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I realize it's not something that happens, but I would say "taking responsibility" would mean taking, oh, I dunno, $50M of that $800M in compensation in 2021, a

• eatonphil 4y ago
  Lots of execs take "only" $100ks of compensation in salary and the rest in stock.
  • sianemo 4y ago
    He's perfectly capable of giving stock to these employees as well.
    • 88913527 4y ago
      It's simple to say we'd be more charitable if we had incomes 1,000x or more our current annual compensation, but I do genuinely wonder if I'd be different. Would I be greedy, would I care about doing right to the laid off employees-- it's hard to imagine how crossing that bridge might change people.
      • sianemo 4y ago
        I'm not going to try to justify how I would act, or how anyone else should act, were I to have a compensation package putting me easily in the top 0.1% of society, but we can collectively dispense with the notion that certain types of compensation (i.e. stocks) must necessarily be prohibitively harder for a CEO to give up than just money.
        • selectodude 4y ago
          The CEO of Robinhood would need to file a public form with the SEC if he wanted to sell any of his shares. People watch that and say "hmmm, why is the CEO of Robinhood wanting to sell shares? I wonder what he knows that we don't" and the stock goes down on that information. Stock is absolutely more difficult to liquidate for a CEO.
      • leereeves 4y ago
        Is it charitable to accept responsibility for the consequences of your mistakes, and compensate those you've harmed? Or is it just common decency?
        • 88913527 4y ago
          It's probably not that simple. Most chief executives delegate the responsibility of hiring staff to others. Sure, the buck stops with the executive, but ultimately nobody can review every single operational decision at scale. Maybe they hired for a world where the pandemic didn't happen and the monetary supply didn't tighten, then the world changed.
          • tmpz22 4y ago
            The entire purpose of the C-suite is to stay on top of macro level stuff, and its the boards purpose to make sure the C-suite is doing it. They didn't do their job. And they got rich not doing it.
            • deleted 4y ago
              [deleted]
            • trelane 4y ago
              I think it's high time to see if there aren't better ways to track the macro level stuff than hiring overlords. It seems to keep not working well.
          • NegativeLatency 4y ago
            "With great power comes great responsibility"
            • trelane 4y ago
              Nah, there's not really responsibility when your parachute is golden.
      • NegativeLatency 4y ago
        I think by example we can guess that you might act exactly that way (since so many other people do) but IMO the important thing is how do we as a society want people to act (ITT it would not be how this person is acting). IMO we as a society should pass rules and laws to prevent people from acting this way ie limits on compensation.
    • wombat-man 4y ago
      Looking at Robinhood stock, it might be way less than that now. But I get your point
    • gruez 4y ago
      Robinhood is a public company. There's no difference between getting stock/RSU compared to getting paid in cash and then using it to buy stocks.
      • alasdair_ 4y ago
        There is if you are an executive that is privy to non-public information.
        • gruez 4y ago
          That's insider trading, and a whole different accusation than the one levied above, which is implying some sort of wealth inequality issue that executives are compensated in stocks and non-executives are compensated in cash.
          • alasdair_ 4y ago
            My point is that if you have non-public information, you can’t actually sell the shares for cash whenever you wish, so it’s not the same thing.
            • gruez 4y ago
              >you can’t actually sell the shares for cash whenever you wish, so it’s not the same thing. I guess it's true that you can't sell "whenever you wish", but if you set up a rule 10b5-1 plan your shares are effectively as good as cash.
  • KMnO4 4y ago
    Frustrating to see the incredibly common conflation of equity and salary. Even though it’s always correctly suffixed with “compensation”, people assume that means “a bank account with 8 zeros”.
    • tschwimmer 4y ago
      That's because it effectively is. I suggest you look into pledged asset lines (and more broadly 'buy, borrow, die'), which are even more tax advantaged than just getting paid directly. Sure, there is some marginal cost associated with borrowing against granted equity, but it's almost certainly less than 10%. So yes, it is accurate to assume that if an exec vets $x00 million dollars of equity a year, they have a high percentage of that available to spend on whatever consumption or investment they desire.
      • notacoward 4y ago
        Quite possibly the best comment in this thread. Some people are quick to say that the high on-paper number doesn't mean anything, but remain (in most cases wilfully) blind to the fact that the low on-paper number doesn't mean anything either. As you point out, the real number is unknown and often not fixed but for all practical purposes probably still way higher than most of us will ever experience.
    • NegativeLatency 4y ago
      Feels like you're arguing semantics, either way the CEO is being made wealthy right? Probably still getting much more than they need to live off of, so some of that should go to the people getting let go.
    • PheonixPharts 4y ago
      It's even more bizarre/frustrating for someone, especially in tech where many of our TC is largely RSUs, not understand that wealth is almost never held in cash. When I was young (and poor) I also believed that being rich meant having Scrooge McDuck piles of cash to swim in. After my first big RSU payout I quickly realized that nobody with more than a few 100k in assets keeps anything close to the majority of them in cash. Savings accounts are for the poor. Anyone, even in the every day millionaire level, keeps most of their wealth in non-cash investments, leaving only enough cash to cover crisis situations. Especially with inflation this high, holding cash is literally throwing money away. Nobody has a bank account with 8 zeros, except maybe lottery winners that never learned the basics of asset management.
  • radicaldreamer 4y ago
    Steve Jobs famously took a $1 salary and everything else was in stock.
    • adave 4y ago
      Coz salary is taxed higher, many billionaires do this. He had enough control to not pay tax and just spend on the company's credit card.
      • jacklizhui 4y ago
        The take away here is, he did get compensated. What proportions were cash salary, irrelevant.
    • bostonpete 4y ago
      That's not really true, at least not in the same way being discussed above. Jobs already owned millions of shares in Apple stock, so yes, he profited from the stock but AFAIK that was only from the appreciation of existing stock, not from new grants.
      • Phlarp 4y ago
        If nothing else, he also got unlimited personal use of the company jet.
      • radicaldreamer 4y ago
        There's a whole options backdating scandal associated with his comp, so no, it wasn't just existing stock.
• paisawalla 4y ago
  Sure, go ahead and ask those laid off if they'd feel better if they were given a nice grant of $HOOD, which was worth about 500% more in 2021. The post-IPO 2021 price stabilized for a while around $50, so $50M is about 1M shares. The article says about 1,000 people were laid off, so if split equally that's 1,000 shares per employee. Since then, the price has come down to about $9, so it's a severance of $9,000 today. I would hope everyone getting laid off receives at least that much.
• manquer 4y ago
  The rich don’t see it that way. At its core wealth accumulation is a scoring contest so every penny counts for those care. Also if you have all the material needs that is satisfied, then you go after the rare hard to get high value exclusive money drain this is human nature. For your specific example what that 50m might make difference it maybe a bigger jet that flies further or a second jet for the family or a yatch or a castle in Italy or penthouse in New York. For you and me that may seem ridiculous and unnecessary, yet we do the same thing too. There are many many parts of the world owning a car (or even riding in one) eating three meals a day or eating out are luxuries many don’t see in their lifetimes. Yet we use do all those things without second thought to people leaving on $1 a day or less .
  • rch 4y ago
    I'd like to see what that amount of cash could could do for southern Madagascar right now.
    • topicseed 4y ago
      I'd like to see what the amount you and I spend on a nice dinner out or nice shoes could do for a southern Malagasy right now.
    • neodypsis 4y ago
      Well, you can take a guess by observing how the vainilla price spikes affected Madagascar in recent years.
  • nathanvanfleet 4y ago
    I agree with you but there is also the dynamic that there is always other richer people than you with richer lifestyles. So while you might think that one jet is enough for you if you had friends who didn't own a jet. When all your friends own 3 jets it makes you feel like you should also own 3 or whatever random expense you can imagine. And while you say "human nature" I'd rather say it's "human illness." They someone are within a strata of society where there is no limit, a 20 minute private jet flight or a $20,000 meal is not out of the question and is in fact the norm. They buy a fully renovated house for $10 million but then gut it to renovate it to "their tastes" and then live in it for two weeks of the year. There's just not culture to tell them it's excessive.
• gerdesj 4y ago
  It's the difference between having only one or even no helipad on your floating gin palace or two.
• nerdponx 4y ago
  The article said it was around 1000 employees. So cutting his pay by $50m would mean $50k per laid-off employee. How as an investor or shareholder can you not look at this as downright robbery?
  • Keegs 4y ago
    But the same $50m paid to a single employee (on top of hundreds more) is not robbery?
    • nerdponx 4y ago
      I might have been too obtuse with my post. I meant that it's robbery for the CEO to be compensated so much.
  • spywaregorilla 4y ago
    That would be his money, not the shareholders
• decebalus1 4y ago
  But how would that motivate the other CEOs or aspiring CEOs to be better CEOs? /s
• remflight 4y ago
  With $800M you can’t keep up with the really successful billionaires. You know, things like sports teams, bezos’s yacht etc.
• SergeAx 4y ago
  What do you mean "how is your life different"? His yacht may not have a second helicopter pad, for example!
  • mpclark 4y ago
    Thing is, though, you really do need that second helicopter pad. That way, when yours is parked up there, you can still receive visitors. It’s not easy being rich.
    • dougSF70 4y ago
      100% this
  • richbell 4y ago
    Or he may have to settle with a medium-sized jacuzzi. https://www.youtube.com/watch?v=frh5lA5uGRU https://www.youtube.com/watch?v=frh5lA5uGRU
• AussieWog93 4y ago
  >I realize it's not something that happens It definitely happens in some cultures. I remember reading about the CEO of Nintendo taking a temporary pay cut after the botched launch of the Wii U. At the time, people were talking about other Japanese CEOs that had done this too.
• imgabe 4y ago
  For one thing, as another comment mentioned, he didn’t actually get $800M because that was contingent on hitting various price targets that didn’t happen. For another, it’s not like it’s just cash sitting in a checking account. It would be stock in the company. Since he’s a CEO, he can’t just sell it whenever he wants, insider trader rules mean there’s only certain windows when he could buy or sell, and the CEO selling off that much of his holding would raise all sorts of questions among investors. If he did it as a personal gift to each employee, there’d be enormous gift taxes that would eat most of it. If he did it as part of their compensation, it would be coming from the company, not him, and he would have to justify to the board of directors and shareholders why he’s spending so much on a lavish severance package that is far beyond the industry norm (assuming they aren’t already getting generous severance packages) It’s not as simple as “Oh rich people could just fix every problem by giving away all their money, but they’re just greedy jerks”
  • 4ggr0 4y ago
    To counter that a bit, rich people with these kinds of assets can take out loans or cash with their assets as collateral. And of course these loans have way better rates than whatever kinds of loans you and me could get. Even better - This way, they don't even have to pay capital gains tax. What I'm saying is, Vlad could most likely buy an expensive yacht without ever having to actually sell stock, so the argument that "it’s not like it’s just cash sitting in a checking account" is not that fair as well. Makes it seem like the uber-rich are actually quite restricted and that all of their money is locked up in investments and other things. Which is simply not true, they can use these locked-up assets in very attractive ways. See this article for a better write-up: https://www.businessinsider.com/securities-asset-backed-loans-no-taxes-real-estate-investing-sbloc-2021-11 https://www.businessinsider.com/securities-asset-backed-loan...
    • imgabe 4y ago
      Loans still have to be paid back at some point. It’s true that sometimes banks are happy to let the billionaires have the loans for their whole lives and get paid back out of their estate when they die. But, when you borrow against a security (like a stock) and the value of that security plummets (like pretty much every tech stock did recently) the terms of your loan can force you to sell the stock and pay it off right away. (and sell it at the worst possible time since it just crashed and now you’re locking in that loss) So it’s not really a good idea to over leverage yourself in that way. Sure, he can borrow a bunch of money against his stock and buy a giant a yacht or give it away to people who got laid off, just like a normal person can borrow a year’s worth of salary from credit cards or take out a high interest loan to buy an expensive car, but that doesn’t mean it’s a good idea.