7 ms·

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

by sysstemlord 2y ago

iLoveOncall 2y ago
Salaries don't come out of profits. Profits are calculated after employee compensations obviously.
- Folcon 2y 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.
- passwordoops 2y ago
  So maybe the CEO compensation should be adjusted accordingly?
  - JumpCrisscross 2y ago
    > 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.
    - passwordoops 2y ago
      $193M compensation to lead a business to unprofitability is a problem. Period.
      - JumpCrisscross 2y ago
        > $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.
        pjc50 2y ago
        > 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.
        JumpCrisscross 2y ago
        > the argument usually made for redundancies: reducing the overall payroll It’s for increasing profits. Redundancies are reduces at profitable and unprofitable firms alike.
- hgomersall 2y 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.
  - deleted 2y ago
    [deleted]
  - roenxi 2y ago
    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.
    - giantg2 2y ago
      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.
    - pjc50 2y ago
      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.
      - pbhjpbhj 2y ago
        Aren't most shareholders there to attempt to loot the company? Capitalism is surely about aligning and exploiting greed, like a confidence trick?
  - giantg2 2y ago
    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.
- pjc50 2y 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/1713445/000162828024006294/reddits-1q423.htm#i1b9a579e78a34dfa99f7f26daeec195b_40 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 2y 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-business-plan/index.html https://www.cnn.com/2024/02/23/tech/reddit-ipo-filing-busine...
- deleted 2y ago
  [deleted]
- giantg2 2y 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.
  - JumpCrisscross 2y ago
    > 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.
- consp 2y 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.
  - JumpCrisscross 2y ago
    > 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.
    - 2y ago

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

iLoveOncall 2y ago

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

Folcon 2y 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.
passwordoops 2y ago
So maybe the CEO compensation should be adjusted accordingly?
- JumpCrisscross 2y ago
  > 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.
  - passwordoops 2y ago
    $193M compensation to lead a business to unprofitability is a problem. Period.
    - JumpCrisscross 2y ago
      > $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.
      - pjc50 2y ago
        > 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.
        JumpCrisscross 2y ago
        > the argument usually made for redundancies: reducing the overall payroll It’s for increasing profits. Redundancies are reduces at profitable and unprofitable firms alike.
hgomersall 2y 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.
- deleted 2y ago
  [deleted]
- roenxi 2y ago
  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.
  - giantg2 2y ago
    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.
  - pjc50 2y ago
    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.
    - pbhjpbhj 2y ago
      Aren't most shareholders there to attempt to loot the company? Capitalism is surely about aligning and exploiting greed, like a confidence trick?
- giantg2 2y ago
  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.
pjc50 2y 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/1713445/000162828024006294/reddits-1q423.htm#i1b9a579e78a34dfa99f7f26daeec195b_40 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 2y 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-business-plan/index.html https://www.cnn.com/2024/02/23/tech/reddit-ipo-filing-busine...

deleted 2y ago
[deleted]
giantg2 2y 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.
- JumpCrisscross 2y ago
  > 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.
consp 2y 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.
- JumpCrisscross 2y ago
  > 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.
  - 2y ago