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The Chief Legal Officer, Daniel Gallagher, made $30M this year. It breaks down into $257k cash, $4.2M bonus and $25.5M in stocks and options. This is a far larg

The Chief Legal Officer, Daniel Gallagher, made $30M this year. It breaks down into $257k cash, $4.2M bonus and $25.5M in stocks and options. This is a far larger amount than any other executive. In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC (Securities and Exchange _Commission_), the highest role of the SEC, appointed by the US President. He was hired by Robinhood in May 2020, and his previous job was at WilmerHale, a firm specializing in defending other firms against the SEC. This guy must be worth his weight in gold in avoiding regulatory fines for Robinhood.

DSingularity 5y ago
How do you value the stock options of a company that hasn’t had its IPO?
- jjice 5y ago
  Maybe off of current worth estimated after sale of shares to earlier investors? I'm not completely sure though.
- wfleming 5y ago
  Probably using the same fair market value that pre-IPO startups calculate to assess your tax liability when you exercise options.
- mdoms 5y ago
  Same way you do after an IPO. Based on the sale price of the stock.
- bhahn 5y ago
  You generally use 409a valuations, which increase in regularity and accuracy as the company matures (ie. gets bigger and closer to an actual IPO).
  - plank_time 5y ago
    As a former Uber employee, I assure you they do not become more accurate. It’s all based on funding rounds etc. The stock market is a different beast altogether.
- bern4444 5y ago
  Lots of ways to value a company. Once you have the value of the entire company, the price per share just depends on the number of shares. Options are then calculated based on a formula using the price per share as one input. You can value a company by comparing it to its peers (this is like company Y which has similar users, growth potential etc) You can value a company by only caring about its assets and liabilities. Private shares of a company can exist and be traded, another market based valuation just with fewer data points that are private and not publicly shared. And plenty more ways. Finance is really all about answering this question, how much is something worth and then creating mechanisms to trade that value in different ways.
- aeyes 5y ago
  When I worked at a pre IPO startup they always used the valuation of the last investment round.
- plank_time 5y ago
  409a valuation.
oliv__ 5y ago
Talk about a revolving door...
swarnie_ 5y ago
> In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC > his previous job was at WilmerHale, a firm specializing in defending other firms against the SEC. How is that situation even remotely legal?
- s1artibartfast 5y ago
  Why wouldn't it be as long they follow the law in both jobs? It is like defense attorney becoming a prosecutor or an IRS employee becoming a tax advisor. The best person to give advice on a subject are those who have experience on both sides.
  - bern4444 5y ago
    Its not a good idea to allow heads of massive institutions to just hop around right after their tenure is over. For one, it creates a negative incentive for the regulatory roles. Now people will seek to be head of the SEC just so they can score a specific job after. Incentives are misaligned. Lots of private sector companies (especially law firms) include non-compete clauses for similar reasons. They want to prevent their former employees from leveraging their insider information against them. An IRS employee becoming a tax advisor is one thing. The head (and more broadly executive level personnel) of the IRS becoming the head of accounting of a major firm is another.
    - s1artibartfast 5y ago
      >For one, it creates a negative incentive for the regulatory roles. Now people will seek to be head of the SEC just so they can score a specific job after. Incentives are misaligned. I just don't see the misalignment in incentives. Everyone is thinking about their compensation next job, and it is only a problem if being bad at your current job somehow makes you more attractive to your next employer. Unlike the private sector, there shouldn't be any insider information to protect. The SEC should be transparent about the law.
      - bern4444 5y ago
raziel2701 5y ago
So the Big Short was spot on when it showed the SEC lady using that position to leverage her way into a job in the sector she's supposed to regulate. It makes sense an SEC regulator knows all the ins and outs and would be the best person capable of finding and exploiting loopholes.
- kolbe 5y ago
  It also makes sense as a quid pro quo. But we can only speculate either way.
- deleted 5y ago
  [deleted]
ffggvv 5y ago
yeah basically every obama official now works in big tech. but somehow people think only republicans are corrupt. the biggest companies are chock full of obama staffers.
staysaasy 5y ago
That's a ton of cash, but I believe that this eye-watering number is based upon the fair-market value of equity _granted_ in a particular year. That is, other executives might actually have higher total compensation based upon vesting if they received grants (say) 18 months ago. It's still a crazy ass number but maybe not crazy at the level of "this person is more important than the CEO."

DSingularity 5y ago

How do you value the stock options of a company that hasn’t had its IPO?

jjice 5y ago
Maybe off of current worth estimated after sale of shares to earlier investors? I'm not completely sure though.
wfleming 5y ago
Probably using the same fair market value that pre-IPO startups calculate to assess your tax liability when you exercise options.
mdoms 5y ago
Same way you do after an IPO. Based on the sale price of the stock.
bhahn 5y ago
You generally use 409a valuations, which increase in regularity and accuracy as the company matures (ie. gets bigger and closer to an actual IPO).
- plank_time 5y ago
  As a former Uber employee, I assure you they do not become more accurate. It’s all based on funding rounds etc. The stock market is a different beast altogether.
bern4444 5y ago
Lots of ways to value a company. Once you have the value of the entire company, the price per share just depends on the number of shares. Options are then calculated based on a formula using the price per share as one input. You can value a company by comparing it to its peers (this is like company Y which has similar users, growth potential etc) You can value a company by only caring about its assets and liabilities. Private shares of a company can exist and be traded, another market based valuation just with fewer data points that are private and not publicly shared. And plenty more ways. Finance is really all about answering this question, how much is something worth and then creating mechanisms to trade that value in different ways.
aeyes 5y ago
When I worked at a pre IPO startup they always used the valuation of the last investment round.
plank_time 5y ago
409a valuation.

oliv__ 5y ago

Talk about a revolving door...

swarnie_ 5y ago

> In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC > his previous job was at WilmerHale, a firm specializing in defending other firms against the SEC. How is that situation even remotely legal?

s1artibartfast 5y ago
Why wouldn't it be as long they follow the law in both jobs? It is like defense attorney becoming a prosecutor or an IRS employee becoming a tax advisor. The best person to give advice on a subject are those who have experience on both sides.
- bern4444 5y ago
  Its not a good idea to allow heads of massive institutions to just hop around right after their tenure is over. For one, it creates a negative incentive for the regulatory roles. Now people will seek to be head of the SEC just so they can score a specific job after. Incentives are misaligned. Lots of private sector companies (especially law firms) include non-compete clauses for similar reasons. They want to prevent their former employees from leveraging their insider information against them. An IRS employee becoming a tax advisor is one thing. The head (and more broadly executive level personnel) of the IRS becoming the head of accounting of a major firm is another.
  - s1artibartfast 5y ago
    >For one, it creates a negative incentive for the regulatory roles. Now people will seek to be head of the SEC just so they can score a specific job after. Incentives are misaligned. I just don't see the misalignment in incentives. Everyone is thinking about their compensation next job, and it is only a problem if being bad at your current job somehow makes you more attractive to your next employer. Unlike the private sector, there shouldn't be any insider information to protect. The SEC should be transparent about the law.
    - bern4444 5y ago

raziel2701 5y ago

So the Big Short was spot on when it showed the SEC lady using that position to leverage her way into a job in the sector she's supposed to regulate. It makes sense an SEC regulator knows all the ins and outs and would be the best person capable of finding and exploiting loopholes.

kolbe 5y ago
It also makes sense as a quid pro quo. But we can only speculate either way.
deleted 5y ago
[deleted]

ffggvv 5y ago

yeah basically every obama official now works in big tech. but somehow people think only republicans are corrupt. the biggest companies are chock full of obama staffers.

staysaasy 5y ago

That's a ton of cash, but I believe that this eye-watering number is based upon the fair-market value of equity _granted_ in a particular year. That is, other executives might actually have higher total compensation based upon vesting if they received grants (say) 18 months ago. It's still a crazy ass number but maybe not crazy at the level of "this person is more important than the CEO."