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$2.5B in stock comp for about 3,000 employees. that’s roughly $830k per person in just six months. Almost 60% of their revenue went straight back to staff.
by hmate9 1y ago
$2.5B in stock comp for about 3,000 employees. that’s roughly $830k per person in just six months. Almost 60% of their revenue went straight back to staff.
- tomasphan 1y agoThat’s how it should be, spread the wealth.
- onlyrealcuzzo 1y agoSpreading illiquid wealth *
- BhavdeepSethi 1y agoFunny since they have a tender offer that hits their accounts on Oct 7.
- gk1 1y agoThey’ve had multiple secondary sales opportunities in the past few years, always at a higher valuation. By this point, if someone who’s been there >2 years hasn’t taken money off the table it’s most likely their decision. I don’t work there but know several early folks and I’m absolutely thrilled for them.
- chermi 1y agoSecondaries open to all shareholds are on upward trend across start-ups. I think it's a fantastic trend.
- Der_Einzige 1y agoOh no, "greedy" AI researchers defrauding way greedier VCs and billionaires!
- yieldcrv 1y agoprivate secondary markets are pretty liquid for momentum tech companies, there is an entire cottage industry of people making trusts to circumvent any transfer restrictions employees are very liquid if they want to be, or wait a year for the next 10x in valuation
- onlyrealcuzzo 1y agoOh, yes, next year OpenAI will be worth $5T, sure
- yieldcrv 1y agoI mean… if they do the same low float accounting that got them to the $500bn print, why not it’s just selling a few shares for any higher share price
- hlava 1y agoTo the top 1%.
- blitzar 1y ago0.0001%
- Hamuko 1y agoIt doesn't seem that spread out.
- lemonlearnings 1y ago3000x One person with 830k is comfortable living. Probably gets spent into general economy. 1x Person with billions probably gets spent in a way that fucks everyone over.
- kibwen 1y agoSounds like they could improve that bottom line by firing all their staff and replacing them with AI. Maybe they can get a bulk discount on Claude?
- franktankbank 1y ago[flagged]
- datadrivenangel 1y agoif Meta is throwing 10s of million at hot AI staffers, than 1.6M average stock comp starts looking less insane, a lot of that may also have been promised at a lower valuation given how wild OpenAI's valuation is.
- darth_avocado 1y agoThey have to compete with Zuckerberg throwing $100M comps to poach people. I think $830k per person is nothing in comparison.
- munk-a 1y agoBoth numbers are entirely ludicrous - highly skilled people are certainly quite valuable. But it's insane that these companies aren't just training up more internally. The 50x developer is a pervasive myth in our industry and it's one that needs to be put to rest.
- bitexploder 1y agoThe 50x distinguished engineer is real though. Companies and fortunes are won and lost on strategic decisions.
- kridsdale1 1y agoDave Cutler is a perfect example. Produced trillions of dollars in value with his code.
- charcircuit 1y agoIt's not a myth and with how much productivity AI tools can give others, there can be an order of magnitude difference than outside of AI.
- xnx 1y ago> training up more internally Why would employees stay after getting trained if they have a better offer?
- deleted 1y ago[deleted]
- varenc 1y agoIt's a bit misleading to frame stock comp as "60% of revenue" since their expenses are way larger than their revenue. R&D was $6.7B which would be 156% of revenue by the same math. A better way to look at it is they had about $12.1B in expenses. Stock was $2.5B, or roughly 21% of total costs.
- skybrian 1y agoIt's not cashflow, though, and it's not really stock yet, I don't think? They haven't yet reorganized away from being a nonprofit. If all goes well, someday it will dilute earnings.
- gizajob 1y agoI’m guessing it will be a very very skewed pyramid rather than equal distribution.
- manquer 1y agoStock compensation is not cash out, it just dilutes the other shareholders, so current cash flow should not have anything do to the amount of stock issued[1] While there is some flexibility in how options are issued and accounted for (see FASB - FAS 123), typically industry uses something like a 4 year vesting with 1 year cliffs. Every accounting firm and company is different, most would normally account for it for entire period upfront the value could change when it is vests, and exercised. So even if you want to compare it to revenue, then it should be bare minimum with the revenue generated during the entire period say 4 years plus the valuation of the IP created during the tenure of the options. --- [1] Unless the company starts buying back options/stock from employees from its cash reserves, then it is different. Even secondary sales that OpenAI is being reported to be facilitating for staff worth $6.6Billion has no bearing on its own financials directly, i.e. one third party(new investor) is buying from another third party(employee), company is only facilitating the sales for morale, retention and other HR reasons. There is secondary impact, as in theory that could be shares the company is selling directly to new investor instead and keeping the cash itself, but it is not spending any existing cash it already has or generating, just forgoing some of the new funds.
- lemonlearnings 1y agoYay for the workers!