Reddit CEO defends $193M compensation following backlash from unpaid moderators

https://fortune.com/2024/03/19/reddit-ceo-steve-huffman-defends-193-million-compensation-following-backlash-unpaid-moderators/

by thunderbong • 2 years ago

62 83 2 years ago

fortune.com

iLoveOncall2• 2 years ago

Volunteer work is unpaid, more at 5.

mananaysiempre• 2 years ago

Not precisely. Both Reddit volunteer work and (the vast majority of) Wikipedia volunteer work is unpaid, but the legal rights you get to everyone else’s (and retain to yours) are different enough that it’s foolish to engage in the former but reasonable to engage in the latter. Not that everyone will want to work on Wikipedia, but at least it’s not a bad idea on its face.

(Stack Overflow toyed with going over to the Reddit side, but they have backed off for now.)

sysstemlord• 2 years ago

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

iLoveOncall2• 2 years ago

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

Folcon• 2 years ago

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.

passwordoops4• 2 years ago

So maybe the CEO compensation should be adjusted accordingly?

hgomersall• 2 years ago

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.

pjc503• 2 years ago

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?

TheAdamist• 2 years ago

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...

giantg23• 2 years ago

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.

consp• 2 years ago

"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.

rightbyte2• 2 years ago

At some point you are the problem if you work for free for a commercial entity.

This neo-$whatever belief in that commercial entities can replace community run things can't die off soon enough.

Radim2• 2 years ago

At some point you are the problem if you work for free for a commercial entity.

Sounds harsh, but this is the correct stance.

The free labour you provide is not only "your loss". There are second order effects: you effectively make it harder for others to compete with said commercial entity.

This includes salaried employees of competing companies whose wages you effectively press down. And even other volunteers and non-profits, because defending and sustaining their project in face of "free inputs, for-profit outputs" competition is that much harder. Community projects die because of this.

"Working for free for a commercial entity" is just a bad idea all around. You exploit yourself (whatever, your choice, you may be getting other kicks out of it) and harm others.

romwell3• 2 years ago

You just provided free content (a brief opinion piece) for publication on a commercial entity (HackerNews, run by YCombinator)...

...which, according to you, is a "bad idea all around", since you exploit yourself and harm others.

So, why are you acting against your morals and judgement?

shafyy• 2 years ago

No. The problem is that we live in a society where everything anybody does needs to have a financial motive, otherwise you get fucked. And you drank the big corp kool-aid in gallons if you truly think defending a dude that just earned $193M on a public forum is something sensible to do.

JumpCrisscross9• 2 years ago

problem is that we live in a society where everything anybody does needs to have a financial motive

But it doesn’t. Exhibit A: Reddit moderators. (Exhibit B: this thread, and this comment.)

If you find value in moderating, moderate. This is purely a problem of sour grapes—Reddit never pretended to be an Altman-esque non-profit.

romwell3• 2 years ago

They're not defending the CEO, it seems, but rather shift the blame onto volunteer mods who put in the hours into sustaining a commercial platform rather than joining a "community-run" one.

Which isn't making it a better argument, since there are many reasons why online communities form where they do, and "community-run" platforms aren't necessarily an option.

This platform isn't "community-run" either, and yet the parent commenter is participating here (and thus is "the problem" too), so I think they should get off the high horse.

caseyy• 2 years ago

I didn’t read it as a strong defense of the CEO. I also agree that labor needs to have appropriate self-worth and eschew being exploited. This causes many problems in many industries, such as downwards pressure on wages and labor negotiating power. For example, Reddit mods have recently had their negotiating power checked in the blackout protests.

Exploitation, when it’s so voluntary, is definitely a dance that takes two. Both parties are responsible for the situation that arose. The abused party, of course, we can sympathize more with. But they could always have chosen and even today they can choose to not engage anymore.

capybara_2020• 2 years ago

As an alternate perspective.

Maybe people are ok with companies making money from their free work as long as the company does not antagonize the people offering free services just to milk every drop of money from other peoples handwork.

It used to be that forum owners had to beg their users for money to keep the servers going. Which is also not a great situation. But now it seems like it swung completely in the other direction, with users having to beg the forum owners to keep/add things they use.

Shawnj2• 2 years ago

Yeah people are happy to post and use social networks and forum sites (eg Discord, here, etc.) when those sites don’t make intrusive changes a significant amount of users dislike or do shady things like the Meta Cambridge Analytica scandal.

pbhjpbhj4• 2 years ago

You just provided content -- and encouraged others to provide content -- for a privately run for-profit company who use this site to promote their businesses.

Ideally, forums like this would be some sort of cooperative structure owned and run by those who wish.

I'd love to see r/AskHistorians break off as a co-op who earn their own money and use it to resource history-based activity. They put so much value in that others leech off.

rightbyte2• 2 years ago

Ye that is true. I am trying to rationalize why I am not hypocritical right now :)

I think the difference is that you created your own forum and community on Reddit under the pretense that it is yours. Reddit more or less sucked up the existing forums. And then Reddit throws more and more ads in your face and siezes control of the means of memeing.

HN seems to be run in a different way. Many of the old forums were run by commercial entities, but at the time they did not try to profit from the forums in such a in your face way.

nashashmi• 2 years ago

moderators are not professionals working according to direction. They are doing things as they see fit. And some of them are doing things for their own agenda (G. Maxwell) paid by some shadow org. Fine.

The other mods are complaining that they are doing some very noble work and are doing it for free. That's how noble work goes. It is thankless.

If any mods want money, I think they should be allowed to pin sponsored threads and use that for referrals. Oh wait! They can do that already.

I guess they are trashing on the CEO for not giving them a network of sponsors whose ads they can pin and make special money.

sesm• 2 years ago

That’s a good point. In video game related subreddits mods are often employees of the publishing company.

shp0ngle• 2 years ago

They can do another blackout since the last one was so successful and achieved all its goals

Ylpertnodi• 2 years ago

They can do another blackout since the last one was so successful and achieved all its goals

Gotta start somewhere.

RileyJames• 2 years ago

Reddit going public (again) is such a weird and egregious destruction of any value that reddit had left.

It’s like Wikipedia going public with the expectation that it would continue to hold any value going forward. The proposition can’t hold true.

passwordoops4• 2 years ago

Gotta cash in on the AI hype while you can!

I figure the price will track the AI bubble, so probably go up, then crash and burn when investors realize LLMs are good tools, but not $30 a month good to most business clients. But the execs and board will make of quite handsomely by then

JumpCrisscross9• 2 years ago

Gotta cash in on the AI hype while you can

Reddit is among the most-trafficked websites on the planet. Its value has little to do with AI and everything with attention.

hsjsbeebue2• 2 years ago

Reddit is one of the few places you can build an audience and attract people for free. The trouble is most subs aren’t for profit so the mods don’t benefit. Given the mods money might be good but it might be bad in that you attract people trying to make a buck and ultimately spammers and AI crap.

pennybanks2• 2 years ago

what would a for profit sub look like? paid entry? a specialized market place that takes commission? wouldnt it just be like fb marketplace if they did create a sub with profit in mind?

hsjsbeebue2• 2 years ago

a sub that is the community for a paid product (although that is not reddit like)

a sub with sponsorship maybe

Eddy_Viscosity2• 2 years ago

It could like like a youtube channel with ads. Some of the revenue from ads shown in that sub go to pay the moderator.

ionwake2• 2 years ago

Its a bit annoying the "you cant use reddit unless you open the native app" moment to short the company, came before it IPO'd.

Sorry if this is negative, but like wtf have they been doing to it over the last 10 years.

As a plus, the native app IS great. But at what cost bros.

zoky• 2 years ago

As a plus, the native app IS great.

You may be the only person in the world who thinks that, who doesn't also work for Reddit.

ionwake2• 2 years ago

lol ok I must be out of touch

nmfisher• 2 years ago

Reddit mods are quite far down the list of "people I have sympathy for". Arguably (?) they play a role in keeping out spam/off-topic posts, but there's a reason reddit is often referred to as a hivemind. Mods play a big part in that.

boomboomsubban• 2 years ago

Not being paid plays a role in that. A person willing to spend countless hours on unpaid volunteer work is likely to have some other motivation. The common ones are flexing their ego or being ideologically driven.

Some genuinely like the topic they're moderating, but they often get burnt out by how shitty the job is.

Barrin92• 2 years ago

Isn't this an exceptionally high compensation even among American CEOs? This makes him what, the second highest paid CEO after Sundar, twice as well compensated as Tim Cook? For Reddit estimated at 6 billion? It's not obvious from the article but is this a one time thing stretched out over years?

Takennickname• 2 years ago

Which probably means he has no faith in the company's stock or else he would have taken stock options instead of taking it all in cash.

suddenclarity2• 2 years ago

It's almost all stock with an estimated fictional value. As stated in the article.

frankjr• 2 years ago

In anticipation to Reddit's IPO, it was revealed that Huffman’s compensation package for 2023 was worth $193.2 million, which included salary of $341,346, stock awards worth $98.3 million and stock options valued at $93.8 million.

waitforit• 2 years ago

Many people complain about that number (not necessarily on hackernews, but there are some comments like that already) without realizing that most of that value is based on the stock price and not cash. Depending on how the IPO fares this $193M value can turn into $1M or $1B+ (both extremes and very unlikely to happen).

He got around $1.1M in cash.

According to an SEC filing, Huffman got a salary of $341,346 in 2023 and a $792,000 “incentive” bonus. In February, Huffman’s salary was raised to $550,000 with the bulk of his $193 million compensation package tied to stock.

epolanski• 2 years ago

Stock compensation is arguably way more valuable than cash compensation unless you're leading a sinking ship, taxation is much better and you get more power/votes in the company.

pbhjpbhj4• 2 years ago

I'm sure the most active mods would be happy to have shares worth only a mere few hundred thousand dollars?

Regardless of the amount it's a particularly egregious example of profiting from other people's hard work.

dkjaudyeqooe• 2 years ago

But when the victims are willing and enthusiastic participants, who would complain bitterly if they were barred from contributing their free labor, what are you supposed to do?

Their free labor is compensated by something else, probably status or power, obviously, so it's not clear that anyone is being taken advantage of.

suddenclarity2• 2 years ago

This common argument seems like a misunderstanding of how Reddit works. Mods aren't unpaid workers for Reddit, but rather, mods get access to a free platform to create a community on the condition that it follows the rules. That's the compensation. In contrast, one of the forums I'm active on just did a donation run to keep their servers running for another year.

pavlov• 2 years ago

The same applies to all public company CEOs. They all get paid mostly in stock.

Ultimately it's the other shareholders paying these compensation packages. They may sometimes be well deserved, but discussing and criticizing them is fair too.

Sometimes courts do strike down excesses. Elon Musk's $55 billion package was voided by a Delaware court because the Tesla board didn't follow proper procedure. (I.e. not because he didn't create shareholder value — he absolutely did! — but because the process was flawed.)

threeseed• 2 years ago

Many of the moderators are very much paid.

Some work for the companies that a subreddit may be centred around, others get kickbacks from those looking to promote products and my favourite are the state actors who help to ensure certain viewpoints dominate.

But of course Reddit has been happy to turn the other cheek to all of this over the decades. Anything goes so long as it doesn’t end up in the media.

TrackerFF• 2 years ago

I'm a big user of reddit, but the platform has definitively suffered a bunch of things that could be tied up to their use of free moderation:

- Some subreddits are so politically biased, that you really need to know the political leaning prior to using them. Getting locked out of huge subreddits like r/worldnews is easy as pie, if you just write the wrong things on certain topics.

- A bunch of subreddits automatically get closed/locked due to lack of moderators.

- There are so many different rules to follow. Just posting something in a random sub comes with a 50/50 chance of your post getting removed or shadow-banned.

And let's not even start on the straight up enshittification of the platform features. I fully expect reddit to become a completely close-off / walled garden app that follows the worst TikTok practices. As long as I can use old.reddit, I'm happy, but I think we all know that it will disappear one day.

As for the compensation...yeah, outrageous comp when the site is feeding off free work.

And the usual corporate response from the CEO "The board decides my compensation, and if the website does well then so do I"

o_____________o• 2 years ago

There are so many different rules to follow. Just posting something in a random sub comes with a 50/50 chance of your post getting removed or shadow-banned.

Reddit has god awful UX/I and makes moderation very difficult. They could help themselves with very simple features like post templates and flows, but instead, every semi-popular subreddit faces a daily onslaught of low effort users posting repetitious garbage. Users will feel frustrated by seeing the garbage, but also launch into righteous complaints about mods if they're moderated.

They also make it clear that a post is being held for moderation and then encourage the user to message the moderators directly, so now you have low effort, high volume, and a guaranteed sense of immediate opposition.

The real takeaway for me is that at this point, Reddit is popular because it's popular, not because it deserves anything.

thinkingemote• 2 years ago

Reddit has huge value in hidden marketing. Many users, subreddits and moderators are paid by companies. These create a lot of good content! It's not obvious bland marketing it's good and engaging.

They work to promote people, products and companies from the boring to the new, the safe to the illicit.

It's exactly the same with Musks twitter: getting the power users who are paid to tweet to pay the platform.

some1else• 2 years ago

Maybe spend a couple bucks on bringing closed captions to video AMAs. I clicked the link to the embed featured in the article, and it's 20 min of unsubtitled speech.

https://www.reddit.com/r/RDDT/comments/1bhr6uv/amalmosta_ans...

AnonC• 2 years ago

Some 2022 figures below for comparison. This is total compensation (including stocks), not just base salary.

Andy Jassy, Amazon: $1.3 million (a big fall from $212 million the year before)

Jensen Huang, Nvidia: about $21 million

Mark Zuckerberg, Meta: about $26 million

Satya Nadella, Microsoft: about $55 million

Tim Cook, Apple: about $100 million

Sundar Pichai, Alphabet: about $226 million

It’s not very surprising to see that a CEO (u/spez) who’s actively driving the company into the ground gets an atrocious pay. I hope all the large investors in the Reddit IPO ‘lose their shirts’. The hype can’t get any louder.

Reddit CEO defends $193M compensation following backlash from unpaid moderators

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