'It's Performance-based', Reddit CEO Steve Huffman Defends His Rs 1600 Cr Salary Amid Backlash

Reddit is the talk of the town. With its IPO attracting loads of investors, as per reports, it has already been oversubscribed between four and five times. In a recent turn of events, the CEO is now facing backlash for his salary package!

Insiders familiar with the situation indicated in a report by Reuters, that Reddit may be highly likely to reach its aimed valuation of $6.5 billion.

Does This Mean That It’s A Hit In The Market?

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While oversubscription doesn't assure a robust performance upon its stock market debut, it does suggest that Reddit is progressing as expected to achieve its anticipated price range of $31 to $34 per share.

Despite having a dedicated user base, Reddit has incurred losses since its establishment in 2005. The platform has faced challenges in achieving the commercial success seen by competitors such as Meta Platforms' Facebook and Twitter, which has recently rebranded as X.

Reddit CEO Faces Backlash For His Handsome Salary Package!

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Reddit CEO Steve Huffman faced criticism regarding his $193 million salary (Rs 1,600 crore), with social media users expressing varied perspectives on his compensation. Some argued that it's excessive for a platform that doesn't remunerate moderators or users, while others contended that such a high salary is unjustified, especially when the company is not profitable.

In His Defense, CEO Steve Huffman Said That He Didn’t Decide His Salary Package

In response to the criticism, Steve Huffman defended his compensation, stating, “Look, I'm glad this question was asked because there's been a lot of commentary on this topic.” He explained that his salary, which comprises both salary and stock, is determined by Reddit board members and is based on his performance.

According to a 2023 SEC filing, Steve Huffman earned $341,346(Rs 2.8 crore), which is relatively low for a CEO of a major public corporation. However, in February, his salary was increased to $550,000(Rs 4.5 crore), and he also received a reported $792,000(Rs 6.5 crore) bonus last year.

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The majority of Steve Huffman's compensation consists of restricted stock units and stock options, and it is contingent upon him remaining at Reddit until late 2028. Steve Huffman explained that the significant grant he received at the end of 2023 was due to the board's decision to cancel existing stock awards and issue him a 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," he said.

Steve Huffman’s Stake In Reddit

Steve Huffman holds approximately 3.2% ownership stake in Reddit. The company aims for a $6.4 billion valuation for its IPO, intending to sell 22 million shares, with a targeted issue price range of $31 to $34 per share.