8 ms·

GoPro's CEO honors a costly promise

146 points by techaddict009 11y ago

prbuckley 11y ago
That is a very standup move.
icu 11y ago
Woodman should be commended for keeping his word. Not only does this light the way for other CEOs to keep their word, it enhances Woodman's future standing with investors, employees and any other stakeholders.
testingonprod 11y ago
This guy is amazing for that.
- collyw 11y ago
  Your comment would imply that not keeping your word would be the norm. Sad, but probably true in the world of high paid people.
  - brianwawok 11y ago
    Even if 1% of verbal contracts for 200 million dollars are not honored.. the expected value of not signing is -2 million.. seems smart to spend 5k on a lawyer, no?
    - nirmel 11y ago
      I don't know why I'm challenging you on this, but the expected value is -2m times the probability of your contract being worth $200m in the first place. At best, that's 1 in a thousand, thus making the expected value at best $2000, making the $5000 a waste, per your logic.
Pyxl101 11y ago
Detail missing from this article (at least the article linked as I write this comment): Neil Dana was GoPro employee #1 and still works at the company. This detail is seemingly absent from a bunch of news articles, and that fact really surprises me. It's like the news wants to make this sound more controversial than it really should be; they clearly want to play up the "college roommate" aspect and describe the move as "generous", rather than the "employee #1" aspect. Woodman and Dana reportedly had a contract that Dana would receive 10% on sales of Woodman's stock, as first employee and head of sales, and Woodman is honoring the contract. It's not just, as far as I can tell, some kind of donation or obscure college bet. Sure, the contract was verbal. I still don't think we should be /astonished/ that someone honors an employment contract that was made for equity. That's setting the bar rather low, isn't it?
- joelrunyon 11y ago
  > I still don't think we should be /astonished/ that someone honors an employment contract that was made for equity. That's setting the bar rather low, isn't it? Yes, that's the standard, but yet, everyone is still surprised. Highlighting these events in a public manner could help push the tide to make sure this isn't such a rare event.
- rifung 11y ago
  Well in fairness, with the way companies treat their employees nowadays, or at least appear to, the bar is very low. It would not surprise me at all if early employees get shafted when they dont have things down in writing. It doesn't even surprise me when employees get screwed even with things in writing. Its not like people have low expectations of companies for no reason.
- venomsnake 11y ago
  With the high profile clawbacks in the recent years it is indeed rare. I am sure that there were legal ways to pay him way less.
- jib 11y ago
  Well it is a good story, right? Like Wizards of the Coast's really expensive table: http://www.peteradkison.com/blog-entry-3-wizards-of-the-coast-equity-distributions-part-2/ http://www.peteradkison.com/blog-entry-3-wizards-of-the-coas...
meesterdude 11y ago
This shouldn't be special or surprising news; but its certainly nice to see.
skrebbel 11y ago
As a European, I often read HN in awe, but this beats it. I find it a testament to American culture that the vast majority of commenters here are amazed that someone kept a promise. How can you do business like that? If you can never just look someone in the eye and make a deal?
- anu_gupta 11y ago
  What, you think Europeans don't lie and cheat as well?
  - deleted 11y ago
    [deleted]
  - skrebbel 11y ago
    Of course they do. It's just that I've done a fair amount of business by looking people in the eye. I've also worked at a 300 person software agency where that way of doing business was the norm. Sure, there was some paperwork, but it wasn't all-encompassing.
    - justincormack 11y ago
      Indeed the entire London financial centre works with verbal contracts, at least where not switched to electronic, so the foreign exchange market etc.
      - gohrt 11y ago
        Note the difference between a repeated game of many oral contracts over time, vs a one-off even that will never be repeated (founding a massively successful company)
    - mikeash 11y ago
      Did that paperwork not describe the work to be done and the payment to be made in exchange?
- 11y ago
mhomde 11y ago
Reminds me of the bit Chris Rock used to do about taking credit for stuff you're supposed to do "I take care of my kids, I take them to school!" he says proudly "That's what's you suppose to do you dumb M---F!"
ebbv 11y ago
The title of this article is very misleading. The "promise" was already turned into a legally binding agreement. It's not like he's just now deciding to honor it, which the title implies.
bound008 11y ago
What has happened to journalism? Is anyone else on here sick of reading typos. "GoProp". Can't even get the name of the company right.
- jkaunisv1 11y ago
  Nobody pays for it so they don't have money to hire proofreaders?
  - robotresearcher 11y ago
    Spellcheck is very, very cheap.
    - jkaunisv1 11y ago
      It's not about having spellcheck. It's about having the time to calmly read something over in a copy-editing mindset. Preferably with a different set of eyes than the ones that wrote it. Spellcheck won't catch brand-name errors unless GoPro is in your dictionary. It won't catch grammatical problems, or typos that happen to be real words. The journalist who wrote it and the editor who approves it are probably way too distracted and have a ton on their plate. By the time it's going to press it all blurs together and errors slip through.
booruguru 11y ago
Can someone explain this story to me ELI5-style (like I'm 5 years-old)?
- __z 11y ago
  Guy makes promise. Guy keeps promise. PR piece shows up on fortune.com.
- pc86 11y ago
  Woodman is GoPro CEO, Dana is GoPro employee #1 Woodman agreed to pay Dana 10% of stock back in college. Woodman (through the company) gave Dana what amounts to just under $230 million. Other than the S1 filing (the document filed with the SEC prior to GoPro's IPO) which mentioned this deal, it was a verbal contract. Were he so inclined, Woodman probably could have refused to give Dana the $230 million and gotten away with it.
kolbe 11y ago
I really doubt Dana and Woodman were thinking about it at the time, but this is a kind of a nice way to structure an equity compensation contract with early employees or investors. Instead of saying "I want x% of the company's shares," employees are probably better off looking at the most powerful person at the company and saying "I want y% of everything he makes."

146 points by techaddict009 11y ago

That is a very standup move.

icu 11y ago

Woodman should be commended for keeping his word. Not only does this light the way for other CEOs to keep their word, it enhances Woodman's future standing with investors, employees and any other stakeholders.

testingonprod 11y ago

This guy is amazing for that.

collyw 11y ago
Your comment would imply that not keeping your word would be the norm. Sad, but probably true in the world of high paid people.
- brianwawok 11y ago
  Even if 1% of verbal contracts for 200 million dollars are not honored.. the expected value of not signing is -2 million.. seems smart to spend 5k on a lawyer, no?
  - nirmel 11y ago
    I don't know why I'm challenging you on this, but the expected value is -2m times the probability of your contract being worth $200m in the first place. At best, that's 1 in a thousand, thus making the expected value at best $2000, making the $5000 a waste, per your logic.

Pyxl101 11y ago

Detail missing from this article (at least the article linked as I write this comment): Neil Dana was GoPro employee #1 and still works at the company. This detail is seemingly absent from a bunch of news articles, and that fact really surprises me. It's like the news wants to make this sound more controversial than it really should be; they clearly want to play up the "college roommate" aspect and describe the move as "generous", rather than the "employee #1" aspect. Woodman and Dana reportedly had a contract that Dana would receive 10% on sales of Woodman's stock, as first employee and head of sales, and Woodman is honoring the contract. It's not just, as far as I can tell, some kind of donation or obscure college bet. Sure, the contract was verbal. I still don't think we should be /astonished/ that someone honors an employment contract that was made for equity. That's setting the bar rather low, isn't it?

joelrunyon 11y ago
> I still don't think we should be /astonished/ that someone honors an employment contract that was made for equity. That's setting the bar rather low, isn't it? Yes, that's the standard, but yet, everyone is still surprised. Highlighting these events in a public manner could help push the tide to make sure this isn't such a rare event.
rifung 11y ago
Well in fairness, with the way companies treat their employees nowadays, or at least appear to, the bar is very low. It would not surprise me at all if early employees get shafted when they dont have things down in writing. It doesn't even surprise me when employees get screwed even with things in writing. Its not like people have low expectations of companies for no reason.
venomsnake 11y ago
With the high profile clawbacks in the recent years it is indeed rare. I am sure that there were legal ways to pay him way less.
jib 11y ago
Well it is a good story, right? Like Wizards of the Coast's really expensive table: http://www.peteradkison.com/blog-entry-3-wizards-of-the-coast-equity-distributions-part-2/ http://www.peteradkison.com/blog-entry-3-wizards-of-the-coas...

meesterdude 11y ago

This shouldn't be special or surprising news; but its certainly nice to see.

skrebbel 11y ago

As a European, I often read HN in awe, but this beats it. I find it a testament to American culture that the vast majority of commenters here are amazed that someone kept a promise. How can you do business like that? If you can never just look someone in the eye and make a deal?

anu_gupta 11y ago
What, you think Europeans don't lie and cheat as well?
- deleted 11y ago
  [deleted]
- skrebbel 11y ago
  Of course they do. It's just that I've done a fair amount of business by looking people in the eye. I've also worked at a 300 person software agency where that way of doing business was the norm. Sure, there was some paperwork, but it wasn't all-encompassing.
  - justincormack 11y ago
    Indeed the entire London financial centre works with verbal contracts, at least where not switched to electronic, so the foreign exchange market etc.
    - gohrt 11y ago
      Note the difference between a repeated game of many oral contracts over time, vs a one-off even that will never be repeated (founding a massively successful company)
  - mikeash 11y ago
    Did that paperwork not describe the work to be done and the payment to be made in exchange?
11y ago

mhomde 11y ago

Reminds me of the bit Chris Rock used to do about taking credit for stuff you're supposed to do "I take care of my kids, I take them to school!" he says proudly "That's what's you suppose to do you dumb M---F!"

ebbv 11y ago

The title of this article is very misleading. The "promise" was already turned into a legally binding agreement. It's not like he's just now deciding to honor it, which the title implies.

bound008 11y ago

What has happened to journalism? Is anyone else on here sick of reading typos. "GoProp". Can't even get the name of the company right.

jkaunisv1 11y ago
Nobody pays for it so they don't have money to hire proofreaders?
- robotresearcher 11y ago
  Spellcheck is very, very cheap.
  - jkaunisv1 11y ago
    It's not about having spellcheck. It's about having the time to calmly read something over in a copy-editing mindset. Preferably with a different set of eyes than the ones that wrote it. Spellcheck won't catch brand-name errors unless GoPro is in your dictionary. It won't catch grammatical problems, or typos that happen to be real words. The journalist who wrote it and the editor who approves it are probably way too distracted and have a ton on their plate. By the time it's going to press it all blurs together and errors slip through.

booruguru 11y ago

Can someone explain this story to me ELI5-style (like I'm 5 years-old)?

__z 11y ago
Guy makes promise. Guy keeps promise. PR piece shows up on fortune.com.
pc86 11y ago
Woodman is GoPro CEO, Dana is GoPro employee #1 Woodman agreed to pay Dana 10% of stock back in college. Woodman (through the company) gave Dana what amounts to just under $230 million. Other than the S1 filing (the document filed with the SEC prior to GoPro's IPO) which mentioned this deal, it was a verbal contract. Were he so inclined, Woodman probably could have refused to give Dana the $230 million and gotten away with it.

kolbe 11y ago

I really doubt Dana and Woodman were thinking about it at the time, but this is a kind of a nice way to structure an equity compensation contract with early employees or investors. Instead of saying "I want x% of the company's shares," employees are probably better off looking at the most powerful person at the company and saying "I want y% of everything he makes."