Redfin announced 470 layoffs Tuesday – and shareholders rubber-stamped lucrative compensation packages for top executives.*
At the company’s annual shareholder meeting, Redfin stockholders by a wide margin approved the compensation packages for Glenn Kelman, the company CEO; Chris Nielsen, chief financial officer; Adam Weiner, president of real estate operations; and Bridget Frey, chief technology officer at Redfin.
The payment reflects 2021 performance, with the specific packages proposed by Redfin’s board of directors more than a year earlier. Along with his perch as CEO, Kelman also sits on Redfin’s board.
Kelman receives $300,000 in annual cash compensation, which, a Redfin spokeswoman pointed out, is a relatively modest sum for a CEO.
“At 4-1, the ratio of our CEO’s 2021 compensation to our median employee’s 2021 compensation was significantly lower than public companies we compete with,” the spokeswoman said.
However, Nielsen, Redfin’s CFO since 2013, received $2.3 million in annual compensation. Weiner snared $2.7 million.
Nielsen’s seven-figure payment derives from a $501,000 base salary, more than $1.6 million in stock awards, and a $160,000 bonus. The bonus was awarded based on “achievement of financial goals” and “achievement of diversity goals,” according to a Securities and Exchange Commission filing.
Wiener’s payday largely was derived from some $2.2 million in stock options.
Frey nabbed $2.2 million total. And, as with Nielsen, $160,00 comes from achievement of diversity and financial goals.
The board also approved payment for Ee Lyn Khoo, who left the company in January. She earned $3.2 million in compensation as Redfin’s chief human resources officer.
The pay-outs were approved amid an annual shareholder meeting, which lasted eight minutes. Shareholders had been given copies of the agenda in advance, and overwhelmingly voted — without debate or discussion — in favor of the compensation packages.
In comments sought for this article, the Redfin spokeswoman also noted: “Compensation is set by our board, benchmarked against comparable companies and designed to attract and retain the most qualified people and hold them accountable by tying pay to results.”
She added: “Because a significant portion of executive’s equity compensation is based on meeting performance goals, 2021 compensation was not final until we had full-year 2021 results.”
“We’re losing many good people today, but in order for the rest to want to stay, we have to increase Redfin’s value,” Kelman said. “And to increase our value, we have to make money. We owe it to everyone who has invested your time or treasure in this company to become profitable, and then very profitable.”
Redfin did not announce mass layoffs in 2021. However, the company lost $118 million during a historically great year for housing professionals, with total sales and price appreciation reaching levels not seen in at least 15 years.
Redfin did announce 121 layoffs in the second week of January 2022, simultaneous to its acquisition of Bay Equity Home Loans.
Throughout 2021 and so far, this year, Redfin’s stock has been in freefall. Share price has gone from a peak of $97 last February to a little more than $7 at close of business Thursday. Redfin has a market value of $776 million.
The setbacks may be calculated in future executive compensation.
“In 2022, a significant portion of compensation will be tied to business performance and will be shared with investors in 2023,” the Redfin spokeswoman said.
* UPDATE: The story was updated on June 21 to clarify that Redfin shareholders approved the pay package. Shareholders include company executives and employees. But the majority of Redfin shareholder stock lies with outside investors including Bares Capital Management and the Vanguard Group.