Are Robinhood employees more valuable than Stripe's?
Employees at top paying fintechs like Stripe and Robinhood have a lot of pressure to perform, particularly due to their sky-high wages. As profitability becomes increasingly challenging for top firms, the question can be raised: do fintech employees earn too much money?
Staff at Robinhood, the online broking fintech, may have cause to gloat after the company's second quarter results presentation. It revealed that, although 175 employees had left the firm this quarter (leaving 2,145), net revenues shot up to $486m, a 53% increase year-on-year. It put revenue per employee at $871k, the highest it's ever been and a 150% increase on last year.
Compare this to Stripe. They're in different sectors, but the payments fintech has over 7,000 employees, more than triple Robinhood's number. Former fintech CFO Rupak Ghose estimated in the FT in March that revenue per head at Stripe was just $400k. While that still seems like an impressive number, Stripe's pay (suggested by levels.fyi) seems disproportionate by comparison. Going purely off averages (of course, the most elite employees will be top revenue generators), Stripe software engineers with five or more years of experience are all being employed at a loss.
Robinhood's pay for software engineers on Levels is still very high, averaging out just above $350k. However, Robinhood's newly released results suggest its employees are paid more than half a million dollars less than the revenue they generate on average. Should they be asking for more? There are a number of contextual factors that differentiate the two companies and that might warrant the lower pay. For example, Robinhood is publicly traded, which means much of the $109m it paid in share based compensation this quarter can immediately be accessed. Stripe's stock based compensation comes in the form of restricted stock units (RSUs) where opportunities to cash out are fewer and further between. Given that Stripe only just presented employees with that opportunity in March, chances are another won't come again for some time.
Hybrid working policies can also play a role; those luxurious fintech offices aren't cheap. Robinhood has been adamant about its staff returning to the office four days per week, well above the average in the eFinancialCareers Fintech Report. Stripe is far more WFH friendly, with 96 open listings offering fully remote work compared to just 11 from Robinhood
Stripe also has a far more expansive product suite on offer. Robinhood made a big deal about its array of products expanding in its investor call, with CEO Vlad Tenev repeatedly bringing up credit card issuer X1, whom the bank acquired for $95m last month with plans to develop a Robinhood credit card. He maneuvered around a question about the profitability of its new business so, as Robinhood's expansion continues, it will be interesting to monitor how much revenue each employee is able to generate. It's grown in each of the last five quarters, so the firm will have reason to be hopeful.
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