Election of Jonathan Howard as Head Chef

I haven’t made any arguments, I have a high opinion of Jon which I felt compelled to share.
Since it is an opinion, the validation is that it is what I think.
You can do with that as you please, and you can look at my twitter or site if you’d like more context.

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Very well said, RT. A nice summation of my feelings on the topic. Said better than I’ve said it.

Appreciate the further discussion on this topic. Just expressing that from time to time it feels like we are not getting all the info. Maybe our forum discussions would be better suited for updates that provide insights on comp/talent sourcing endeavors. Maybe the forum did discuss these things on days I wasn’t able to attend.
Certainly I’ve received more info on this forum with a pending signal vote than I feel like we’ve seen on this topic in several months.

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Respectfully, could you justify this statement with something tangible @Neiltbe? This isn’t intended to be a gotcha, there just seems to be a distinct lack of evidence that this candidate is a proven successful operator (or I couldn’t find it, at least).

On the other hand, perhaps “a nice guy with good problem solving skills” is a sufficiently high bar for this role because there were no better candidates willing to risk their current job to take it on. I hope that’s not the case for the sake of the community, but it would at least provide some clarity.

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Hey, once again this needs to be checked.

There is not a 612.5k vest it’s 600k. (12.5k is the monthly vest over 4 years (4812.5k).
Second at $2 sushi there is no 1.2m that only exists for keeping the token price above $3.
So deduct that 2.4m. You only have the 600K $SUSHI
2USD (1.2m) & 350K $SUSHI*2usd (700k).

Over 4 years you’d have 1.9m in $sushi upside (not the 4.3m your math indiciates) plus salary. This also assumes somehow he gets his bonus for shipping, but price doesn’t appreciate which is unlikely. The deal is very fair for a Head Chef.
Happy to have this discussion with anyone about the numbers and market rate offers.

So, since there is now a “package” for a Head Chef role. Why don’t we first vote for hiring a chef with this package. Once this is approved and public I’m sure there will be more candidates. You might say it’s too late, but this was my exact suggestion at the start of all this, like a year ago.

I don’t think many potential candidates would have considered that there was a package this lucrative on offer. Once this is more public and approved by the community, it will be easier to attract talent. I don’t feel like much has been done to attract more talent and the entire process was handled behind closed doors.

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Small $sushi holder first time posting. My sushi has lost mostly all of it’s value. I vote yea to get someone in here to deliver.

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Hello everyone. We are C3, a compensation consulting firm specifically for web3. We have commented on various Sushi posts in the past, including voicing our concern over the design of the Compensation Committee. We remain concerned over the compensation governance process at Sushi. Setting that aside, our rather lengthy post below dissects the candidate’s pay package by component:

Salary

We are not aware of market data that would support a base salary this high. For non-founder CEOs of venture-backed, pre-IPO technology companies, median salaries are $300K. The median base salary of a CEO of a public, technology company with ~$1.2 billion in revenue and 3,000 employees, is $800K - which, again, is for a tech organization that is more complex than Sushi and that generates more revenue. Therefore we would recommend a lower base salary.

Bonus

The goals associated with this component seem fluffy/discretionary. With the absence of transparency or formulaic goals, this is guaranteed pay valued at $700,000 (assuming a $2 price). A sign-on bonus of $700,00 is generous although not unheard of broader market. Most often than not, sign-on bonuses of this magnitude are used to make a candidate whole for compensation they forfeit from leaving their current employer. Is that the case here?

We would suggest (1) more transparency about the goals used to determine this bonus, as well as the overall compensation-decision making process the Committee goes through, (2) making majority of the bonus contingent on meeting measurable targets (e.g., $X million in TVL), (3) implementing a performance period such that if the goals are not met within a specified timeframe, the bonus is forfeited, and (4) consider implementing a vesting requirement for earned Sushi or enforcing token ownership requirements that state that the Head Chef must hold a certain amount of tokens (e.g., 2 times base salary within 3 years).

Guaranteed Sushi Grant

One key question to evaluate this offer is whether this grant is one-time or reoccurring (e.g., made every year)? If this is a one-time grant, then $1.2 million Sushi annualized over four years of service ($300K per year) is relatively reasonable. However, if this is a reoccurring grant, then the value is too high, especially considering the current depressed price.

Our one other comment is that monthly vesting is not required if you are providing such a large salary as the candidate does not rely on token comp to cover their expenses. We would strongly recommend less frequent vesting (like every year), which is more retentive and is aligned with the longer-term turnaround strategy.

Sushi Price Target Incentives
Likewise, will the 1.2 million Sushi be one-time in nature or reoccurring? 1.2 million tokens valued at $2 price today is $2.4 million dollars, which would be excessive if this is a reoccurring grant. However, if the candidate is not expected to get a refresher grant during the next four years, then the annualized value is $600K, which is more palatable.

If this is a reoccurring grant, then we think the current price targets are OK since the candidate will receive another grant with higher price hurdles during the next cycle (although the magnitude of the award should decrease). If this is a one-time grant, then these targets are not rigorous enough and we question whether it accomplishes any objectives. Performance-based pay is meant to incentivize the participant to achieve certain goals. In this case we would argue that Sushi is in turnaround mode, so we should incentivize a “return to normal”, not a $1.50 increase in price.

Alternatively, Sushi can scrap absolute price targets entirely and get creative with the design of performance goals in an effort to mitigate market volatility (for example, measuring relative return or market cap improvement).

Additionally, what are the vesting provisions for the earned Sushi? We would recommend implementing something since the candidate can earn everything amid a bull market and leave. Finally, what is the measurement period for this grant? Can the targets be achieved at anytime, over a year, over four years?

What is the point of utilizing performance-based tokens if we are just adjusting price targets for bear markets? This runs counter to a pay-for-performance philosophy and, quite frankly, if we are consistently adjusting targets then we might as well only grant service-based tokens. We would suggest keeping these targets and pegging the Head Chef’s package to them (“all in one boat”). And, we would recommend a full review of compensation for the other employees (conducted by an outside firm) to determine competitive levels for each person and an appropriate mix of performance-based pay.

Severance

This does not make sense to us. Severance is intended to serve as a compensation/bridge between jobs. Equity-based incentives are never included in severance, and unvested awards are typically forfeited entirely upon termination without cause. Otherwise, equity serves no retentive or motivational value. So, in this case, “Sushi comp” should be removed from the severance definition.

Additionally, why would severance decrease as the Head Chef works longer? If anything, it should increase over time. Finally, a 24 month severance multiple is not uncommon for CEOs of public companies, but it is generous for an organization of Sushi’s size and scope, especially considering the high base salary. We would recommend a flat 6 month to 18 month severance multiple covering only base salary.

In conclusion, there are some outstanding items we would like to have answered before properly evaluating the offer. However, there are clear red flags present in this offer (high salary, generous severance) and we question whether any outside compensation experts were involved when crafting it. We do not have a relationship with anyone at Sushi or the Compensation Committee - our comments are made on behalf of the community. We are happy to work with any party to improve this offer.

C3

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After staying silent for a while, can’t anymore.

Lots of words to answer some pretty straightforward one-line questions this community seems to be actually concerned about:

This will be judged and awarded by the compensation committee by unanimous vote in their sole and subjective opinion.

He can’t and won’t share any confidential information with them, but he’ll be allowed to continue investing and advising, provided that it doesn’t detract from his duties to Sushi. To clear any potential conflicts of interest, he’ll inform the compensation committee of any new investments.

  • Who is on the compensation committee?

  • Who was on the leadership search committee?

  • What is your DeFi experience and specific subject matter expertise on AMMs, Lending, Yield Farming? Regulatory navigation of such topics? It’d be a huge shame SushiSwap devolves into peddling NFTs.

Team members’ current price-based bonuses from the bull market are so high they don’t carry much weight in motivating. They’ll be lowered to these same price tiers and ratios to adjust for bear market downturn.

  • Why sneak in this clause to overturn Sushi 2.0 parameters? Never heard of lowering the bar if goals aren’t met. I echo other concerns this sort of vague, but significant addition does not bode well for your credibility. Is the team’s intention to just ride the market?

  • The previous concern does not bode well for the parameters of severance. If you underperform is the DAO just stuck with you guys and held hostage to trigger a 3x salary severance?

  • Where are the other candidates?

General thoughts/ questions:

  • This is incredible move to centralization. Are you aware of the implications of introducing a head chef in this regulatory environment and solidifying effectively a common enterprise?
  • There is almost no discussion on actually improving governance. This entire proposal writes like a rubber stamp while being completely tone deaf to what has made SushiSwap unique in terms of decentralization
  • There is absolutely no discussion on decentralization, yes decentralization is a key feature of SushiSwap that has set it apart from more centralized actors.
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Schematics - just make it clear. This proposal reads like intentional obfuscation, similarly to the hidden clause to lower the performance target.

Neiltbe, are you paid to be on the comp committee? If so, by whom? I think this will be very telling.

Nope, all comp committee work that I do is volunteer work done for free for Sushi.

I’ll gap fill and help do some other freelance work for them on the product & ops side under the advisory work category – team was overwhelmingly supportive with 100% voting internally yes for me to get a lot of these things done.

Definitely:

  1. Launched a 20M MAU game as tech lead at Lolapps. Being able to operate at the scale of 40M MAU’s as a tech lead over the suite of games is insanely impressive. Last I checked sushi was near 15K DAU’s right now. I really appreciate folks who have led things and had the experience of touching the scale of tens of millions of users. That type of experience first hand will be critical for Sushi to be something that impacts millions of lives.

  2. I saw the dunking on BigHead & Stoner Cats previously w/ Ashton & Mila but I think that’s a big deal, super helpful rolodex for Shoyu, Shoyu needs to become a big money maker & I love the connections.

  3. Launched Emissary medical tourism marketplace, backed by Matrix & Khosla. I like a Chef that has had the discipline of having to work with & report to top tier investors. It’s very practical nonetheless.

  4. Found a 6/7fig contract exploit https://twitter.com/staringispolite/status/1549155519272665089?s=20&t=z1SSJEo4czhWz5w2v3rL9Q (I like a Chef that can code, and find exploits lol).

  5. One of the first 5 engineers at Minted.com, company went on to be worth roughly a Billion. I like a Chef that’s operated at this size and seen what it takes to go from 5 devs to being worth hundreds of millions.

I’m sure there is more but 5 seems like a nice round number.

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Hey guys. I’m gonna be a dirty fence sitter and watch how this unfolds. If you would like to attend the weekly forum tomorrow and ask Jon whatever questions you have - LESGHO. I’d like to hear concerns from everyone. Let’s talk.

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Bought some sushi when I was excited for Shoyu launch. Worst decision of my life. Jonathan I would really appreciate if you used your NFT experience to make that business something. I look forward to attending the call.

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This statement is blatantly wrong! I can happily walk you through it to refresh your memory.

When @BoringCrypto , @mountain_goat, and yourself decided to become community representatives for the transition to Sushi 2.0, you took the responsibility of handling the compensation matters between contributors and investors. Initially, you said that you would not be compensated for your work and that there were no incentives. However, in a later comment, you said that this can’t be done pro bono and that payments are necessary to have checks and balances. After a while, you came up with a massive ask of paying you 1 million dollars for an increase of 1 billion dollars market cap for Sushi for acting as an advisor, but many people in the internal discord rejected it instantly since it made no sense for you work as an advisor just for being the middle man to sort out compensation stuff. On the next all-hands call, everyone agreed that the previous ask was unreasonable, but the consensus was for all the efforts you’re putting in as a compensation committee member should be paid $70/hour. There was a vote for it, and everyone, including myself, voted “yes” for it; we also agreed that this would, in some form, set the road to an advisory path in the future.

From what I understand, you have been billing us close to 40 hours a week with the agreed comp rate by checking in with Jiro a few moments ago.

I remember this part explicitly because, when we were all drafting the Sushi 2.0 proposal, you added the positions of Compensation Committee member, Advisor, and even Community Oversight roles for you, which came in surprising for me at that moment because there was a conflict of interests and this wasn’t agreed upon before. When I bought it up to his notice, Jiro also removed that part from the final proposal.

Ref: Edit history of the final Sushi 2.0 Proposal

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I didn’t want to get into this and take the attention away from a great candidate but I am happy to address a few items.

I have paid out of pocket and donated my own money to keep Sushi online when it came to making sure vendors got paid post-Frog Nation and made sure they got paid. Vendors were quite literally days away from pulling the plug on the project and it would have gone offline. That is how close we got to catastrophe, and a random community member like myself had to come in to keep things chugging along. I have never discussed this publicly, as it was a crisis averted and there’s no reason to make the team look bad that a random had to come in and keep the lights on, wasn’t their fault, structural issues. But I came in and helped in a major way and continue to. I have no control over the project but this story is a reflection of my desire to see sushi succeed. I have advanced tens of thousands of dollars personally out of pocket to ensure vendors haven’t cut the lights. Think about that for a second, I care enough about Sushi that I advanced $50,000 out of pocket because Sushi was dealing with issues and was at risk of going offline.

Ya, I offered to only charge for services if Sushi were to appreciate. You are the knucklehead why I am getting paid $70/hr & log my hours when I was going to do it for free & only take payment via vested Sushi upside. Being paid for work is a matter of principle for me.

I have no influence over Sushi’s direction but I’ve closed BD deals for Furo & Sushi, where necessary, helped bring in new demand and buy pressure and helped retain legal counsel amongst other things. I could go on but this is not about me. Let’s take a look at what you’ve done: Here is your original Samurai proposal. It’s been 1 year and you’ve been unable to ship a ticketing system for the support organization. Sushi’s All-In-One Customer Support and Engagement. It is gross incompetence that you’ve been unable to ship a ticketing system to this point. And I’ve told you this directly. I encourage all readers to go look at what you have promised in your original Samurai proposal one year later:

  1. Create a DeFi 101 coursebook (NO)
  2. Create analytics and community reports. (NO)
  3. Provide direct support lines for Institutions (NO)

Now lets go over v2 Samurai v2 Proposal from February

  1. Create Self-Serve Content and Articles for Sushi and its Partner Ecosystem (NO)
  2. Implement Bot and Live Chat (NO)
  3. Implement a Seamless Ticketing Experience (NO)
  4. Create analytics and community reports. (NO, unless that is this: a very sad excuse for community reports. https://toshokan.samurais.io/)
  5. Create fun & engaging tools & events centered around brand awareness. (NO)
  6. Assist in managing elevant social media channels on behalf of Sushi (YES).

This track record is poor and I understand you are unhappy with me because I’ve told you directly that you coast & need to pick up your game. I also declined a 200k+ per year compensation package that you asked for LESS THAN 2 MONTHS AFTER YOU WERE GIVEN A SALARY VIA THE PASSING OF V2 before everyone else on the team was paid you were granted financial security, and you had the audacity to ask for a 200K comp package less than 60 days from v2 vote. What could have changed in 60 days that you were deserving of 90,000/year more?

This is a document you authored & tried to get me to agree to. LOL, I said HELL NO, and since then there’s been an animosity toward me. But that’s ok, because I am not getting guilt tripped into “being a bro”.

Finally, I am specifically talking about you. There are great Samurai on the team and i know they will not criticize you due to the Samurai stick together stuff, but I am happy to. Your output has been negligible, unfortunately for the community you received a 1year grant via 2.0.

Meanwhile, you’re responsible for setting up a Discord bot that took > 5 weeks & blog a couple times per week on https://www.samurais.io/. I was a co-author of Samurai v2 & I am looking forward to sharing halfly performance reviews with the community.

Correct, I didn’t care what the title was whether it was community oversight, comp committee, or advisory which was the term the team used. I signed off on the edited/removed version, this is a whole lot of nothing with a picture of nothing lol.

I can help clear up some of these points

Venture backed pre-ipo

I don’t see the comparison here, to be honest. Crypto isn’t the Nasdaq, doesn’t share the same risk profile or compensation standards, etc. Can’t speak for the others, but I did lean on my lawyer for comparisons (they’ve seen much higher) and a couple close friends in defi as well.

We would suggest (1) more transparency about the goals used to determine this bonus

Absolutely. I would too, and that would be the plan. This was probably not sufficiently explicit in the original post. As proposed, this would have to be unanimous by the compensation committee (ie. my vote doesn’t matter) and should absolutely be transparent as they’re set. DeFi moves quickly, and I’m not sure a DAO vote on every minor milestone would be productive/optimal for achieving the DAO’s goals, though obviously that’s their decision. I do think the comp committee will have crucial context internally as well as the ability to move quickly, in order to set these appropriately. For what it’s worth, I don’t see any way this becomes a guaranteed bonus, and given that a number of comments have brought up shipping speed, I anticipate it being something I’ll have to work for.

One key question to evaluate this offer is whether this grant is one-time or reoccurring (e.g., made every year)?

I read this as clear, but if you missed this, then it seems that it wasn’t. This is one-time. If any future grants were to be contemplated in the future, that would be up to the DAO

However, if the candidate is not expected to get a refresher grant during the next four years, then the annualized value is $600K, which is more palatable.

That’s exactly right. I would quibble with the idea that it’s possible to annualize a value from price targets, but I believe I understand what you’re getting at

Finally, what is the measurement period for this grant? Can the targets be achieved at anytime, over a year, over four years?

This is in the original proposal as well. I don’t want to replicate the whole thing here, but I’d encourage a reread on this one. In short: A single month’s worth is unlocked if the 30-day time-weighted average rises above a certain price that month. It doesn’t contemplate an expiry, but if the DAO were to approve them, the DAO could presumably remove or change them.

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Jon would be you kind enough to ask your non sushi related supporters to leave the sushi community to do our governance process without interference. Let’s not lose sight of this being about sushi.

This is a temperature check designed to measure sushi community’s feelings on you being proposed as a candidate. It’s a legitimate part of our system.

It’s alarming that it’s continued since this was posted and you have seemed comfortable for it to continue, this is similar to Sifu tactics and we are jaded from being flooded with outside opinions telling us about the latest messiah in the past.

The stats from forum yesterday may even be tge worst ever attempted manipulation of forum by a cohort.

Would appreciate your intervention :pray:

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I am 100% against this proposal. Jonathan Howard is not qualified as Head Chef of sushi from every aspect. he doesn’t even have defi experience. Best way is to make public the compensation package. I believe there will be more candidates interested. then we could vote for one of them.

also Jonathan please stop bringing your non sushi related supporters here to vote for you. this forum is for sushi community. please non sushi related supporters leave the sushi community !