Reddit CEO defends $193M compensation following backlash from unpaid moderators(fortune.com)
fortune.com
Reddit CEO defends $193M compensation following backlash from unpaid moderators
https://fortune.com/2024/03/19/reddit-ceo-steve-huffman-defends-193-million-compensation-following-backlash-unpaid-moderators/
92 comments
The same applies to all public company CEOs. They all get paid mostly in stock.
Ultimately it's the other shareholders paying these compensation packages. They may sometimes be well deserved, but discussing and criticizing them is fair too.
Sometimes courts do strike down excesses. Elon Musk's $55 billion package was voided by a Delaware court because the Tesla board didn't follow proper procedure. (I.e. not because he didn't create shareholder value — he absolutely did! — but because the process was flawed.)
Ultimately it's the other shareholders paying these compensation packages. They may sometimes be well deserved, but discussing and criticizing them is fair too.
Sometimes courts do strike down excesses. Elon Musk's $55 billion package was voided by a Delaware court because the Tesla board didn't follow proper procedure. (I.e. not because he didn't create shareholder value — he absolutely did! — but because the process was flawed.)
Stock compensation is arguably way more valuable than cash compensation unless you're leading a sinking ship, taxation is much better and you get more power/votes in the company.
I'm sure the most active mods would be happy to have shares worth only a mere few hundred thousand dollars?
Regardless of the amount it's a particularly egregious example of profiting from other people's hard work.
Regardless of the amount it's a particularly egregious example of profiting from other people's hard work.
But when the victims are willing and enthusiastic participants, who would complain bitterly if they were barred from contributing their free labor, what are you supposed to do?
Their free labor is compensated by something else, probably status or power, obviously, so it's not clear that anyone is being taken advantage of.
Their free labor is compensated by something else, probably status or power, obviously, so it's not clear that anyone is being taken advantage of.
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This common argument seems like a misunderstanding of how Reddit works. Mods aren't unpaid workers for Reddit, but rather, mods get access to a free platform to create a community on the condition that it follows the rules. That's the compensation. In contrast, one of the forums I'm active on just did a donation run to keep their servers running for another year.
Reddit has huge value in hidden marketing. Many users, subreddits and moderators are paid by companies. These create a lot of good content! It's not obvious bland marketing it's good and engaging.
They work to promote people, products and companies from the boring to the new, the safe to the illicit.
It's exactly the same with Musks twitter: getting the power users who are paid to tweet to pay the platform.
They work to promote people, products and companies from the boring to the new, the safe to the illicit.
It's exactly the same with Musks twitter: getting the power users who are paid to tweet to pay the platform.
Reddit is one of the few places you can build an audience and attract people for free. The trouble is most subs aren’t for profit so the mods don’t benefit. Given the mods money might be good but it might be bad in that you attract people trying to make a buck and ultimately spammers and AI crap.
what would a for profit sub look like? paid entry? a specialized market place that takes commission? wouldnt it just be like fb marketplace if they did create a sub with profit in mind?
It could like like a youtube channel with ads. Some of the revenue from ads shown in that sub go to pay the moderator.
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a sub that is the community for a paid product (although that is not reddit like)
a sub with sponsorship maybe
a sub with sponsorship maybe
Many of the moderators are very much paid.
Some work for the companies that a subreddit may be centred around, others get kickbacks from those looking to promote products and my favourite are the state actors who help to ensure certain viewpoints dominate.
But of course Reddit has been happy to turn the other cheek to all of this over the decades. Anything goes so long as it doesn’t end up in the media.
Some work for the companies that a subreddit may be centred around, others get kickbacks from those looking to promote products and my favourite are the state actors who help to ensure certain viewpoints dominate.
But of course Reddit has been happy to turn the other cheek to all of this over the decades. Anything goes so long as it doesn’t end up in the media.
Isn't this an exceptionally high compensation even among American CEOs? This makes him what, the second highest paid CEO after Sundar, twice as well compensated as Tim Cook? For Reddit estimated at 6 billion? It's not obvious from the article but is this a one time thing stretched out over years?
> In anticipation to Reddit's IPO, it was revealed that Huffman’s compensation package for 2023 was worth $193.2 million, which included salary of $341,346, stock awards worth $98.3 million and stock options valued at $93.8 million.
Which probably means he has no faith in the company's stock or else he would have taken stock options instead of taking it all in cash.
It's almost all stock with an estimated fictional value. As stated in the article.
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At some point you are the problem if you work for free for a commercial entity.
This neo-$whatever belief in that commercial entities can replace community run things can't die off soon enough.
This neo-$whatever belief in that commercial entities can replace community run things can't die off soon enough.
As an alternate perspective.
Maybe people are ok with companies making money from their free work as long as the company does not antagonize the people offering free services just to milk every drop of money from other peoples handwork.
It used to be that forum owners had to beg their users for money to keep the servers going. Which is also not a great situation. But now it seems like it swung completely in the other direction, with users having to beg the forum owners to keep/add things they use.
Maybe people are ok with companies making money from their free work as long as the company does not antagonize the people offering free services just to milk every drop of money from other peoples handwork.
It used to be that forum owners had to beg their users for money to keep the servers going. Which is also not a great situation. But now it seems like it swung completely in the other direction, with users having to beg the forum owners to keep/add things they use.
Yeah people are happy to post and use social networks and forum sites (eg Discord, here, etc.) when those sites don’t make intrusive changes a significant amount of users dislike or do shady things like the Meta Cambridge Analytica scandal.
No. The problem is that we live in a society where everything anybody does needs to have a financial motive, otherwise you get fucked. And you drank the big corp kool-aid in gallons if you truly think defending a dude that just earned $193M on a public forum is something sensible to do.
I didn’t read it as a strong defense of the CEO. I also agree that labor needs to have appropriate self-worth and eschew being exploited. This causes many problems in many industries, such as downwards pressure on wages and labor negotiating power. For example, Reddit mods have recently had their negotiating power checked in the blackout protests.
Exploitation, when it’s so voluntary, is definitely a dance that takes two. Both parties are responsible for the situation that arose. The abused party, of course, we can sympathize more with. But they could always have chosen and even today they can choose to not engage anymore.
Exploitation, when it’s so voluntary, is definitely a dance that takes two. Both parties are responsible for the situation that arose. The abused party, of course, we can sympathize more with. But they could always have chosen and even today they can choose to not engage anymore.
> problem is that we live in a society where everything anybody does needs to have a financial motive
But it doesn’t. Exhibit A: Reddit moderators. (Exhibit B: this thread, and this comment.)
If you find value in moderating, moderate. This is purely a problem of sour grapes—Reddit never pretended to be an Altman-esque non-profit.
But it doesn’t. Exhibit A: Reddit moderators. (Exhibit B: this thread, and this comment.)
If you find value in moderating, moderate. This is purely a problem of sour grapes—Reddit never pretended to be an Altman-esque non-profit.
They're not defending the CEO, it seems, but rather shift the blame onto volunteer mods who put in the hours into sustaining a commercial platform rather than joining a "community-run" one.
Which isn't making it a better argument, since there are many reasons why online communities form where they do, and "community-run" platforms aren't necessarily an option.
This platform isn't "community-run" either, and yet the parent commenter is participating here (and thus is "the problem" too), so I think they should get off the high horse.
Which isn't making it a better argument, since there are many reasons why online communities form where they do, and "community-run" platforms aren't necessarily an option.
This platform isn't "community-run" either, and yet the parent commenter is participating here (and thus is "the problem" too), so I think they should get off the high horse.
> At some point you are the problem if you work for free for a commercial entity.
Sounds harsh, but this is the correct stance.
The free labour you provide is not only "your loss". There are second order effects: you effectively make it harder for others to compete with said commercial entity.
This includes salaried employees of competing companies whose wages you effectively press down. And even other volunteers and non-profits, because defending and sustaining their project in face of "free inputs, for-profit outputs" competition is that much harder. Community projects die because of this.
"Working for free for a commercial entity" is just a bad idea all around. You exploit yourself (whatever, your choice, you may be getting other kicks out of it) and harm others.
Sounds harsh, but this is the correct stance.
The free labour you provide is not only "your loss". There are second order effects: you effectively make it harder for others to compete with said commercial entity.
This includes salaried employees of competing companies whose wages you effectively press down. And even other volunteers and non-profits, because defending and sustaining their project in face of "free inputs, for-profit outputs" competition is that much harder. Community projects die because of this.
"Working for free for a commercial entity" is just a bad idea all around. You exploit yourself (whatever, your choice, you may be getting other kicks out of it) and harm others.
You just provided free content (a brief opinion piece) for publication on a commercial entity (HackerNews, run by YCombinator)...
...which, according to you, is a "bad idea all around", since you exploit yourself and harm others.
So, why are you acting against your morals and judgement?
...which, according to you, is a "bad idea all around", since you exploit yourself and harm others.
So, why are you acting against your morals and judgement?
>You clamor about the need for change in a society.... and yet you are a part of of one, how curious!
The town drunk telling you to hand the barkeep your keys does not detract from the validity of their point. Try to approach things from the strongest avenue possible, otherwise things devolve into guttersniping.
And the point is, at some point, you have to get it out there somewhere in order for it to have been said. The only concern I have with the points being made here; is the paradox of FLOSS. We must have a public, free and in the public trust corpus of software. Locking everything behind for profits just leads to computing definitely being inaccessible to most everyone. Yet look at all the value extraction bootstrapped on FLOSS stacks where companies get bootstrapped around the composition of a few primitives; but inevitably hooked by the caste of management/MBA types, or utilized as social engineering lever by governments. See social media, car manufacturers, IaaS now, finance companies, banks, etc ...
It is a most concerning trend.
The town drunk telling you to hand the barkeep your keys does not detract from the validity of their point. Try to approach things from the strongest avenue possible, otherwise things devolve into guttersniping.
And the point is, at some point, you have to get it out there somewhere in order for it to have been said. The only concern I have with the points being made here; is the paradox of FLOSS. We must have a public, free and in the public trust corpus of software. Locking everything behind for profits just leads to computing definitely being inaccessible to most everyone. Yet look at all the value extraction bootstrapped on FLOSS stacks where companies get bootstrapped around the composition of a few primitives; but inevitably hooked by the caste of management/MBA types, or utilized as social engineering lever by governments. See social media, car manufacturers, IaaS now, finance companies, banks, etc ...
It is a most concerning trend.
It’s not necessarily a bad idea if the individualized return is positive. Feeling like a big shot for making a cogent point in a public forum has an unquantifiable non zero worth to the commenter.
> has an unquantifiable non zero worth to the commenter.
Yes, that's the "other kicks out of it" above. Already covered.
More importantly:
> You just provided free content (a brief opinion piece) for publication on a commercial entity (HackerNews, run by YCombinator)... ...which, according to you, is a "bad idea all around", since you exploit yourself and harm others.
If HackerNews is indeed a PR branch of some commercial entity, then people posting here for free provide value (which is not to say any of my comments do…) to that entity. Potentially harming alternative forums, whether free or commercial. The point stands.
> So, why are you acting against your morals and judgement?
Good call. I guess I didn't perceive HN as for-profit. Perhaps OP's "At some point" is now, for me.
Yes, that's the "other kicks out of it" above. Already covered.
More importantly:
> You just provided free content (a brief opinion piece) for publication on a commercial entity (HackerNews, run by YCombinator)... ...which, according to you, is a "bad idea all around", since you exploit yourself and harm others.
If HackerNews is indeed a PR branch of some commercial entity, then people posting here for free provide value (which is not to say any of my comments do…) to that entity. Potentially harming alternative forums, whether free or commercial. The point stands.
> So, why are you acting against your morals and judgement?
Good call. I guess I didn't perceive HN as for-profit. Perhaps OP's "At some point" is now, for me.
>Good call. I guess I didn't perceive HN as for-profit. Perhaps OP's "At some point" is now, for me.
Props to you for consistency! No more questions.
Props to you for consistency! No more questions.
You just provided content -- and encouraged others to provide content -- for a privately run for-profit company who use this site to promote their businesses.
Ideally, forums like this would be some sort of cooperative structure owned and run by those who wish.
I'd love to see r/AskHistorians break off as a co-op who earn their own money and use it to resource history-based activity. They put so much value in that others leech off.
Ideally, forums like this would be some sort of cooperative structure owned and run by those who wish.
I'd love to see r/AskHistorians break off as a co-op who earn their own money and use it to resource history-based activity. They put so much value in that others leech off.
Ye that is true. I am trying to rationalize why I am not hypocritical right now :)
I think the difference is that you created your own forum and community on Reddit under the pretense that it is yours. Reddit more or less sucked up the existing forums. And then Reddit throws more and more ads in your face and siezes control of the means of memeing.
HN seems to be run in a different way. Many of the old forums were run by commercial entities, but at the time they did not try to profit from the forums in such a in your face way.
I think the difference is that you created your own forum and community on Reddit under the pretense that it is yours. Reddit more or less sucked up the existing forums. And then Reddit throws more and more ads in your face and siezes control of the means of memeing.
HN seems to be run in a different way. Many of the old forums were run by commercial entities, but at the time they did not try to profit from the forums in such a in your face way.
Maybe spend a couple bucks on bringing closed captions to video AMAs. I clicked the link to the embed featured in the article, and it's 20 min of unsubtitled speech.
https://www.reddit.com/r/RDDT/comments/1bhr6uv/amalmosta_ans...
https://www.reddit.com/r/RDDT/comments/1bhr6uv/amalmosta_ans...
Volunteer work is unpaid, more at 5.
Not precisely. Both Reddit volunteer work and (the vast majority of) Wikipedia volunteer work is unpaid, but the legal rights you get to everyone else’s (and retain to yours) are different enough that it’s foolish to engage in the former but reasonable to engage in the latter. Not that everyone will want to work on Wikipedia, but at least it’s not a bad idea on its face.
(Stack Overflow toyed with going over to the Reddit side, but they have backed off for now.)
(Stack Overflow toyed with going over to the Reddit side, but they have backed off for now.)
Some 2022 figures below for comparison. This is total compensation (including stocks), not just base salary.
Andy Jassy, Amazon: $1.3 million (a big fall from $212 million the year before)
Jensen Huang, Nvidia: about $21 million
Mark Zuckerberg, Meta: about $26 million
Satya Nadella, Microsoft: about $55 million
Tim Cook, Apple: about $100 million
Sundar Pichai, Alphabet: about $226 million
It’s not very surprising to see that a CEO (u/spez) who’s actively driving the company into the ground gets an atrocious pay. I hope all the large investors in the Reddit IPO ‘lose their shirts’. The hype can’t get any louder.
Andy Jassy, Amazon: $1.3 million (a big fall from $212 million the year before)
Jensen Huang, Nvidia: about $21 million
Mark Zuckerberg, Meta: about $26 million
Satya Nadella, Microsoft: about $55 million
Tim Cook, Apple: about $100 million
Sundar Pichai, Alphabet: about $226 million
It’s not very surprising to see that a CEO (u/spez) who’s actively driving the company into the ground gets an atrocious pay. I hope all the large investors in the Reddit IPO ‘lose their shirts’. The hype can’t get any louder.
Its a bit annoying the "you cant use reddit unless you open the native app" moment to short the company, came before it IPO'd.
Sorry if this is negative, but like wtf have they been doing to it over the last 10 years.
As a plus, the native app IS great. But at what cost bros.
Sorry if this is negative, but like wtf have they been doing to it over the last 10 years.
As a plus, the native app IS great. But at what cost bros.
I'm a big user of reddit, but the platform has definitively suffered a bunch of things that could be tied up to their use of free moderation:
- Some subreddits are so politically biased, that you really need to know the political leaning prior to using them. Getting locked out of huge subreddits like r/worldnews is easy as pie, if you just write the wrong things on certain topics.
- A bunch of subreddits automatically get closed/locked due to lack of moderators.
- There are so many different rules to follow. Just posting something in a random sub comes with a 50/50 chance of your post getting removed or shadow-banned.
And let's not even start on the straight up enshittification of the platform features. I fully expect reddit to become a completely close-off / walled garden app that follows the worst TikTok practices. As long as I can use old.reddit, I'm happy, but I think we all know that it will disappear one day.
As for the compensation...yeah, outrageous comp when the site is feeding off free work.
And the usual corporate response from the CEO "The board decides my compensation, and if the website does well then so do I"
- Some subreddits are so politically biased, that you really need to know the political leaning prior to using them. Getting locked out of huge subreddits like r/worldnews is easy as pie, if you just write the wrong things on certain topics.
- A bunch of subreddits automatically get closed/locked due to lack of moderators.
- There are so many different rules to follow. Just posting something in a random sub comes with a 50/50 chance of your post getting removed or shadow-banned.
And let's not even start on the straight up enshittification of the platform features. I fully expect reddit to become a completely close-off / walled garden app that follows the worst TikTok practices. As long as I can use old.reddit, I'm happy, but I think we all know that it will disappear one day.
As for the compensation...yeah, outrageous comp when the site is feeding off free work.
And the usual corporate response from the CEO "The board decides my compensation, and if the website does well then so do I"
> There are so many different rules to follow. Just posting something in a random sub comes with a 50/50 chance of your post getting removed or shadow-banned.
Reddit has god awful UX/I and makes moderation very difficult. They could help themselves with very simple features like post templates and flows, but instead, every semi-popular subreddit faces a daily onslaught of low effort users posting repetitious garbage. Users will feel frustrated by seeing the garbage, but also launch into righteous complaints about mods if they're moderated.
They also make it clear that a post is being held for moderation and then encourage the user to message the moderators directly, so now you have low effort, high volume, and a guaranteed sense of immediate opposition.
The real takeaway for me is that at this point, Reddit is popular because it's popular, not because it deserves anything.
Reddit has god awful UX/I and makes moderation very difficult. They could help themselves with very simple features like post templates and flows, but instead, every semi-popular subreddit faces a daily onslaught of low effort users posting repetitious garbage. Users will feel frustrated by seeing the garbage, but also launch into righteous complaints about mods if they're moderated.
They also make it clear that a post is being held for moderation and then encourage the user to message the moderators directly, so now you have low effort, high volume, and a guaranteed sense of immediate opposition.
The real takeaway for me is that at this point, Reddit is popular because it's popular, not because it deserves anything.
Reddit mods are quite far down the list of "people I have sympathy for". Arguably (?) they play a role in keeping out spam/off-topic posts, but there's a reason reddit is often referred to as a hivemind. Mods play a big part in that.
Not being paid plays a role in that. A person willing to spend countless hours on unpaid volunteer work is likely to have some other motivation. The common ones are flexing their ego or being ideologically driven.
Some genuinely like the topic they're moderating, but they often get burnt out by how shitty the job is.
Some genuinely like the topic they're moderating, but they often get burnt out by how shitty the job is.
They can do another blackout since the last one was so successful and achieved all its goals
>They can do another blackout since the last one was so successful and achieved all its goals
Gotta start somewhere.
Gotta start somewhere.
Reddit going public (again) is such a weird and egregious destruction of any value that reddit had left.
It’s like Wikipedia going public with the expectation that it would continue to hold any value going forward. The proposition can’t hold true.
It’s like Wikipedia going public with the expectation that it would continue to hold any value going forward. The proposition can’t hold true.
Gotta cash in on the AI hype while you can!
I figure the price will track the AI bubble, so probably go up, then crash and burn when investors realize LLMs are good tools, but not $30 a month good to most business clients. But the execs and board will make of quite handsomely by then
I figure the price will track the AI bubble, so probably go up, then crash and burn when investors realize LLMs are good tools, but not $30 a month good to most business clients. But the execs and board will make of quite handsomely by then
> Gotta cash in on the AI hype while you can
Reddit is among the most-trafficked websites on the planet. Its value has little to do with AI and everything with attention.
Reddit is among the most-trafficked websites on the planet. Its value has little to do with AI and everything with attention.
2010 called, they want their social graph back:
https://www.reddit.com/r/privacy/comments/1atb6ac/reddit_has...
https://techcrunch.com/2024/02/22/reddit-says-its-made-203m-...
https://www.cnbc.com/2024/03/15/ftc-investigating-reddit-ove...
https://www.reddit.com/r/privacy/comments/1atb6ac/reddit_has...
https://techcrunch.com/2024/02/22/reddit-says-its-made-203m-...
https://www.cnbc.com/2024/03/15/ftc-investigating-reddit-ove...
> 2010 called, they want their social graph back
Attention sells ads. A social graph is something else. About as relevant as yelling about AI potential. Maybe it’s there. But again, a separate argument.
Attention sells ads. A social graph is something else. About as relevant as yelling about AI potential. Maybe it’s there. But again, a separate argument.
which is incidentally why the entire place is a barren content wasteland these days, full at first glance but quickly becomes apparent it is just astroturfed to shit, with every comment thread being bombarded by various companies and political groups' pr goons or LLM powered bots trying to sway public opinion.
I never had a great deal of love for reddit but "the entire place is a barren content wasteland" is a pretty sweeping generalisation that you cannot possibly be in a position to make. I only hang out on a couple of subs and they're lively, full of nice characters, and well-moderated. I'd be very surprised if I have somehow discovered the only oases of normality in a barren content desert.
I have noticed that any time I encounter a post from an r/{placename} sub, it appears to be full of the most irritating, racist shit-stirrers but I just steer clear of those subs altogether.
I have noticed that any time I encounter a post from an r/{placename} sub, it appears to be full of the most irritating, racist shit-stirrers but I just steer clear of those subs altogether.
The problem is you need to wander from oasis to oasis, as oppose d to circumnavigating shitholes. To me that seems like a wastelnd.
This metaphor is getting a bit tortured and depends on me - having stumbled randomly into a few subreddits that are cool - being a statistical anomaly. I dunno, enjoy the site or don’t - no skin of my nose either way - but your experience is certainly not universal.
I only use it for either enthusiast related things (audio/fashion/sports discussion/tv shows) or for general research, like travel planning.
I've never noticed this type of activity, so it's definitely not the "entire place". I assume this is largely relegated to the top level subreddits?
I have mixed feelings about all the crap going on behind the scenes with this company. For the most part, it's been the only place I can get relatively unbiased takes and info outside of more specialized enthusiast forums.
I've never noticed this type of activity, so it's definitely not the "entire place". I assume this is largely relegated to the top level subreddits?
I have mixed feelings about all the crap going on behind the scenes with this company. For the most part, it's been the only place I can get relatively unbiased takes and info outside of more specialized enthusiast forums.
I also appreciate the niche subs, but sweeping generalisations generally only fit the sweeping general no? Of course reddit has its communities, my concern is the site you get before you put a lot of effort into curating your feed is largly at the mercy of lobbying groups which reddit doesnt combat but actively facilitates despite pretending to present community / real people opinions / poaitions. It leads to accounts spamming the same popular content and comments to farm up karma and build credibility for accounts that are later to be used to sway public opinion. Its misleading and drives away genuine interactions.
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That is meaningless if you haven't in nearly two decades found effective way to monetize that traffic.
> meaningless if you haven't in nearly two decades found effective way to monetize that traffic
Sure. Not relevant in the context of $800+ million of revenue [1].
[1] https://www.sec.gov/Archives/edgar/data/1713445/000162828024...
Sure. Not relevant in the context of $800+ million of revenue [1].
[1] https://www.sec.gov/Archives/edgar/data/1713445/000162828024...
forsure. I think it was like top 3 recently. i dont know if the numbers came out but the deal with google to let them use data to train their AI had to be a pretty penny tho.
This is certainly an issue, that companies can sell other people's IP in this way, ie sell UGC.
Seems like a loopholes that civilised society should close.
Seems like a loopholes that civilised society should close.
Reddits ad system blows. They havent monetized shit other than selling data to AI companies, so yes, its value is very dependent on how much those companies will pay at the moment.
moderators are not professionals working according to direction. They are doing things as they see fit. And some of them are doing things for their own agenda (G. Maxwell) paid by some shadow org. Fine.
The other mods are complaining that they are doing some very noble work and are doing it for free. That's how noble work goes. It is thankless.
If any mods want money, I think they should be allowed to pin sponsored threads and use that for referrals. Oh wait! They can do that already.
I guess they are trashing on the CEO for not giving them a network of sponsors whose ads they can pin and make special money.
The other mods are complaining that they are doing some very noble work and are doing it for free. That's how noble work goes. It is thankless.
If any mods want money, I think they should be allowed to pin sponsored threads and use that for referrals. Oh wait! They can do that already.
I guess they are trashing on the CEO for not giving them a network of sponsors whose ads they can pin and make special money.
That’s a good point. In video game related subreddits mods are often employees of the publishing company.
Since when does Reddit make $193M yearly profit? It seems a lot has happened since I stopped using Reddit.
The CEO is paid $193M, this has nothing to do with any profit reddit makes.
Which, they have never made a profit, "Now, Reddit — which is not yet profitable"......"Reddit reported a net loss of $90.8 million in 2023, a narrower loss than the $158.6 million loss it netted in 2022." https://www.cnn.com/2024/02/23/tech/reddit-ipo-filing-busine...
Which, they have never made a profit, "Now, Reddit — which is not yet profitable"......"Reddit reported a net loss of $90.8 million in 2023, a narrower loss than the $158.6 million loss it netted in 2022." https://www.cnn.com/2024/02/23/tech/reddit-ipo-filing-busine...
Pretty wild that a CEO can make that sort of money while running an unprofitable business. I can't imagine thinking so much of myself that I would value myself at 100s of millions. I wonder if there's some sort of pathology behind it.
> wonder if there's some sort of pathology behind it
That of taking a company public.
I get where you’re coming from. But Reddit, given its heritage of leadership, is a weird hill to take a stand on.
That of taking a company public.
I get where you’re coming from. But Reddit, given its heritage of leadership, is a weird hill to take a stand on.
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> "Reddit reported a net loss of $90.8 million in 2023, a narrower loss than the $158.6 million loss it netted in 2022."
I know it's naive but cutting the CEO's (and rest of C suite) salary to normal employee levels would fix that loss down to 0.
I know it's naive but cutting the CEO's (and rest of C suite) salary to normal employee levels would fix that loss down to 0.
> cutting the CEO's (and rest of C suite) salary to normal employee levels would fix that loss down to 0
Now do it with cash flow.
Now do it with cash flow.
Salaries don't come out of profits. Profits are calculated after employee compensations obviously.
Ok, but when you look at the forecast, and see an expected loss of 90 million, maybe the CEO should say, perhaps if I was paid 90 million less then we will be in profit, and I would still have enough money to retire in excessive luxury.
Clearly there's a group of people of people who are selfish and think so highly of themselves that this sort of logic will never make sense to them. Any company or executive that says they care about the workers, customers, or cause and is making 8+ figures is lying whether they realize it or not. I realize some people will make the argument that the comp needs to be so high to attract top talent. But there's a pool of talented people who would do it for less. Plenty of non-profits or mission-driven companies have lower paided executives.
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Doesn't sound like the CEOs problem; he isn't there to make personal sacrifices to make the company profitable and I don't think anyone would pretend he is. If anyone should be making that observation it is whoever signs off on his compensation.
Although the compensation package won't cash so the situation isn't quite that simple.
Although the compensation package won't cash so the situation isn't quite that simple.
It's baffling how shareholders are so tolerant of a CEO looting the company for substantial fractions of its total value annually. But it's very widespread.
Aren't most shareholders there to attempt to loot the company? Capitalism is surely about aligning and exploiting greed, like a confidence trick?
It can only be viewed as a sacrifice if you believe he legitimately deserves that much money. That money could be used to increase employee comp instead of shareholder value. That's a lot of money for running an unprofitable business. I wish I was so delusional that I thought I deserved 100s of millions for running an unprofitable company.
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Distinction without a difference. If the salary was lower, the profit would be higher.
No, the important distinction is "is that coming from cash or stocks". The cash component of salaries goes in the profit&loss account. See https://www.sec.gov/Archives/edgar/data/1713445/000162828024...
Revenue $804m (!), expenses $944m (!). But I'm having trouble working out which of the expenses breakdown entries has the board salary in. And if it's compensation in stock, does that have to be expensed?
No, the important distinction is "is that coming from cash or stocks". The cash component of salaries goes in the profit&loss account. See https://www.sec.gov/Archives/edgar/data/1713445/000162828024...
Revenue $804m (!), expenses $944m (!). But I'm having trouble working out which of the expenses breakdown entries has the board salary in. And if it's compensation in stock, does that have to be expensed?
Sure, but there's a sort of nominal expectation that post salaries, especially salaries of that magnitude an entity has some profit. The obvious exception being they had an unprofitable year but have a gigantic pile of money sat in a bank somewhere.
So maybe the CEO compensation should be adjusted accordingly?
> maybe the CEO compensation should be adjusted accordingly?
This is outside the domain of unpaid moderators’ unless the CEO’s compensation is threatening the company’s survival. It clearly is not.
This is outside the domain of unpaid moderators’ unless the CEO’s compensation is threatening the company’s survival. It clearly is not.
$193M compensation to lead a business to unprofitability is a problem. Period.
> $193M compensation to lead a business to unprofitability is a problem. Period.
The compensation did not lead to unprofitability—it contributed to it. And we have no evidence by which to claim it would have been worse under less-paid management. (Well, with Reddit, we might.)
I’m not defending the compensation per se. But arguing everyone at any profitable entity should be paid less until the venture is profitable, irrespective of any other facts, is silly. Particularly when it comes to non-cash compensation.
The compensation did not lead to unprofitability—it contributed to it. And we have no evidence by which to claim it would have been worse under less-paid management. (Well, with Reddit, we might.)
I’m not defending the compensation per se. But arguing everyone at any profitable entity should be paid less until the venture is profitable, irrespective of any other facts, is silly. Particularly when it comes to non-cash compensation.
> But arguing everyone at any [un?]profitable entity should be paid less until the venture is profitable, irrespective of any other facts, is silly.
This is the argument usually made for redundancies: reducing the overall payroll.
This is the argument usually made for redundancies: reducing the overall payroll.
> the argument usually made for redundancies: reducing the overall payroll
It’s for increasing profits. Redundancies are reduces at profitable and unprofitable firms alike.
It’s for increasing profits. Redundancies are reduces at profitable and unprofitable firms alike.
He got around $1.1M in cash.
> According to an SEC filing, Huffman got a salary of $341,346 in 2023 and a $792,000 “incentive” bonus. In February, Huffman’s salary was raised to $550,000 with the bulk of his $193 million compensation package tied to stock.