Steve Huffman is the CEO of Reddit

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Reddit CEO Steve Huffman discussed his compensation package in a video Q&A posted on the forum.
The CEO’s $193 million pay package includes a mix of salary and stock.
Reddit is targeting a $6.4 billion valuation as it moves to go public later this week.
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AdvertisementReddit CEO Steve Huffman has received backlash over his $193 million compensation.
Ever since word got out about Huffman’s pay, users on Quora, Reddit, and X have criticized the package.
Some feel the amount is too high for a platform that doesn’t pay moderators or users — and for a company that hasn’t been profitable thus far.
“The feel good moment of simultaneously revealing your CEO is overpaid while your risk assessment underscores the important of unpaid moderators,” one user wrote in a discussion post about the topic on Reddit.
Huffman went on the platform he cofounded to defend his pay in a video Q&A.
Advertisement”Look, I’m glad this question was asked because there’s been a lot of commentary on this topic,” Huffman said.
The CEO said his compensation is based on salary and stock, and Reddit board members set the amount based on his performance.
According to an SEC filing, Huffman got a salary of $341,346 in 2023, which is relatively low for a CEO of a major public corporation.
In February, this was raised to $550,000.
He also got a $792,000 bonus last year based on Reddit user numbers, revenue, and a type of profitability known as adjusted EBITDA that excludes certain expenses.
Related storiesThe bulk of his compensation package is now in restricted stock units and stock options.
A lot of this compensation is based on Huffman staying at Reddit through late 2028, and some is triggered based on completing the IPO, according to the SEC filing.
AdvertisementHalf of the stock options vest at $25.29, a relatively easy bar to reach.
The other half only vest if Reddit shares reach $45, $60, and $90 in public market trading over 10 years, the SEC filing explains.
That’s a higher bar and aligns the CEO’s interests with shareholders.
A “big grant” late last yearHuffman said in the video that his “big grant at the end of 2023” was a result of the board canceling existing stock awards and then granting him this new equity package.
“They did this to simplify things for both the company and me and align my performance with the company’s performance.
Some of the stock vests at IPO,” the CEO added.
However, the SEC filing also states that some of Huffman’s previous performance-based RSU award was cancelled because the grants were “not providing the incentive initially intended.”
Reddit went on to say that it cancelled many of the “PRSUs for which performance had not already been achieved.”
AdvertisementHuffman already owns Reddit stockIn addition, Huffman already owns about 3.2% of Reddit.
The company is targeting a $6.4 billion valuation for its upcoming IPO this week.
So the CEO’s stake will be worth about $200 million, even before his new equity compensation begins to kick in.
Reddit and its investors plan to sell 22 million shares and they are targeting an IPO price of $31 to $34.
Zuckerberg versus ElonIn contrast, Meta cofounder and CEO Mark Zuckerberg gets a $1 annual salary, and was awarded no bonus and zero equity awards in 2020, 2021 and 2020, according to Meta’s latest annual proxy filing.
Meta pays more than $20 million a year to cover Zuckerberg’s security and use of a private jet.
And, of course, he owns a major stake in the company, so if his performance improves, Meta shares should rise, making him more wealthy.
The company also started issuing dividends, which means Zuckerberg collects hundreds of million of dollars a year from those payouts.
AdvertisementElon Musk is on the other end of the spectrum.
His pay package at Tesla was valued at more than $50 billion.
A Delaware judge recently struck down this compensation.
Huffman’s chances of getting even richerBack at Reddit, it’s unlikely that Huffman will get $193 million in compensation.
That’s an estimate the company has to make for regulatory and disclosure purposes.
It’s based on the estimated fair value of the package on a certain date.
His new RSUs vest in installments through late 2028, and the stock options can be exercised over 10 years, but only if Reddit shares hold up and then go higher.
Either way, Huffman is already incredibly wealthy and has a chance to become even richer as Reddit goes public.

In a video Q&A that was uploaded on the forum, Reddit CEO Steve Huffman talked about his compensation package.

A combination of stock and salary make up the CEO’s $193 million compensation package.

With its planned IPO later this week, Reddit is aiming for a $6.04 billion valuation.

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Steve Huffman, the CEO of Reddit, has drawn criticism for earning $193 million.

People on Quora, Reddit, and X have been critical of the package ever since information regarding Huffman’s salary leaked out. Some believe that the sum is excessive for a platform that doesn’t compensate users or moderators, as well as for a business that hasn’t turned a profit yet.

In a Reddit discussion thread about the subject, one user stated, “The feel good moment of simultaneously revealing your CEO is overpaid while your risk assessment underscores the importance of unpaid moderators.”.

In a video Q&A, Huffman defended his salary on the platform he cofounded.

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In light of the wealth of commentary on the subject, Huffman expressed her gratitude for the question’s raising.

According to the CEO, the Reddit board members determine how much stock and salary he receives depending on how well he does.

Huffman received $341,346 in pay in 2023, which is comparatively little for the CEO of a significant publicly traded company, according to an SEC filing. This was increased to $550,000 in February. In addition, he received a $792,000 bonus from Reddit last year, which was determined by revenue, revenue from Reddit, and adjusted EBITDA—a measure of profitability that takes out specific costs.

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These days, stock options and restricted stock units make up the majority of his compensation package. According to the SEC filing, a large portion of this compensation is contingent upon Huffman remaining at Reddit until late 2028, and some is contingent upon the successful completion of the IPO.

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At $25.29, a comparatively low bar to clear, half of the stock options vest. According to an SEC filing, the remaining half will only vest if Reddit shares trade for $45, $60, and $90 in the open market over a ten-year period. As it aligns the CEO’s interests with shareholders, it sets a higher standard.

Final year of last year, a “big grant”.

In the video, Huffman claimed that the board’s decision to revoke his previous stock awards and give him this new equity package was what led to his “big grant at the end of 2023.”.

By doing this, they aimed to streamline matters for me as well as the business and match my output with that of the latter. The CEO went on, “Some of the stock vests at IPO.”.

However, Huffman’s prior performance-based RSU award was partially revoked, according to the SEC filing, because the grants were “not providing the incentive initially intended.”. Many “PRSUs for which performance had not yet been achieved” were canceled, according to Reddit. “.

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Huffman already possesses Reddit stock.

Huffman already owns roughly 32 percent of Reddit in addition. The company plans to list this week at an IPO with a valuation of $6.04 billion. Therefore, even before his new equity compensation starts to kick in, the CEO’s stake will be worth roughly $200 million.

An IPO price of $31 to $34 is the target price for Reddit and its investors, who intend to sell 22 million shares.

Zuckerberg versus Elon.

In comparison, according to Meta’s most recent annual proxy filing, CEO and cofounder Mark Zuckerberg of Meta receives a $1 yearly salary, no bonus, and no equity awards in 2020, 2021, or 2020.

To cover Zuckerberg’s security and private jet expenses, Meta spends over $20 million annually. His ownership of a significant portion of the company is also a factor, so if he performs better, Meta shares should increase in value and he will become even wealthier. Additionally, the business began paying out dividends, from which Zuckerberg receives hundreds of millions of dollars annually.

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Conversely, Elon Musk is at the other extreme. Around $50 billion was included in his compensation package at Tesla. Recently, this compensation was overturned by a Delaware judge.

The likelihood that Huffman will become even wealthier.

That Huffman will receive $193 million in compensation is unlikely, according to Reddit. The estimate is something the business must provide for disclosure and regulatory requirements. It is predicated on the package’s estimated fair value as of a specific date.

His newly acquired RSUs vest in stages until the end of 2028, and he can exercise his stock options over a ten-year period—but only if Reddit shares continue to rise.

In any case, Huffman is already extraordinarily wealthy and stands to gain even more as Reddit goes public.

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