Reddit CEO Steve Huffman Responds to $193 Million Compensation Criticism

Reddit CEO Steve Huffman has been under fire for his substantial $193 million compensation package, a figure that has sparked widespread debate among users across various social media platforms, including Quora, Reddit, and X.

by Faruk Imamovic
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Reddit CEO Steve Huffman Responds to $193 Million Compensation Criticism
© Getty Images/Randy Shropshire

Reddit CEO Steve Huffman has been under fire for his substantial $193 million compensation package, a figure that has sparked widespread debate among users across various social media platforms, including Quora, Reddit, and X.

Critics argue that the amount is excessive, especially for a platform that doesn't compensate its moderators or users and has yet to turn a profit.

Unpacking Huffman's Compensation

In response to the backlash, Huffman addressed the concerns in a video Q&A on Reddit, the very platform he co-founded.

He explained that his compensation consists of a salary and stock, with the Reddit board determining the amount based on his performance. According to a recent SEC filing, Huffman received a salary of $341,346 in 2023, which was later raised to $550,000 in February.

Additionally, he earned a $792,000 bonus last year, pegged to Reddit's user growth, revenue, and a specific measure of profitability known as adjusted EBITDA. The bulk of Huffman's controversial compensation package comes in the form of restricted stock units (RSUs) and stock options.

A significant portion of this package is contingent upon Huffman remaining with Reddit through late 2028, with some milestones linked to the company's anticipated initial public offering (IPO).

Comparisons and Context

In the video, Huffman revealed that a "big grant" received at the end of 2023 resulted from the board's decision to cancel existing stock awards and provide him with a new equity package.

This move aimed to simplify the compensation process and align Huffman's performance with that of the company. Some of the stock is set to vest at the time of the IPO, indicating a direct link between his rewards and the company's success in going public.

However, comparisons have been drawn between Huffman's package and those of other tech CEOs, such as Meta's Mark Zuckerberg, who takes a $1 annual salary with no bonuses or equity awards, and Elon Musk, whose compensation at Tesla was valued at over $50 billion but recently contested in court.

These comparisons highlight the diverse approaches to executive compensation in the tech industry. As Reddit gears up for a $6.4 billion valuation for its upcoming IPO, Huffman's stake in the company is set to be worth around $200 million, even before his new equity compensation begins to take effect.

This places him in a position to significantly increase his wealth, depending on the performance of Reddit's shares post-IPO.

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