By reinstating its cofounder as CEO, Workday is employing a classic Silicon Valley strategy to confront the AI threat pressuring software stocks: the founder’s comeback.
Bhusri’s return to lead the HR software firm underscores a conviction that only a founder, with billions of dollars and a personal legacy at risk, possesses the distinct vision and clout to navigate turbulent times. Holding majority voting control alongside his operational power as CEO, Bhusri will have enhanced authority to enact any tough decisions he deems essential. However, a detailed examination of his compensation package indicates it also serves as a recognition of the grim investor outlook for software-as-a-service (SaaS) companies.
To entice Bhusri back to the CEO role he vacated two years ago, Workday is awarding him a $138.8 million compensation package consisting of cash, performance-based stock, and restricted stock. Over half of this package, $75 million, is contingent on Bhusri achieving a set of undisclosed stock price goals within the next five years. The other portion is perhaps more revealing: approximately $60 million in restricted stock vests solely based on Bhusri remaining at Workday for the next four years, with no performance hurdles attached.
With Wall Street pessimistic about SaaS firms, Workday is essentially acknowledging the profound doubt that even its founder-savior will encounter in steering a successful transition into the AI era.
The market downturn over recent weeks has erased about $40 billion in value from Workday, cutting its market capitalization in half from a peak of $80 billion. The share price has plunged 51% to around $150 from an intraday high of $311.28 less than two years ago. This year alone, the stock is down 29%, caught in the widespread sell-off engulfing the SaaS sector. Other SaaS companies have also experienced double-digit stock price declines.
“AI is reshaping how work gets done and represents an even bigger transformation than the shift to cloud 20 years ago,” Bhusri wrote in a post the day after the leadership change was announced. “Just as we helped redefine enterprise software when we founded Workday, I believe we can once again lead the way in this AI era.”
The stakes are high for Bhusri personally, regardless of his return to the CEO position. As a major shareholder in the SaaS giant for the past two years, Bhusri has watched the value of his more than 8-million-share stake plummet by half, from a high of $2.6 billion in 2024 to approximately $1.3 billion. This represents a paper wealth loss of roughly $1.3 billion in under two years.
20 years of decision making data and 68% voting control
Bhusri likely has more direct experience running a company than the typical founder. He co-founded Workday with his best friend and mentor, Duffield, in 2005, and the pair became co-CEOs in 2009. In subsequent years, Bhusri served as chairman after passing the chairman title to Duffield, before becoming co-CEO again in August 2020 with Luciano “Chano” Fernandez. After Fernandez departed in December 2022, the board named ex-Sequoia Capital partner Carl Eschenbach to serve as co-CEO with Bhusri, before Bhusri assumed the executive chair role in February 2024. Now, with Eschenbach departing as CEO, Bhusri is once again at the helm as both CEO and chairman.
As the company enters a new chapter, it possesses 20 years of decision-making data and process history that provide an opportunity to deliver enterprise-grade intelligence to major clients, Bhusri noted in his post.
Workday’s fate is closely tied to Bhusri. The firm uses a dual-class share structure, meaning publicly traded Class A shares have one vote each, while Class B shares carry 10 votes apiece. Through their ownership of Class B shares, along with their affiliates and a voting rights agreement from Workday’s 2012 IPO, cofounders Dave Duffield and Bhusri collectively control 68% of the voting power.
While Bhusri’s LinkedIn post brims with optimism about Workday’s future, the financial reality is more complicated. Over the last three years, the company has announced multiple rounds of layoffs affecting thousands of positions, citing reasons such as realignment, a pivot toward AI, and efforts to boost profitability. Last February, Workday reduced its workforce by about 7.5% as part of a restructuring, recording $172 million in related costs.
Although revenue continues to increase—Workday reported $8.4 billion in total revenue for fiscal 2025, a 16% year-over-year rise—the pace of growth is decelerating. For instance, subscription revenue growth slowed from 19% in fiscal 2024 to 17% in fiscal 2025, with the latest quarter showing 15%. Furthermore, the uncertain impact of AI on SaaS companies casts a severe pall over the industry, and its effect on Workday is particularly evident. On the day Bhusri’s return was announced, the stock fell over 6%, highlighting investor unease about the company’s ability to adapt to the AI age.
Workday has not disclosed the precise targets Bhusri must meet to earn his $138.8 million package, but the revealed terms indicate the $75 million award will be split into portions requiring Bhusri to hit specific stock price milestones and remain with the company. Returning the share price to its former peak would necessitate more than doubling it within five years. Bhusri’s $60 million restricted stock grant will vest over four years provided he stays at Workday. He will also receive a $1.25 million annual salary and a potential yearly cash bonus of up to $2.5 million. He is ineligible for further equity grants until 2027.
Former CEO Eschenbach, who resigned from all positions and will now act as a senior advisor, received a severance package worth approximately $3.6 million. He will also benefit from accelerated vesting on nearly 140,000 restricted stock units that were scheduled to vest in the year following his exit. At $150 per share, Eschenbach’s equity is valued above $20 million, and he will gain accelerated vesting on an additional 24,000 shares if certain performance conditions are satisfied. An independent evaluation of his departure terms rated it a nine out of ten, suggesting it is “extremely likely” Eschenbach felt compelled to leave.
In a post, Eschenbach commended Bhusri and his former colleagues at Workday.
“The opportunity ahead of us is always greater than what’s behind,” Eschenbach wrote. “We are at a massive inflection point with AI, and there is nobody better than Aneel to lead Workday through this moment and drive the vision forward.”
The agreement between Bhusri and Duffield also stipulates that if one co-founder becomes incapacitated or passes away, the other gains control of both ownership stakes. The dual-class share structure is scheduled to end in October 2032—one year after Bhusri’s performance period concludes in early 2031. This provides Bhusri a substantial window to determine whether having a co-founder in the CEO role can positively influence the stock price during the AI revolution.