$168M/(3800 employee / 100*23 layoff) = $192,219 per layed off employee
Not that I am suggesting he should pay the layed off employees from his personal kitty. Just trying to understand the numbers.
Edit: OP said CEO and COO each. So $192K x 2 ~= $384,000.
Should we talk about that too?
Hate to go there on HN but there _is_ a moral side to this.
What is the cost of making the kind of mistakes this guy did? And who should pay for them?
No there isn’t. Wasting money to keep employing people isn’t good for anyone. The labor market is still tight right now so the employees are better off going to a company that actually wants them.
Is this a valid argument? I dont know, but i feel that it isn't.
Are you saying executive compensation should be orthogonal to company performance?
Overpaid executives failed, so workers lost their jobs, but the executives get to keep theirs all the while saying things like "I take responsibility for this" when it is objectively false that they are taking responsibility.
Does that seem right to you? Is that a good way to run a business, to keep failed leadership?
Their failure has already dropped a huge amount of their stock-based compensation. Their base salary shouldn't be determined by the company's failure (only their _future_ salary).
What if you applied this to a worker instead of a CxO? Would you yourself take a pay-cut, after the fact, if the company fails to perform?
Yes. Yes I would take the CEO's total compensation package.
I am skeptical that the CEO is worse off than any employee.
As in you would accept, without knowing ahead of time, a cut to your salary when the company's performance drops?
I'm not talking about performance based bonuses or commission based pay. I'm talking about a salary that was pre-negotiated at the time of your employment, but upon the company performing badly, your salary is dropped.
This is what the OP is saying - that high CxO pay is the problem, and that they should have been paid less (after the company's performance dropped).
Plenty of CEOs already do (or did during their tenure) take no material base salary and their compensation is tied entirely to the performance of the company.
Is that not reasonable for large, profitable businesses. It has its own issues, but what compensation plan doesn’t?
that's not what i meant.
The question is whether you would take a pay cut _after_ the company performed poorly, but you didn't know ahead of time that it would cut your pay. Performance based bonuses or commission is obviously pre-negotiated and thus, not subject to post-fact alteration.
Should companies be forced to keep unproductive or no longer useful workers? Clearly there is not enough customer demand for Robinhood to continue employing their ops/content/etc. workers. What are those workers going to do then, if they keep working?
Do you understand how risk works? If you take on more risk, you should be compensated for that risk, else it doesn't make sense for you to take so much risk if you can get the same reward by taking less risk.
Executives as a whole (CEOs, VPs, even directors!) take a lot more risk - career and financial risk - than your typical line engineers. Their success depends on the success of the initiatives they lead, which can be subject to macro or competitive factors entirely outside their control. Those initiatives are generally longer timeline, meaning they have less chances at bat (and thus higher variance in outcome) than an IC. And a shitty IC can always be rehired pretty much trivially. If your company fails with you at the helm, you're not getting another CEO job. For example, Carly Fiorina has never held another management role in a large multinational corporation after her failure at HP.
On top of that, executives have to hold a large portion of their compensation as stock which they are barred from selling as long as they work at the company. If the company tanks, they take a retroactive paycut, often times upwards of 50%. They don't get refreshers to boost their comp back to original levels like ICs either.
Yeah CEOs nowadays have quite excessive compensation. But they will never have compensation at a single digit multiple of the average employee. The risk they take is too big for that to sufficiently compensate them.
The same document points out that the CEO and CCO (both co-founders) each realized more than $168M in compensation in 2021. That's the number to talk about I think.