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Robinhood lays off 23% of staff

wsj.com

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Re: Robinhood lays off 23% of staff

#371

Post by deaddodo »

onlyrealcuzzo wrote: post #365
deaddodo wrote: post #361

Earlier quoted context omitted.

> If you're in charge of managing 121k people - 10x the average salary seems like a minimum. 100x seems in the realm of reasonable. Except, that’s not a CEO’s job. Even remotely. At best they “manage” a few department heads who each manage a few middle managers who each manage a few direct managers who then manage the workforce. Even then, that’s a misrepresentation however. They are in charge of managing and directi…

It's more difficult to justify to shareholders paying less, tbh. The risks of a bad CEO are enormous.

And yet, CEOs for decades (the 50s-80s) did just fine at a fraction of wealth disparity compared to today [1]. In fact, in just the last three years; the overall disparity has increased 31% despite corporations failing to properly manage the pandemic or their workforces.

1 - https://www.forbes.com/sites/annefield/2022/05/23/ceo-worker...

Re: Robinhood lays off 23% of staff

#372

Post by umeshunni »

adrr wrote: post #280
Bluecobra wrote: post #33

Earlier quoted context omitted.

Not to mention they are screwed if congress passes legislation to ban selling order flow to firms like Citidel.

All the discount brokers will go back to charging $5 trade. Will be a big loss for retail investors.

> Will be a big loss for retail investors

You mean it will be a big loss for retail traders

Re: Robinhood lays off 23% of staff

#373

Post by bumby »

onlyrealcuzzo wrote: post #322
bumby wrote: post #313

Earlier quoted context omitted.

Not scientific and maybe inaccurate, but a quick Google search showed the average Intel employee makes $100k. The shift in social norms where 100x the average employee (of a tech firm, which skews towards high salaries) is considered “basically nothing” is something worth talking about.

Intel employs 121k people. If you're in charge of managing 121k people - 10x the average salary seems like a minimum. 100x seems in the realm of reasonable. If the CEO's salary is distributed to all employees, they would get a ~0.05% raise. If distributed to the shareholders, it would increase profits by ~0.01%. Yet this person's decisions can have much bigger consequences to both employees and shareholders.

The thing is, they aren’t actively managing 121k people anymore than the President is commanding 1MM+ troops. Nobody is capable of actually managing that scope. In reality, they are managing a handful who are also managing a handful who are also managing a handful etc. If you disagree, ask yourself if they could intelligently describe a randomly selected employees day-to-day duties. If they can’t, they aren’t really managing them in a meaningful way.

I agree they manage the strategic vision of the company. The research on whether they make a real difference in the long term trajectory seems mixed.

Re: Robinhood lays off 23% of staff

#374

Post by fairity »

paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

> At this point "taking responsibility" would mean resigning and letting someone more competent fix his messes.

Your derision is probably blinding you from the solution that's most likely to produce the best outcome -- him learning from his mistakes & cleaning up his own mess. Resigning won't be a magical fix-all.

It's actually ironic that your definition of "taking responsibility" is him quitting and having someone else clean up his mess. Paying back a portion of his stock based compensation from 2021 or forfeiting his comp going forward would make sense though.

Re: Robinhood lays off 23% of staff

#375

Post by bumby »

onlyrealcuzzo wrote: post #365
deaddodo wrote: post #361

Earlier quoted context omitted.

> If you're in charge of managing 121k people - 10x the average salary seems like a minimum. 100x seems in the realm of reasonable. Except, that’s not a CEO’s job. Even remotely. At best they “manage” a few department heads who each manage a few middle managers who each manage a few direct managers who then manage the workforce. Even then, that’s a misrepresentation however. They are in charge of managing and directi…

It's more difficult to justify to shareholders paying less, tbh. The risks of a bad CEO are enormous.

The research is a bit mixed on whether a CEO of a large corporation (S&P 500 size) really matters so I’m not sure the risk statement can be said with conviction.

Re: Robinhood lays off 23% of staff

#376

Post by martin82 »

alain94040 wrote: post #356
peanutz454 wrote: post #338

Earlier quoted context omitted.

Wow! $168M/(3800 employee / 100*23 layoff) = $192,219 per layed off employee Not that I am suggesting he should pay the layed off employees from his personal kitty. Just trying to understand the numbers. Edit: OP said CEO and COO each. So $192K x 2 ~= $384,000.

Your math makes no sense. The fewer the employees laid off, the more the dollar per employee will be. What does that mean? If a company lays off only one employee, then all of the CEO's salary could have gone to one person?

I think it just shows that the CEO earned enough to give every laid off employee a whole annual salary, so you could argue that the layoff could have been prevented for at least a year.

Re: Robinhood lays off 23% of staff

#377

Post by mavelikara »

buscoquadnary wrote: post #230

So several times I've had the opportunity to join fast growing startups that offered quite a bit more compensation, and equity as well. One of the things that I always took consideration of was the stability of the company vs where I was at. Many of these people made a bet that working for Robinhood would pay off, it didn't that is part of the risk that came with the SV salaries, and the stock. I get that it sucks, b…

Public companies have shareholders to please quarter-after-quarter. If the markets remain bearish for long, public companies will have to do multiple layoffs as they restructure their operations.

Private startups, especially well-capitalized ones, have only their Boards (mostly, founders) to answer to. They can be, counterintuitively, more stable job-wise than many public companies.

Re: Robinhood lays off 23% of staff

#378

Post by honkycat »

paxys wrote: post #29

> As CEO, I approved and took responsibility for our ambitious staffing trajectory—this is on me Reminder that Vlad Tenev received $800M in compensation in 2021. In the same year the company made terrible bets on crypto and banking, took an irreversible reputation hit among its core user base because of the GME fiasco, had multiple user data breaches, was subject to several investigations and was fined hundreds of mi…

At first I was like "jesus christ this is going to be a bloodbath" and then I read your post and thought "huh yeah i guess it makes sense they are firing people."

Re: Robinhood lays off 23% of staff

#379

Post by chii »

bsuvc wrote: post #368
chii wrote: post #355

Earlier quoted context omitted.

Their compensation being high is not really relevant imho. It's the hidden assumption that if only the CxO compensation was lower, those workers could've been saved (aka, instead of redundancy, the CxO takes a pay cut to pay for the wages of those workers). Is this a valid argument? I dont know, but i feel that it isn't.

I'm trying to understand your point of view. Are you saying executive compensation should be orthogonal to company performance? Overpaid executives failed, so workers lost their jobs, but the executives get to keep theirs all the while saying things like "I take responsibility for this" when it is objectively false that they are taking responsibility. Does that seem right to you? Is that a good way to run a business,…

> Overpaid executives failed

Their failure has already dropped a huge amount of their stock-based compensation. Their base salary shouldn't be determined by the company's failure (only their _future_ salary).

What if you applied this to a worker instead of a CxO? Would you yourself take a pay-cut, after the fact, if the company fails to perform?

Re: Robinhood lays off 23% of staff

#380

Post by chmod600 »

chii wrote: post #355
alex_young wrote: post #261

Earlier quoted context omitted.

Completely valid point. The same document points out that the CEO and CCO (both co-founders) each realized more than $168M in compensation in 2021. That's the number to talk about I think.

Their compensation being high is not really relevant imho. It's the hidden assumption that if only the CxO compensation was lower, those workers could've been saved (aka, instead of redundancy, the CxO takes a pay cut to pay for the wages of those workers). Is this a valid argument? I dont know, but i feel that it isn't.

The other point is that investors didn't get the desired performance out of their $168M CEO.
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