After the compensation storm: the moment of truth for Monday's founders arrives
Amidst a 20% workforce reduction and controversy over executive pay, Monday is set to release its Q2 2026 financial results. Investors are looking for proof that the company can adapt to the AI era.
The storm surrounding the doubling of compensation packages for Monday executives Roy Mann and Eran Zinman is an interesting story, but not the most important one for the company today. Alongside the layoff of 20% of its workforce and the vote on salaries at the shareholders' meeting, another event will take place this week: the publication of financial reports for the second quarter. The day after tomorrow, Monday, Mann and Zinman will have to face investors in a real test and show which group of software companies Monday belongs to — one that can turn AI into a competitive advantage or one that will not survive the revolution.
Of course, this will not be decided definitively in the second quarter of 2026, but if Mann and Zinman really want to justify their new salary, they will have to prove that they know how to steer the Monday ship to the safe harbor of AI. If Monday knows how to reinvent itself in the new era, a compensation package that will reach $14 million for each in 2029, with most of it based on shares, is small money. The problem is that until today, it is impossible to say that Mann and Zinman have excelled in identifying the deep change taking place in the software market in general and in the market for workflow management software in organizations in particular.
Monday's stock began to crash as early as the end of 2024 as the realization seeped in that AI could replace many organizational software programs. Monday's managers denied the new reality for a long time and said it was just a point-specific negative sentiment around software stocks. It was evident that only at the beginning of 2026 did Mann and Zinman begin to acknowledge the depth of the challenge facing Monday, but even then they had not yet reached the stage of taking action, despite the fact that the capital market had already sent it clear messages. The company itself continued to grow, even if at a lower rate, but the stock plummeted. In the last 12 months, it has already lost 62%, and the current value of $4 billion is almost 50% away from the value at the IPO in 2021.
Monday, for its part, continued business as usual: rented more floors for offices in Israel and recruited employees at a high rate. In fact, even at the beginning of the year, when the entire software market was already screaming the words 'SaaS apocalypse', Monday said it would increase its workforce by another 11%-15% in 2026. At the end of 2025, Monday's management provided a new and very optimistic forecast for revenue of $1.8 billion in 2027 compared to $1.2 billion in 2025. In the few months that have passed since these decisions and statements, Monday has made a U-turn on all items: it canceled the office expansion and not only stopped hiring employees, an action that was denied by the company over the last few months, but fired 620 employees. Monday's detailed annual report reveals that in 2025 it hired 647 employees. This means that almost all employees hired for Monday in 2025 were released. Monday also asked to withdraw from the 2027 forecast and announced this to investors at the beginning of 2026, a few months after it first presented it.
The chaotic conduct of Monday's managers is the big question mark hovering over the company today. The salary is just another symptom of this. It is not even the size of the compensation package — if the stock does not rise, the two will receive almost nothing as most of the money is in equity compensation — and not the unfortunate timing of the vote last Thursday, just after the hearings for the laid-off employees ended. As they said this week at Monday itself, the work process on formulating the new salary package began half a year ago, meaning in the winter of 2026, when the company already knew it was about to cancel the optimistic forecast for 2027 and when the collapse in software stocks was at its peak.
There is no dispute that Mann and Zinman are talented entrepreneurs who brought Monday, which, by the way, very few investment funds believed in at the beginning of its journey and called its solution "Excel with colors", from zero to $1.2 billion in 2025. But precisely because of the size to which they managed to bring their startup, which also became a public company in 2021, the scale of responsibility today is different. After the cut, Monday still employs 2,500 employees, sells to thousands of customers, and its stock is held by countless investors. This is the difference between being a successful entrepreneur in a startup and a manager of a public company.
The shareholders' meeting approved the compensation package for the two on Thursday, and this was also expected because Americans like layoffs in the name of efficiency, and the new salary is really not unusual in the landscape of public companies traded on Wall Street. Fortunately for Monday, it did not succumb to the courtship of the Tel Aviv Stock Exchange to register for trading here, because local institutional bodies would not have gotten involved with public opinion and would likely have rejected the new salary policy. But all this was yesterday. On Monday, if Monday cannot show growth in financial reports or give an optimistic forecast, those same investors will cut the stock violently. Here, unlike in Tel Aviv, there are no sentiments because investors have a choice of countless other "Mondays".
Monday has not yet changed the forecast for revenue of $1.46 billion this year, which will reflect a growth rate of 20%, while in the second quarter it is supposed to show revenue of about $355 million, with no growth compared to the previous quarter. From the financial reports of its American competitors published last weekend, nothing can be concluded because they showed conflicting trends. For example, Atlassian, which is behind the popular Jira software, showed excellent results and the stock jumped by 30%, while HubSpot plummeted by a similar rate after weak forecasts. This difference sharpens again that AI does not harm everyone indiscriminately, but only those who do not know how to deal correctly with the new situation. This is the heavy burden of proof that now lies on Mann and Zinman.
