Reddit has never turned a profit in nearly 20 years, but it just filed to go public anyway
Reddit has never turned a profit in nearly 20 years, but it just filed to go public anyway
Reddit, the message board site known for its chronically online userbase and for originating much internet discourse, filed for its long-anticipated initial public offering on Thursday.
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https://www.reddit.com/r/technology/comments/1axll4s/reddit_files_to_go_public_reveals_that_it_paid/
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Spez got paid, according to that, $193,000,000 last year as CEO.
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reddit "never turned a profit".
I can't imagine the corruption/anti-integrity required to reconcile those 2 facts.
How come he isn't in jail, for fraud??
The article in the reddit post you shared is misleading. According to the S1 filed with the SEC, spez’s current base pay is $450,000; in 2023 he got roughly $792,000 in performance-based bonuses. The rest of that 193 million is options.
How did he get performance based bonuses when his company isn't profitable?
Apparently that wasn't one of his MBOs, so we can infer the board is a bunch of dumbasses.
And with any luck those options will be worth fuck all after the IPO flops
Base pay is a meaningless figure in tech. Total comp is all that matters. The true high rollers intentionally keep their base pay low to dodge taxes. This doesn’t mean they aren’t still getting and using this money, it’s just an intentional straw man to allow them to make this exact argument.
Except that Spez can't convert those options until some time after IPO and probably only in a staggered way.
You don’t need to exercise your stock options to access their value. It’s common practice to take loans out against their value, which allows you to access your money effectively tax free by instead paying interest against the loan. This is (again) a fairly commonplace practice used to make collecting tax difficult, and allow them to make the argument to regulators that they aren’t actually being paid that much, it’s totally just options they would never sell off. That’s why C suite has such a “burn everything to the ground, as long as our stock price goes up” mentality, because if it doesn’t, they have to start worrying about interest on their loans— because they have fairly low liquidity (percentage wise).
Why would there be any fraud? His salary is approved by the board that represents the current shareholders.
It's also not particularly surprising on account of there being plenty of VC-subsidised companies that never turned a profit, had high salaries for their executives and then IPO'd.
If your question is moreso on the absurdities of capitalism, then that's another discussion entirely, but I feel it's important to note that this is nothing out of the ordinary.
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