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For context, Drew Houston's total compensation for the year in 2023 was $1.5M: > According to our data, Dropbox, Inc. ... paid its CEO total annual compensatio

• gcr 2y ago
  The severance packages suck. COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6. Many job searches take longer than 6 months, so employees will be left high and dry right when they need it most.
  • nop_slide 2y ago
    > COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6. Are we in the same industry, where are you based? I got 2 months when I was laid off last year. I also know many tech people who got just 1 month.
    • hn_throwaway_99 2y ago
      Agreed. "Industry standard is to offer 18 months"!! Please let me know this industry, because it ain't tech where I live!
      • pc86 2y ago
        It's not any industry anywhere. Any layoff thread on HN is people saying what they wish things were but framing it as "this is how everyone else does it this one company is being greedy" when it's not the case 99% of the time.
  • cruffle_duffle 2y ago
    > COBRA is the single largest expense for departing employees. Life pro tip: Do not use COBRA!!!!! It is almost always much, much cheaper to find an ACA compliant healthcare plan on your state's health insurance market. For one thing the plans will often be cheaper (though with fewer features). For another ACA plans qualify for tax credits, etc and COBRA doesn't. When I got laid off I made one of the worst financial mistakes of my life keeping my employer's high-deductible plan via COBRA. I stupidly figured it had to somehow still work out to be cheaper than shopping for private insurance. Boy was I wrong! Between the "high deductible" part and the fact the plan wasn't able to qualify for tax credits I overpaid my medical expenses by about $10,000 over the course of a year. Had I gone with even a "bronze" level ACA compliant plan that would have been cash in my pocket that would have helped out a lot while I was looking for work. The big reason was my medication was like $800/mo. And on my employer's plan once I hit my $3500 deductible it went to $0/mo. This wasn't a problem when my former employer picked up most of the insurance premium for my high deductible plan but with COBRA you are paying the entire premium! And for my use case, medication was my top medical expense so I was paying a hefty premium for a fancy health plan that didn't actually cover my expenses. A "regular deductible" ACA plan would have made much more sense in my unemployed scenario as the premium was not only lower but the medication was generic and would have only been like a $23 copay! Always, always bust out Excel and compare the full cost of healthcare on different plans. Compute the total cost of your medications, how & when you'll hit things like your deductible, what tax credits & deductions apply, etc. What made rational financial sense while employed might not make sense when unemployed or buying your own health plan. But you have to find out for yourself. Rarely does it make sense to continue paying your employers health plan via COBRA. After loosing your job you have like a 30 day window to switch plans before you will be locked into your COBRA plan for the remainder of the year -- do not dilly dally around, figure it out now!
• grepfru_it 2y ago
  That’s actually a pretty low salary but I just looked up their revenue numbers and it’s not looking that hot. They are also hemorrhaging cash this year. His salary and the performance of the company were probably a good foreshadowing of the layoffs
  • hn_throwaway_99 2y ago
    > His salary and the performance of the company were probably a good foreshadowing of the layoffs As is standard. My recommendation to anyone that works in a corporate environment is that if you want to know whether the company will be at risk of layoffs in the future, become good friends with someone in sales. When the sales leads and activity start to drop (or growth rate starts to slow), you can usually be assured that layoffs will eventually follow. In my experience the sales folks were always the first to clean up their resumes and start the job hunt because they knew what was coming.
• bhouston 2y ago
  > Drew Houston's total compensation for the year in 2023 was $1.5M That is insanely low for the CEO of a public company of Dropbox's size. But I suspect he owned a lot of shares in the company so when it went public, so he doesn't need salary, it is just a rounding error in terms of his wealth. EDIT: Yeah, he is worth $2B according to Forbes: https://www.forbes.com/profile/drew-houston/ https://www.forbes.com/profile/drew-houston/
  • echoangle 2y ago
    I always wonder what gives these people the drive to continue. Maybe I’m lazy and lacking vision but if I were worth 2B, I don’t think I would go to the office every day just to get accused of mismanagement when I have to lay people off. I would take my yacht to the Caribbean and slack off.
    • pc86 2y ago
      Some people do exactly that but it's rare that someone will simultaneously have the drive to do something that will generate them billions of dollars and also be willing or able to just stop working at that point. Also remember once you have that much money a lot of things become basically free, both figuratively ($100,000 to a billionaire is nothing) and literally (comped rooms, gifts, etc for basically every event and your company(ies) end up footing the bill for most of your expenses). There's plenty of people who make $5-50 million in a windfall and are never heard from again.
      • echoangle 2y ago
        True, it’s probably that this drive is what allowed them to be billionaires in the first place. Just to rant a bit more: the Wordpress situation makes this point even more crazy to me. Mullenweg has about 400m and instead of retiring and enjoying life, he’s arguing with anonymous users on Hacker News. No offense against hacker news but defending my life decisions on HN isn’t exactly the first thing I would do if I could do everything I ever wanted. Like, go buy a plane and take flying lessons, or go scuba diving? Nah, I’d rather justify myself on the internet.
• Workaccount2 2y ago
  Public company CEO pay is almost always paid by shareholders not by the company itself. It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not. CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money. It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.
  • JohnMakin 2y ago
    Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.
    • Workaccount2 2y ago
      Stock/cash is not fungible for the company itself. Using shareholders as an ATM is a surefire way to tank a stock, and companies tend to use it as an absolute last resort.
      • JohnMakin 2y ago
        We aren’t talking in the context of the company though. The gp comment said it’s not an apples to apples comparison to say a CEO makes 100x an employee because CEO’s compensation is stock. If the CEO’s stock compensation has a monetary value of $100 and the employees salary is $1, it absolutely is fair to say the CEO is compensated 100x the employee, regardless of it is stock or cash. The CEO can borrow against this and use it as effectively cash, if they are unable or do not want to exercise the options. This is such an insanely common practice and absurdly pedantic argument that I wonder why we’re even having it. Does the distinction matter? Of course it does not.
        • Workaccount2 2y ago
          It's not apples to apples because it is in essence two different employers. The CEO does not work for the company (this why you see that $1 CEO salary so often), the CEO works for the shareholders. But the employees work for the company. They are two distinct entities with two distinct finances. If a company does layoffs and the CEO still gets paid, that is perfectly logical because the company was never paying the CEO in the first place. Whether or not the CEO got his $5 million compensation package has no impact on whether or not the company could have laid people off, as just about everyone portrays it (and thinks how it is).
• ericmcer 2y ago
  Seriously, that severance is awesome. Of all the tech workers struggling, the ones from companies big enough to throw 4+ mo severance packages are not the ones I am worried about. Any smaller company your severance is a pat on the back.
  • eweise 2y ago
    Yep. last time I got laid off, I got paid through that day. nothing else.
    • xnorswap 2y ago
      Lobby your representative for change. This is something that laws can and should fix. Not having worker protections is a political choice. It's not something the market or technology will solve. Many countries have laws that prevent workers getting laid off with no severance. It is a solved problem, but it's inherently a political problem.
    • JediPig 2y ago
      This is why people should build a huge ass f-u fund and not look back.
      • bityard 2y ago
        Yep, this is what I do. Individual responsibility is an unpopular idea these days but the way I look at it, I am the one who is ultimately in charge of my family's wellbeing. That is far too important to entrust to a corporation's generosity or the whims of lawmakers.
        • johnnyanmac 2y ago
          I was responsible and still got punished. What do I do?
        • eweise 2y ago
          I don't think its an unpopular idea. But the fact is, being an employee is a lopsided relationship. You only have one employer but they have many employees. You leave and they still have an army to keep the business going but you get laid off and your income goes to 0. So yeah you can keep some money in the bank but still being without work especially with a family and mortgage, is a terrible spot to be in.
• duped 2y ago
  > Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship. Layoffs are the trolley problem but you get to pick how many people are lying down on each side of the track and if you want yourself to be one of them. That said, if one reaches the conclusion that under their leadership they were forced to downsize by 20% (either due to over hiring, failure to reach revenue/growth targets, whatever) that should make that person one of the people on proverbial tracks. Compensation has little to do with it.
  • Matticus_Rex 2y ago
    >that should make that person one of the people on proverbial track That's a satisfying thing to say, but as practical advice it's absolutely terrible. Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them. And that's the question -- what will make the company most likely to be the most successful going forward? Even if the current trouble is because of some of that leader's mistakes, the answer is often to keep that leader. Sometimes it isn't.
    • pixelatedindex 2y ago
      > Often that person's leadership wasn't the problem Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.
      • deleted 2y ago
        [deleted]
      • teitoklien 2y ago
        The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low. Them doing layoffs doesnt mean the people become destitute. It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy. Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume. I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America. This is not the titanic, those people will move on to places where they’ll have a chance for promotion.
• amelius 2y ago
  > Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship. But they always fire the weak employees, not the ones that can easily help themselves. Maybe we should have some laws that randomize the layoffs ...
  • onion2k 2y ago
    they always fire the weak employees This is definitely not the case. Companies use a lot of different mechanisms to choose who to lay off, and it's rarely entirely performance based.
    • steveBK123 2y ago
      Arguably from what I've seen it is TOO random or non-performance based. Some combination of personal dislike and unfamiliarity. The people making the cuts are not line managers and are sometimes given very short amount of time to make their cut list. So "oh I know that person" stays vs "I have no idea what they do / they asked me a pointed question in a meeting once" goes.
      • scarby2 2y ago
        I've been laid off twice, neither time has been performance based. once i was on a team of 2 ICs and a Manager - only the manager stayed - the company is now about to fold. Other time i was let go as part of the entire US arm
        • steveBK123 2y ago
          Yes, most layoffs I've seen in my career are of the "mass layoff" variety, and these are generally far from being performance based. There's just too many people, the decision making is too quick, at too high a level.. and more driven by cost / future strategy (so which teams to cut deeper).
  • heyjamesknight 2y ago
    This is a joke, right? If a company is underperforming, then the underperformers are the first to go. Market economies require efficiency. Capital flows in the direction of success. Impeding this flow with regulation is a great way to create a malfunctioning economy.
• hiddencost 2y ago
  Uh, drop box cost per employee is likely closer to $750k, not $100k.
  • pclmulqdq 2y ago
    That $1.5M comp package is about 2-4 employees being laid off. It's not very many people. It's also insanely low for a CEO, but about right for the CEO of a company in decline (which dropbox is).
• napierzaza 2y ago
  [dead]
• bravetraveler 2y ago
  https://blog.dropbox.com/topics/company/a-message-from-drew https://blog.dropbox.com/topics/company/a-message-from-drew Drew is developing a habit. 16% last year edit: 11% before that: https://dropbox.gcs-web.com/node/8916/html https://dropbox.gcs-web.com/node/8916/html
  • alberth 2y ago
    It's less of a habit and more indication of a matured business. Their revenue has only been growing ~5% (and slowing to just 1% most recent quarter). When you aren't growing, you must focus on operation efficiencies. Rule of 40, now being applied to margin.
    • bravetraveler 2y ago
      Yea, that's fair. I'm just being critical of the 'facade' (said with less ire than it sounds). The size is no surprise, in or out. I'll be mildly merciful - not all his doing
    • johnnyanmac 2y ago
      I'm not going to believe this "matured business" narrative when the letter itself claims right after that. >We continue to see softening demand and macro headwinds in our core business. This isn't a matured business strategy. This is a business predicting a cold winter and trying to bundle itself up. Of course, the less people to warm up the better.
• pjmlp 2y ago
  Nope, MBAs have to learn exponential growth is impossible to accomplish forever. Companies should be managed to be profitable, while paying employees and business expenses. Anything other is a pipe dream that eventually blows up, but since only employees suffer while the MBA guys go to become CEO of yet another adventure, who cares. /s
  • anon291 2y ago
    The myth of exponential growth is not that companies can't grow exponentially forever (since that's the case for most companies) but rather that the valuation of these companies depends on exponential growth (it does not). Most public companies in the United states do not experience the exponential growth many tech startups do, but do perfectly well for themselves, their customers, and their employees. No one is pushing for exponential growth. If a company wants to stop, declare a dividend, and be done with it, and let investors choose a new rodeo.
    • pjmlp 2y ago
      Except that isn't what happens, instead every year a new goal that has to be X % higher is set, and when expectations are not met, the employees are the ones landing on the street for stupid values of X%. The one signing off on X% might even get a bonus for doing that, and enjoy some Bahamas vacations.
      • anon291 2y ago
        In tech sure, but in the market, many companies simply return dividends. Lots of mining stocks, retailers, commodity producers, etc don't experience exponential growth
        • pjmlp 2y ago
          In this case we're talking about tech sector anyway.
        • johnnyanmac 2y ago
• apwell23 2y ago
  > $100K all-in comp (which seems low to me for a tech salary) ic1 at dropbox is 175k and ic4 is near 500k, ic5 near 700k. https://www.levels.fyi/companies/dropbox/salaries https://www.levels.fyi/companies/dropbox/salaries Do they really need such highly paid engineers? Are they really doing anything that innovative, new or first on market. They could probably save these jobs by adjusting the comps.
  • johnnyanmac 2y ago
    This is how Musk stripped 80% of twitter. Take that as you may. Remember that Dropbox (like Twitter) is HQ'd in San Francicso.
• thrownaway561 2y ago
  I still hate the fact that people can borrow money against a stock. Stock should be sold, period. That is how the market sets a price for stock, through the volume of it being sold and bought. By allowing people to borrow against a stock, let's them get the money for the stock while still holding it. That artificially increases the stock price and value.
  • trallnag 2y ago
    Isn't this also the case with mortgages?
    • thrownaway561 2y ago
      Are you talking on the consumer level or the banking level? On the consumer level, you need to have mortgages as I don't think most people have 500K lying around in order to purchase a home. As such, there needs to be some way for the common person to borrow the money to finance a home. Obviously there is no way to "sell" your mortgage, you can only sell your home. And yes, you can borrow money against your home in the form of a HELOC, but you doing so doesn't affect the price of the home or the market, just what you have to pay off. Most banks on the other hand, bundle mortgages and sell them on the open market in order to recoup their cost of them rather than servicing the loan. To me this shouldn't be allowed. If a bank wants to sell their mortgage portfolio to another bank or group of bank, that's ok, that doesn't affect the market and is a private transaction. What I have a problem with is them bundling the mortgages and placing that portfolio on the open market as that causing collapse like we saw in 2012.
  • currymj 2y ago
    probably whoever makes the loan will hedge, maybe by shorting the stock. or buying puts, but then whoever sells them the puts will hedge by shorting the stock. if they decide not to hedge, then it must be because they don't think they're exposed to much risk, which basically means they like the stock and would be willing to own it. it feels like it mostly works out.
• deleted 2y ago
  [deleted]
• carabiner 2y ago
  Why is the CEO's TC relevant to layoffs?
• insane_dreamer 2y ago
  > No growth is more or less bad on Wall Street. In other words, this is to satisfy Wall Street.
• johnnyanmac 2y ago
  If this is "saving the ship", more companies need to remember what a shipwreck is.