this post was submitted on 21 Mar 2024
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Antiwork

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Redditor explains that reddit's moderators can't understand how rich people's wealth operates because it is too complicated for poor people (old.reddit.com)
submitted 7 months ago* (last edited 7 months ago) by MonsiuerPatEBrown@reddthat.com to c/antiwork@lemmy.ml
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[–] Nougat@fedia.io 68 points 7 months ago (2 children)

OP here has their head up their ass, because u/omegadirectory is 100% right.

[–]omegadirectory

857 points 2 hours ago* sigh, I hate to sound like a CEO apologist, but I also don't want incorrect information being spread. The headline and the fact that the Fortune article is paywalled makes it easy for someone to skim the headline and the first paragraph and get steaming mad.

From a different article from the same day: https://www.businessinsider.com/reddit-ceo-steve-huffman-defends-193-million-compensation-package-2024-3

"A Securities and Exchange Commission filing said Huffman in 2023 got a salary of $341,346, which is relatively low for a CEO of a major public corporation. In February, this was raised to $550,000. He also got a $792,000 bonus last year based on Reddit's user numbers, revenue, and a type of profitability known as adjusted EBITDA that excludes certain expenses."

"The bulk of his compensation package is now in restricted stock units and stock options. A lot of this compensation is based on Huffman staying at Reddit through late 2028, and some is triggered by completing Reddit's initial public offering, the SEC filing said.

Half of the stock options vest at $25.29, a relatively easy bar to reach. The other half vest only if Reddit shares reach $45, $60, and $90 in public-market trading over 10 years, the SEC filing says — that's a higher bar and aligns the CEO's interests with shareholders."

Huffman didn't get $192 million in cash. $192 million wasn't taken out of the revenues and paid to the CEO. He got $341346 + $792000 in cash for 2023, and the rest in stock and stock options. The stock and stock options are valued at just over $190 million, but that valuation is based on the projected stock prices when the company goes public. If the company doesn't go public, he might never realize the value of those stock and stock options. If the company goes public, but the stock dips or never hits those $45+ thresholds, he can't exercise those options and he doesn't realize those gains.

[–] TropicalDingdong@lemmy.world 32 points 7 months ago (1 children)

You the real MVP.

So if we can short reddit to sub 45, Spez gets fucked.

Bruh that company isn't worth 8 a share.

[–] Nougat@fedia.io 35 points 7 months ago

... Spez gets fucked.

Dude got paid $1.3M cash for one year of douchebaggery. If the IPO happens at $34, which seems likely, he's still going to get several million dollars at least from that. That ship has sailed.

[–] eltrain123@lemmy.world 4 points 7 months ago* (last edited 7 months ago) (1 children)

So… where is the complicated part?

Guy has a 192million dollar package, gets a million and change up front, almost 100mil when they go public and pump the stock up to 25 bucks. If they can inflate it hard enough to spike at ipo, he gets the rest of the 192mil. Once it crashes, the little guys are left holding the bag while Spez walks away with all of their money.

This is why they are trying to create an atmosphere of exclusion and by selling stock internally at tiers based on user engagement until they go public.

No one is too dumb to understand that. That’s why people are declining the option to buy pre-ipo. spez has been making shit decisions and preying off user/mod labor since the inception of the company. This is where they finally try to slit the golden goose’s throat… problem is, they forgot to fatten the goose first.

[–] Nougat@fedia.io 3 points 7 months ago

... almost 100mil when they go public and pump the stock up to 25 bucks.

That's not accurate. If the stock price reaches $25.90, half of the options vest at some price. If they vest at an option price of $25.90, then Huffman has the option to purchase those shares at $25.90. If the price he's able to sell those is also $25.90, there's zero profit. Maybe they would vest at some lower price? I'm not sure.

The bulk of the money is on the far end. I'm sure the option price for all of them is set right now, and I suspect it's likely at that $25.90 price. When (if) those later chunks vest at those higher stock prices, there's a whole lot more differential between the stock price and the option price.