Election of Jonathan Howard as Head Chef

Listening to the discord forum gave me even less confidence.

@Neiltbe noted only he himself (?) comprised the compensation committee.
When asked how he reached such high benchmark numbers, @Neiltbe spoke about former market driven revenues and that the proposed compensation simply “fit into the budget”. The budget has not been made clear, despite numerous posts here indicating how the total comp would comprise 15% of the treasury.

@jhoward disclosed that he had a previous relationship with @Neiltbe, but hadn’t spoken in 2 years. He also said he had previously helped Neil raise funds for his startup.

@mountain_goat disclosed there were only two candidates that were considered.

Will let everyone here form their own opinions of these revelations. I hold the opinion this poll is null and there is no consensus to move towards a snapshot given multiple issues, clear conflicts of interest, and that this proposal could effectively be broken up into multiple components to be separately voted upon for a healthy governance process. Separate the candidate from the comp, from performance target reductions.

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There should be 2 polls really.

1: on the candidate themself

2: on the compensation structure

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In relation to the compensation package, I do have the following questions which imo will help the Sushi community to better understand if the remuneration is fair for the specific role:

• What benchmark has been used for the Chef’s remuneration? How does the numeration compare to other major DEXs non-founders equivalent positions?
• How does the total remuneration % to protocol revenue compares to other DEXs equivalent position?
• The last 30 days the protocol revenue for Sushi per Tokenterminal is $728k. Does it make sense the annual compensation for the Head Chef, excluding bonuses, to be more than a months protocol revenue?
• Why has the token price been used as threshold for the bonus compensation? The token price, in a big extent, is outside the Head Chef’s control and performance as it is mainly driven by crypto/economics cycle.
• Imo there are other Key Performance Indicators that are much more important and are representative of the head Chefs contribution as :

  1. The increase of protocol revenue, which will have direct impact on xSushi holders and the token price
  2. the successful/high quality -on time and on budget launches of Sushi products
  3. New users added to the Sushi ecosystem
  4. Increased volume of transactions and TVL
  5. Value added to the Sushi ecosystem from new products and whether the investments have been a good use of funds
    I am sure that the community will come up with additional metrics that are more representative than the token price itself.
    I want to acknowledge that the Head Chef’s position is instrumental for Sushi’s success and the individual must be compensated fairly for the responsibility and the risk which it entails. However, I feel that no sufficient information has been shared in relation to the process followed and the data used with the Sushi community in order to be able to assess that fairness of the compensation. It feels like the compensation package has been copied from a VC or web2 tech company, without taking into accounts the specifics of Sushi and Crypto/DEX industry.
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Seems like a potential Head Chef attracting a new community to Sushi would be a massive positive. This nomination has put a spotlight on a DAO that could benefit from a previously untapped group of young, ambitious builders and investors. The vast majority of them have not posted here, but they are paying attention.

It’s perfectly fair to request that they refrain from voting, but the fact that this proposal has brought new people to this forum only for them to leave with a bad taste in their mouths is a missed opportunity. If a 9-figure DAO doesn’t want new people to vote on temp checks, it should be trivial to implement token or reputation gating instead of leaving the option open and then labeling it a governance attack.

None of the new posters have touched on compensation terms or the transparency of the nomination process, because those are governance issues that are none of our concern. We are simply people with reputations in web3 providing insight into the competency of a candidate the DAO members clearly lack context on, and this community is better off discounting or ignoring those perspectives if they are unwelcome instead of meeting them with hostility.

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Replying for clarity since most of this is not true.

Me & Matthew (Imsoftware) are on the comp committee. When looking at what makes sense for Sushi and exercising judgement about putting this forward we looked at where Sushi was today (present day metrics, challenges, etc.) & the challenges faced. Budget was the most important factor for me, the funds for this were already earmarked for Head Chef purpose via Sushi 2.0

Yeah I met Jon in SF, he was super helpful in showing me the ropes in the Bay Area how to pitch, fundraise, etc. I founded a web 2 SaaS co. You can find the details of that in the 2.0 comments section where I share my background. There was a content plan & then an ask for everyone to amplify to their networks & specifically ping me for outbound for anyone the team would like to outbound to. We actually had a few Sushi integration partners reach out and point me in the direction & that was followed up on. However from the team there was not any prospects identified that people felt fit the bill.

I moved from SF to the East Coast at the start of the pandemic so we didn’t really chat but when this whole thing of having to find a head chef given the mandate I hit him up and talked about what was going on at Sushi, 2.0 and if he’d throw his hat in the ring etc.

Not true. More than 2. Two is the number that made it to a certain checkpoint in the process. The majority of candidates dropped out once they were informed of the entirety of what the pathway to a nomination & election would look like & all of the hoops they needed to jump through as an individual.

Just for context sushi 2.0 went to snapshot on 5/12. You introduced jon to sushi team discord group 1 month prior to 2.0.

So people were asked to reach out to their networks in 2.0 a month after you introduced your friend as a candidate.

How you can’t see any unfair advantage in that process is beyond me.

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Complete lie. No other words to describe it. You are choosing to selectively omit certain information you had access to. It was even discussed today on the call how the process evolved.

Happy to share the backstory publicly:

When it became clear 2.0 was going to come with a firm need for a chef it was still being figured out if that meant required now or later. Jon was not the first candidate introduced to the team. There was another candidate introduced by @BoringCrypto first. Pegbit decided to disclose this. I followed suit 3 days later intro’ing Jon. If what you’re saying is true and there was an advantage then the first candidate introduced would’ve had the greatest head start & as such been the pick.

Thereafter the decision was made that it was unacceptable to tack on a chef within the 2.0 proposal but instead a simple head chef mandate. From that point on both candidates were put on pause until 2.0 voting and they had no contact with the team. After 2.0 passed, a process was created, drafted, and ok’d by the team, social media & content went live & the floodgates opened and process began and contact with candidates 1&2 would resume. A decent number of candidates applied and of course as I have said previously a large number of them bowed out when they heard about all of the steps and what it would require to be Chef. (DAO vote, public nomination, etc.)

That process outlined was followed. The result of that is Jons nomination being put forth.

You obviously knew all of this but instead decided to misrepresent. It is a shame. I am looking forward to next weeks community call for chat around the process & hope you will attend.

I think there’s a lot of comments in this thread that point to misdirection, gaslighting

Replying for clarity since most of this is not true.
Complete lie. No other words to describe it.

@Neiltbe respectfully your follow up comments only validate the comments you made on the discord forum, which I believe are also recorded in Youtube for others to make their own determination.

How does it make sense that a leadership committee is comprised of 2 individuals? I also find it hard to believe that Arca and other group had no influence on this committee based on the disclosures in this thread, of course this is dependent on your willingness to be transparent. It does not bring confidence there were also only two candidates for such an enormous compensation package, one of the candidates which you clearly stipulated a close, if not previous financial relationship with.

While the purpose of this thread is to focus on the candidate. There are clearly two issues. First, the candidate and comp package are tied together - there’s been many calls to logically separate the two. Second, the process on how this candidate was selected and now forced through with a comp package that includes other pork such as a glaring lowering of the performance bonus target from Sushi 2.0, definitely weakens the credibility of this candidate. Pork is a consistent problem of these proposals - you mention a mandate to select a head chef, but Sushi 2.0 did not stipulate a mandate to determine compensation outside the original allocations nor to update the performance bonus parameters voted by governance.

Matthew stands to explicitly gain from this proposal through a performance bonus target reduction, so it cannot be said this proposal is independent from recommendations made from a two man committee. In fact this disclosure only seems to suggest Matthew is acting as a hidden hand from frog nation to the selection of this candidate and is pushing for more focus on NFTs while the DAO has never agreed this is the best or competent course of action considering Sushi has not shown competitiveness in NFTs. Was it not previously disclosed the lead on Shoyu was a family member of Matthew’s?

These are simple questions, while I appreciate your answers, they raise more significant questions.

Also respectfully @Neiltbe who are you? I’ve been in and out of sushiswap for a while and this is the first time I believe we’ve made your acquaintance?

As an aside, listening on the discord forum the rationale of previous revenues was used to justify this compensation package. I think a better lens to view Sushi is effectively a non-profit, Sushi 2.0 mentioned the formation of a foundation. This isn’t a business, to capture it as one or view it as a saas business through your Bay Area experience would be incredibly faulty and disregard the history of Sushiswap

Hey everyone , it was an honor to be on the community call earlier today with 400 or so of you. I’ve really appreciated the people caring about Sushi so passionately (even if we disagree) that they researched, listened to a 90 minute talk, made their case on the forum, said it to my face, all while being respectful. I’d like to show I value them & this part of the process, show the community they were heard, and include substance to back that up.

Here are some changes to the proposal that I’d like to incorporate:

  1. Lowering severance from “24 months down to 6”, to instead "18 months down to 6”. I believe this keeps intact the principles I’ve explained here and on the call, of aligning incentives with the execution and financial cost of a new Head Chef search process, and of commitment between DAO & team, but puts a lot of money where my mouth is as well

  2. For Roadmap Performance Bonus Incentives, there was a concern about rubber-stamping. For transparency and accountability, compensation committee will publish each month’s targets ahead of time

  3. More than verbally committing to transparent financials: my first Roadmap Performance Bonus Incentives milestone will be working with the lawyers to resolve their blockers and release transparent financials to the maximum extent allowed. Not only that, but I cannot access any other Roadmap bonuses, even if achieved, until the first publication. If the community likes, I’d also propose a discussion and votes on any additional/specific metrics they want to see included, which I can bring to the lawyers as well

  4. @C3_Group’s idea of Sushi Price Target Incentives expiring after 4 years. It limits DAO costs and we don’t plan to wait around anyway, so this makes sense. There’s a danger that the process around a possible replacement drags on forever, so we’d include a forcing function: on the last day, it auto-renews another 4 years, but only if the DAO hasn’t issued something different via Snapshot (this could include deciding no replacement at all)

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Again, many including well known Sushi contributors have called for the comp proposal to be separate from the candidate. Personally, this would be good governance. The fact there is only one candidate doesn’t give anyone a choice.

What do lawyers have to do with transparent, if not redacted financials? Who do these laywers represent? This has never been the operating standard here. Its still unclear in simple speak what this comp package is, in comparison to the only other example I can find on this thread, the samurai seemed straightforward. Nor does it seem like there is willingness to be transparent about already published financials in Sushi 2.0. What was the previous and current bonus performance target?

Respectfully theres a lot of intentional obfuscation on very simple numbers previously and currently published that don’t have any legal blockers whatsoever. Bringing in lawyers into a community discussion doesn’t feel like Sushi.

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I don’t see where we disagree here. The DAO does need to pay its dev team, and there was a direct question on that, about revenues and costs

It’s always possible I misspoke on the call, but certainly can confirm that nothing I said came with an intention of changing the Sushi 2.0 plans, entity status and so on. I don’t remember anyone talking about capturing or saas at all

The DAO can pay its or many dev teams independent of your proposal. As you said on your call - let devs dev, you’re here to do other stuff. Lets not get things intentionally combined.

nothing I said came with an intention of changing the Sushi 2.0 plans

Details: 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.

This is just one example of the doublespeak going on here. We voted for clear performance targets in Sushi 2.0, your very proposal lowers them to $3. Moving goalposts?

Another problem is Head Chef. If Sushi is a DAO why not have multiple operating teams? Right now all the obfuscation, contention, etc all stems from focusing on items like comp and moving towards increasing centralization (2 man comp committee, 1 candidate, high utilization of the remaining treasury), as opposed to the decentralization that made Sushi great. I’d say give it up - open this up for everyone, reduce the capture. This isn’t a San Francisco startup.

This is compensation committee territory, and I wasn’t around for past obfuscation that was or wasn’t present so I can’t speak to that. From my perspective, everyone’s already trying to be as transparent as possible and as clear as possible.

On lawyers, I’m not “bringing them into a community discussion”. We’re talking about financials, and I’m simply reporting what I understood from the team on that (I’ll let them speak authoritatively, but I can tell you what I understood): Sushi already has lawyers; they represent Sushi DAO and the dev team, which I believe came out of exactly the Sushi 2.0 entity formation work you mentioned; the team said they want to release financials; those lawyers said to wait for regulatory reasons. That doesn’t mean never, or imply any resistance to the idea. Quite the opposite

I’m talking about clarity of previous published and voted upon numbers. How are these numbers related to regulatory matters? Seems like we’re using laywers now as the scarecrow to answering basics. Also a full spreadsheet of financials was previously disclosed in Road Ahead from a previous round of community discussion- now there’s a reversion on current spending and basics like what % of the treasury your own comp is?

Using “legal” to obfuscate our discussion now, this doesn’t feel like SushiSwap anymore honestly.

Again your own proposal (unless you’re saying the compensation committee wrote your proposal?)

Details: 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.

This overturns the parameters set in Sushi 2.0. Why add in this pork? Or is this a regulatory matter?

Also lets all agree to stop using the word committee - its now disclosed as just Neil and Matthew. I really don’t see how anyone can pretend this is proper.

Sushi already has lawyers; they represent Sushi DAO and the dev team

Edit: Just noticing this. This raises a lot more questions. How can the same lawyers represent the non profit foundation (not yet created? since your own proposal stipulates the creation of some entity?) and the dev team. Acknowledging the DAO and dev team are one and the same is a big red flag. If you want to discuss real regulatory concerns, then I’d start here first.

Please don’t be disingenuous. This was not only disclosed, it was clear black and white, and a core part of the 2.0 proposal which was voted on by govt. Along with an obligation for the entire team to undertake a leadership search.

The comp committee has a primary responsibility of accountability. You’d know the history of Sushi shows this had been a major problem in the past by those that abused the lack of it. It’s not responsible for dealing with govt. matters, that can only be decided on by govt.

Respectfully you’re woefully disingenuous at this point.

Initially we propose Matthew Lilley & Neil to sit on this committee

This has implied this committee would grow as two people were a stop gap measure.

Nowhere in Sushi 2.0 stipulates the Compensation Committee’s mandate is intertwined with Leadership Search. These are two clearly separate mandates and sections (Sushi 2.0: A Restructure For The Road Ahead) and therefore as many have called in this forum, separate the compensation from the candidate. Even more so separate the candidate from Sushi 2.0 performance targets.

Picture gets even worse, when the candidate is mentor, friend, if not financial contributor of one committee member, and the candidate’s proposal lowers a performance target that will financially benefit another committee member, if not elevate the focus on a project led by that committee member’s family. The intention of committees is to avoid individual capture. This is far from accountability.

The clear issue is all the pork that is sneaked into these proposals to try to pass everything all at once. This isn’t accountability by any means. The genuine course of action is to follow Sushi 2.0 as you laid out. Compensation Committee, Leadership Search, separate mandates, separate proposals. Keep the Sushi 2.0 performance targets and open discussion for lowering them clearly as a another proposal. Many prominent Sushi contributors have already called this out. You cannnot deny governance responsibility while trying to manipulate governance into an all-in-one package in which specific clauses benefit you directly with no relation to the matters at hand.

Sorry but I am against the “roadmap performance bonus” concept entirely. It is redundant with SUSHI price targets, is too wishy-washy in terms of how its triggered, and can encourage haphazard shipping without due care. See my post here: Election of Jonathan Howard as Head Chef - #72 by pocketsquare

Like I said above, there should be 2 polls here: 1 on the compensation structure which in its current form Im a hard no. 2 on Howard himself which I am open to.

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Yup, lets do a separate proposal for compensation. Understand incentive comp is crucial, so lets focus more on TVL and revenues earned by the protocol.

If the business makes money, Jon and the team rightly score a payday.

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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