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> As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today– and I want to show accountability not just in words but in
by haswell 4y ago
> As the CEO and founder of Zoom, I am accountable for these mistakes and the actions we take today– and I want to show accountability not just in words but in my own actions. To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus. Members of my executive leadership team will reduce their base salaries by 20% for the coming fiscal year while also forfeiting their FY23 corporate bonuses.
It’s nice to see the phrase “I am accountable” followed by a description of what that accountability entails.
Whether or not the steps taken seem fair is a separate conversation, but it seems like a step in the right direction.
When you’re making CEO salary, no amount of salary reduction will have a day to day impact, but this seems strongly symbolic at least.
- kevviiinn 4y ago[dead]
- A4ET8a8uTh0 4y ago<< When you’re making CEO salary, no amount of salary reduction will have a day to day impact, but this seems strongly symbolic at least. Even symbolic gesture is more than I have come to expect these days. While it may not be what is demanded, I welcome it as a welcome change. That said, I disagree with the categorical phrasing. Clearly some reduction would make an impact ( I think we agree that 100% would; if so, at this point it only becomes a question of what is reasonable ).
- haswell 4y agoI guess my point was that it would be very surprising if someone making that amount of money did not have finances structured such that they could stop working tomorrow and be fine through the end of their lives. To your point, if one has a habit of spending lavishly, it seems fair that the source of funding has to come from somewhere that isn’t this year’s paycheck, but it seems like the end result would be a faster-than-planned depletion of resources rather than impacting day to day living. And he’s presumably back to making normal salary within a year.
- A4ET8a8uTh0 4y agoI don't really disagree with that point with possibly one exception: board forced CEO's hand. Still, day to day living expenses are in the eye of the beholder. Once you get to that point, you do miss little comforts in life like being able to eat endangered penguin pate or rent a sub party at mariana trench. It is harder to justify that expense when you just had your salary adjusted. Not impossible. Just harder. << And he’s presumably back to making normal salary within a year. I am tempted to set myself a reminder to check, but I don't think you are wrong by saying that.
- hgsgm 4y ago>To that end, I am reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus. What about equity grants?
- endisneigh 4y agoLol, no good deed unpunished.
- whimsicalism 4y agoHe owns 22% of the company. He literally just made ~1 billion on this decision and is foregoing a salary of ~1 million.
- prewett 4y agoOnly if he sells right now, otherwise he literally hasn't made any money, just his current potential-money (like potential-energy) has increased. It remains to be seen what will happen in the future. He is also exposed to all sorts of other things, like he could lose a billion dollars of the course of a year because the Fed decides to hike interest rates 4%.
- whimsicalism 4y agoSure, it also remains to be seen what the value of the dollar is in the future. You could lose a billion in real dollars just holding cash. Don't really think it diminishes my point.
- _blz2 4y agoThe volatility in equity prices and dollar strength is not comparable. This analogy is just absurd.
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- pastor_bob 4y agoI agree, but it's a lot easier for a Founder CEO with 22% ownership of the company to do. It's completely not comparable to a CEO hired with no initial equity stake. Just for illustration. The 10% stock price jump this message caused just earned him $500+ million
- jonathankoren 4y agoThat’s why you clawback the equity as well
- dahfizz 4y agoWhy? Because the CEO did his job and made the stock price go up?
- Kranar 4y agoThat would be counterproductive. The fact he made these measures is what made the stock price go up. The goal isn't to just punish someone for the sake of punishing them, the goal is to improve the value of the company, which the CEO just did by taking these steps.
- gwbrooks 4y ago"You" who? He's the largest shareholder both by share count and, even more so, via his super-voting shares. As another commenter noted, the layoffs made shareholders money. Assuming the board is largely made up of equity holders, a clawback would punish exactly the sort of behavior and performance they want. Equity confers different responsibilities, rights and, yes, paydays than labor. Acting like every hit the latter takes should somehow mean a haircut to the former ignores that.
- nine_zeros 4y agoAt least they are taking some hit to themselves? I know a lot of folks are going to complain about equity. But equity is already down. This is a nice gesture, much much better than other layoff peers.
- anigbrowl 4y agoAlso he and the C-suite are foregoing their bonuses but giving them out to departing employees. Pretty decent.
- HollywoodZro 4y agoIt's a gesture, but the issue is that salary and bonus are often a smaller part of executive compensation. The equity grant that they receive is often millions more than the salary and the company performance bonus. I think forgoing the equity and instead adding it to the severance pool would be truly owning up to the decisions made by executive management.
- fatnoah 4y agoLooking at SEC filings, he received a grant of 612,499 shares of stock on July 8, vesting quarterly over 4 years. That means ~153k shares will vest in 2023. Zoom stock is up $4 based on the announcement, making his RSUs worth over $600k more. He gave up just over $300k in cash compensation to do so. That's an ROI of 100% in one day.
- anigbrowl 4y agoIt would have gone up anyway just based on the workforce cuts, no? Also, I think it's better to look at the price over time rather than assume the pop from an announcement is the new baseline. It's not that I think the guy is a saint or anything, but many CEOs conduct layoffs and write about how sad they are without making any financial sacrifice. So even a limited gesture of giving up ~30% of his potential gains this year is unusual by prevailing norms.
- ren_engineer 4y agoshort of giving shares away to laid off employees there isn't much a founder can do, majority of their net worth is equity. Even for the CEOs their income is mostly tied to stock performance. If the CEO was much worse than the average tech CEO the board would fire them the biggest reason these companies are getting flak is due to pretending they weren't like other industry "soulless corporations". People naturally don't like hypocrisy, you can't LARP like your employees are family to squeeze productivity out of them and then drop them at the slightest downturn in profit. the social contract has been broken for the worse between employees and companies, people just need to act accordingly
- MuffinFlavored 4y ago> short of giving shares away to laid off employees there isn't much a founder can do is it realistic to ask a company not to hire if they think they're just going to lay people off 12-18 months later or is that too perfect of a science? obviously you don't want to ask companies not to try to grow/be conservative because then we'll have too much unemployment... i think? it's just so "convenient" the timing of all of these layoffs. it's like because one company did it, the climate is "ok, it's acceptable, let's do it now while we can squeeze it in with everybody else doing it so we don't look so bad/get singled out" i get it, monetary rates/fiscal policy changed. but the fed has been signaling this change for months, going slow. how long has zoom known they need to layoff 15% of people? they've probably been carrying this "weight"/burden for a while?
- ethbr0 4y agoThe most ethical way to do it would have been to tell your candidates "We're hiring for excess capacity, so this would be a contract to hire position." Then candidates might have made different decisions, like "Maybe this job isn't worth relocating my family internationally for." It's pretty Machiavellian to present the role as otherwise, when HR had strong suspicions it'd be first on the chopping block. Does a company have to telegraph the nature of the position this? No. Of course not! And it's not even in their best interest to do it. But does it make them ethically shitty to optimize their offer attractiveness at the expense of people's lives? In my book, yes.
- vsareto 4y agoThis is probably the best you can hope for in terms of fairness right now. You'll never see executives put themselves financially in the same situation as the lowest level people they are letting go. This is actually a pretty big step, but the move will need some benefit to the company for it to become more common-place. They might roll these bonuses into subsequent bonuses, but that may actually end up being a motivator if these bonuses are truly forfeit until things are improved by the executives.
- HollywoodZro 4y agoThe big thing would be for Mr. Yuan to forgo his equity grant for FY23 and also take his equity grant from FY22 and distribute that as severance for the employees who lives are impacted negatively due to the decisions of executives in the organization. That truly means "taking ownership" of what happened. The individuals leaving were not the ones who hired or authorized the hires without the evaluation of long-term viability for the organization. They were just doing their jobs.
- jo6gwb 4y agoI think the reason we don't see other CEOs acting like Mr. Yuan is because of this sentiment. Whatever you do, it will never be enough.
- neon_electro 4y agoPerhaps "we" need to do a better job defining what "enough" is, then? So that we don't allow the goalposts to be moved. People lost their livelihoods, and in the US, their access to affordable healthcare until they figure out a new solution or get a new job.
- kelseyfrog 4y agoWe tell ourselves perfect is the enemy of good and then try anyways. But it seems like they get to say, perfect is the enemy of good, so I'll give up before I start. It's this difference in character that creates greater division rather than lessening it.
- jeffbee 4y agoMFer made > 1000 million dollars just by putting out this press release.
- justapassenger 4y agoSalary and bonus are tiny part of the compensation for folks at their level. Are they also forfeiting their equity grants for FY23?
- deleted 4y ago[deleted]
- password11 4y ago> If you are a US-based employee who is impacted, you will receive an email to your Zoom and personal inboxes in the next 30 minutes that reads [IMPACTED] Departing Zoom: What You Need to Know. This is the way to notify people of a layoff. Immediate binary yes/no. Although there is no great way to do it, this layoff seems pretty respectful and well done.
- klabb3 4y agoI think the best way is: - invite everyone 2 weeks before to a townhall named [REQUIRED] An update on your employment - read the names of the fired people from a fancy envelope - when someone is called, their corp access is revoked in real time and they are kicked off the call
- deathanatos 4y agoHopefully they're also sending a NACK email too. Having been through it, let me tell you that's a gut wrenching n minutes to wait, though.
- MollyRealized 4y agoOkay, gotta ask for learning purposes: what's a NACK email? *EDIT: Ah. "Negative acknowledgement." In other words, someone hears from them regardless of whether they're impacted or not, i.e. [NOT IMPACTED].
- coffeebeqn 4y agoAt my first company they announced layoffs almost a month out but not who was impacted. A horrible idea that created a very paranoid environment for at least the next year
- gregschlom 4y agoNow if they could please stop using "to say goodbye" as a euphemism for "to layoff", that would be great.
- JohnFen 4y agoIt sure beats "rightsizing," though.
- Kankuro 4y agoIf find "let [people] go" much worse euphemism. I was shocked the first time I heard it, like if it was just the fate and the people deciding were not involved in this situation. In France, the local euphemism is to say that someone has been thanked ("remercié").
- JohnFen 4y agoI agree! I have a habit of ignoring claims of accountability because so often, the "accountability" seems to be nothing more than saying "I accept the accountability". Empty talk. It's nice to see at least a gesture towards making it mean something.
- bitL 4y agoMost of the comp comes from stocks so he should also renounce any stock-related gains to make it more than cosmetic.
- blululu 4y agoSymbolic gestures mean a lot - especially when you are in a position of leadership. It will not break the bank for him (I would be surprised if the effected employees will be ruined by this either), but it is important for the people making decisions to have a bit of skin in the game. None of the other CEO's who "took full responsibility" (running tally here: https://www.itakefullresponsibility.fyi https://www.itakefullresponsibility.fyi) did anything close to this. I have to give a some respect that this man didn't just pass the pain off onto his subordinates.
- squokko 4y agoHe owns billions in founder's stock so this is immaterial. It's not like Satya Nadella or another hired CEO.
- kfir 4y agoWhile I understand your point, your example is a tad flawed https://www.celebritynetworth.com/richest-businessmen/ceos/satya-nadella-net-worth/ https://www.celebritynetworth.com/richest-businessmen/ceos/s...
- ShakataGaNai 4y agoDidn't look super deeply, but from an SEC filing dated 2018 - he was making a base pay of $300k/year. Some research online indicated his most recent bonuses were nearly the million mark. So he goes from making over $1mil USD to $6,000/year. If the above is correct. The salary alone should be enough to keep a couple people around. Yes, that doesn't make a big dent in ~1300 people laid off. But I imagine for those being laid off it's slightly less shitty (still super shitty) knowing that the CEO isn't still making 7 or 8 figures, like at most companies. https://www.sec.gov/Archives/edgar/data/1585521/000119312519083351/d642624dex105.htm https://www.sec.gov/Archives/edgar/data/1585521/000119312519...
- cycomanic 4y agoSee comment above he is making another $10M in stock.
- 2devnull 4y agoI really want to agree. On an emotional level, I do agree. It’s important that the entire organization feel they rise or fall together, as a team, and this should impact leadership more heavily than the rank and file. But on the other, as you note, it’s just a symbolic thing. As such, a large part of me feels, do we really benefit as a society for those increasing even more the extent to which virtue signaling is institutionalized? So I agree in spirit, but worry that this is an under appreciated long term risk to business culture specifically, and society more generally. “Symbolic” on some level really just translates to “BS” and we have more than enough of that already.
- benatkin 4y agoThis is appropriate use of the term "virtue signaling" that would go well in a textbook for a university course that deals with the concept.
- ChrisMarshallNY 4y ago> When you’re making CEO salary, no amount of salary reduction will have a day to day impact, but this seems strongly symbolic at least. If I remember correctly, Steve Jobs had a $1 salary. And a Learjet. A lot of these folks don't make most of their money from salary. If his main income is from stocks, then he may actually be doing fairly well.
- rchaud 4y agoWhich is what makes it galling to see other CEOs, also receiving most of the compensation in stock, 'taking responsibility' by....leaving their personal bottom lines unchanged. Unlike Steve Jobs though, the Zoom CEO won't be able to back-date his options to collect a cool $20 mill in capital gains [0] [0]: https://www.cultofmac.com/443542/steve-jobs-apple-stock-backdating-scandal/ https://www.cultofmac.com/443542/steve-jobs-apple-stock-back...
- stainforth 4y agoThe learjet flights were "unrealized flights"
- fijiaarone 4y agoBecause of his Gulfstream?
- ChrisMarshallNY 4y agoI know it was a Gulfstream, but I referred to it as a “Learjet,” because that’s a more well-known term, and it really doesn’t matter to most of us mensch. It’s like calling a Fuji copy machine a “Xerox” machine. Fairly standard type of literary trick.
- stainforth 4y agoMy comment was a play on another comment that refers to wealth from stock as "unrealized gains"
- faangiq 4y agoWell I give them some credit for trying. Too bad all their comp is in stock.
- benatkin 4y agoNo, to me this is much worse than doing nothing, and makes me dislike Zoom even more. Doing this and saying nothing might have had a similar degree of sanctimoniousness. I guess I think that if he thought this was a good idea he should have waited a few days to do it quietly, instead of pretending to understand the struggles of the employees in his own personal financial life. However, if it helps some employees process it maybe it's worth it even if it rubs some the wrong way, like it would me.
- martin82 4y agoNow, CEOs are incentivised to make absolutely ridiculous amounts of money one year so that they can then pretend to be "accountable" the next year No big corp CEO will ever be accountable for anything.
- youssefabdelm 4y agoYou forgot the most important part: his net worth is $3.8 BILLION with a big fat juicy B
- youssefabdelm 4y agoThis would be nice if the CEO was not the founder, but in this case, he's the founder and his net worth is $3.8B.
- 5350-uiop-1130 4y ago> reducing my salary for the coming fiscal year by 98% and foregoing my FY23 corporate bonus wouldn't be surprised if is a white lie or straight lie. with corpo-speak it's often more about what isn't said then what is.
- 29athrowaway 4y ago"I am accountable" means "I am taking the blame on behalf of the board"
- eagleinparadise 4y agoLook up how much he has cashed out by selling shares since 2021. I just eyeballed it and it looks he's sold at least $2-300M easy. He probably has incentive packages. I've never seen a CEO carve out incentive/future awards as a pay reduction but it would be more meaningful
- EdwardDiego 4y agoThat's so much better than "I'm fully accountable, but no-one will actually hold me accountable, but every other CEO is saying they're accountable without actually being held to account, so I'm only saying this to emulate other CEOs, which is also how I reached the decision to layoff a bunch of employees."
- deleted 4y ago[deleted]