Thread by @LFDodds

Why are Silicon Valley companies so socially irresponsible even though they are staffed by idealists?

One rarely discussed reason might be their massive stock compensation packages, which incentivise employees to work against their leaders' promises.

telegraph.co.uk/technology/201…

When I first published this article a couple of weeks ago I didn't get the chance to tweet about it much, but I think it's actually a really important topic.

1) According to @VincentDeluard, tGoogle, Apple and Amazon have increased the total value of their stock compensation by between 1,500% and 3500% (!). In 2017, nine tech giants spent more on it than the GDP of Croatia.

2) If you look at what tech workers are saying @teamBlindapp, stock compensation is an overwhelming obsession. People say things like:
- "How do I get to these levels?"
- "Which company has the best TC [total comp]?
And, when you ask for career advice:
- "TC or GTFO"

3) But @StockOptionCnsl says stock comp is not all it's cracked up to be, because it can require serious financial planning and existing wealth to exploit.

"People do very regularly walk away from stock options because they don't have a rich uncle or whatever," she says."

4) Similarly, @hypatiadotca told me that this is one way in which Silicon Valley, despite appearing meritocratic, reinforces generational wealth. "There are semi-predatory companies that will make you a loan to buy them, but they take like 50% or so of any earnings," she says.

5) But for the rest of us, that isn't the biggest problem with stock compensation. The biggest problem is:

What does stock compensation incentivise? Very often it means maximising the commercial numbers at the expense of wider social goals and "social responsibility".

6) @alexstamos, formerly of Facebook, described how Silicon Valley is effectively "outsourcing" its moral incentives to Wall Street. "You have these weird situations of 'well, you're telling me you care about safety and security, but that's not how you're paying me'," he says.

7) Likewise, @Ginger explained how such incentives exert a continual mental pressure on tech workers, subtly distorting their good intentions towards commercial metrics – and told a very interesting story about a time he saw that happen at Facebook.

Together, I think there is compelling case that stock compensation – not necessarily in itself, but in the specific form it's currently done – plays an under-acknowledged role in the problems of the tech industry. For more detail, read the full piece here! telegraph.co.uk/technology/201…

Oh, here's a fun chaser to this whole story: Lyft's first financial results showed a $1.13bn loss, up 386% (!!) quarter-on-quarter.

BUT... a large majority of this loss, at $894m, was attribtable to stock-based compensation and IPO0related taxes.