Does that not mean that reddit would have made a 113 Million profit before his $193 million compensation package?
No. His normal salary is around 300k a year. This $193 million figure was the presumed valuation of a stock/options package he received ahead of the IPO. It doesn’t cost the company anything to pay him in stock, so it doesn’t affect the profit/loss calculation.
Yes but where is the $300k coming from if they’re losing $90.8m a year? How can they afford to stay in business? Before they went public, who was foolish enough to invest in a company that has never turned a profit? The money doesn’t just come out of thin air. Someone has to be giving it to him.
If I was rich and started a company that lost $90.8m a year, I’d shut down after less than a year before I went broke and homeless. How can a company that never turns a profit make enough money to pay any employee, let alone the CEO?
Reddit has a lot of users that spend a lot of time there, so it is advertising potential, and a lot of Brands pay for ads on Reddit. Investors hope they will eventually make enough ad revenue to turn a profit.
However Twitter was and is in the same boat, it is a big site with many users, but was never profitable.
No. His normal salary is around 300k a year. This $193 million figure was the presumed valuation of a stock/options package he received ahead of the IPO. It doesn’t cost the company anything to pay him in stock, so it doesn’t affect the profit/loss calculation.
Yes but where is the $300k coming from if they’re losing $90.8m a year? How can they afford to stay in business? Before they went public, who was foolish enough to invest in a company that has never turned a profit? The money doesn’t just come out of thin air. Someone has to be giving it to him.
If I was rich and started a company that lost $90.8m a year, I’d shut down after less than a year before I went broke and homeless. How can a company that never turns a profit make enough money to pay any employee, let alone the CEO?
Reddit has a lot of users that spend a lot of time there, so it is advertising potential, and a lot of Brands pay for ads on Reddit. Investors hope they will eventually make enough ad revenue to turn a profit.
However Twitter was and is in the same boat, it is a big site with many users, but was never profitable.