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Their salaries are in the $250k to $500k range. The rest is stock. Unrealized gains that may or may not be realized in the market.

pavlov 3y ago
Stock-based compensation is counted as an expense in the accounting rules used by public companies (GAAP). So if they give $100M in stock awards, that’s a negative $100M on the company’s profit & loss statement, even though it’s not actually paid in cash by the company. For that reason many tech companies also report non-GAAP numbers where the profit looks nicer because they can leave out stock-based compensation (and anything else they feel like they can get away with).
ryandrake 3y ago
Compensation is compensation. Stock has value even if that value is constantly changing. If they disagree, I'd happily take their worthless millions of Unity stock off their hands for them. The point is how does an executive team who together makes on the order of $100M/yr justify its own compensation if the company is losing on the order of $100M/yr?
- vondur 3y ago
  If they keep screwing up the company, that stock may not be worth much.
- tensor 3y ago
  Business 101 is that all funded companies aim to lose money in order to grow. As long as the growth rate is sufficiently high to justify the losses, this is considered good performance. However, if that ratio goes the wrong way, then companies need to make internal adjustments to bring it back in line. That could be new or different pricing strategies, but it also usually involves some efficiency improvements and cost cutting. This is why you have scenarios like this where the company is yes overall losing money each year (as intended), making more revenue than last year (good), and still cutting jobs (because they are still not at the right ratio of revenue growth to losses). So the executives could be doing a completely fine job bringing the company back to the right path. With only trivial high level information like we have we can't tell. To really know if they are doing well or not you'd need to dive into the finances.
- deleted 3y ago
  [deleted]
- 015a 3y ago
  Going to the public markets and saying "we're selling $100M worth of stock to fill a gap in our revenue" is basically suicide. This is essentially what happened to SVB earlier this year; its different because they're a bank and there's bank runs to consider and the FDIC and etc, but they said "we need liquidity so we're selling a bunch of investments" and everyone went like "huh? are y'all ok? screw that we're out" and they died a week later. SVB literally would have been fine, if you remove market psychology from the picture. But, that's a fallacy that everyone from You to highly experienced banking professionals make; ignoring market psychology. People have this idea of stock having value; but it only has market value. Its a similar fallacy as believing that your investments are protected because you have stop-losses set; stock only has value because people believe it has value, and if corporate leadership takes action that would cause a lot of people to stop believing your stock has value, that stock doesn't have value anymore. Its not a house; its fairy dust.
  - rileymat2 3y ago
    "stock only has value because people believe it has value" Unless this is an indictment of all pricing, it seems short sighted as companies have assets and cashflow that exist beyond belief. When you buy stock you are buying a (small) percentage of everything that company owns.
    - 015a 3y ago
      I mean, look at SVB, only as the most recent example. They went from an extremely valuable company to being worth zero over a weekend, despite having billions of dollars in assets (even minus liabilities). Their shareholders also went to zero with them. You can argue that SVB is weird because they're a bank and their assets had to be liquidated to service banking customers; but that's basically how all companies work. Assets get liquidated to service debtors, generally at a significant discount on the value they reported the asset to be worth to the government. Usually; "believe has evaporated" happens to companies that, right before the belief evaporated, had to take on significant debt to survive another quarter, so that liabilities number is high. Lawyers and gutters get paid. Maybe insiders get priority liquidation. You can reasonably philosophically view corporate shares are partial ownership in the assets of a company. Realistically; if there's been one instance in history of a share converting into liquid capital after a "belief has evaporated" event, that resulted in more than, like, I can buy a coffee with this money, I'd love to hear about it.
jjoonathan 3y ago
tf? Unrealized gains don't count? Then why don't you give me your unrealized gains?
- lotsofpulp 3y ago
  niceice did not write that they did not count. > Yes, but the top brass are racking in tens of millions This characterization is obviously not accurate. How much unrealized gains do you think Unity executives have from their stock compensation if their market cap graph looks like this: https://www.macrotrends.net/stocks/charts/U/unity-software/market-cap https://www.macrotrends.net/stocks/charts/U/unity-software/m...
  - jjoonathan 3y ago
    Why are you trying to handwave away the biggest part of compensation? Yes, losses happened, no this does not make the amount small. Not on an absolute scale and not compared to salary. Lol.
callalex 3y ago
What makes them unrealized? They are selling and realizing all the time, and get the massive unfair tax advantage of capital gains instead of income like for people that work for a living.
- pxx 3y ago
  Err equity compensation is not taxed as capital gains unless there's growth. Depending on how things are structured you pay taxes at different times but the value at grant is taxable as ordinary income. The only taxability difference is what to do with growth between grant and vest (and depends on when you pay the grant value's taxes). This is a common misunderstanding and sometimes causes people working at big companies to hold onto their RSUs needlessly even though they've already been taxed as ordinary income. In the RSU case you can't elect for different treatment on grant-vest gains, and it's very unclear if you would even want to.
- lotsofpulp 3y ago
  Equity compensation for earned income is subject to ordinary income tax, not capital gains tax.
- deleted 3y ago
  [deleted]

pavlov 3y ago

Stock-based compensation is counted as an expense in the accounting rules used by public companies (GAAP). So if they give $100M in stock awards, that’s a negative $100M on the company’s profit & loss statement, even though it’s not actually paid in cash by the company. For that reason many tech companies also report non-GAAP numbers where the profit looks nicer because they can leave out stock-based compensation (and anything else they feel like they can get away with).

ryandrake 3y ago

Compensation is compensation. Stock has value even if that value is constantly changing. If they disagree, I'd happily take their worthless millions of Unity stock off their hands for them. The point is how does an executive team who together makes on the order of $100M/yr justify its own compensation if the company is losing on the order of $100M/yr?

vondur 3y ago
If they keep screwing up the company, that stock may not be worth much.
tensor 3y ago
Business 101 is that all funded companies aim to lose money in order to grow. As long as the growth rate is sufficiently high to justify the losses, this is considered good performance. However, if that ratio goes the wrong way, then companies need to make internal adjustments to bring it back in line. That could be new or different pricing strategies, but it also usually involves some efficiency improvements and cost cutting. This is why you have scenarios like this where the company is yes overall losing money each year (as intended), making more revenue than last year (good), and still cutting jobs (because they are still not at the right ratio of revenue growth to losses). So the executives could be doing a completely fine job bringing the company back to the right path. With only trivial high level information like we have we can't tell. To really know if they are doing well or not you'd need to dive into the finances.
deleted 3y ago
[deleted]
015a 3y ago
Going to the public markets and saying "we're selling $100M worth of stock to fill a gap in our revenue" is basically suicide. This is essentially what happened to SVB earlier this year; its different because they're a bank and there's bank runs to consider and the FDIC and etc, but they said "we need liquidity so we're selling a bunch of investments" and everyone went like "huh? are y'all ok? screw that we're out" and they died a week later. SVB literally would have been fine, if you remove market psychology from the picture. But, that's a fallacy that everyone from You to highly experienced banking professionals make; ignoring market psychology. People have this idea of stock having value; but it only has market value. Its a similar fallacy as believing that your investments are protected because you have stop-losses set; stock only has value because people believe it has value, and if corporate leadership takes action that would cause a lot of people to stop believing your stock has value, that stock doesn't have value anymore. Its not a house; its fairy dust.
- rileymat2 3y ago
  "stock only has value because people believe it has value" Unless this is an indictment of all pricing, it seems short sighted as companies have assets and cashflow that exist beyond belief. When you buy stock you are buying a (small) percentage of everything that company owns.
  - 015a 3y ago
    I mean, look at SVB, only as the most recent example. They went from an extremely valuable company to being worth zero over a weekend, despite having billions of dollars in assets (even minus liabilities). Their shareholders also went to zero with them. You can argue that SVB is weird because they're a bank and their assets had to be liquidated to service banking customers; but that's basically how all companies work. Assets get liquidated to service debtors, generally at a significant discount on the value they reported the asset to be worth to the government. Usually; "believe has evaporated" happens to companies that, right before the belief evaporated, had to take on significant debt to survive another quarter, so that liabilities number is high. Lawyers and gutters get paid. Maybe insiders get priority liquidation. You can reasonably philosophically view corporate shares are partial ownership in the assets of a company. Realistically; if there's been one instance in history of a share converting into liquid capital after a "belief has evaporated" event, that resulted in more than, like, I can buy a coffee with this money, I'd love to hear about it.

jjoonathan 3y ago

tf? Unrealized gains don't count? Then why don't you give me your unrealized gains?

lotsofpulp 3y ago
niceice did not write that they did not count. > Yes, but the top brass are racking in tens of millions This characterization is obviously not accurate. How much unrealized gains do you think Unity executives have from their stock compensation if their market cap graph looks like this: https://www.macrotrends.net/stocks/charts/U/unity-software/market-cap https://www.macrotrends.net/stocks/charts/U/unity-software/m...
- jjoonathan 3y ago
  Why are you trying to handwave away the biggest part of compensation? Yes, losses happened, no this does not make the amount small. Not on an absolute scale and not compared to salary. Lol.

callalex 3y ago

What makes them unrealized? They are selling and realizing all the time, and get the massive unfair tax advantage of capital gains instead of income like for people that work for a living.

pxx 3y ago
Err equity compensation is not taxed as capital gains unless there's growth. Depending on how things are structured you pay taxes at different times but the value at grant is taxable as ordinary income. The only taxability difference is what to do with growth between grant and vest (and depends on when you pay the grant value's taxes). This is a common misunderstanding and sometimes causes people working at big companies to hold onto their RSUs needlessly even though they've already been taxed as ordinary income. In the RSU case you can't elect for different treatment on grant-vest gains, and it's very unclear if you would even want to.
lotsofpulp 3y ago
Equity compensation for earned income is subject to ordinary income tax, not capital gains tax.
deleted 3y ago
[deleted]