Much-hated Reddit founder and CEO Steve Huffman gifted himself a stunning $193 million compensation package — while unpaid moderators on the platform have yet to see a single dollar, as Variety reports.
It’s an especially pertinent topic given that the company went public at a share price of $34 today, for a valuation of $6.4 billion.
During a recent Q&A video posted to the subreddit named after the company’s brand new New York stock exchange ticker RDDT, Huffman argued that he was totally justified in paying himself more than the CEOs of Meta, Pinterest and Snap combined.
“If the company does well, I will do well,” he said. “If the company does not do well, I don’t either.”
That logic seems doubtful. Reddit, a 20-year-old company, has yet to turn a profit. In 2023, the platform lost a whopping $90.8 million.
In other words, in what world does paying a CEO almost $200 million make sense when the company has yet to make any money?
Huffman, commonly known by his Reddit handle spez, has become tremendously unpopular among his company’s user base.
“When your entire business model is one prick taking nearly everything,” one user wrote in a discussion about the IPO on the subreddit r/wallstreetbets last month. “And relying on people continuing to work for free.”
The rebellion against Huffman really took off last year, when the company made highly controversial and platform-altering changes to its API. At the time, nearly 3,500 subreddits went dark for 48 hours in protest against the changes, which made access to the API exceedingly expensive. As a result, several Reddit app developers called it quits.
In a disastrous attempt to do damage control, Huffman hosted an Ask Me Anything on the platform that was immediately met with outrage.
Not long after, Huffman accused moderators — volunteer power users who have historically kept many communities from melting down into a toxic cesspool — of being “landed gentry.”
His inflammatory comments left countless users with a bad taste in their mouths.
“The admins have failed Reddit,” one user wrote in the official thread announcing the API changes last year. “Apologies must be publicly made for the misleading statements and outright lies that have been made.”
Instead of focusing on its users and the value of self-governance by volunteers, Reddit has agreed to hand over content they’ve generated to Google to train its AI models, in efforts that are now being investigated by the Federal Trade Commission.
Google has also paid the company $60 million to train its AI with users’ posts, further suggesting Reddit is hoping to squeeze its user base for cash.
It’s anybody’s guess as to where Reddit’s IPO will go. Its opening price at $34 a share is the top of the anticipated range, indicating that investors are excited. Following its debut, Reddit shares jumped as much as 70 percent, confirming this suspicion.
But whether the stock will manage to keep this momentum going remains to be seen. Users on r/wallstreetbets are predicting the company’s stocks will tank. One top-voted post claims Reddit’s IPO is a “pump and dump” scheme, accusing the company of fraudulently inflating the value of its stock before cashing out.
Power users and moderators, who Reddit gave a chance to participate in the IPO, balked at the chance, indicating just how disillusioned they’ve become.
“It doesn’t really feel like Reddit is necessarily giving back, so much as it feels like maybe it’s asking for even more,” moderator and Cornell University research manager Sarah Gilbert told CNBC.
“Even with the opportunity to buy in, I would not,” moderator and attorney Courtnie Swearingen added. ” I cannot risk money on a company that I haven’t been able to trust for a decade.”
More on Reddit: Mysterious Entity Paying Reddit $60 Million to Train AI With Users’ Posts
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