It’s all aboard the gravy train at Roblox Corporation after the company launched a SEC filing (opens in new tab) detailing its executive compensation plans for the coming years (thank you Reuters (opens in new tab)). Roblox’s success is hard to overstate—if it were a country, its daily users would make it more populous than Canada (opens in new tab)— and another recent filing revealed that the company has just over $550 million in the bank.
That’s a lot of Robux: and it has to go somewhere. The SEC filing (opens in new tab) shows that Roblox Corporation’s proposal to compensate its founder and CEO David Baszucki over the next five years through stock-linked payments rather than salary will total about $234 million. Baszucki’s 2020 salary was $6.8 million, although at the time he was also earning a base salary of $500,000.
Half a million a year? Chicken feed! The huge payout is tied to the company’s performance and, according to the filing, is awarded in lieu of other compensation “for the 7-year period from 2021 to 2027”. So at least we know when he plans to retire. Another element of this worth pointing out is that Roblox shareholders had an advisory vote on this package, which was passed, and the deal was crafted alongside an independent compensation advisor (which sounds like a good job, if you get).
There’s also this rather amusing line buried in the jargon:
“Mr. Baszucki was particularly receptive to receiving the Founder and CEO Long-Term Performance Award, as he believes he should only be rewarded if significant long-term superior performance is delivered. The Founder and CEO Long-Term Performance Award is CEO was a welcome commitment from the LDCC and a show of faith in their abilities to lead Roblox into the future.”
Well, if someone offered me $234 million, I daresay I would be particularly receptive, too. Of course, taking pictures is easy: Baszucki founded this platform and led it to incredible success. He should and will benefit greatly from this: and says elsewhere in the suit that “one of his many goals was to use the wealth that was created through his Roblox ownership as a means of furthering the many charitable causes he believes in. .” Baszucki says the “liquid proceeds” from the award will be used for philanthropic purposes.
The issue isn’t really a well-paid executive (in fact, the file shows a bunch of them, though none at the CEO level). It’s just that Roblox is a platform built on the work of its young audience – and they can make money from their creations, but only after Roblox Corporation a 72% cut of eye-watering (opens in new tab). Roblox often trumpets the success stories on the platform, but the business model is about taking most of all the money that goes through it.
Roblox became a publicly traded company in March of last year and at the moment the direction of travel is upwards. It continues to face considerable challenges and legitimate criticisms of how it does business: whether this is a miserable revenue split with the kids they raise on Roblox; or the platform being used to prepare and endanger children (opens in new tab). Roblox faces more (and repeated) allegations that It just doesn’t do enough to protect its young audience from scammers. (opens in new tab).
Roblox is clearly going to be here for quite some time: it almost seems too big to fail, for the immediate future anyway. No one should dispute that the people who built this platform deserve to be richly rewarded, and indeed they will be. But how it handles its sheer scale, and whether Roblox will fairly reward children’s creators who make it what it is, are questions that make $240 million seem like a bargain.