond to requests for comment.