[andygcook]

For context, Drew Houston's total compensation for the year in 2023 was $1.5M:

> According to our data, Dropbox, Inc. ... paid its CEO total annual compensation worth US$1.5m over the year to December 2023. That's a notable increase of 34% on last year

via https://finance.yahoo.com/news/heres-why-dropbox-inc-nasdaq-...

Even if Drew took minimum wage, that would save ~15 jobs assuming $100K all-in comp (which seems low to me for a tech salary). 500 employees is more like $50M/year, and probably more.

Of course, Drew Houston's net worth is ~$2B and he could technically loan Dropbox Inc money personally to save the jobs, my guess is a lot of his net worth is actually Dropbox stock that he would have to liquidate and would affect the stock price materially. He would also need to follow insider trading laws too and can't just up and sell vast amounts of stock on a whim. Most executives are on pre-approved schedules to sell any stock to avoid triggering insider trading.

The severance package Dropbox is offering is pretty good - 16 weeks of pay + an additional week for each year of tenure, impacted employees get their Q4 equity vest & prorated bonuses, everyone keeps company devices, an offer for extra time + help for people on visas, and job placement help for everyone.

Dropbox is a public company that is profitable, but not really growing through their flagship product. No growth is more or less bad on Wall Street. They also haven't really had a major hit since their initial file-sharing product and missed some shots they probably should have hit (mainly vs. Notion with Dropbox Paper, Mailbox acquisition, etc). With many systems moving away from "files" and to "cloud objects" like Figma, Notion, etc, their workhorse product might be going away over time too. They need the time and focus to find that next S-growth curve.

Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.

[duped]

> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.

Layoffs are the trolley problem but you get to pick how many people are lying down on each side of the track and if you want yourself to be one of them.

That said, if one reaches the conclusion that under their leadership they were forced to downsize by 20% (either due to over hiring, failure to reach revenue/growth targets, whatever) that should make that person one of the people on proverbial tracks. Compensation has little to do with it.

[Matticus_Rex]

>that should make that person one of the people on proverbial track

That's a satisfying thing to say, but as practical advice it's absolutely terrible.

Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them. And that's the question -- what will make the company most likely to be the most successful going forward? Even if the current trouble is because of some of that leader's mistakes, the answer is often to keep that leader. Sometimes it isn't.

[pixelatedindex]

> Often that person's leadership wasn't the problem

Then what is the problem? Ultimately you’re paid the big bucks for being held responsible. Why isn’t it never something like the CEO doesn’t get any stocks that year. I’m not saying he needs to leave the company but maybe he should take a substantial hit to his pay. He has enough money to put food on the table for many years, unlike the people who are let go where it’s mostly a mixed bag.

[s1artibartfast]

>Why isn’t it never something like the CEO doesn’t get any stocks that year.

Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.

[DrillShopper]

Do those metrics count "number of people laid off" explicitly?

We know they do implicitly because laying off people makes the company more profitable, but is there any penalty for killing jobs?

If not, shouldn't there be?

[s1artibartfast]

No, I dont think there should be a penalty by default.

The objective of a company isnt and shouldn't be to run a charity. Some amount of layoffs are desirable just as a matter of housekeeping. Layoffs can be a hard part of doing a good job.

I think there are extreme examples and tactics where layoffs cross a moral line but not a legal line. for example, I think the humane thing to do is freeze hiring before layoffs so you dont relocate someone only to let them go.

That said, there are already a lot of business incentives to avoid turbulence in headcount. It is slow and expensive to hire people and let them go.

[mulmen]

The purpose of a corporation is to make money, not jobs.

[pixelatedindex]

> Performance based compensation is absolutely standard for CEOs- Both in terms of options and stock grants.

Yes but you’re still making $1.5M after a 34% haircut. That seems like a reward, and not any real sense of taking responsibility when you have to let go 1 in 5. Wouldn’t it be better if he just got a base salary of 200K or something and no stocks for that year? He already has a bunch of equity and if he does well at the end of the year, that equity will be worth more anyway.

[s1artibartfast]

In what sense do you think it would be better? Would it advance CEO performance or the company? Would it bring the world more into alignment with some sense of moral justice?

[sangnoir]

And who sets the standards? Their CEO-buddies on the boards. None of them would dare rock the boat.

One of the failure modes of 401ks and investment funds are large investment pools that don't vote at AGMs, leaving boards largely dominated by CxOs, to their own devices.

[s1artibartfast]

Either you dont understand my point, or I dont understand yours.

Im saying CEOs have financial skin in the game tied to company performance. They get less, often much less when the company shits the bed. This was in response to a parent post that seems to think CEO comp is entirely isolated from performance.

[geodel]

Held responsible for what? The what part is written in contract for execs, movie stars, sport persons. I have not seen in any category people not getting paid per their contract for poor performance.

[teitoklien]

The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.

Them doing layoffs doesnt mean the people become destitute.

It is better to layoff people who are not adding value to a company, so that those newly unemployed folks can join a different company and build great products and add more value to the economy.

Ofcourse this only applies to US tech sector where hiring is tight. Especially when coming out of top tier companies like dropbox on your resume.

I don’t think its that dramatic, folks who tend to hold similar ideologies like you state, tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing or due to overburdened climate regulations and redtape leading to fewer factory jobs in America.

This is not the titanic, those people will move on to places where they’ll have a chance for promotion.

[dandellion]

Whenever people are laid off where you work, I suppose you always volunteer to take their place? Since according to you it's only such a minor inconvenience I think it would be hypocritical of you to not to offer to take their place.

Grandparent is not even saying that it should be avoided, just that the CEO should face some accountability from it. In many cases they have none at all, whereas the impact on the employees can range from actually quite low (as in your example) to very high. In fact there is no upper ceiling to impact to the worker which is the real problem. From the horror stories I've heard about the US they could even lose health insurance and end up with someone in the family dying because they can't afford treatment. Accountability is good precisely when there are such asymmetrical power imbalances, where one person makes the decision and someone else bears all the consequences. Either you add some feedback loops or the imbalance grows unchecked until it becomes unsustainable, and eventually you end up with a war of independence, or a French revolution and things like that.

With just a bit of empathy it should be easy to understand why accountability is needed in such situations to keep a good social dynamic long term. Someone with the empathy of a river boulder might think it's just people behaving irrationally, but I suggest you look into game theory and you'll see how some seemingly irrational behaviours like tit-for-tat are not as irrational as they seem.

[johnnyanmac]

>The ones out of job can join a different company, america’s unemployment rate especially in the tech sector tends to be low.

>Ofcourse this only applies to US tech sector where hiring is tight.

So, which is it? Will we move on or wont we?

>tend to not even bat a single eye, when average americans who lack the privilege of a tech worker lose their job to automation (with tech) or outsourcing

They keep trying to re-outsource tech every decade and we're in another wave. Why would I not be batting all my eyes at outsourcing?

[sangnoir]

> Often that person's leadership wasn't the problem, but even when it was, that doesn't necessarily mean that the company will be better-off without them

How convenient (for them)! When the company is doing well, they get millions in bonuses because their irreplaceable leadership skills - which make them 2000x more valuable than the least paid worker - were instrumental to the organization's success.

When the chips are down, it wasn't their fault per se, and the company still would be allegedly worse off without them, so laying-off waves of those who don't have decision-making power is the correct remedy, until the good times roll again, and senior leadership is ready to claim responsibility.

It must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"

[JumpCrisscross]

> must be nice to claim "macro-economic headwinds" as justification for poor performance and poor planning, but still get paid bonuses for the never-mentioned "macro-economic tailwinds"

What would you do if you owned a business? Fire leadership every time they make a wrong call? Or ban them from admitting they made a wrong call?

[johnnyanmac]

>What would you do if you owned a business?

- Find the issues, the ACTUAL issues. not "the stockholders are unhappy" issues. Not the "we overhired" issues. tangible issues hurting my bottom line. Economic head/tailwins is not a tangible issue for anything (let alone performance related) so much as a means to adjust projected earnings.

- Make an action plan, give tangible, reasonable goals. Not speculation on what appeals to monopoly money. We're a software company; if we can't collect internal data, how are we handling client data with any integrity.

- If anyone in leadership acted maliciously, they are gone. Full stop. Others are corrected. I can correct ignorance or incompetency. I won't stand deception and trickery among what should all be an aligned company with aligned goals.

(note, I won't codify a need to "fire someone" everytime a mistake is made either. a mistake is a managerial failing at best and a company failing at worst. Operate in a “a rising tide lifts all boats” mentality, not blame culture)

- if action plans and projected revenues look dire and we absolutely need to, introduce cuts. Try to cut my (assuming I'm earning anything) salaries first, then other execs. If absolutely necessary after they, we do layoff rounds. Ideally this should not happen because I have a proper savings chest for the worst times, but I'm not 100% opposed to layoffs as a last resort.

now of course, all this is unnecessary because dropbox is in fact not at the point where any of this is needed. Except maybe for Monopoly money. But yes, I have thought quite a bit about this scenario. And I still know this is still a shallow exercise since I'm missing tons of looholes and other scenarios.

[sangnoir]

If I owned a controlling stake in a business, I'd fire the leadership every time there's evidence of short-term thinking. The problem with public companies is systemic: a large fraction of shareholders want short term appreciation, and so they support and reward short-term mindsets in leaders at the cost of long-term value.

[JumpCrisscross]

> I'd fire the leadership every time there's evidence of short-term thinking

Have you owned a business? Worked for a manager who thought like this? You’re describing the sort of mercurial boss who fires people for disagreeing with them.

[duped]

If the leadership mistakes lead to the loss of livelihood and healthcare of thousands of employees because of their mistakes, yes, they should be included in the firings, or strongly considered for them - more so than any of the people getting laid off who made no mistakes, except working for a bad leader.

[flappyeagle]

Go start a company already — you’re on YC forums

[johnnyanmac]

1. This really shouldn't be advice handily thrown out like "learn how to play guitar". You gotta spend money to make money, and if you're laid off without a plan this is the worst time to spend money.

2. I plan to one day. I very much plan not to rely on a VC for that. The purpose for my company is to not require millions to ship products users want/need and to stay extremely lean. A small team of "full stack" developers, to put it roughly. I should already be in a very solid position by myself before I come to such a crossroad.

3. I will admit I am not this "full stack" dev yet. I will still need some months/years to get to this point myself. So I'm a "student" as of now.

[flappyeagle]

No one is ready. You become ready by just doing it

[sangnoir]

I have started a company[1], but that's neither here nor there. I vehemently disagree with your insinuation that I couldn't challenge leadership culture had I not.

Founding a company doesn't make one infallible or irreplaceable. Though to be fair, it doesn't feel that way when it's your company though!

1. I will note that this is an incredibly low bar.

[flappyeagle]

You want to be the boss. Start a company. You want someone else to control your employment, work for someone else. It’s simple.

[lucianbr]

> Often that person's leadership wasn't the problem

What's the basis for this claim? I would rather think often it was the problem. Not absolutely every time, but most times. After all, the C-suite makes the decisions. I can not believe management decisions do not influence the course of a business.

Sure, it's possible that outside circumstances were such that no decision could avoid a bad outcome. But that's a rather unlikely possibility. Most of the time, outcomes depend on decisions. Otherwise businesses would be some headless automatons. And if that was the case, we should not pay execs much at all.

It's an obvious cheat: when times are good - it's all because of the leaders, when times are bad, it's all because of the environment. This is what they claim, but it is not the truth. Again, what's the basis for this claim? Any proof, studies, anything?

[duped]

I didn't say which track they were on in the problem, just that they're on one of them.

[steveBK123]

Generally leaders are not going to fire each other.

So sometimes a doomed strategy will be pursued far longer than you'd expect, barring some board or activist intervention.

Some of it is self interest, some of it is hubris.. but also one can easily blame a bad run on some broader economic situation, specific competitor actions, or right strategy with wrong team (so fire the team) .. this works for a while until it doesn't.

[ericmcer]

Seriously, that severance is awesome. Of all the tech workers struggling, the ones from companies big enough to throw 4+ mo severance packages are not the ones I am worried about. Any smaller company your severance is a pat on the back.

[eweise]

Yep. last time I got laid off, I got paid through that day. nothing else.

[xnorswap]

Lobby your representative for change. This is something that laws can and should fix.

Not having worker protections is a political choice. It's not something the market or technology will solve.

Many countries have laws that prevent workers getting laid off with no severance. It is a solved problem, but it's inherently a political problem.

[JediPig]

This is why people should build a huge ass f-u fund and not look back.

[SoftTalker]

Yes, as soon as you have a regular paycheck you should start building an emergency fund. This should be taught to everyone in high school (or earlier) but we don't do it, among many other "life skills" that we do not teach because they aren't on the state standardized tests.

[johnnyanmac]

I had 6 months saved . It's been 13 months. School did not prepare me for the fact that my college degree in STEM could still leave me on the market for an entire caledar year

[bityard]

Yep, this is what I do. Individual responsibility is an unpopular idea these days but the way I look at it, I am the one who is ultimately in charge of my family's wellbeing. That is far too important to entrust to a corporation's generosity or the whims of lawmakers.

[eweise]

I don't think its an unpopular idea. But the fact is, being an employee is a lopsided relationship. You only have one employer but they have many employees. You leave and they still have an army to keep the business going but you get laid off and your income goes to 0. So yeah you can keep some money in the bank but still being without work especially with a family and mortgage, is a terrible spot to be in.

[johnnyanmac]

I was responsible and still got punished. What do I do?

[pjmlp]

In many countries severance package is guaranteed by law.

[SoftTalker]

What happens if there isn't enough money left to fund the legally-required severance? Do the taxpayers pick up the cost?

[DebtDeflation]

Same thing that happens when there isn't enough money to pay their taxes. Or their debtors. Or their vendors. Or their payroll.

[dandigangi]

USA: lol ok but no

[otteromkram]

Yet, people still vie from all over to work at US companies and we still draw the best talent.

There's also unemployment benefits for US workers.

Haters gonna hate, I guess.

[pjmlp]

No need to be in US to work for US companies, and still get a nice severance package.

Not everyone is looking forward to US working conditions.

[benced]

And it leads directly into the US being richer than all but tiny petro-states and growing faster than all of its peers. Fair enough if that's not what you want but there are tradeoffs.

[WrongAssumption]

You can certainly work for a US company outside the US, however you will not get a US salary.

[johnnyanmac]

>There's also unemployment benefits for US workers.

if you consider a few hundred a week "benefits", sure.

> people still vie from all over to work at US companies and we still draw the best talent.

yes, because like companies, the USD is coasting off of successes from long ago. We corrupted the tech boom, but fell behind on the FEV boom and manufaacturing in general.

USD is great to earn. It's horrible to live in the USD to utilzie it though. That's why companies are trying yet again to outsource.

[giancarlostoro]

And all the debt you pile up while struggling to get hired.

[anon291]

The average tech worker really should not have to go into any debt for even a year long hiatus from their typically well paying job. All that is required is living like a typical American and saving your salary. I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.

[giancarlostoro]

My cost of living has increased proportionately with my compensation, but also I don't work for any FAANG companies. I would love to work for someone that actually pays well, but typically those companies have ridiculous interview processes. Not all of us went through the standard CS degree pipeline and memorized all those questions. My first job was paying me 35 thousand a year, something most people probably would be surprised about, and I suffered through that for almost four years, the only raise I got was very marginally insignificant. It's not been a fun ride considering this is what I love to do, I know others who do drastically less work than I do and make more income wise.

[johnnyanmac]

Your assumption here assumes that

1. all tech jobs pay well. Well enough to expect 1 year+ savings. They don't

2. that we all have the same cost of living or family situation. Even living frugally, supporting a spuose and kid on savings is not trival.

>I honestly don't see how anyone can claim tech workers are not compensated for the volatility inherent in the industry.

Come work in the games industry for a while. 30% more hours, maybe 60% of the pay in a "good studio", and near guaranteed layoffs when the proect ends.

[andreimackenzie]

Early-in-career folks are more vulnerable. Even before major family/life costs start to play a role, it can be difficult to save enough for a safety net after moving to an apartment (even w/ roommates) from college & managing student debt, etc. I remember it took me a couple of years of stability to not feel at risk.

[anon291]

Sure, no argument there.

[grepfru_it]

That’s actually a pretty low salary but I just looked up their revenue numbers and it’s not looking that hot. They are also hemorrhaging cash this year. His salary and the performance of the company were probably a good foreshadowing of the layoffs

[hn_throwaway_99]

> His salary and the performance of the company were probably a good foreshadowing of the layoffs

As is standard. My recommendation to anyone that works in a corporate environment is that if you want to know whether the company will be at risk of layoffs in the future, become good friends with someone in sales. When the sales leads and activity start to drop (or growth rate starts to slow), you can usually be assured that layoffs will eventually follow. In my experience the sales folks were always the first to clean up their resumes and start the job hunt because they knew what was coming.

[bravetraveler]

https://blog.dropbox.com/topics/company/a-message-from-drew

Drew is developing a habit. 16% last year

edit: 11% before that: https://dropbox.gcs-web.com/node/8916/html

[alberth]

It's less of a habit and more indication of a matured business.

Their revenue has only been growing ~5% (and slowing to just 1% most recent quarter).

When you aren't growing, you must focus on operation efficiencies.

Rule of 40, now being applied to margin.

[johnnyanmac]

I'm not going to believe this "matured business" narrative when the letter itself claims right after that.

>We continue to see softening demand and macro headwinds in our core business.

This isn't a matured business strategy. This is a business predicting a cold winter and trying to bundle itself up. Of course, the less people to warm up the better.

[bravetraveler]

Yea, that's fair. I'm just being critical of the 'facade' (said with less ire than it sounds). The size is no surprise, in or out. I'll be mildly merciful - not all his doing

[thrownaway561]

I still hate the fact that people can borrow money against a stock. Stock should be sold, period. That is how the market sets a price for stock, through the volume of it being sold and bought. By allowing people to borrow against a stock, let's them get the money for the stock while still holding it. That artificially increases the stock price and value.

[currymj]

probably whoever makes the loan will hedge, maybe by shorting the stock. or buying puts, but then whoever sells them the puts will hedge by shorting the stock.

if they decide not to hedge, then it must be because they don't think they're exposed to much risk, which basically means they like the stock and would be willing to own it. it feels like it mostly works out.

[trallnag]

Isn't this also the case with mortgages?

[thrownaway561]

Are you talking on the consumer level or the banking level?

On the consumer level, you need to have mortgages as I don't think most people have 500K lying around in order to purchase a home. As such, there needs to be some way for the common person to borrow the money to finance a home. Obviously there is no way to "sell" your mortgage, you can only sell your home. And yes, you can borrow money against your home in the form of a HELOC, but you doing so doesn't affect the price of the home or the market, just what you have to pay off.

Most banks on the other hand, bundle mortgages and sell them on the open market in order to recoup their cost of them rather than servicing the loan. To me this shouldn't be allowed. If a bank wants to sell their mortgage portfolio to another bank or group of bank, that's ok, that doesn't affect the market and is a private transaction. What I have a problem with is them bundling the mortgages and placing that portfolio on the open market as that causing collapse like we saw in 2012.

[insane_dreamer]

> No growth is more or less bad on Wall Street.

In other words, this is to satisfy Wall Street.

[johnnyanmac]

If this is "saving the ship", more companies need to remember what a shipwreck is.

[apwell23]

> $100K all-in comp (which seems low to me for a tech salary)

ic1 at dropbox is 175k and ic4 is near 500k, ic5 near 700k.

https://www.levels.fyi/companies/dropbox/salaries

Do they really need such highly paid engineers? Are they really doing anything that innovative, new or first on market.

They could probably save these jobs by adjusting the comps.

[johnnyanmac]

This is how Musk stripped 80% of twitter. Take that as you may.

Remember that Dropbox (like Twitter) is HQ'd in San Francicso.

[hiddencost]

Uh, drop box cost per employee is likely closer to $750k, not $100k.

[pclmulqdq]

That $1.5M comp package is about 2-4 employees being laid off. It's not very many people.

It's also insanely low for a CEO, but about right for the CEO of a company in decline (which dropbox is).

[carabiner]

Why is the CEO's TC relevant to layoffs?

[bhouston]

> Drew Houston's total compensation for the year in 2023 was $1.5M

That is insanely low for the CEO of a public company of Dropbox's size. But I suspect he owned a lot of shares in the company so when it went public, so he doesn't need salary, it is just a rounding error in terms of his wealth.

EDIT: Yeah, he is worth $2B according to Forbes: https://www.forbes.com/profile/drew-houston/

[echoangle]

I always wonder what gives these people the drive to continue. Maybe I’m lazy and lacking vision but if I were worth 2B, I don’t think I would go to the office every day just to get accused of mismanagement when I have to lay people off. I would take my yacht to the Caribbean and slack off.

[csallen]

People enjoy having a purpose and a mission in life. Leading a team of people that you put together, in order to improve a project you started, and knowing that doing so will improve both your lives and theirs, is incredibly fulfilling. Even if the day-to-day is full of hardships. In fact, working to overcome hardship is one of the primary source of meaning in life.

Kids are another example. They're expensive, they're annoying, they ruin your health, they take up your free time, they consume all your resources, and they're inherently needy, selfish, and largely incapable of being grateful. Yet raising kids can be profoundly rewarding and fulfilling, in part because of the hardships, and in part because you're contributing to something bigger than just yourself, which is another crucial ingredient of meaning.

Sitting around on a yacht doing nothing is not so different than moving into your parents' basement and doing nothing, save with better scenery. It's the kind of thing you crave when you're burned out, overworked, and jaded, the same way we crave sleep when we're tired and food when we're hungry. It's a reaction to a state of being. But we only desire sleep until rested and we tire of eating once we're sated.

If you ever get to your tropical yacht vacation you may find that, in much the same way, what you thought was a permanent desire was only a temporary one.

[keybored]

Dreaming of winning the lottery and Going On Permanent Yacht Vacation is precisely the difference between being a worn out low-level worker and being a high-level executive who has all their needs met (or at least has the resources to have them met). With the latter you can have enough resources for you next ten generations and still go to work and optimize shareholder profits while thinking to yourself that you are serving a higher purpose.

[s1artibartfast]

you are not wrong, but I don't think that is necessarily a huge criticism.

[keybored]

Criticism? What would be the point in that? Where did I imply that such a personality type can absorb criticism?

[skellington]

Type A people who become CEOs don't dream of sitting around on yachts.

Some might be driven by money, but at a certain level it probably switches to a sense of responsibility, but also, it's intoxicating to be at the top where you don't really have to work in the same way, but get to direct what happens. People enjoy power. People enjoy the secrets of what happens at the top. People enjoy the recognition (within their peer group). etc...

[_yb2s]

One hardly needs $2B to slack off on a boat in the Caribbean… many people do so on surprisingly nice ~30 foot sailboats you can buy with a few months work at minimum wage, and wild seafood is free

I see a lot of people that say “If I won the lottery I’d….” and then describe something they could definitely do without winning the lottery… which makes me think they still would not actually do so if they won

[gardenhedge]

If you win the lottery there's no risk in doing it

[_yb2s]

Sure there is- opportunity cost, the real dangers and skills required to operate a vessel at sea, etc. You can pay a professional crew to do everything for you, but then you'll probably feel pretty useless, and be looked down upon by the people you meet along your journey that do it themselves.

The sea doesn't care how rich you are, and being a helpless dependent is boring and infantilizing no matter how big your boat - and you don't develop skills without taking risks.

Ultimately, I don't think people are often that conscious of their real goals and motivations. It's easy to say you have no choices in life because of financial and time constraints, but I don't think those are the real reasons most people choose to do or not do things.

[computronus]

Lawrence: Well, what about you now, what would you do [if you had a million dollars]?

Peter: ... Nothing.

Lawrence: Nothing, huh?

Peter: I would relax, I would sit on my ass all day ... I would do nothing.

Lawrence: Well you don’t need a million dollars to do nothing, man.

https://www.youtube.com/watch?v=4lmW2tZP2kU

[toast0]

I don't have billions and I don't manage people (I've been voluntold to manage 1 person a few times, and I'd rather that not happen again), but I have enough that I don't need to work for economic reasons.

I'm working part time anyway, because it keeps me busy and interacting with people outside my home, and it gives me access to interesting real world problems that I can't really access as an individual person on the interwebs. Having other people depend on me to get things done provides motivation to keep moving on things that I can't seem to manage on my personal projects.

If I liked the kind of organizational management work a CEO does and I was good at it, I'd probably get roped into being a CEO.

[yoshyosh]

He breaks it down in this interview, I believe in this section https://youtu.be/KSeraZxSAbQ?t=1350

Ultimately he mentions that being CEO is a rare opportunity to play a more infinite game and practice the craft of getting really good at something that doesn't have an end

[jnwatson]

Even if he still wants to work, restructuring a second tier post-growth tech company wouldn't be my first choice.

[spacebanana7]

Yeah I figure a long shot deep tech project would be better suited to a billionaire. Little to no accountability for the first decade or so, and loads of glory if it somehow works out.

[thayne]

I can understand wanting to continue doing something. What I don't understand is why instead of putting their time and now considerable wealth into more philanthropic pursuits, they decide to continue increasing their wealth, often at the expense of other, less fortunate people.

[mrkramer]

People who have mission and vision of the future are entrepreneurs because they want to solve problems and help other people not because they want to become rich and sail with yacht.

Listen to Snapchat's founder and CEO Evan Spiegel[0] why he didn't sell to Facebook for $3 billion. He even didn't sell to Google which offered 10x more ($30bn) for Snapchat.

[0] https://www.youtube.com/watch?v=BVu6M72XWUI

[echoangle]

To clarify, I actually kind of get it for businesses that actually have a important mission (using my definition of important of course). If you’re working on curing cancer, I would understand that a CEO doesn’t want to leave even if he’s set for life. I just don’t see entertainment and service businesses like Snapchat or Dropbox as actually meaningful endeavors. To me they are nice to have and something I would work at for money, but I wouldn’t feel like I’m making the world a better place. Maybe that’s exactly the thing I was misunderstanding about those CEOs, they truly think their work is needed and important for the world.

[searchableguy]

No idea about what big CEOs feel but for me, I would absolutely continue working even if I was a trillionaire someday. What matters and drives me would be impact and influence I could have on society. Have couple billions? Throw them on things I care about and keep getting more to throw at the same.

[pc86]

Some people do exactly that but it's rare that someone will simultaneously have the drive to do something that will generate them billions of dollars and also be willing or able to just stop working at that point.

Also remember once you have that much money a lot of things become basically free, both figuratively ($100,000 to a billionaire is nothing) and literally (comped rooms, gifts, etc for basically every event and your company(ies) end up footing the bill for most of your expenses).

There's plenty of people who make $5-50 million in a windfall and are never heard from again.

[echoangle]

True, it’s probably that this drive is what allowed them to be billionaires in the first place.

Just to rant a bit more: the Wordpress situation makes this point even more crazy to me. Mullenweg has about 400m and instead of retiring and enjoying life, he’s arguing with anonymous users on Hacker News. No offense against hacker news but defending my life decisions on HN isn’t exactly the first thing I would do if I could do everything I ever wanted. Like, go buy a plane and take flying lessons, or go scuba diving? Nah, I’d rather justify myself on the internet.

[CrimsonCape]

The internet is a direct pipe to every person on earth. You have to acknowledge that this is new territory for humankind.

In fact, internet communication is much closer to dark-age "public square" type communication. Bring your soapbox to the square, talk loudly, gather a crowd, and listen to the crowd jeer or clap. We haven't had that since the industrial revolution pre-1800s (i.e. at the earliest 1700s)

For the forseeable future, we are in a situation where people will "feel" that the most authentic communication is intentionally said in-front of the internet bystanders. So a CEO posting an intimate reply to an individual with billions of people able to see the intimate reply is more "authentic" than everything else.

(Much closer to dark-age communication implies that we are closer to "old" methods of communication that disappeared for the last couple of centuries. We used to have industrial revolution-type communication medium, one-direction broadcast medium.)

[randomdata]

I expect a lot of people with that kind of money can't enjoy life as it disconnects them from everyone else. Your friends can't afford to do those things with you, so you either end up buying friends – with all the disillusionment that goes with that – or you turn away from people and get your fix trolling computers instead.

[0xfeba]

hey gotta do something on the toilet

[jrussino]

I have a slightly different version of this. There are some other replies here to the effect of "people like to have a purpose in life". But surely "helping people share files" or whatever the Dropbox "mission" is can't be that inspiring, right? I mean, the point of starting a company like that is to make those billions. Maybe to do it successfully you need to delude yourself into thinking that mission is really important, I don't know.

But for me, if I had that kind of business success I'd cash out and go do something that feels actually important. Go get a PhD and take a crack at curing some obscure disease, or setting up a Dyson swarm around the sun, or making a great work of art, or thinking about how to improve elementary education a la Khan Academy; something like that. Then you get to have a real purpose and work toward something that most people don't just by virtue of the fact that it doesn't pay well enough, and you still get to spend plenty of time on your yacht!

[lucianbr]

The instinct to acquire resources does not have a limit. When homo sapiens evolved, such a limit would not have been a useful adaptation. There were no billionaires then.

Also it's nice to boss people around, probably for the same reason.

You and lots of people say would do something or other. I submit that it's different when you're actually in that position, as opposed to imagining it. Lots of us imagine we're going to go to the gym for years, and give up after a month or two.

[echoangle]

Some people have made the (good in my opinion) point that this is actually survivorship bias and a lot of people actually do retire and are never heard from again once they have enough money. So people predicting what they would do aren’t necessarily that wrong, it seems that some people actually do that.

[renewiltord]

Yeah but if you were worth $10m, $100m, $250m, would you take it easy? If you would, then you wouldn’t get to $2b.

[echoangle]

I got from the other comments that he got the 2B by owning part of the now very valuable company, not by working for a salary. Assuming he picked a good enough successor that didn’t completely ruin Dropbox, he should still have pretty much the same net worth without any work, no?

[JAlexoid]

Your presumption is that it's about the money for everyone.

But there's a lot more at play when you are rich enough to not worry about money.

[anon291]

Because it's fun? Honestly after two days of vacation, I'm about ready to do something

[foobiekr]

It’s not “ridiculously low.” Before the layoff they were 2700 people. That’s like a VP2 at most large tech companies and 1.5M total comp is spot on for that level.

[BonoboIO]

I think even the Mozilla CEO made more … I looked it up as I wrote this.

Nope … the Mozilla CEO makes 6.9M a year which is insane.

In comparison Drew is underpaid by a factor of 50 or more.

[pjmlp]

Nope, MBAs have to learn exponential growth is impossible to accomplish forever.

Companies should be managed to be profitable, while paying employees and business expenses.

Anything other is a pipe dream that eventually blows up, but since only employees suffer while the MBA guys go to become CEO of yet another adventure, who cares. /s

[anon291]

The myth of exponential growth is not that companies can't grow exponentially forever (since that's the case for most companies) but rather that the valuation of these companies depends on exponential growth (it does not). Most public companies in the United states do not experience the exponential growth many tech startups do, but do perfectly well for themselves, their customers, and their employees.

No one is pushing for exponential growth. If a company wants to stop, declare a dividend, and be done with it, and let investors choose a new rodeo.

[pjmlp]

Except that isn't what happens, instead every year a new goal that has to be X % higher is set, and when expectations are not met, the employees are the ones landing on the street for stupid values of X%.

The one signing off on X% might even get a bonus for doing that, and enjoy some Bahamas vacations.

[anon291]

In tech sure, but in the market, many companies simply return dividends. Lots of mining stocks, retailers, commodity producers, etc don't experience exponential growth

[johnnyanmac]

indeed. but tech gets some new boom every 3 years and that's why no company worth their salt is going to settle on dividends. It's still growing fast, so companies expect fast growth. Even in the recession they don't want to pretend exists but knows exists.

[pjmlp]

In this case we're talking about tech sector anyway.

[otteromkram]

I have an MBA and am not a CEO. I'm probably better at developing software than you, too.

But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.

Keep that narrative alive; I love it!

[wolvesechoes]

"But, I do get a chuckle out of what you believe is a "diss," when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate."

This doesn't mean it is not a diss - most parasites fare quite well, and definitely determine fates of their hosts.

[pjmlp]

Like all rules there are exceptions, and I am old enough to remember when management was battled earned from the trenches, not people thinking they could manage any random company.

It is like assuming generals can win wars straight into the battlefield after graduation from military school.

Some get lucky, most of them do not, then again the little soldiers are the ones thar have to worry with the actual outcome.

Good that you're having fun.

[johnnyanmac]

>when you're actually stating that MBA holders will not only do better in life, but they'll also control your fate.

Not if I can help it. America is doomed but I can scavenge out my own little hole to settle in and see if that survives the fallout.

If there's one thing I learned, it's that tech has an amazing ability of scale that can even topple titans if you strike at the right time and place. You won't make trillions, but you can live very comfortably. And that's all I want; I don't need infinite money and exponential growth. And if I do get a company that achieves that I will keep it that way. a proper business, not a speculative stock to gamble with.

It means absolutely nothing to you, but you're the exact kind of person I'd avoid in my company at all costs. Our goals diverge too much, and that's not a bad thing. Comapnies need to have proper alignment to succeed.

[Workaccount2]

Public company CEO pay is almost always paid by shareholders not by the company itself.

It's so misleading that these "CEO compensation is 100x employee pay" stats always get kicked around like it is an apples to apples comparison. It's not.

CEO's get paid in stock which they need to redeem from shareholders. Employees get paid with cash which them redeem from the company's checking account. They are different sources of money.

It's so annoying that this keeps getting repeated, on and on and on. It's totally disingenuous.

[pjc50]

The company's checking account also belongs to the shareholders, albeit indirectly.

The remarkable thing is how readily shareholders will accept narratives which give the CEO very large amounts of compensation. The notorious $50bn is a high mark: https://www.forbes.com/sites/antoniopequenoiv/2024/06/13/tes... - but that is very much taking value away from shareholders and handing it to the CEO in huge amounts.

[Workaccount2]

It doesn't indirectly belong to share holders, it directly does.

But that doesn't change the fact that employee's are paid with money that is generated by the business itself. Stock compensation comes from the wallets of shareholders and is totally disconnected from the operations of the company (although generally proportionate).

[anticensor]

Indirectly as in separate legal personhood from the shareholders themselves.

[JohnMakin]

Yes, but we can all agree that stock/$ is pretty fungible and can be exchanged for goods and services in pretty much the same way. So effectively, it is apples to apples.

[Workaccount2]

Stock/cash is not fungible for the company itself. Using shareholders as an ATM is a surefire way to tank a stock, and companies tend to use it as an absolute last resort.

[JohnMakin]

We aren’t talking in the context of the company though. The gp comment said it’s not an apples to apples comparison to say a CEO makes 100x an employee because CEO’s compensation is stock.

If the CEO’s stock compensation has a monetary value of $100 and the employees salary is $1, it absolutely is fair to say the CEO is compensated 100x the employee, regardless of it is stock or cash. The CEO can borrow against this and use it as effectively cash, if they are unable or do not want to exercise the options. This is such an insanely common practice and absurdly pedantic argument that I wonder why we’re even having it. Does the distinction matter? Of course it does not.

[Workaccount2]

It's not apples to apples because it is in essence two different employers. The CEO does not work for the company (this why you see that $1 CEO salary so often), the CEO works for the shareholders. But the employees work for the company. They are two distinct entities with two distinct finances.

If a company does layoffs and the CEO still gets paid, that is perfectly logical because the company was never paying the CEO in the first place. Whether or not the CEO got his $5 million compensation package has no impact on whether or not the company could have laid people off, as just about everyone portrays it (and thinks how it is).

[runako]

Can pretty quickly see that the CEO comp # in question is not the stock. Houston sold many times more than $1.5m in stock in 2023. The $1.5m is likely direct cash and services.

[pclmulqdq]

He owned a huge amount of dropbox before it went public. $1.5M is the money from the company to him (likely including stock compensation).

[amelius]

> Layoffs suck and no one wants to do it, but sometimes it's needed to save the ship.

But they always fire the weak employees, not the ones that can easily help themselves.

Maybe we should have some laws that randomize the layoffs ...

[onion2k]

they always fire the weak employees

This is definitely not the case. Companies use a lot of different mechanisms to choose who to lay off, and it's rarely entirely performance based.

[steveBK123]

Arguably from what I've seen it is TOO random or non-performance based.

Some combination of personal dislike and unfamiliarity.

The people making the cuts are not line managers and are sometimes given very short amount of time to make their cut list. So "oh I know that person" stays vs "I have no idea what they do / they asked me a pointed question in a meeting once" goes.

[scarby2]

I've been laid off twice, neither time has been performance based.

once i was on a team of 2 ICs and a Manager - only the manager stayed - the company is now about to fold. Other time i was let go as part of the entire US arm

[steveBK123]

Yes, most layoffs I've seen in my career are of the "mass layoff" variety, and these are generally far from being performance based.

There's just too many people, the decision making is too quick, at too high a level.. and more driven by cost / future strategy (so which teams to cut deeper).

[infamouscow]

When layoffs are random, it engenders a profound sense of betrayal among those who have diligently gone the extra mile. It severs ties and creates a chilling effect, dampening the morale of those who remain.

Employees, acutely aware that their efforts might be disregarded in the next round of cuts, become increasingly disincentivized to exceed expectations. The result is a workforce more focused on survival than excellence, fostering an environment where mediocrity thrives.

[JAlexoid]

Why would you fire your best and brightest? That would be like throwing out good fruit, when there are spoiled ones.

No, it's a very poor idea to force companies to lay off at random.

[bastardoperator]

We should start with the executives who didn't perform/execute, they're the biggest liability.

[pclmulqdq]

This often does happen along with layoffs when a company is in real trouble. A problem of silicon valley culture is that you basically can't fire anyone for underperformance, so you need to have these sorts of layoffs as a prophylactic measure to cull the heard. So that means you get a cycle of "overhiring" followed by "layoffs" and that is working exactly as intended.

[bastardoperator]

California is at will, you can fire anyone for anything or even nothing. I'm yet to see poor performing executives take themselves out before they take out the people that actually create value. You don't need to have layoffs, you need better leaders, and they're the last ones to get culled, usually running off with bonuses for under-performance and lousy work.

[pclmulqdq]

Legally yes, culturally no.

[johnnyanmac]

>That would be like throwing out good fruit, when there are spoiled ones.

Have you seen the industry lately? They don't care unless they have leadership who actually has tech experience. The company will float long enough for the next executive to worry about the consequences.

To put it more charitably: They may want to care but there's too much beuracracy to holistically figure out performance, and the stats measured are horrible 99% of the time anyway. So yeah, it all comes down to "vibes". Which is probably worse than random for tech workers. They won't feel short term consequences, so it's not a big deal for them if they lose a few "best and brightest" (they will probably leave after the layoff announcements anyway).

[Clubber]

>But they always fire the weak employees

What you are referring to is called rightsizing and it's taught in business schools, but almost never implemented well. I would guess it's because it takes to long to figure out who's weak and who's not and they are in a hurry to cut costs.

[heyjamesknight]

This is a joke, right? If a company is underperforming, then the underperformers are the first to go. Market economies require efficiency. Capital flows in the direction of success. Impeding this flow with regulation is a great way to create a malfunctioning economy.

[pixelatedindex]

I’ve seen instances where the people with the most seniority are let go first because they cost the company more.

[johnnyanmac]

Nope. it REALLY depends. Sometimes underperformers are focused on. Sometimes worst ratio of performance to pay is focused on. Sometimes it's random if lawsuits are a worry (AKA they want to layoff the older workers but need to shuffle in some others so it isn't suspicious). Sometimes it's purely vibes for who's picking who to be laid off.

There's no consistent layoff strategy. Especially not in times like this.

> Impeding this flow with regulation is a great way to create a malfunctioning economy.

yup, and look where we are heading next year...

[indy]

Isn't firing the weak employees the correct long term strategy? Especially with regards to ensuring that the remaining employees stay employed

[s1artibartfast]

Im not sure if you are sarcastic or not.

If not, I think you have a highly unrealistic opinion of who the company operates for.

[gcr]

The severance packages suck.

COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6.

Many job searches take longer than 6 months, so employees will be left high and dry right when they need it most.

[nop_slide]

> COBRA is the single largest expense for departing employees. Industry standard is to offer 18 months, not 6.

Are we in the same industry, where are you based? I got 2 months when I was laid off last year.

I also know many tech people who got just 1 month.

[hn_throwaway_99]

Agreed. "Industry standard is to offer 18 months"!! Please let me know this industry, because it ain't tech where I live!

[pc86]

It's not any industry anywhere. Any layoff thread on HN is people saying what they wish things were but framing it as "this is how everyone else does it this one company is being greedy" when it's not the case 99% of the time.

[cruffle_duffle]

> COBRA is the single largest expense for departing employees.

Life pro tip: Do not use COBRA!!!!! It is almost always much, much cheaper to find an ACA compliant healthcare plan on your state's health insurance market. For one thing the plans will often be cheaper (though with fewer features). For another ACA plans qualify for tax credits, etc and COBRA doesn't.

When I got laid off I made one of the worst financial mistakes of my life keeping my employer's high-deductible plan via COBRA. I stupidly figured it had to somehow still work out to be cheaper than shopping for private insurance. Boy was I wrong! Between the "high deductible" part and the fact the plan wasn't able to qualify for tax credits I overpaid my medical expenses by about $10,000 over the course of a year. Had I gone with even a "bronze" level ACA compliant plan that would have been cash in my pocket that would have helped out a lot while I was looking for work.

The big reason was my medication was like $800/mo. And on my employer's plan once I hit my $3500 deductible it went to $0/mo. This wasn't a problem when my former employer picked up most of the insurance premium for my high deductible plan but with COBRA you are paying the entire premium! And for my use case, medication was my top medical expense so I was paying a hefty premium for a fancy health plan that didn't actually cover my expenses.

A "regular deductible" ACA plan would have made much more sense in my unemployed scenario as the premium was not only lower but the medication was generic and would have only been like a $23 copay!

Always, always bust out Excel and compare the full cost of healthcare on different plans. Compute the total cost of your medications, how & when you'll hit things like your deductible, what tax credits & deductions apply, etc. What made rational financial sense while employed might not make sense when unemployed or buying your own health plan. But you have to find out for yourself. Rarely does it make sense to continue paying your employers health plan via COBRA. After loosing your job you have like a 30 day window to switch plans before you will be locked into your COBRA plan for the remainder of the year -- do not dilly dally around, figure it out now!

[anon291]

Forget ACA compliant health plans. When I was laid off, since my income / week was $0 (Oregon), we just got medicaid for my kids, and pregnant wife, and I paid an extremely modest amount for a solid plan. There is no reason to use COBRA. It's a relic and probably should be done away with.

[cruffle_duffle]

> It's a relic and probably should be done away with.

This is the conclusion I came away with as well. It made sense back before there was the public health insurance marketplace.

...but I tell you what there was nobody out there who told me "hey, revisit your health insurance" and it cost me a non-trivial amount of real money to learn that lesson!

[wmfiv]

Please look at your individual situation and don't take this suggestion blindly. If you've already contributed significantly to your deductible or out-of-pocket maximum it can definitely make sense to continue with COBRA.

Also you can game the COBRA enrollment window. You have 60 days from your loss of coverage to elect COBRA and once you elect COBRA you have another 45 days to submit payment. You can elect on the 59th/60th day and then pay 45 days later if you ended up needing the coverage. If you don't need the coverage don't pay.

[cruffle_duffle]

> Please look at your individual situation and don't take this suggestion blindly.

Exactly. The message here is it is incredibly important to re-evaluate your healthcare plan. Every household is going to be different! Bust out excel and crunch the numbers.

[pclmulqdq]

COBRA can be good if you are on a platinum plan and have a lot of foreseeable health expenses. HDHP COBRA makes no sense at all.

[anon291]

Please check though, because my kids qualified for medicaid despite my six-figure income. The state of Oregon qualifies by week, so even if you made $10 million / year, if your expected income in the week is $0, you qualify for that week (yes, I literally asked them this question, and he said yes, that is how it works). According to our DHS, there is no upper limit on yearly income that would mandate a clawback of benefits received[1] . And in Oregon at least, OHP is accepted everywhere, and is usually better than the platinum plans (no payments taken from users, ever)

[1] As another example, I asked if I didn't work Jan - Nov, and then made $10 million in December, would my kids qualify for mediacid Jan - Nov, and he said yes.

[pclmulqdq]

That is interesting to know, and does seem to be true if that $10 million is the lottery and is truly random income and is truly instantaneous. If you are working on a company that you sell, it may not be the case.

[anon291]

that is not what I was told. I bluntly pointed out that I expected to make good money that year despite being laid off (and I did), and he said it did not matter, since I was unemployed, my expectation for the current week was zero. It has nothing to do with whether you have a lotto ticket or a company exit.

Although obviously if you're working at your company, you are not unemployed and do not have zero income expectation.

[anon291]

My advice is to simply go on Medicaid.

When I was laid off in 2023, my mom and aunt told me to go on Medicaid. I thought it was a bit ridiculous since I had already made well above the poverty line, and was planning on still pulling in a substantial amount in the same year despite the lay off (I was laid off in January). I was going to pay several thousand a month for COBRA, and I thought my mom and aunt were crazy, since they are the sort to claim everyone's using welfare (my aunt retired early and is on medicaid, since her income is zero, so I guess she has some evidence to support her claim).

Anyway, so I did look into it mainly for the 'I told you so' aspect, to 'prove' to her that the social safety net did not exist as she imagined it.

However, to my surprise, it did, and within an hour of filling in the form online, I got free medicaid for my kids, and highly subsidized marketplace plans for my wife and I. In my state, medicaid eligibility is based on expected income / week. According to the man on the line from the state, even if I did end up making more, since my expected income was $0 (being unemployed), I still qualified! My wife's premium / month was like $100 (she was pregnant so qualified for more).

I did tell several colleagues about this, but they didn't believe me and forked over thousands of dollars.

In my state, medicaid is superior to my old PPO plan. For one, there is no co-pay and my daughter ended up needing major orthopedic intervention (severed finger) and we paid $0 out of a total cost of $150k. Although you're assigned a doctor, it's still essentially a PPO plan (you can see whomever you want whenever you wanted, so we stuck with our old doctors).

So, please avail yourself of the very safety net you pay for. COBRA is basically always a bad deal. There is almost certainly a subsidized plan out there for you. There's a pervasive myth that the social safety net doesn't exist in the USA and I almost lost $10k (or more with my daughter's incident) because I didn't do the obvious. I also learned that should I ever want to leave my job to start a business, I honestly really don't need to worry about health insurance.