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Comment by gberger | Hacker News Reader

The Chief Legal Officer, Daniel Gallagher, made $30M this year. It breaks down into $257k cash, $4.2M bonus and $25.5M in stocks and options. This is a far larger amount than any other executive.

In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC (Securities and Exchange _Commission_), the highest role of the SEC, appointed by the US President.

He was hired by Robinhood in May 2020, and his previous job was at WilmerHale, a firm specializing in defending other firms against the SEC.

This guy must be worth his weight in gold in avoiding regulatory fines for Robinhood.

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So the Big Short was spot on when it showed the SEC lady using that position to leverage her way into a job in the sector she's supposed to regulate. It makes sense an SEC regulator knows all the ins and outs and would be the best person capable of finding and exploiting loopholes.

It also makes sense as a quid pro quo. But we can only speculate either way.

> In 2011-2015, Daniel Gallagher was 1 of 5 Commissioners of the SEC

> his previous job was at WilmerHale, a firm specializing in defending other firms against the SEC.

How is that situation even remotely legal?

Why wouldn't it be as long they follow the law in both jobs? It is like defense attorney becoming a prosecutor or an IRS employee becoming a tax advisor.

The best person to give advice on a subject are those who have experience on both sides.

Its not a good idea to allow heads of massive institutions to just hop around right after their tenure is over.

For one, it creates a negative incentive for the regulatory roles. Now people will seek to be head of the SEC just so they can score a specific job after. Incentives are misaligned.

Lots of private sector companies (especially law firms) include non-compete clauses for similar reasons. They want to prevent their former employees from leveraging their insider information against them.

An IRS employee becoming a tax advisor is one thing. The head (and more broadly executive level personnel) of the IRS becoming the head of accounting of a major firm is another.

>For one, it creates a negative incentive for the regulatory roles. Now people will seek to be head of the SEC just so they can score a specific job after. Incentives are misaligned.

I just don't see the misalignment in incentives. Everyone is thinking about their compensation next job, and it is only a problem if being bad at your current job somehow makes you more attractive to your next employer.

Unlike the private sector, there shouldn't be any insider information to protect. The SEC should be transparent about the law.

Think of it this way as well, Robinhood's chief regulatory officer quits and gets hired as head of the SEC. Works as head of the SEC for a few years. Their tenure at the SEC ends and they jump right back to Robinhood.

I have 0 doubt in my mind, anyone in that position wouldn't already be predisposed to believe that actions (regulations, enforcement etc) that help Robinhood (and other trading platforms) are a good thing and will work for those corporate interests because they share the same beliefs by default.

Then, once they leave the SEC, they're welcomed back with massive pay as a thank you for the job they did pushing Robinhood's agenda forward which is at odds with good governance principles.

Its like making the head of Exon the head of the govt's renewable energy initiatives. They're gonna say increasing renewable energy output isn't a worthwhile pursuit, what we really need is more oil. Let's sign a big contract over with exon, I even know the people who work there and can make it happen!

Working against society's interests in favor of the corporations

The problem with this view is that SEC chairman is selected by the president, so their values and positions all baked into their appointment. If the president's office wants someone with a more or less favorable position on to trading platforms, they find one. If they don't comport with the government's expectations, they are replaced. Same with the Exon example.

I work in a highly regulated industry and think that the cop and robber idea people have is out of tune with reality witch is more collaborative. Most agencies want businesses to succeed and actively work to help them do so within the confines of the law.

As far as I know, non competes for lawyers are almost universally non enforceable, and some states have determined that lawyers can't even sign such an agreement as it violates legal code of ethics.

Because its a massive conflict of interest.

Its the same reason you wouldn't let a Defence contractor CEO be secretary of defence, or why you shouldn't let a telecoms lobbyist run the FCC.

Oh wait...

Talk about a revolving door...

How do you value the stock options of a company that hasn’t had its IPO?

Probably using the same fair market value that pre-IPO startups calculate to assess your tax liability when you exercise options.

Lots of ways to value a company. Once you have the value of the entire company, the price per share just depends on the number of shares. Options are then calculated based on a formula using the price per share as one input.

You can value a company by comparing it to its peers (this is like company Y which has similar users, growth potential etc)

You can value a company by only caring about its assets and liabilities.

Private shares of a company can exist and be traded, another market based valuation just with fewer data points that are private and not publicly shared.

And plenty more ways. Finance is really all about answering this question, how much is something worth and then creating mechanisms to trade that value in different ways.

You generally use 409a valuations, which increase in regularity and accuracy as the company matures (ie. gets bigger and closer to an actual IPO).

As a former Uber employee, I assure you they do not become more accurate. It’s all based on funding rounds etc. The stock market is a different beast altogether.

Maybe off of current worth estimated after sale of shares to earlier investors? I'm not completely sure though.

When I worked at a pre IPO startup they always used the valuation of the last investment round.

Same way you do after an IPO. Based on the sale price of the stock.

409a valuation.

yeah basically every obama official now works in big tech.

but somehow people think only republicans are corrupt. the biggest companies are chock full of obama staffers.

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