Its stock down more than half this year, Shutterfly gives CEO big raise
Shutterfly, the Redwood City Internet-based digital photo sharing site, boosted the salary of its chief executive, Jeffrey Housenbold, by nearly two-thirds next year to $485,000 from the $300,000 salary he got in 2008, according to a filing the company made Monday with the SEC. That comes on the heels of a 9 percent salary increase he got last year. He’ll also get 10 percent of his new salary as a guaranteed minimum bonus to his cash compensation.
The company also served up a helping of 400,000 restricted stock units to Housenbold, of which 280,000 will vest automatically over the next three years. The remaining 120,000 units are to be granted during 2009 only if certain performance goals are met, with 20 percent to be awarded for each of the first three quarters and 40% for the final quarter, subject to the achievement of certain financial goals.
This seems to signal a shift in executive compensation strategy for Shutterfly’s board of directors, whose compensation committee said less than a year ago that “(s)alary and bonus levels are secondary considerations to most executives,” and that stock options were the company’s equity award of choice because they “foster employee stock ownership and focus executives on increasing long-term value for the stockholders,” and are inherently performance based because, “their intrinsic value depends entirely on an increase in the stock price above the option exercise price.”
Housenbold cleared $1.9 million in 2007 exercising some of the 1.04 million option shares he was given when he first joined Shutterfly a year before its initial public offering. However, he first became an actual shareholder in the company he runs earlier this year when he paid nearly $150,000 to buy 12,000 shares at an average per-share price of $12.44. He bought 25,000 more in August for $232,731, averaging about $9.31 per share.
Shares of Shutterfly closed Monday at $7.11, down 72 percent so far this year, giving Housenbold a paper loss of nearly $55,000 on the shares he’s bought so far this year. Given that the 550,000 options he has been granted since the IPO are now all underwater, no wonder restricted shares probably seem a more attractive choice these days.
17 comments
avi
this is what i called bs
Nov 25, 2008
brangelina
horrible horrible horrible. he should be ashamed of himself.
Nov 25, 2008
sad in hayward
He will be making almost a million dollars a year (google his bonus information…), but he laid off all of hayward (about 100 people) to “save money”. This is clearly the responsible way to lead a company through a recession.
How does he sleep at night?
Nov 25, 2008
charlotte
This is disgraceful. Somehow I don’t think the rest of Shutterfly’s employees will be getting similar bumps in their salaries, do you?
Nov 25, 2008
sad in hayward
He will be making almost a million dollars a year (google his bonus information…), but he laid off all of hayward (about 100 people) to “save money”. This is clearly the responsible way to lead a company through a recession.
How does he sleep at night?
Nov 26, 2008
Ex Employee
They treat there production employees like slaves, even full time (not seasonal). We were promised “Shutterfly will ALWAYS have a production facility in Hayward” by a Senior VP before they went public (I personally don’t care as I quit 2 years ago). Now they give this SHORT LITTLE insincere man a huge raise? What has he done for shutteyfly since he started 3 years ago (besides going public).
Dec 2, 2008
Ex SFLY Employee
I agree with the earlier postings too. In this economic scenario and the current layoff announcements by Shutterfly at Hayward, how does a board make such a BIG MISTAKE by awarding such a raise for a non performing CEO??? That too especially since the company stock has been a disaster for all its shareholders over the last year and this guy who is full of hype, BS and false stories has done nothing to deliver results!!! Either the board has no clue or needs to be changed along with this midget, good for nothing CEO.
Dec 2, 2008
david wayman
i think its sad when he runs a company that needs to put their blue collar workers thousands of miles away because white collars creative
bosses ( who he’s being paid well to manage) cant get it done .
why would he be pd to manage a workforce in two cities that he doesn’t
live in
Shutterfly is soo out of touch with the common folk and it makes me sick that they try to play this” feel good company” on the public.
I think they will sell , with the plan-TOP management gets their money now!
If Jeff would try to get the workforce to stop wasting money or his managers making stupid plans ,perhaps they wouldn’t have to ship off the labor force to other cities ! If you get pd 400,000 a yr ,the man should be able to live in the same zipcode with his workforce !Let him answer the whys to cost overruns ,in materials and hrs being pd for workers being trained poorly!Who thinks this is a great ideal he sits in his nice Redwood City Offices with all the other “creative people”!! while his labor force his farmed out to Arizona,whats next–perhaps mexico!!
Makes you feel good all over !Does MR John Q. Public think this is the way to handle people–out of site , then jeff can’t be the one to blame.
I am a former worker , and I resented the way the company treated their real workers . By the way when he had a good group of labor , stock was going for $37.00 a share .Mr jeff wanted to dump his labor costs , and shutterfly was sold on not improving the training or equipment,just get me a cheeper labor pool with other states lower cost of living = $8.00 a hr vs Hayward ‘s big $10per hr.Hey Jeff why is Arizona good for production ,but not good for your big time salary–boy you sure no how to manage a company.
Dec 3, 2008
another ex-employee
I too am an ex-employee… this company is so far from the ‘glossy’ image they present on their website, it’s ridiculous. I worked there sometime back, saw how things work from the inside, and had a tour of the Hayward facility as well- I saw workers there who are really the backbone of what this company sells and makes profits on each and every day. I wonder what kind of ‘bonuses’ they got for their hard work and dedication over the last few years?
It’s a very sad comment about the state of companies these days… so many people that do the real work are crapped on, while the folks at the top just keep getting richer. May these so-called execs get what they deserve one day- like unemployment, financial hardship, not knowing where your next paycheck is coming from. Shame on them.
Dec 4, 2008
You have got to be kidding me
Another ex-SFLYer here….this is the saddest thing I have heard this season. So many of my ex-coworkers and friends are loosing their job (after they are worked to the bone this holiday season) as SFLY will be moving to AZ for ‘economic’ reasons and many other friends are working 7 days a week only to be re-paid by lame unfilled promises and exec’s getting more than they deserve….. If all the stockholders decide to sell after hearing this what will happen???
Dec 11, 2008
Disgusted
As if things weren’t bad enough with Mr. Housenbold giving himself a hefty 62% raise, today they announced layoffs at Shutterfly. 5% of the staff, which isn’t as bad as a lot of companies in the valley, but is still significant, especially to those workers who were affected (including a husband and wife team that worked here.) In the meantime, they are pimping new quarterly objectives and reviews in the hopes of creating a “high performance culture”. Clearly the management team is completely out of touch. Makes me think that sooner or later, this company will collapse under the weight of its executives’ egos.
Jan 29, 2009
yet another ex-SFLY employee
Unfortunately, as a recent ex-SFLY RWC employee, it’s not a shock to see this. There was a lot to love about Shutterfly on the surface, but it didn’t take long to see the warts. The company really suffers from ignoring the skills, insight, and potential of existing employees. The personal growth potential is zero. Despite significant trouble filling open positions, internal employees were never really considered. The management, while saying they want leaders and risk-takers, discouraged such behavior by being top-driven and unable to foster employee growth. So, to advance professionally, you had to leave. The turnover was very high for such a small company, especially one where people really seemed to enjoy working there. Turnover costs a lot of money, as do unfilled positions. Until Jeff truly starts to value his employees at all levels, and hires a management team that shares that perspective (or is willing to stand up to him), they will continue to fail. Getting a big fat raise shortly before laying off hard-working employees only exacerbates the perception that already exists at SFLY. Actions speak louder than words Mr. Housenbold!
Jan 29, 2009
still another former sfly -ee
I was sick to read about Jeff’s big fat raise especially after being part of the “restructuring” and now finding myself on unemployment.
It’s very true what other former -ees have said about management . . . and it’s not just at the top. One of the biggest problems is the management that is in place is too inexperienced to manage their functional areas. Time and time again I came forward with ideas to improve the department I worked in. I was basically told that “I” (my manager) speaking) had already worked out what needed to be done and that it was up to each functional person to “discover” the improvements to their area. What??? Are you trying to run a business on the fast-track or hire people that need remedial attention. If someone hasn’t figured out in twelve months how to improve the domain of their function – it’s not likely that they will.
I think there are some talented people at SFLY but by and large the management and staff are inexperienced and that’s the way top management likes it. When you need to “restructure” 4 – 6 times in a twelve month period, that’s not called being “flexible and responding to the market”; that’s called disorganized and you haven’t got a clue nor the cajones to follow through with your initial plan.
The move by SFLY to lay-off on Jan 29, 2009 and not give even one month medical coverage is reprehensible. I’m still waiting for my COBRA benefits package in the mail. Hope I don’t need a doctor.
When SFLY says they compensate at mid-range – they’re not kidding!!!
Feb 9, 2009
yet another ex-SFLY employee
The disappointment grows still… Just saw that there are already job openings posted for the positions some of the “laid off” people held. Less than 2 weeks later. Hhhmmm… isn’t that illegal? I’m sure they’ve got their legal ducks in order, but the message it sends is pitiful. Employees can understand when friends lose their jobs due to economic pressures, but when it was just a cowardly way to eliminate someone and replace them with someone else… well, that’s just a morale killer and a great way to lose the respect of your remaining team. At least have enough character to be honest with people as you show them the door, SFLY management!
Feb 23, 2009
soon to be ex employee
What plagues Shutterfly the most is its past. The company when at startup mode
hire folks that were just of that caliber, worthy of working for a startup. Come
2009, being public company, sfly fails to recognize employees talents by
having some way of promoting employees not by skills, talent or achievements by
but by dull number of years with the company. Which leaves a certain group
of Buttlickers to ever be promoted. Everybody else who has talent is evoper getting
fed up with it and leaves or just ceases to put in effort cause it dveoesn’t matter.
So unless a person just can not pass drug test anywhere else, they just move on.
It’s pretty sad actually as turnover and lack of focus on innovation what lets small
time competitors like photopipe and artscow.com to really get a head.
Feb 23, 2009
Another thought
I think the “layoffs” were managements way of increasing the stock price. Just like getting Jeff to buy the stock. This is probably why he got this raise since he lost so much money. Either way, the stock price increased after the announcement.
They way they did it sucked. They gave everyone 2 days notice for health insurance and most people got 1 month severence. Even if they were at the company for years it didn’t matter. They also laid off a married couple even though they did not work in the same group and both performed very well. They laid off someone on maternity leave too. Worst part of it all is they are rehiring some of these positions.
Lastly, the comments above are correct. To get promted is an act of god. But, come in from a different company with the exact same experience you can take an upper management job. Good luck trying to retain employees after the recession ends.
Mar 21, 2009
david
Why is the company losing millions at the end of every period closing.
My guess poor management in training from bottom on up. Causing cust. orders being done many times before its right . Cost over runs because no one has a clue on how to manage supply’s or labor force .
Why should they since the plants are thousands of miles away
Dec 28, 2010