It's all aboard the gravy train at Roblox Corporation, after the company released an SEC filing detailing its executive compensation plans for the coming years (thanks, Reuters). Roblox's success is hard to overstate—if it were a country, its daily users would make it more populous than Canada—and another recent filing revealed the company's sitting on just over $550 million in the bank.
That's a lotta Robux: and it's got to go somewhere. The SEC filing shows Roblox Corporation's proposal to compensate its founder and chief executive officer David Baszucki over the next five years, via share-linked payouts rather than salary, will total an estimated $234 million. Baszucki's compensation in 2020 was $6.8 million, though at that time he was also being paid a base salary of $500,000.
Half-a-million a year? Chicken feed! The whopping payout is linked to the company's performance and, per the filing, is granted in lieu of other compensation "for the 7-year period from 2021 through 2027." So at least we know when he plans to retire. One other element of this that's worth pointing out is that Roblox shareholders had an advisory vote on this package, which passed, and the deal was drawn-up alongside an independent compensation consultant (which sounds like nice work if you can get it).
There is also this rather amusing line buried deep in the jargon:
"Mr. Baszucki was particularly receptive to receiving the Founder and CEO Long-Term Performance Award as he believes that he should be rewarded only if significant long-term outperformance is delivered. The Founder and CEO Long-Term Performance Award was a welcome commitment from the LDCC and a show of faith in his abilities to lead Roblox into the future."
Well if someone offered me $234 million I daresay I'd be particularly receptive too. Of course, it's easy to take pot-shots: Baszucki founded this platform and has led it to incredible success. He should and will benefit handsomely from that: and says in another part of the filing that "one of his many goals was to use the wealth that has been created through his ownership in Roblox as a means to promote many charitable causes in which he believes." Baszucki says the "net proceeds" of the award will be used for philanthropic purposes.
The issue isn't really one well-paid executive (actually, the filing shows a whole bunch of 'em, though none on the CEO's level). It's that Roblox is a platform built on the labour of its young audience—and they're able to make money from their creations, but only after Roblox Corporation takes an eye-watering 72% cut. Roblox frequently trumpets the success stories on the platform, but the business model is all about creaming off the lion's share of all money that goes through it.
Roblox became a public company in March last year and, at the moment, the direction of travel is upwards. It continues to face considerable challenges and legitimate criticisms about how it does business: whether that's a miserly revenue split with the children who create in Roblox; or the platform being used to groom and endanger kids. Roblox faces further (and repeated) allegations that it just doesn't do enough to protect its young audience from scammers.
Roblox is clearly going to be here for a good while to come: it almost feels too big to fail, in 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 deals with its enormous scale, and whether Roblox will ever fairly reward the child creators who make it what it is, are questions that make $234 million seem like pocket-change.
