Reddit CEO's $193 million compensation draws tough scrutiny

Reddit co-founder and CEO Steve Huffman’s compensation package for 2023 was a staggering $193 million. This has not only shocked the Reddit community but many internet users for quite a few reasons.

Reddit revealed Huffman’s pay package, which mostly includes stock options, in the mandatory U.S. Securities and Exchange Commission (SEC) filing late last month. As the company nears its IPO (Initial Public Offering), this handsome figure has drawn severe criticism. Interestingly, Huffman has defended his compensation via a Reddit AMA.

Steve Huffman has justified his compensation package

As expected, Reddit CEO Huffman’s compensation package has drawn widespread criticism, especially on Reddit. It is important to note that moderators, who essentially manage and run the sub-forums, called sub-Reddits, continue to remain unpaid.

Specifically speaking, moderators have always been considered volunteers. They contribute as per their schedule. While there are strict rules about moderation, it is the moderators who ensure the sub-Reddits remain civil and active.

While avoiding justifying his salary while Reddit’s moderators remain unpaid, Huffman answered why he was awarded $193 million last year. It is interesting to note Reddit has officially admitted that “its results and user experience could be harmed if it were unable to keep a sufficient number of volunteer moderators.”

Could Steve Huffman’s compensation package hurt Reddit’s IPO?

Steve Huffman is Reddit’s CEO and co-founder. He goes by his Reddit username “spez” on the social media platform. He co-founded Reddit with his college roommate, Alexis Ohanian, in 2005.

Condé Nast acquired Reddit for a mere $10 million in 2006. Although this made Steve Huffman and Alexis Ohanian multimillionaires both have expressed regret at selling for such a small amount at the time.

Reddit rehired Huffman as CEO in 2015. Although the platform was growing, his primary objectives were to further propel the company, create a clear content policy, and stabilize infrastructure.

“If the company does well, I will do well,” Reddit CEO Steve Huffman said in a Q&A video on the platform. “If the company does not do well, I don’t either.” https://t.co/PEmZWwuC7i pic.twitter.com/12ilOnBRpU

— FORTUNE (@FortuneMagazine) March 20, 2024

Since then, Reddit has banned thousands of communities for hate speech. The platform underwent a major redesign, and Huffman’s growth propelled him into Fortune’s 40 Under 40 list.

All this success for Reddit, however, hasn’t trickled downwards to its moderators, who continue to remain unpaid. They are still volunteers, who are slogging away for free to maintain the platform.

Hence, Reddit CEO Huffman’s handsome compensation package may invariably be compared to the lack of profit-sharing or compensation for moderators, threatening and occasionally even arm-twisting them. This may impact Reddit’s upcoming IPO.