Election of Jonathan Howard as Head Chef

Hey all,

I’m not a massive SUSHI holder but have been staking xSUSHI for over a year and following the community and governance on/off for awhile now. I run an investment firm called Compound that has backed a variety of early crypto protocols as well as broader tech companies so have some experience on comp structures across both. Here’s my $0.02 on some ideas that probably could use a bit more time and thought put into them that I hope the community can use to factor into their decision.

Going to preface this with I think it’s a shame this proposal was structured and proposed the way it was. With 2 weeks till start date it’s a bit of a middle finger to at a minimum governance theater, and at a maximum the community. Ultimately this feels like one of the clearer signals I’ve seen from a DAO that forums are what we all know they are, which is largely a way to make community members feel heard, but with the real discussions happening behind closed doors. For what it’s worth, I don’t think all decisions should be brought to pure democracy but it’s clear current structures of voting 1:1 token is broken and would have liked more context given about the process behind structure or at a minimum a proper amount of time given to this discourse.

In addition, I feel that the current feeling behind this proposal is that SUSHI is dead in the water at current trajectory so we might as well hail mary. Not exactly a position of strength. That said, I think Jonathan (or someone with a similar background) brings a level of understanding managing a scaling organization that is needed if SUSHI is going to be a DeFi protocol that spins up multiple products across multiple chains.

A few quick notes echoing a lot of sentiment.

On cash comp
I think the salary is high but not outlandish. The comps of venture-backed CEOs (probably a better comp based on Sushi FDV of ~$377M) or public company CEOs should be considered here but crypto is its own beast. A CEO often carries duties that a crypto protocol leader does not, and vice versa. For reference based on valuation and/or traction this would comp to a growth stage (Series B/C) non-founder CEO where we’d likely see non-founder base cash comp ~$350k on the mid to high end along with higher equity (but less liquidity). Some data here:

Again not apples to apples but I would probably aim for base cash comp to be lower based on SUSHI comp structure, especially with the clause surrounding legal as that is clearly where there is unspoken risk to any Head Chef that is based in the US.

Higher level notes

  • I agree with @BoringCrypto that a baseline package should have been brought forward to aid in the search ahead of a candidate. Again ranges should have been setup and agreed upon, not exact figures.

  • On SUSHI Structure: Based on Sushi 2.0 proposal avg eng comp is $308k (2.468M/8). There’s other math you can do if you look at the projected costs on USDC basis and divide team but in general I don’t love seeing the Head Chef cash comp at over 2.5x the avg eng team comp.

    • The total sushi allocation in 2.0 is ~4.7M SUSHI with 2.3M SUSHI “guaranteed” (only tied to vesting, not performance). There’s an additional ~1.55M SUSHI left for “future hires and funding” as well. The head chef comp is guaranteed 600k SUSHI, or ~24.5% of the total team allocation at 2.0 genesis. This seems fair. That said, I would bet there will almost certainly be another proposal for more SUSHI allocation to contributors/head chef in the next 12-18 months.

    • Where things get tough is…Sushi 2.0 allocated 2.4M total SUSHI for performance bonuses, while Head Chef gets 350k for roadmap implementation (I think fair if he can actually deploy a pre-defined list with timelines) in addition to 1.2M SUSHI for strike prices. So Head Chef is pulling down 1.55M total SUSHI vs. all of 2.0 team of 2.4M. A high amount but not crazy if the strike prices are aggressive

    • The strike prices are too low. Market Beta will carry Sushi back up to $3 at least just in a given bull cycle and while it’s not the point, if you were to look at average token purchase (to disregard early farming) price of SUSHI holders, it’s likely a huge % are underwater.

      • A commentary on this is that retaining talent is important, I support restriking options for the contributors but would start it at $6 instead of $3 with back-weighting even more heavily on $8/$10/$12 tiers. I don’t think the argument of striking at 4x is outlandish considering that was token price ~6 months ago and we’re potentially near bottom of market. This will put SUSHI in the biggest “win” scenario at ~$3B FDV…less than half of what UNI’s FDV is today after the token has sold off materially in the past year.
  • Compensation committee should be more than 3 people, with the community electing members in addition to the core team. Could structure as Head Chef, Neil, 3 community selected members, 1 team selected member (haven’t thought through perfect structure admittedly).

  • The reverse vesting is a really poor structure (the idea that it becomes “cheaper to fire someone over time” is not valid). I would suggest a 6 month guaranteed severance (this isn’t uncommon with C-suite roles) if fired within the first year, with an additional month added for each quarter of duty served, capped at 12 months.

  • Advisory - I would urge the community to watch this as this can be exploited to funnel hundreds of thousands of dollars to people with connections to the team but no real value.

Anyways, it’s possible I made some mistakes on math here but wanted to weigh in even though based on my first point, I imagine this will be brute forced through regardless of any discourse.

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I agree with C3 here. This compensation package is at least double what it should be. I for one would withdraw my investment in $SUSHI if this is how the team is looking to spend the treasury.

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After speaking with Jon in the Forum, I think he can be a fit for Head Chef, as he has experience in startups, is a software engineer, etc. He seems like a nice guy, speaks well, and probably works well with others. Some of the team seem to like him, and sounds like some large investors are already sold on his candidacy.

I originally voiced concerns about Jon’s deal earlier on, particularly on the severance approach, but I felt the base salary was quite high for someone with no past track record with the Sushi team, running a DeFi protocol, or being 100% up to speed with the full suite of products that Sushi offers. All of this is fine, however I believe Sushi needs to evaluate what it should be spending dependant on the skills and track record to be acquired.

I feel like most of the team just wants to move on with this and get back to doing Sushi, and rightfully so after the past year we have had. But this decision makes a very big impact. It’s nice to see Jon’s counter with a reduction of severance, but there hasn’t been a lot of movement otherwise.

The discussion around the compensation being that “is this something the DAO can afford” I feel is the wrong approach. If I was to present my candidacy with the same deal for this role, I would hope that the community would shout out that these numbers are not appropriate. Which brings us to Jon, and questioning his proposed compensation. If the DAO is to be making the decisions on what it can afford, that should be up to the DAO to vote on. So much as @pocketsquare and @Boringcrypto pointed out, this should really be 2 votes, one for compensation, and one for candidate.

Sushi has no track record of Sushi related performance to gauge Jon on, and would essentially be signing off on a now ~$1.5M test to see if this is a good fit. It could quite possibly be, but we honestly have no past data to prove that.

Severance as a tool is also something that has never sat well with me this whole time. I personally believe this is a nice way to pitch it to the community as, “the ball is in your court” if you wish to fire me. Severance traditionally is a way to say this didn’t work out, and good luck on your transition to your next destination. I understand Jon is giving up a lot to come here, but I don’t think the DAO should have to shoulder that choice.

The structure of this deal makes me feel like Jon believes he has leverage to ask for whatever he wants.

At this point it’s really about the hopes of the community’s voice getting to Jon in order to negotiate his comp. However as addressed above, there may be no real need for him to do so.

What I would like to see is a better deal drafted up that aligns both the DAO and Jon where there may be more upside rather than upfront, and potentially some sort of probationary term, however Jon did seem to dismiss that.

So one of the remaining options is to have a proposal go up that indicates that the DAO should vote on a comp package for a Head Chef, and then a vote for the candidate. I would also like to personally hear from large investors as to their thoughts on this deal and its structure.

Other option, is that another candidate comes forward, and contends for Head Chef. Let’s see if that is a possibility now that there is a an ask for Head Chef comp.

In conclusion, I feel like the position of Head Chef should be a $400-500K salary to start, and something around 250-300K vested SUSHI. Milestones on product delivery are tricky for me as the current team has been working on those for months, albeit them delayed, but creating a payout of this magnitude in this direction may not be in the best interest of the DAO as these products will get shipped regardless. Is this amount of SUSHI worth it in attempt to expedite the roadmap?

Something I would prefer is after 1 year, the Chef be up for renegotiation. At that time performance can be reviewed, and perhaps the Chef has over delivered, and should be paid more. This is a possibility. I don’t believe Jon is the “killer” that Sushi needs, but think he is suitable for this duty. Again, this is why I am hung up on Sushi shovelling over so much to him in the first place, carte blanche. Personally, I’d like to be impressed and offer more later, than gamble so much up front.

Throughout this process, and I am sure some will disagree, but I don’t think there has been maleficence. What I think this is a case of, is not having the correct people in places where there should have been in the first place. Also, there were not many checks and balances put in place to make sure this was the best way forward. Myself and a few others have been vocal about this deal, but ultimately the deal has got to the place it has, and due to the amount of input from contributors, has formulated in this way.

What my bigger picture concern is, that in 18 months from now Sushi will have very little treasury left, and will need to become revenue positive. If it is not able to do that, what next? Sushi may be in a position where it needs to raise funds, and that could lead to the final nail in the coffin toward the hope of a community lead project that differs itself from the “VC Backed” projects. I do hope that this is not the case, but this is a possibility, and I am not sure I heard a particular path forward to attempt to “decentralize Sushi”. Perhaps all of this is inevitable, and VC backing is the only wei.

So my ask to you @jhoward is this:

Are you willing to re-evaluate your compensation deal after many vocal individuals feel this is not appropriate for the DAO? If not, and the community was to vote against your deal compensation, would you look to come back with another offer, or will you walk from this position?

As of right now, I will be voting No for you as Head Chef with the current terms and structure in place.

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Hey Tangle,

I don’t understand this question when I’ve been engaging and proposing adjustments the entire time. The first version was itself the product of many adjustments and I incorporated community thoughts the same day as the call. I spent the weekend reading feedback as well, and should have more tomorrow morning pacific time, once everyone’s had a few days to digest and write

I would just say I’m going to keep doing what I’ve been doing: engage, incorporate feedback, and try to find the best balance possible across many many sides, with the goal of Sushi making the comeback it deserves. Of course it’s not possible to please everyone, so eventually we’ll have a vote

As an aside, I think you may misunderstand the roadmap bonuses? Forgive me if I misread you, but nowhere does it say I get bonuses for work that’s already done, or for other peoples’ work. A huge priority I’ve heard not just from me but from every side of Sushi’s community is to increase the pace of shipping. This aligns me strongly with that goal. If I’m not involved, I get nothing; if I play a large or small role, it would be proportional. I don’t get a vote in how to assign those values

I am lost as to why a candidate for a job at sushi is telling us we will vote.

The community has spoken clearly on this. I will be sharing the admin mode stats on this vote publicly. Why do you think you have the power to tell community we will vote?

We are and we have voted for a temperature check. Without the 70%+ new (zero trust level) users that voted yes for you it is a clear NO.

Are you saying that you’re encouraging the team to ignore this and put you through to a snapshot vote regardless?

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Hey all,

We’ve had a few days since the community call and the earlier changes that I proposed, for people to voice their thoughts. I took some time this weekend to digest feedback from the community and the team. I think the following is an even better proposal and balance of all the interests.

First off, a couple corrections:

Start date is just the earliest I told them I could do. It’s clear people took symbolism from that date, whereas we hadn’t anticipated it would communicate anything in particular. I want to apologize for the message that sent to some of you, and make it very clear that a ram-through was never the intention. It was meant to just be a neutral component of a proposal and if anything, communicate my excitement to get going. (To be honest, I had felt bad about being unavailable until then!) Clearly we missed that mark and I’m sorry for that. Hopefully I’ve shown that I’m hearing and engaging with the community’s feedback, between the community call, volunteering my previous suggested changes, and this reply. I’ll continue to do so.

There’s also an idea floating around that we’ll probably be adding more Sushi token incentives in 12-18 months. Obviously it’s up to the DAO, but I haven’t heard anything like this, nor did I have any plans to.

With that, here’s a revised set of improved proposal points:

Salary: bring down to $700K

Advisor concerns:
We were always going to target world-class allies with niche expertise that can help take Sushi to the next level. You also can’t get around the fact that these are not people who have significant time and effort to put in for nothing. The idea is to move quickly to solidify key allies when we find them. This isn’t help at the level of a quick call or DMs, but meaningful work with skill or experience we need to execute the DAO’s wishes, sustained over a year, with aligned incentives. I’d propose we add a check/balance to have any such advisor go through snapshot vote rather than compensation committee.

Compensation committee:
As I understand, the current committee is only designed as it is because it’s what the DAO voted for in Sushi 2.0, not an end-all be-all. I fully support an initiative to expand the comp committee to incorporate the community. I think in these comments we’ve already seen some real skill for gelling common feedback together, voicing concerns clearly, and proposing thoughtful solutions from people with experience building.

Price targets:
Move the $3 tier to a new higher $13 tier. That would mean to earn the lowest tier in full, the 30-day time-weighted average would have to reach $5+ in 12 separate months. I don’t buy that the current situation is simply market neutral and we’ll ride beta up: the past is the past, narrative is against Sushi, and competitors continue to take more market share. That has to be reversed with a lot of effort. That said, this view was expressed enough that I want to “disagree and commit” here, and raise the price targets as mentioned above

Severance has been a lightning rod, but also seeing a lot of confusion with the problem it was trying to get creative to solve. I think it can be structured more clearly this way: Severance is only 6 months, period, and we tackle the same problem with a different mechanism below

I do understand that some would like 0 commitment, and others suggested a 6 month trial. I hear those people, but unfortunately it’s just not something I can do. Ultimately I’m still guaranteed to pay more than two years’ base in opportunity cost and I am taking on high risk in multiple ways. More importantly from the DAO’s point of view, as I’ve said, replacing the Head Chef exacts a huge cost to the team/shipping. A low-cost vote to do so is an equally huge risk to the DAO, and it orients the team toward short-term thinking rather than hard critical choices. I understand the fear that comes from. I saw the last time too. But that’s not any way to win. Since many had issues with using severance for this, I’d propose that a cleaner way would be a separate 12 month contract. Same USDC/Sushi base, same Sushi cliff, same commitment to work together and adapt unless it’s worth sending the team back to a new Head Chef search. If it were worth it, the DAO would pay severance & the remainder of the contract, if any. If not worth it, the DAO instructs us to change something. Same full optionality for the DAO, and it’s much clearer and doesn’t muddy the concept of severance. Bottom line is I’ve dug into the problems we face: I think we all know we have an uphill battle ahead of us. It’s one that I strongly believe we can win, but we can’t do it with an easy eject button. Hard problems take hard work and time. Essentially what I’m asking for is one year - during which we’ll continually adapt to your direction - to prove we’re on the right track.

In summary: 12 month contract, 6 months’ severance.

Previous suggested improvements would still apply as well:

  • Price target bonuses expire after 4 years
  • Transparent financials as first roadmap item
  • Roadmap bonus details made public ahead of time

Looking forward to hearing thoughts on these latest adjustments

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Lots of compelling discourse in this post - from both sides.

This comment by @BoringCrypto’ seems to have the most logic and addresses the frustration:

It feels like the community is upset about the pay and lack of alternatives; the only choice is to either vote yes or no. I am glad to see @jhoward in the forums - it shows a passion for the role.

As for comp, I don’t think it is super unreasonable. Let’s protect our treasury and assets - but not so much so that we defer talent or candidates.

If crypto wants to be competitive with legacy industries, we must be willing to compensate the right talent appropriately. Now it is up to the community to decide if Jon is that fit.

I hope we focus less on the compensation and more on Jon’s qualifications or lack thereof.

This feels like an appropriate next step:

P.S. thanks for @mhdempsey’s perspective on comparisons and appropriate comp structure. This is a similar framework which we should approach this proposal.

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I tried to ask this question on the forum. This may be inaccurate, I do not know, but it doesn’t feel like we negotiated the compensation package. Here is where I ask whether Jon would accept $500k/year. Discord.

This probably should have been 2 proposals. 1) nomination for head chef; 2) compensation package.

Certainly, knowing where the proposed candidate sits on compensation is important and appropriate.

I do not have experience at the level Jon possesses (in terms of value of businesses), but in none of the businesses with which I’m involved, would we not negotiate compensation.

It is a good business practice for us as a DAO, to seriously consider expenditures, of which compensation is one. With that, we should be thinking in terms of how do we negotiate appropriate compensation for a head chef. Your analysis is fair and reasonable @Tangle.

Now for some comments unrelated to Tangle’s post. Just as general items of concern.

We should also be taking these actions as “business” actions without personal attacks or maligning of the candidate or of others in the DAO. It is not helpful to the goal of on-boarding impressive talent to improve the business.

If we have problems with the process, let’s discuss and attack the process. If we don’t like the proposed compensation, let’s discuss and attack the compensation. In the end, we are all people who care about the future growth of this new business experiment.

This very public debate and even rising to the level of “infighting” can be harmful to the sushi reputation. It may dissuade Jon, or other talented individuals from participating in Sushi and helping to grow the protocol.

Idk. I’m not entirely certain where I’m going with this. Treating our own team and prospective team members with respect needs to be of greater importance.

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Personally I’ve felt distracted by the monetary aspect of the proposal which is taking away from a more positive outlook in what Jon may very well be able to bring to Sushi. I haven’t found information which gives me reason to believe otherwise. Certainly doesn’t give me the same vibes of Dani & frog nation.
This is where I whole heartedly agree with @nickjrishwain’s post. Proposing at least two separate votes would have made this process feel much safer to decide and easier to digest. Rather then an all or nothing approach (how I see it).
I encourage @Neiltbe & @jhoward to consider Nick and all others which hold the same ideas which would allow a friendly compromise. Also keep in mind, this doesn’t necessarily mean the current numbers would change. Just allows for separate sections of this deal for community conversation regarding the Head Chef position.

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@BrahDawg I do not get the same vibes as Frog Nation, either. It feels we’re going to a negative space that might be damaging to our reputation as an organization.

We’ve all become ultra-protective and defensive, b/c last year we had to be to avoid a horrific proposal with Dani, Sifu, and Frog Nation. Don’t want that organization PTSD to hamper our efforts to improve the organization.

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Unfortunately we are building the wrong optics from the outside from the negativity. I can admit I’ve contributed to this.
It’s time to move forward and get out of that jaded shadow of the past. All the ideas are out there to move forward. The time is now.

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+1
i really hope this is the way forward for this proposal

Move forward with what though? The proposal still feels tainted for these reasons that are hard to address:

  • Neil seems to have taken charge of screening the candidates
  • Neil submitted his own candidate.
  • The DAO was not reached out to for solutions when few candidates appeared.
  • The DAO was not kept in the loop that a negotiation process appeared to have begun.
  • One candidate was put forward for a temperature check
  • The one candidate put forward to the DAO is Neil’s hand-picked candidate

This seems unethical if you are intending to work on behalf of the DAO to obscure the process to those who are being asked to vote for your personal recommendation. I optimistically want to believe Jon Howard is a reputable individual with the best interest of Sushi in mind, but this process is tainted by the fact that this information was kept hidden until Pegbit chose to inform us. This makes the proposal feel like it’s pulling a fast one on the voting members of the DAO. It does not lend itself to the trusting relationship we all wish to have with the Sushi Team.

I think that is what needs to be addressed. Perhaps if Neil expands on their relationship and then we can determine to what extent it benefits him personally? Also I’m not sure if it would be tactful to say why the other internally approved candidate, Nick, was discarded but that would be useful to understand. While it may be the case that reasons exist as to why details must be obscured, perhaps the person handling the hiring process should not have been putting forward his own people for the role under those circumstances. Perhaps @Neiltbe can address these issues, or better yet @ImSoftware or other members of the Sushi Team?

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I was regarding the 100+ comments with recommendations. Moving forward with all those ideas. Not simply going forward with the original proposal.

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Hey I want to run through this because it’s totally wrong.

I filtered resumes, and managed inbound, & coordinated logistics as well as doing outbound direct messages. Candidates were scored by others (large tokenholders, & team) given a grade & the candidate with the best grade was brought forward.

The best candidate was submitted scored by others (team & tokenholders). There was scoring done by others that placed Jon’s spot in the list. As you can see it’s Aug 4 & no one has come forward in the forums lol. You’re trying to invent a conspiracy that doesn’t exist. Show me the super well qualified candidate that’s come forward because of candidate repression. Has not happened because there was not any candidate repression.

The DAO runs a token voting model. Large tokenholders of the DAO were part of the process & had candidates shared with along the way.

“The DAO”, is now able to vote on the best candidate & the compensation thereof. Negotiation is going on right now hence the candidate changed his comp twice during dialogue with the community. The “community” was always the last stop on the tour & the mechanism through the candidate gets elected (voted).

Jon was one of a handful of candidates, he was scored the best by the team and large stakeholders. I had no influence over who the best candidate was. That was scored by others.

Nick didn’t score as highly as Jon by team & large stakeholders. Simple as that. Had that been the case he’d be the one getting voted on.

What you’re seeking is unfeasible. No one is quitting their job for a chance for a DAO to put them in front of a community, with others, get dunked on, and burn relationships with their current employers. Similarly, Head chef hiring is not a pawn shop race to a bottom. People are not commodities. We aren’t bidding on a bushel of corn. All candidate are not equal, so instead you’ve been presented with the best candidate to see if a workable agreement can be found.

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Apparently there was some candidate suppression. I’ll called this out in this forum as I did in Discord. My submission was dismissed out of hand saying that I was too Anonymous. You said you evaluated my resume, which means you received my submission to your “Form” had my linkedin profile and even my original proposal back in May for my candidacy with full disclosure of who I was. So which is it?

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The two proposal part, one electing a candidate from the pool done by the whole community >70% vote seems like a great idea. I’m still having a problem with the compensation. Google Directors, which were VP’s at very big companies total compensation (including Google Stock options) in around $800k in the SF Bay area (one of the most expensive places to live). Sushi feels more like a start up and needs to be nimble and agile. While others feel the compensation is not out of line, I don’t understand where they get their data from.

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I think members should discuss more around why Jon is fit or unfit for the role based on his skills and profile.

If compensation is the problem, the community members should post suggestions on what the most ideal compensation structure for Jon would look like.

It seems this proposal in it’s current form has failed temp check. Sushi does need a head chef. There were multiple reasonable candidates that applied. I suggest we move forward with a proposal for hiring a Head Chef and a compensation package similar to the one in this proposal, but with the severance reduced to just 6 months.

Applications should be public. Full KYC/AML/TF vetting should be done privately. Resulting in several vetted candidates for the DAO to elect the best one from.

P.S. I hadn’t spoken to Nick (candidate I introduced months back) in a long time, but being back in Sydney we caught up yesterday. He might still be open to the role and also mentioned that there was another quality candidate he had seen come through which I’d love to hear more about.

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I keep seeing mention of “large stakeholders”… with 1.1M SUSHI I guess I’m not?

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