To all the agents in the house,
Last week I spotlighted the pay package of top Redfin executives. The company forked over $300,000 to CEO Glenn Kelman annually, a relatively modest sum. But other executives, including longtime Chief Financial Officer Chris Nielsen, netted over $2 million when stock options are included.
I singled out Redfin, because shareholders there voted to approve these pay packages the same day that Redfin laid off 470 workers. Shareholders approving lucrative annual compensation packages the same day hundreds of people lost their jobs seemed notable.
Why, for instance, did Redfin shareholders not revisit pay for executives like Nielsen and Bridget Frey, the company's chief technology officer, in light of Kelman saying the company was cutting costs with the aim of turning a profit?
Still, I might have been unfair in singling out Redfin. Compass and Zillow have also recently announced mass layoffs, so here's their exec pay.
Compass, which announced the layoffs of about 450 workers the same day Redfin announced its own staff cuts, paid its CEO and co-founder Robert Reffkin $89.9 million in 2021, mostly from stock awards.
Kristen Ankerbrandt, the brokerage's outgoing CFO, made $10.1 million. Greg Hart, now chief operating officer and former chief product officer, earned $13.7 million.
Reffkin's pay seems unusually high.
But, let's compare his compensation to Activision's longtime CEO Bobby Kotick. It's a somewhat useful comparison since Kotick also toes the line with tech, and is annually one of the country's highest paid CEOs. Kotick also has publicly discussed his executive pay.
Kotick was slated to receive $375 million in 2021, more than four times what Reffkin made. Kotick has been repeatedly criticized for netting excess compensation, and has agreed to slightly curtail his pay going forward.
Kotick earned 4.2 times more than Reffkin in 2021. But Activision has a market cap of $59.3 billion as of mid-day Wednesday, or 35 times more the $1.7 billion that Wall Street values Compass. Also, Activision made $2.7 billion in 2021 net income. Compass lost $494 million.
And then there's Zillow, which announced the layoff of about 2,000 workers in November as part of its iBuying wind down. Zillow CEO Rich Barton, who was re-elected to the company's board Thursday, made $21 million in 2021, mostly from stock option awards.
Lloyd Frink, the company's co-founder, president, and executive chairman, pulled in $17 million. Chief Financial Officer Allen Parker earned $14 million annually.
Together, Barton and Frink control their own compensation. They own a combined 51% of shareholder voting power at Zillow.
I report all this not to shame these executives, but because I think executive pay is a newsworthy discussion, particularly when it involves the leaders of public companies with the ability to help or harm the U.S. housing economy.
Hey, maybe Robert Reffkin does deserve $90 million a year. After all, Compass has created thousands of jobs in the U.S. and India and about 27,000 additional independent contractor opportunities for agents. His business model has also arguably helped improve the pay and resources of agents who did not join Compass, but benefited from the brokerage's bidding war for talent.
Meanwhile, Barton and Kelman's companies have created user-friendly websites and informative reports about the American housing market, and also employ thousands of workers. One could certainly argue there is a positive societal value to the existence of Zillow and Redfin.
Agents, what are your thoughts? How should company shareholders decide executive pay? And what is a fair level of compensation for the likes of Barton, Kelman and Reffkin?
Please send me an email anonymously at mblake@hwmedia.com.
Sincerely,
Matthew Blake
Senior Real Estate Reporter
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