
LinkedIn CEO Jeff Weiner Gives $14M in Stock to Employees - prostoalex
http://recode.net/2016/03/02/linkedin-ceo-jeff-weiner-is-passing-his-14-million-stock-grant-to-employees/
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_sentient
I wouldn't by default assume some sort of sinister ulterior motive here.
There's a fairly good chance this is exactly how it appears: A CEO taking the
rather exemplary step of donating an entire year's worth of comp to his
employees, in an attempt to offset external impacts that are only nominally
within his control.

Sure, there's the possibility this act is purely for optics and employee
retention. But if that's what drives people to be good human beings you won't
catch me complaining.

And the "worth noting" section in this article is curious as well. Why does
any amount of personal wealth degrade the value of this act? It's like the
writer is saying "don't be impressed folks, this guy is still rich."

We should encourage and support acts like this, not couch our praise in snark
and envy.

~~~
daurnimator
> Why does any amount of personal wealth degrade the value of this act?

It shows how much of his own lifestyle he is potentially sacrificing. To take
it to the extreme: if he was giving up _all_ his wealth to his employees, you
would treat it differently to if he was giving 0.01%.

Edit: I think this is the most controversial comment I've ever made on HN. It
keeps going up and down between -2 and +8..... I wonder why it's so
polarising?

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barsonme
Probably polarizing because people believe so differently about giving.

Some believe that "good" giving means giving a large portion of what you have,
not a small fraction.

Others believe a gift is good gift, no matter how small.

Others believe a $14mm gift is good because of how large it is, regardless of
whether or not it's 0.01% or 100% of his net worth.

Others take offense when people try to dictate theirs or others lives by
claiming a kind or charitable act is insufficient because it doesn't put out
the giver as much as they should like.

And there are probably other ways to look at it as well.

This sort of debate _always_ crops up when rich people donate money.

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SixSigma
But up/downvoting isn't supposed to be based on how you feel about the comment
but whether it adds value to the site.

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DanBC
Who says?

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djhn
Common sense, convention, HN rules?

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DanBC
What HN rules?

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djhn
My bad, like Six Sigma above said, the guidelines do not include such rule.
Since HN evolved /co-evolved with reddit and follows many of the conventions
even more strictly, I thought this is also an HN rule. Intuitively, it also
makes sense - 'upvoting', or irl aknowledging things you disagree with is how
you would aknowledge that you see the opposing argument as valid, and will
address the disagreement in a response. As opposed to downvoting, or irl
ignoring, comments that fall so far out of scope of civil debate and are not
constructive.

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pfarnsworth
Say what you want about LinkedIn as a product, they treat their employees
really well. When I interviewed there a few years ago, their interview process
was extremely supportive, as opposed to other companies. It really felt like
they wanted you to pass their interview, and it impressed me. I didn't take
their offer, but I also wonder if that was a mistake or not.

I find it surprising that they can treat their employees so well considering
their revenue per employee is relatively low, ~$300,000 if I remember
correctly. Regardless, Weiner's behavior does mesh with the feelings I had
from the company in general.

~~~
themartorana
That's low? Man. I gotta crack the whip at work.

~~~
pfarnsworth
Well, Netflix is $3 million, FB is $1.7 million and Google is $1.3 million (it
turns out LinkedIn is ~$400,000), so relative to its peers it's low.

~~~
zirtik
How are these numbers calculated though? I want to know how what percentage of
these companies' total workforce is outsourced to contractors that are not
included when coming up with the above figures. A company may be off loading a
large chunk of the work to third parties while getting sweet gains and
producing relatively higher per employee revenues.

~~~
gphil
If you factor in the people-hours behind the AWS services Netflix uses, I'm
sure their number looks a lot different.

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phamilton
Do you mean to say that we should include the people who make the products
consumed by Netflix?

That's a very odd way of looking at it. Is that because there are entire teams
at AWS supporting Netflix, which makes them more like contractors?

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mfjordvald
The logic is that if you outsource your ops team to AWS you have less people
but your revenue is still the same, you're just paying AWS instead of
salaries.

So if we take the revenue per person number as anything significant then
netflix skews that by using AWS.

Ultimately it's a number without much meaning.

~~~
joshuahutt
Well, then, couldn't you subtract the cost of their AWS bill (or some fraction
of that cost) from their revenue, to adjust for the lower headcount?

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mrgordon
It would be difficult so no one bothers. How many "people" is monthly use of
S3, DynamoDB, RDS, Route 53, etc. equivalent to? Its not easy or worthwhile to
estimate. Revenue per employee can be a bit of a vanity metric.

~~~
riffraff
well, the obvious solution is using profit/people rather than revenue/people,
isn't it?

EDIT: ah, as another commenter mentioned, it is also true that you might be
growing fast with low profit so I guess both measures make sense (or not) in
different contexts.

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antiviral
This was a very kind gesture. But there is no way this gift would remotely
make up for the value loss experienced by the employees.

According to LinkedIn's site, they have 9,200 employees:

$14 MM stock grant/9,200 employees = $1,521 per employee

In order for this grant by the CEO to fully make up for the amount lost by
employees in their recent stock crash, they would have had to have no more
than $3,804 of LinkedIn stock ($1521/.40). This seems quite low.

According to LinkedIn's 10-K, LinkedIn has 6.1 MM RSUs outstanding, implying
663 shares per employee. The average amount lost per employee would therefore
be: ($272(LNKD high) - $119(current stock price))*663 = $101,439

In other words the CEO's stock gift to employees would only make up 1.5%
(1521/101,439) of the total loss from the recent crash.

There are many reasons other than money to work somewhere: how rewarding the
work is, how much you enjoy working with your team, and the impact you are
having on the world. Those are things that this kind of analysis would not
capture.

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yueq
Not all positions have stock grants, e.g. Sales.

~~~
phamilton
That skews the numbers even more towards huge losses for employees with stock
grants.

~~~
exacube
but the loss (from the stock tanking) would be the same regardless of how many
employees had options though, no?

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phamilton
Loss per employee would go up, since the number of employees with options is
less than originally assumed.

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richiezc
This money is going back into the option pool which is used for new grants,
its not going directly to the currently employees.

With a 15.7B mkt cap the 14MM represents ~8.9bps, I haven't kept up with his
ownership but I remember looking at the S1 and I believe he used to own 4% of
the company.

This is an important but mostly symbolic move.

~~~
encoderer
It reads to me he's talking about the pool of equity allocated to this year's
grants. At companies like LinkedIn, you receive new grants every year to layer
your equity and keep you there past your 4 year mark. Everybody does it
differently, but it's usually something like "We have $x in equity comp
available, lets do some magic calculation based on base pay and annual review
to allocate this between our employees."

Also, I can't speak to this personally but I've heard that LinkedIn offers are
heavy on cash, less equity.

~~~
solsteve
I received an offer from them early last year (declined) and cash compensation
wasn't any higher than the other offers I had at the time, but the equity was
substantially higher.

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vadym909
It would be cool if more of the senior management with >$5M options did that.
If the company prospers they could easily negotiate high rewards again. Its
normally the rank and file who get standardized bit-sized options.

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sytelus
Quote:

 _That’s because, according to a LinkedIn spokesperson, Weiner is forgoing his
annual stock package so that employees can have it instead._

Huge kudos CEO taking responsibility (even though its probably not his fault)
while making sure employees don't get impacted.

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falaki
Does anyone know how this $14M compares to what employees lost recently?

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askafriend
That would be a depressing number to find out.

~~~
antiviral
see my comment above

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maerF0x0
This gesture gives no indication of distribution. It could got to the top 14
execs. Back scratch back style.

~~~
stegosaurus
Wikipedia tells me LinkedIn has ~9000 employees.

So even if it's fully distributed that's about $1500 per member of staff.

Is that exciting? I mean, if you were on minimum wage it might be. Otherwise
it sounds like inflation (5% on $30K). How much do LinkedIn employees earn?

~~~
boling11
$1500 is certainly exciting for a lot of people! Really, if someone gave you
$1500 off the street, would you be like, "is this exciting?"

Applaud him for doing something good. $14m is a lot of money for any
individual to shell out and $1500 is "exciting" to most normal people.

~~~
nonuby
Does it come with the catch that I have to join his professional network? Do
people working at LinkedIn have to use LinkedIn? I always wondered the same
about Facebook, some awesome engineering challenges but many techies I know,
including myself, have zero desire to have a facebook profile

~~~
pc86
I imagine they check but I also imagine you won't be disqualified because you
don't have a profile.

Why does the YC application ask for your HN username?

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dimdimdim
The guy does a good thing and recode is trying to justify that hey it was not
a big deal because he already is rich and has a lot more stock!

At one end journalists cry out aloud about how big CEOs are hoarding cash and
stock without giving much to employees, and when someone does the opposite you
try to justify.

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trying2bneutral
I am not sure what the complete implications of this act are.

Were these options exercised? Does Jeff benefit from not having to pay taxes
on the paper gains he would have realized had he kept these to himself?

Jeff is a great guy but I personally do not think that this act really means
anything substantial for the employees.

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peace011
Definitely a kind gesture from this CEO considering that some people won't
even leave a tip when they're served wild caught fish by a minimum wage
employee at their favorite restaurant, however, this is a first-world
donation. Sure, we shouldn't judge his donation on how much he sacrificed
personally, but IMHO it would have more impact to human progress if he
actually sold the stock to help refugees that actually are in need of housing,
bread, and water.

If what I wrote above doesn't make sense to you, perhaps the following quote
will resonate with you: "The test of our progress is not whether we add more
to the abundance of those who have much, it is whether we provide enough for
those who have little." -Franklin D. Roosevelt

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zmeden
If the CEO is not sure where to donate to 'provide enough for those who have
little', then giving to those that 'have much' and having them make the
decisions might actually be a good choice.

I never felt too positive about piling up of money for years/decades to donate
it later instead of distributing it among the people in the organization now.

Sure, if you believe in an impactful plan that needs lots of money. But even
then I could see arguments against it.

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_yosefk
To everyone criticising this or unimpressed by it - let's hope none of you
ever becomes a victim of such a despicable act, and let's hope as well that
the rest of us don't become less likely to either give or recieve in response
to your comments which I find rather misguided.

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mgiannopoulos
Maybe someone will fix the web interface then.

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xyzzy4
I would sell that stock ASAP.

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werber
Totally anecdotal and totally objective, but he's one of the hottest ceos in
the game

