Between this and their license change fiasco it seems like they're trying to speedrun their way to "company most hated by developers". That said they're apparently making a lot of money doing it, so what do I know.
The rest is stock. Unrealized gains that may or may not be realized in the market.
The point is how does an executive team who together makes on the order of $100M/yr justify its own compensation if the company is losing on the order of $100M/yr?
However, if that ratio goes the wrong way, then companies need to make internal adjustments to bring it back in line. That could be new or different pricing strategies, but it also usually involves some efficiency improvements and cost cutting.
This is why you have scenarios like this where the company is yes overall losing money each year (as intended), making more revenue than last year (good), and still cutting jobs (because they are still not at the right ratio of revenue growth to losses).
So the executives could be doing a completely fine job bringing the company back to the right path. With only trivial high level information like we have we can't tell. To really know if they are doing well or not you'd need to dive into the finances.
SVB literally would have been fine, if you remove market psychology from the picture. But, that's a fallacy that everyone from You to highly experienced banking professionals make; ignoring market psychology.
People have this idea of stock having value; but it only has market value. Its a similar fallacy as believing that your investments are protected because you have stop-losses set; stock only has value because people believe it has value, and if corporate leadership takes action that would cause a lot of people to stop believing your stock has value, that stock doesn't have value anymore. Its not a house; its fairy dust.
Unless this is an indictment of all pricing, it seems short sighted as companies have assets and cashflow that exist beyond belief. When you buy stock you are buying a (small) percentage of everything that company owns.
You can argue that SVB is weird because they're a bank and their assets had to be liquidated to service banking customers; but that's basically how all companies work. Assets get liquidated to service debtors, generally at a significant discount on the value they reported the asset to be worth to the government. Usually; "believe has evaporated" happens to companies that, right before the belief evaporated, had to take on significant debt to survive another quarter, so that liabilities number is high. Lawyers and gutters get paid. Maybe insiders get priority liquidation.
You can reasonably philosophically view corporate shares are partial ownership in the assets of a company. Realistically; if there's been one instance in history of a share converting into liquid capital after a "belief has evaporated" event, that resulted in more than, like, I can buy a coffee with this money, I'd love to hear about it.
So if they give $100M in stock awards, that’s a negative $100M on the company’s profit & loss statement, even though it’s not actually paid in cash by the company.
For that reason many tech companies also report non-GAAP numbers where the profit looks nicer because they can leave out stock-based compensation (and anything else they feel like they can get away with).
Depending on how things are structured you pay taxes at different times but the value at grant is taxable as ordinary income. The only taxability difference is what to do with growth between grant and vest (and depends on when you pay the grant value's taxes).
This is a common misunderstanding and sometimes causes people working at big companies to hold onto their RSUs needlessly even though they've already been taxed as ordinary income. In the RSU case you can't elect for different treatment on grant-vest gains, and it's very unclear if you would even want to.
> Yes, but the top brass are racking in tens of millions
This characterization is obviously not accurate.
How much unrealized gains do you think Unity executives have from their stock compensation if their market cap graph looks like this:
https://www.macrotrends.net/stocks/charts/U/unity-software/m...
I agree that leadership should lead by example. However, tens of millions represent a small fraction of the > 100 million hemorrhaging that the company is reporting.
https://www1.salary.com/Unity-Software-Inc-Executive-Salarie...
The CMO alone makes 32 million? Absolutely wild.
But is the CMO adding that value to the company? Based on their most recent big project being the licensing guffaw that has them hemorrhaging users, I would kind of say... no?
If you suck at coding, you’d likely have a hard time landing a new job. If the Unity’s CMO sucks at doing their job, it’d be a stain in their resume, although it’s likely that they can still have a lucrative job in the future (Unfortunately that’s the reality)
Maybe, but that's a totally different topic.
And I do not understand the rationale when people say salary alone matters and stock compensation does not matter until the gains are realized. It still is an asset even if the values fluctuate. I will be very happy to take the risk of having no salary and millions of stocks as compensation, especially for a well established market leader like Unity.
https://www.macrotrends.net/stocks/charts/U/unity-software/m...
-28% annual return since going public.
https://dqydj.com/stock-return-calculator/
A relatively riskless investment in sp500 would have earned 11%+ per year since 2019.
It describes the one individual getting the most, but I don't know how it falls down through the hierarchy.
So it's not a big deal if I embezzle a few million dollars. It's just a very small fraction of the overall loss of the company so there is no need to look at that.
No. Unity is not making money, they are losing money. That's the problem.
"Reduced losses" means they are losing less money than they were. That's still losing money.
Unity was losing money before the licensing fiasco. It's still losing money.
The title frames it as if the layoffs were unnecessary. The title is technically true but the way it's worded is manipulative.
Unity isn't one of those (even if the C suite was being paid $0 since some are arguing that the top brass salaries are too high).
It doesn't make sense to hold them up as an example of a company doing bad layoffs, especially since there's many other very obvious things to criticize them for.
https://www.macrotrends.net/stocks/charts/U/unity-software/n...
$570M loss just through Sep 30.
https://d18rn0p25nwr6d.cloudfront.net/CIK-0001810806/19c9981...
There is no reason to incorporate distributions to shareholders on an income statement. The whole point is to figure out how profitable the business is, and how much is left for the shareholders.
This can be true when investment/debt money comes cheap and you're company still looks like a rocket in its launch stages. Investors and lenders are happy to pile money in and expect to cash out while you're in steady orbit, or at least not be the last holder of the hot potato if you don't.
But money is no longer cheap and Unity no longer seems to have startup-like growth ahead of it. New fuel isn't coming and the rocket either needs to level off and coast into a steady orbit or come crashing back to earth. Raising revenue and cutting costs is how executives try to stabilize the darn thing.
From the outside, it's looking doubtful that they'll be able to do that, but they don't have many alternatives.
That means you've been selling $1.00 for 70 cents.
Not sustainable. If their customers don't like what they're doing, it's not surprising. Because anyone buying $1.00 for 70 cents is going to be angry when it ends.
If their developers don't like what they're doing, it's not surprising. Anyone benefiting from a company paying them more than they can afford is going to be angry when it ends.