Hacker News Reader

Comment by dylan604 | Hacker News Reader

"Carson sold a mansion for over $3.2 million, but couldn’t afford to pay severance to his employees?

Apparently."

"Carson sold a mansion for over $3.2 million, and bought a boat, but couldn’t afford to pay severance to his employees?

Apparently."

I haven't had a chance to look into how Treehouse started. However, a CEO's role is not to fund a company with their personal finances. If the CEO bought a boat with company funds, or received windfall bonus, that would be an issue. While these are examples of tone deaf behavior from this CEO, I don't understand why these questions are being harped on like this.

View on HN

A little weird to assume he “made” $3.2 million from the house. Who knows what he bought it for, what he owed on it, what his profit in the transaction was, etc.

Maybe he’s neck deep in debt? Maybe he spent all his money on a boat assuming a windfall would come that never came. There can be any number of reasons someone would sell their house as their company goes under.

Seems pretty clear he was fully planing on the acquisition to go through. Which may be haphazard, but happens.

The most likely answer to, “Why did he fire everyone instantly with no severance?” is “Because there is no money.” It seems very likely after the acquisition fell through there was simply nothing left.

Nobody wants to layoff 90% of staff as CEO, so it is understandable to put it off for as long as possible. It's hard to admit things are that bad. If they did the layoffs early enough to have enough cash to pay severance, then this story would have come out months ago. Instead, the CEO held out hope that a deal would come through to make it no longer his problem. The deal fell through, and now they've burned through the cash that could have been used for severance. So instead of severance, they kept their jobs that much longer which is essentially what severance is meant to cover.

I'm not excusing CEO's behavior. It was 100% poorly managed. However, it is a learnable lesson for others that could be in this position. This is a forum full of startups or hopefuls. Not all startups will succeed. There are tough decisions to be made. Nobody will be happy about potential loss of their job. There's always the decision to keep people informed with the potential of panic ship jumping vs going all in on a bet of selling the company.

Also if you’re close to an acquisition and you start laying people off it will probably kill the acquisition anyways, so there’s that to balance.

He bought it for 1.2 million if I recall correctly. That is all public information in Portland.

Not saying he should be funding anything w/ personal money but he sold at a substantial profit to what he bought it at.

You're factually correct, but one of the CEO's functions is maintaining morale amongst employees by at least appearing to exercise inspiring leadership. I don't know enough about the company to blame Carson for its failure, but optics matter in his role.

On the other hand morale will never be good among people who see an ig post of a selfie during a tropical storm and try to spin it as:

> Carson enjoys a climate-related disaster

These people will never experience happiness and high morale

Meh. I’m pretty annoyed about over-the-top wokeness too, but this was shit management. It is understandable that people would be furious and thus inclined to amplify every slight.

They hated jjcon because he told the truth.

forgive for not being cool and hip, but what's a jjcon?

You're still cool and hip. jjcon is the commenter I responded to

Doh! I tried searching internet, but not this page directly.

Sure, there might be lack of inspiring leadership, but really can you expect a CEO of a failing startup to sell his house and distribute the proceeds between workers? I don't think this is a reasonable expectation, inspiring or not.

yeah, so he's a bad boss. that in and of itself is not a crime.

I get it. People are pissed off about not having a job and the no severance is just salt in the wound. Lashing out at the CEO is obvious and justifiable. Stretching that ire into the CEOs personal finance is not serving the cause in a meaningful way. Absolutely, bitch&moan about his Insta posts. Bitch&moan about the fact the CEO wasn't willing to sacrifice some salary as a gesture to offset. Lots of examples of how badly this CEO handled this. Definitely will not look good in his future CEO job interviews.

No one said anything about criminal liability: this is just about being a scumbag. A CEO is a receptacle of trust: they get to see things rank-and-file don't get to see. Leveraging that information asymmetry to profit at the risk of people who put just as much (in a lot of cases more) effort and skill into the success of the company as you do may not make you a criminal in a legal system that has decided a few decades ago to commit civilization suicide by grinding away labor protections, but it sure does make you a scumbag.

Live in modest house and give the people who sacrificed for you like a week of severance or something. Anything.

apologies for introducing a new phrase into an emotional conversation. I didn't mean "is not a crime" in the literal sense of the word. It's just a phrase used to mean things other than criminal activity are causing someone to receive attention like this.

It's not just about him spending money. It's about him clearly not doing everything he can to fix the situation.

When you're buying a boat and spending all your time sailing as you are supposed to be putting together a deal to save the company, and then that deal falls through, people are going to wonder if maybe there was more you could have done if you hadn't been buying boats and playing.

The "doing everything [you] can to fix the situation" won't work if the other party isn't interested. For all we know, this may have been the case. And there are many valid reasons for someone to focus on their personal life. My point is, we don't have the full picture.

His personal life came at a cost of a hundred people’s personal lives.

It absolutely is. When your boss asks for overtime and weekends to support the company in a startup culture, they take the most valuable thing any of us has. The exchange is about more than money and time: they are also expected to pour their time and effort into this one idea with similar, if not equal, sacrifices. They sink or swim with you.

This putz was too cowardly to lead honestly, and too incompetent to get a deal done to protect the livelihood of his team. If he knew he was checked out, he could have explored restructuring and letting the team buy in, maybe allowed them to reach out to their network and replace him. Instead all those hours of effort were reduced to nothing while he ran away from his responsibilities.

Fuck people like that, and fuck their boats and their Instagram feeds. They steal time away from our families for no benefit to us our society at large.

Exactly. Well put.

If you as a CEO feel burnt out etc and can't be bothered anymore to run the company and can't find a buyer, but the folks who joined your company are still invested because they believe in the vision, then let them buy the company from you. I'm sure some arrangement could have been made, even if you're not getting the millions you were expecting.

At least you'd protect your personal brand when you go and do your next venture.

But the way Ryan handled this is really poor - especially those sailing boat shots, while his employees had to worry about finding the next job.

Poor leadership and he totally burnt his personal brand imo.

Edit: typos / clarity

What it clearly demonstrates is that the CEO was far less invested in the company than those who worked for him.

What the attempts at building a norm along the lines of, "It isn't a crime, so people shouldn't talk about his finances" is about attempting to keep people from noticing that is almost always the case. It is class-defense, and what won't look good in future CEO interviews is that he was gauche-enough to draw attention to the difference between incentives-in-theory and the real world.

I don't understand, why are you so eager to nitpick the exact manner in which some anonymous Treehouse employee gets to critique his fucking asshole of a CEO?

Because it cheapens the argument. Complain all you want on the fact you have an absentee CEO where the employees are struggling with the decisions that were made while said CEO is galavanting around. Absolutely, complain away. The CEO does not owe the company money to fund severance packages. To comment about that is just lowering the signal to noise ratio.

Wouldn't it weirder if he kept the mansion? Perhaps he might not have been able to pay the mortgage anymore so he sold it? It's a bit shocking how tone deaf the the Instagram posts are though. Not really excusable when you're totally ghosting your company.

Again, how the CEO manages thier personal finances is really no concern and irrelevant to the conversation as long as there was nothing improper with the company's payment arrangement with the CEO.

It really sounds like this CEO just checked out. Sounds like the board should have stepped in and either replaced him for being an ineffective steward of the company. Which just goes to show that the CEO has fault, but there are others that were asleep at the wheel as well.

But he wasn't just CEO; he was founder and probably still a significant stock holder. While all the shareholders bear some culpability, either:

a. having enough capital in the business to pay severance, or, b. firing people at the point before they stopped being able to avoid severance.

... are both better options than he should have taken.

Severance, in the US, is not a given and is not a mandated thing. If a company is in financial distress, why does it seem that money to pay severance is magically available when they don't have the money to pay wages? Are you suggesting the writing on the wall should have been seen earlier so that they could have made the decision to dismiss the employees while the bank account was flush enough to cover severance?

Except the reason the CEO got rich enough to afford a mansion and a boat is because he accumulated for his personal use the value created by his employees. That alone is reason to ask, "is this really fair?"

Do you have a source saying his $1.8m mansion (his purchase price) was from the value created by his employees? $1.8m homes are certainly expensive, but clearly the board approved his salary and they were the ones primarily funding it, not the employees.

The boat may of been bought from the appreciation of the home.

> Do you have a source?

I mean.. that's capitalism? Capital accumulation is the bedrock of the system.

You should've asked that question when you joined the company and learnt that he had a mansion. Of course you didn't because it's based on a stupid premise that people should be paid based on your perception of fairness.

As opposed to the premise that people be paid based on who they know and how much money their family accumulated before they were born?

no shit Sherlock, what are you gonna do about it? Write another comment on hacker news?

Fair? It's a corporation. CEOs get paid significantly more than employees. It is a fact of life. You do not have to continue employement at a company if you think the pay scale is not fair. Good luck finding a job where you think things are fair. When you do find that job, please, make a Show HN so that others might be able to leave their unfair situations.

CEOs of publicly traded companies, where a significant chunk of their compensation is stock which can be sold on an open market, sure but not all CEOs.

In my entire career the highest paid people in a private company (including multiple high growth B2B startups) has always been the top sales people. Not the sales manager, not the CEO, an individual contributor Sales person. As you hit more and more above quota, accelerators kick in where you commission percentage increases massively. And our CEO loves writing them those checks because good sales people way more than pay for themselves.

I guess if you assume the structure and systems of 21st century capitalism are "a fact of life", like breathing and reproduction, you could make the argument that it's OK.

because it's a perfect symbol of the breakdown our society is experiencing. His life is completely unaffected by the failure of his company, while the employees who were passionate about the mission are left with nothing.

From what I can tell the company didn’t fail, just downsized. That’s mundane, not ‘a perfect symbol’. Downsized employees of tech companies aren’t ‘left with nothing’ they got paid for the work they did and will have no difficulty finding a new job.

They downsized 90%! Saying that they haven't failed yet strikes me as needlessly pedantic.

Yes, employees of a tech startup are probably compensated pretty well and have great job prospects. However, their wealth is probably negligible compared to the CEO, despite them appearing to care much more about their work than the CEO does. I understand that most people will say that this is fair and the market has determined their worth, but even if that's true the people who get the short end will resent it and see that they have more to gain by toppling the system than by working inside it. Wealth Inequality is an existential threat to western capitalist democracy, and if it's not rectified it will lead to revolution. If you are in favor of our current system and wish to preserve it, wealth inequality must be addressed.

Yeah that’s a really wild take from the authors. Nobody knows what’s that 3.2M is, maybe the guy was in debt, or that was all he had. Sure he doesn’t sound like someone I’d ever want to work even next to, but to suggest that the founder is supposed to burn his personal net worth to the ground to pay off employees of a failed venture is disgustingly entitled and cannibalistic on the authors’ part.

I’d take no severance over some guy having to sacrifice his or his family’s livelihood so that he can provide 10 people with parachutes.

Another case totally of course if that mansion was bought with company funds. In that case it’s fraud and charges.

I found this odd too. The idea of limited liability, is that your business can go under, without it taking your personal finances with you.

> pay severance to his employees?

Isn't severance pay something that should be included in the work contract? I don't know how this differs in the US.

While it can be put into a work contract, its never been in any contract of mine (I assume it is in contracts for union employees and for some executives). Many states do require that companies above a certain number of employees have to give notice, usually called WARN acts (and it looks like Oregon's requires 60 days notice according to https://www.oregon.gov/highered/institutions-programs/workfo...). Employees do need to pay out any unpaid holiday or sick time (which is why unlimited vacation is bad, since you don't get cashed out).

Normally when you get severance, it's in exchange for liability from lawsuits and to prevent bad press and sharing of trade secrets. What this does is make it much harder to sell Treehouse since there's now a fair amount of liability attached.

Yup that is why it is called a limited liability corp. the limited liability part

Some people have a child level understanding of how business is ran and financed and then you read such shit.

Reply on news.ycombinator.com