You would think that being a Peloton instructor could come with some perks and a comfortable salary. I mean, your typical spinning instructor in the USA per year gets paid approximately $58,000, which is ok considering. However, Peloton instructors can afford million-dollar penthouses in New York.
Peloton senior instructors and trainers who have been with Peloton since its inception can make upwards of $500,00 a year. Additionally, they may receive bonuses, incentives, stock options, or sponsorships which many instructors have. Instructors typically get paid between $500 to $750 a class.
Discover how much money Peloton instructors make and why it is so. Also, find out how it all began and how else they make their income, not to mention how Peloton as a company can afford to pay them this much and continue to do so.
How much do peloton instructors make?
The salary of a Peloton instructor is probably not what you think, and you might be taken aback when you first hear it. According to a Bloomberg article in July 2021, senior Peloton instructors can make upwards of $500,000 per year.
For a typical class, an instructor can make anywhere from $500 to $750. Moreover, some instructors teach up to 15 classes a week. Do a little bit of math and that equates to $7500 dollars per week if getting paid $500 dollars per class, that equates to $360,000 per year!
This does not include external sponsorships that the instructors are able to take on and do, such as promoting sports drinks, apparel, and the likes. You can just hop onto any of their Instagram pages to find out what sponsorships they do have.
Peloton hires its instructors on a full-time, fixed salary, and incentive compensation basis. This means not only can they make a six-figure salary, but some instructors can also get bonuses, with others even having stock options.
In fact, Foley, the founder of the company, has been said to be a firm believer in shared ownership when it comes to the company, and regulatory filings have shown the former, and current employees held several billion dollars in stock options as of September 30th, 2020.
Do all Peloton instructors make that much money?
Not all Peloton instructors make six-figure salaries. Instructors who are inexperienced and have just joined the company make less, and so do less popular instructors. However, Peloton has talent agents that source the best instructors possible.
What do other typical spinning instructors make?
One would think that spinning instructors would also then make a lot of money if Peloton instructors are worth millions. However, that couldn’t be further from the truth.
The national average salary for spinning instructors in the USA is approximately $58,036 per year. If you consider that senior instructors are raking in $500,000 a year, your typical spinning instructor is getting 10X less.
Are Spinning instructors different from Peloton instructors?
At their core, both spinning instructors and Peloton instructors are the same. They head up a group spinning class, except a spinning instructor is at your local gym, and your Peloton instructors are on your tablet.
The only noticeable factor that we can see that is different is that Peloton instructors are very charismatic and good at their job. Not to mention they are putting up new and exciting classes all the time for you to experience, whether it is a boot camp, endurance ride, or a pop cycling ride.
Why do Peloton instructors make so much money?
To understand this, we first need to understand Peloton as a company and how it got started. John Foley (Peloton CEO) came up with Peloton in 2001. Working for Barnes & Noble with his wife and two kids, he had little time to get to the gym but enjoyed the instructor-led fitness classes such as SoulCycle and Flywheel.
Due to the pressures of work and family, John found himself having to skip those classes and return to using his stationary bike at home, which he described as a “totally unsatisfying experience.”.
He then raised $350,000 in seed money along with $50,000 of his own, having a vision of a stationary bike with a screen that would stream live classes.
At the end of 2012, Peloton had raised $3.5 million, and they additionally launched a Kickstarter campaign which raised their funding an additional $307,000.
The company was able to raise $994 million in venture capital funds along with $1.2 billion at their IPO, which valued the company at $8.1 billion.
Now we discussed the fact that John Foley is a big believer in sharing ownership, and due to this, he has given stock options to some of the instructors worth millions. Also, because of the size of the company and how much its initial value was, John decided to tempt the best instructors to join the team, and he did so with enticing salaries.
How is Peloton able to keep paying their instructors so much?
If you understand anything about a company’s stock, you will know that if the stock of a company goes up, that effectively means people (like you, me, or investors) are buying that stock hoping to make an ROI.
Due to the stock price going up, the company’s value goes high, and they generate more revenue. The company makes more money and can continue providing and creating a better business experience, model, and other new features for their clientele.
In terms of this, they offer more instructors, more classes, they sell apparel and other fitness gear, and so on. They even offer other classes such as Yoga and tread now. Not to mention individuals who want to use the Peloton app, no matter if they have the bike or not, have to pay for a subscription that is roughly $12 a month. An all-access membership will run you $39 a month.
Take into consideration that Peloton has almost 6 million members on its platform. This means the revenue generated from a monthly membership alone is incredible.
Along with all these additional factors like selling merchandise, selling their product (bikes), and offering other classes, Peloton is able to keep paying their instructors a top-notch salary.
We discovered that Peloton instructors get paid an insane amount of money for essentially only being online spinning instructors. Since the beginning, instructors who have been a part of Peloton and senior instructors can make upwards of $500,000 a year.
This does not include bonuses, incentives, or stock options. Needless to say that their salary is so large that it engrosses a typical spinning instructor’s yearly salary by tenfold.
Furthermore, their salary does not include sponsorships from outside companies (endorsements), which they are free to take on as Peloton does not have a non-compete with any of their instructors. If they can, Peloton instructors can push brands and merchandise of all sorts, such as sneakers, sports drinks, fitness clothing, and more.
Thus their salary can be upwards of $500,000 a year; however, how much they actually receive is far greater than that.