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Comment by sysstemlord | Hacker News Reader

Since when does Reddit make $193M yearly profit? It seems a lot has happened since I stopped using Reddit.

The CEO is paid $193M, this has nothing to do with any profit reddit makes.

Which, they have never made a profit, "Now, Reddit — which is not yet profitable"......"Reddit reported a net loss of $90.8 million in 2023, a narrower loss than the $158.6 million loss it netted in 2022." https://www.cnn.com/2024/02/23/tech/reddit-ipo-filing-busine...

Pretty wild that a CEO can make that sort of money while running an unprofitable business. I can't imagine thinking so much of myself that I would value myself at 100s of millions. I wonder if there's some sort of pathology behind it.

> wonder if there's some sort of pathology behind it

That of taking a company public.

I get where you’re coming from. But Reddit, given its heritage of leadership, is a weird hill to take a stand on.

> "Reddit reported a net loss of $90.8 million in 2023, a narrower loss than the $158.6 million loss it netted in 2022."

I know it's naive but cutting the CEO's (and rest of C suite) salary to normal employee levels would fix that loss down to 0.

> cutting the CEO's (and rest of C suite) salary to normal employee levels would fix that loss down to 0

Now do it with cash flow.

Salaries don't come out of profits. Profits are calculated after employee compensations obviously.

Sure, but there's a sort of nominal expectation that post salaries, especially salaries of that magnitude an entity has some profit. The obvious exception being they had an unprofitable year but have a gigantic pile of money sat in a bank somewhere.

So maybe the CEO compensation should be adjusted accordingly?

> maybe the CEO compensation should be adjusted accordingly?

This is outside the domain of unpaid moderators’ unless the CEO’s compensation is threatening the company’s survival. It clearly is not.

$193M compensation to lead a business to unprofitability is a problem. Period.

> $193M compensation to lead a business to unprofitability is a problem. Period.

The compensation did not lead to unprofitability—it contributed to it. And we have no evidence by which to claim it would have been worse under less-paid management. (Well, with Reddit, we might.)

I’m not defending the compensation per se. But arguing everyone at any profitable entity should be paid less until the venture is profitable, irrespective of any other facts, is silly. Particularly when it comes to non-cash compensation.

> But arguing everyone at any [un?]profitable entity should be paid less until the venture is profitable, irrespective of any other facts, is silly.

This is the argument usually made for redundancies: reducing the overall payroll.

> the argument usually made for redundancies: reducing the overall payroll

It’s for increasing profits. Redundancies are reduces at profitable and unprofitable firms alike.

Ok, but when you look at the forecast, and see an expected loss of 90 million, maybe the CEO should say, perhaps if I was paid 90 million less then we will be in profit, and I would still have enough money to retire in excessive luxury.

Doesn't sound like the CEOs problem; he isn't there to make personal sacrifices to make the company profitable and I don't think anyone would pretend he is. If anyone should be making that observation it is whoever signs off on his compensation.

Although the compensation package won't cash so the situation isn't quite that simple.

It can only be viewed as a sacrifice if you believe he legitimately deserves that much money. That money could be used to increase employee comp instead of shareholder value. That's a lot of money for running an unprofitable business. I wish I was so delusional that I thought I deserved 100s of millions for running an unprofitable company.

It's baffling how shareholders are so tolerant of a CEO looting the company for substantial fractions of its total value annually. But it's very widespread.

Aren't most shareholders there to attempt to loot the company? Capitalism is surely about aligning and exploiting greed, like a confidence trick?

Clearly there's a group of people of people who are selfish and think so highly of themselves that this sort of logic will never make sense to them. Any company or executive that says they care about the workers, customers, or cause and is making 8+ figures is lying whether they realize it or not. I realize some people will make the argument that the comp needs to be so high to attract top talent. But there's a pool of talented people who would do it for less. Plenty of non-profits or mission-driven companies have lower paided executives.

Distinction without a difference. If the salary was lower, the profit would be higher.

No, the important distinction is "is that coming from cash or stocks". The cash component of salaries goes in the profit&loss account. See https://www.sec.gov/Archives/edgar/data/1713445/000162828024...

Revenue $804m (!), expenses $944m (!). But I'm having trouble working out which of the expenses breakdown entries has the board salary in. And if it's compensation in stock, does that have to be expensed?

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