
GoPro's CEO honors a costly promise - techaddict009
http://fortune.com/2015/05/14/gopro-ceo-woodman-promise/
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Pyxl101
Detail missing from this article (at least the article linked as I write this
comment): Neil Dana was GoPro employee #1 and still works at the company. This
detail is seemingly absent from a bunch of news articles, and that fact really
surprises me. It's like the news wants to make this sound more controversial
than it really should be; they clearly want to play up the "college roommate"
aspect and describe the move as "generous", rather than the "employee #1"
aspect.

Woodman and Dana reportedly had a contract that Dana would receive 10% on
sales of Woodman's stock, as first employee and head of sales, and Woodman is
honoring the contract. It's not just, as far as I can tell, some kind of
donation or obscure college bet. Sure, the contract was verbal. I still don't
think we should be /astonished/ that someone honors an employment contract
that was made for equity. That's setting the bar rather low, isn't it?

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rayiner
An agreement, even if verbal, can be a contract if the other party gave
consideration (here, labor). So the story is: executive meets terms of
contract with employee #1.

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gohrt
Oral contracts are completely binding in theory, but in practice a judge
requires evidence of the contract's existence and content. What if CEO person
"yes we had an agreement, but it was for 5%, not 10%?" How would a judge
decide? At best, look for _written documents_ about the contract, or testimony
from people who the CEO told about the contract.

Get it in writing.

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skrebbel
As a European, I often read HN in awe, but this beats it.

I find it a testament to American culture that the vast majority of commenters
here are _amazed_ that someone kept a promise.

How can you do business like that? If you can never just look someone in the
eye and make a deal?

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anu_gupta
What, you think Europeans don't lie and cheat as well?

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skrebbel
Of course they do. It's just that I've done a fair amount of business by
looking people in the eye. I've also worked at a 300 person software agency
where that way of doing business was the norm. Sure, there was some paperwork,
but it wasn't all-encompassing.

~~~
justincormack
Indeed the entire London financial centre works with verbal contracts, at
least where not switched to electronic, so the foreign exchange market etc.

~~~
gohrt
Note the difference between a repeated game of many oral contracts over time,
vs a one-off even that will never be repeated (founding a massively successful
company)

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mhomde
Reminds me of the bit Chris Rock used to do about taking credit for stuff
you're supposed to do

"I take care of my kids, I take them to school!" he says proudly

"That's what's you suppose to do you dumb M---F!"

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icu
Woodman should be commended for keeping his word.

Not only does this light the way for other CEOs to keep their word, it
enhances Woodman's future standing with investors, employees and any other
stakeholders.

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kolbe
I really doubt Dana and Woodman were thinking about it at the time, but this
is a kind of a nice way to structure an equity compensation contract with
early employees or investors.

Instead of saying "I want x% of the company's shares," employees are probably
better off looking at the most powerful person at the company and saying "I
want y% of everything he makes."

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bound008
What has happened to journalism? Is anyone else on here sick of reading typos.
"GoProp". Can't even get the name of the company right.

~~~
jkaunisv1
Nobody pays for it so they don't have money to hire proofreaders?

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robotresearcher
Spellcheck is very, very cheap.

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jkaunisv1
It's not about having spellcheck. It's about having the time to calmly read
something over in a copy-editing mindset. Preferably with a different set of
eyes than the ones that wrote it. Spellcheck won't catch brand-name errors
unless GoPro is in your dictionary. It won't catch grammatical problems, or
typos that happen to be real words.

The journalist who wrote it and the editor who approves it are probably way
too distracted and have a ton on their plate. By the time it's going to press
it all blurs together and errors slip through.

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meesterdude
This shouldn't be special or surprising news; but its certainly nice to see.

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ebbv
The title of this article is very misleading. The "promise" was already turned
into a legally binding agreement. It's not like he's just now deciding to
honor it, which the title implies.

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booruguru
Can someone explain this story to me ELI5-style (like I'm 5 years-old)?

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pc86
Woodman is GoPro CEO, Dana is GoPro employee #1

Woodman agreed to pay Dana 10% of stock back in college. Woodman (through the
company) gave Dana what amounts to just under $230 million. Other than the S1
filing (the document filed with the SEC prior to GoPro's IPO) which mentioned
this deal, it was a verbal contract. Were he so inclined, Woodman probably
could have refused to give Dana the $230 million and gotten away with it.

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prbuckley
That is a very standup move.

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testingonprod
This guy is amazing for that.

~~~
collyw
Your comment would imply that not keeping your word would be the norm. Sad,
but probably true in the world of high paid people.

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brianwawok
Even if 1% of verbal contracts for 200 million dollars are not honored.. the
expected value of not signing is -2 million.. seems smart to spend 5k on a
lawyer, no?

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nirmel
I don't know why I'm challenging you on this, but the expected value is -2m
times the probability of your contract being worth $200m in the first place.
At best, that's 1 in a thousand, thus making the expected value at best $2000,
making the $5000 a waste, per your logic.

