Whereas Reddit’s CEO Steve Huffman has been given a $193 million compensation package deal, the moderators on the platform are unpaid—and the disparity has not gone unnoticed. Since phrase acquired out about Huffman’s pay, customers on Quora, Reddit, and X have been ripping into the package deal.
“The feel good moment of simultaneously revealing your CEO is overpaid while your risk assessment underscores the importance of unpaid moderators,” one person wrote in a discussion post on Huffman’s pay on Reddit. One of many danger components Reddit lists in its IPO filing is that its outcomes and person expertise may very well be harmed if it had been unable to maintain a adequate variety of “volunteer moderators.”
“When your entire business model is one pr-ck taking nearly everything,” one other scoffed. “And relying on people continuing to work for free.”
Now, Huffman has defended his pay packet in a Q&A video on the platform.
“Look, I’m glad this question was asked because there’s been a lot of commentary on this topic,” he started, including that his compensation—which is made up of wage and inventory—is about by Reddit’s board relying on his efficiency.
“If the company does well, I will do well,” the CEO added. “If the company does not do well, I don’t either.”
Huffman’s compensation might see a candy enhance due to Reddit’s IPO
In keeping with an SEC filing, Huffman acquired a wage of $341,346 in 2023 and a $792,000 “incentive” bonus. In February, Huffman’s wage was raised to $550,000 with the majority of his $193 million compensation package deal tied to inventory.
So why did it appear to be Huffman acquired a “big grant” on the finish of 2023? As a result of, in keeping with Huffman and the corporate SEC submitting, the board canceled his present inventory awards after which granted him a brand new fairness package deal in late 2023 that included inventory, in addition to inventory choices at varied escalating strike costs.
“They did this to simplify things for both the company and me and align my performance with the company’s performance,” Huffman defined.
“The way the board thinks of my stock ownership is as a percent ownership of the company—so while I’m a founder of Reddit I also sold my stake a long time ago and I was rehired and have to re-earn my ownership,” he added. “Today I own about 3.2% of Reddit but I have the opportunity to increase my ownership.”
Reddit’s upcoming IPO could value the company at $6.4 billion, which means Huffman’s shares may very well be in for a candy enhance quickly.
CEO compensation is all the time a contentious subject—particularly as whereas bosses have seen their paychecks soar through the years, workers’ wages are currently being outstripped by inflation or outpacing it by a small amount.
However though Huffman technically answered why he was awarded $193 million final 12 months, he prevented justifying his wage within the context that Reddit’s moderators stay unpaid.
Reddit declined Fortune’s request for remark.
Who’s Steve Huffman?
Huffman, who can also be identified by his Reddit username spez, based the dialogue web site together with his faculty roommate, Alexis Ohanian, in 2005. On the time, he was on spring break of his senior 12 months on the College of Virginia (UVA), the place he studied pc science.
The location’s viewers grew quickly in its first few months and the pair bought Reddit to Conde Nast the subsequent 12 months for $10 million, turning the 23-year-old co-founders into multi-millionaires overnight.
In hindsight, they’ve each since expressed remorse at selling for such a small amount at the time, given the platform’s success.
Huffman then spent a number of months backpacking in Costa Rica earlier than co-creating the journey web site Hipmunk with Adam Goldstein, an writer and software program developer, in 2010. It was acquired by Concur, the journey and expense platform, for an undisclosed quantity in 2016 however simply 4 years later it had shut store.
In that point, Reddit re-hired Huffman as CEO—in 2015—and tasked him with rising the corporate, “creating a clear content policy” and stabilizing infrastructure.
Since then he’s taken a hardened stance on hate speech (culminating within the 2020 ban of 1000’s of communities) redesigned the positioning and featured on Fortune’s 40 Under 40 list.
