Good morning! Tech companies are tightening their belts — except when it comes to stock, which they’re showering on their restive employees. That’s good news for workers, who will benefit when the market recovers, and also a sign that the cooling job market isn’t really all that cool. I’m Caitlin McGarry, and I firmly believe the best road trip snack is Smartfood white cheddar popcorn. Do not @ me.
Silicon Valley to employees: Stock options for all!
The stock market is tanking, dragging tech stocks and my 401(k) down with it. This is bad news for, well, everyone, but it’s uniquely bad for tech workers, whose compensation packages include shares of their employers that are nowhere near as valuable as they were just a few months ago. Those workers are now clamoring for more shares to make up the difference — and many companies are handing them over.
Coinbase is the latest company to make up for cratering stock with, uh, more stock. The cryptocurrency trading outfit has been thoroughly screwed by the crypto crash and is reportedly cutting costs by freezing hiring for two weeks and putting new projects on ice.
- But the company is also reportedly giving its employees (some 5,000 of them) an extra stock grant to offset half of the difference between its grants at the beginning of the year, when shares were trading 75% higher than they are today, and its stock price as of May 13.
- Employees shouldn’t get too excited: Coinbase’s chief people officer, L.J. Brock, said the grant is not a regular top-up kind of thing. In an internal email viewed by The Information, Brock said “extraordinary conditions” led to the decision.
Tech giants are also handing out stock grants to say “thanks” (and “please don’t quit”) to their employees.
- Microsoft, which beat its most recent earnings estimates and has not outlined any cost-cutting measures, is giving pay raises across the board. The company is also increasing stock grants by 25% for employees at the senior director level and below, calling the merit raises and extra stock a “long-term investment” in its employees.
- Amazon is also investing in stock grants to remain competitive (particularly with neighbor Microsoft). The company plans to spend a record $6 billion on stock grants in Q2, the company’s CFO said during its recent earnings call. That’s almost double what it spent on stock grants in Q1.
- Meanwhile, Apple’s been awarding top engineers six-figure retention grants.
- Over at Netflix, which this week laid off 150 workers, the stock price has cratered by 70% in the last seven months. When the company reported dismal earnings and its first drop in subscribers in more than a decade, employees demanded stock grants. (While many big tech companies have switched to RSUs, which hold their value better when the stock price drops, Netflix has stuck with stock options, which it grants monthly with immediate vesting. That makes Netflix employees’ stock compensation particularly volatile.)
The moves are designed to retain skittish employees. Ultimately, shareholders pay a price, since the shares issued to employees dilute their holdings, but if their portfolios recover, they probably won’t notice. And what really matters for tech companies is whether they can build compelling new products — and that requires people. The market for tech workers is cooling, but not that much (yet), and companies that lose talent will be forced to compete with rivals once the economic downturn eases. Stock grants are expensive, but starting from scratch? A nightmare.
A MESSAGE FROM THE CHAMBER OF DIGITAL COMMERCE
Last chance to register! The DC Blockchain Summit is a one-day, premiere gathering of the most influential people who are focused on public policy action for digital asset and blockchain innovations. It will feature discussions with policymakers, innovators and technologists on the issues impacting the growing blockchain and cryptocurrency landscape. Special government rates available. See you on May 24th!
People are talking
Y Combinator told portfolio founders to brace themselves:
- "Remember that your chances of success are extremely low even if your company is doing well.”
And Mike Schroepfer thinks it's best to prepare for the worst:
- "Bad times can last multiple years and if you can make decisions now that extend your runway that’s probably the right call."
YouTube star Logan Paul doesn’t like Elon Musk’s ideas about moderation:
- “The spread of disinformation is incredibly dangerous, incredibly dangerous.”
Making moves
Fastly bought Glitch, a web coding platform, for an undisclosed amount.
Krish Venkataraman is Socure’s new CFO. Venkataraman’s held the same role at KnowBe4, Dealogic and others.
Orit Kendal is Versapay’s new chief people officer. Kendal was previously LiveAction’s SVP of HR.
Jason Pielemeier is the Global Network Initiative's new executive director. Pielemeier replaces Judith Lichtenberg, who leaves the board next month.
Brian Roach is Red River’s new CEO. Roach is a former SAP North America exec.
Christofer Hoff joined LastPass as CTO and CSO. Hoff held security roles at Bank of America and Citadel.
Campbell Brown got promoted at Meta as head of a new global media partnerships team. Brown was Meta’s VP of News Partnerships.
Krishna Juvvadi is Binance.US’s new VP and head of Legal. He was Uber’s first regulatory attorney.
In other news
Twitter wants to take down misinformation in crisis situations, but implementing that policy could get messy.
Elon Musk offered to buy a flight attendant a horse in exchange for sexual acts, according to Insider. SpaceX paid the flight attendant not to talk about her claims.
Apple execs showed their AR/VR device to the board last week, which could indicate that the product is getting ready for take-off.
Stop talking about abortions on internal messaging boards, a Meta exec told employees yesterday.
Good-faith security research shouldn't be charged under the Computer Fraud and Abuse Act, the DOJ decided. The act’s been controversial for a while now.
Twitter won’t renegotiate the price of Elon Musk’s deal, execs said during an internal meeting yesterday.
Lawmakers are eyeing big online ads businesses. They introduced a bill that would break up major digital ad exchanges from publisher- and advertiser-focused platforms.
Jack Sweeney rediscovered Mark Zuckerberg’s private jet. Meta hasn’t asked him to take it down from Twitter (yet).
Every minute counts
It’s pretty common for people to have a to-do list each day. It’s less common for us to list out every minute of our day, but that’s the norm for VMware’s Sumit Dhawan.
Dhawan needs to plan his schedule this way. He meets with hundreds of customers each month, and he blocks out some time for merely getting things done, because if not, people would write in a meeting. If you ever feel like you’re in a time crunch, take his schedule as a template for getting through the day.
A MESSAGE FROM THE CHAMBER OF DIGITAL COMMERCE
Last chance to register! The DC Blockchain Summit is a one-day, premiere gathering of the most influential people who are focused on public policy action for digital asset and blockchain innovations. It will feature discussions with policymakers, innovators and technologists on the issues impacting the growing blockchain and cryptocurrency landscape. Special government rates available. See you on May 24th!
Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you Sunday.