Ozy Staffers Felt Pressure to Take Stock Options Over Pay Raises
(Bloomberg) -- Some Ozy Media employees felt pressure from management to accept stock options instead of a higher salary, part of a demanding workplace culture that led to high turnover, according to interviews with people who worked there.
Ozy Chief Executive Officer Carlos Watson told employees that he wanted them to accept stock options so they felt like “owners” and would be invested in its long-term success, said the people, who asked to speak anonymously to openly discuss an employer. Some former employees haven’t been able to get the company to tell them how much those stock options are now worth.
Bloomberg spoke with nine former employees for this story. Ozy didn’t respond to multiple requests for comment.
Offering stock options is common in Silicon Valley, where they are seen as incentives to work hard and can make employees wealthy if the startup is successful. But some employees of Mountain View, California-based Ozy viewed the stock options as a way to lower their salaries, the people said.
When Eugene Robinson, an early Ozy employee who was editor at large, had a performance review, Watson asked him if he wanted to receive his salary increase and bonus in stock or cash.
Robinson said he was skeptical of the valuations of media startups and preferred the certainty of cash, or what he called “the bird in the hand.”
“I took the cash because you can’t buy gas or groceries with stock options,” Robinson said. “Carlos turned away and said ‘OK’ but didn’t seem incredibly happy that I made that choice.”
Ozy was valued at $159 million after a funding round last year. But the company’s future is in question after the New York Times reported that its co-founder and chief operating officer, Samir Rao, impersonated a YouTube executive on a conference call with potential investors. The article also raised questions about whether Ozy accurately reported user numbers.
In response, Ozy has hired the law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to review its business activities. One early Ozy investor, SV Angel, led by venture capitalist Ron Conway, told the company it no longer wants the stock it acquired, according to Axios. Katty Kay, a well-known journalist who left the BBC for Ozy, resigned this week, saying in a tweet the allegations were “deeply troubling.”
Other Ozy investors are standing by the company.
“We consider the review of business conduct at Ozy by international law firm Paul, Weiss, Rifkind, Wharton & Garrison LLP to be the right decision and fully support it,” said German media giant Axel Springer.
Laurene Powell Jobs’s Emerson Collective, one of Ozy’s first investors, said in a statement that it “did not participate in Ozy’s latest investment round and has not served on its board since 2019.”
Ozy bills itself as a “modern media company,” creating podcasts, television shows and events. But former employees describe a workplace culture that featured long hours and unrealistic demands that left them vulnerable to burnout. Watson often held meetings on weekends. Many Ozy employees left the company after less than a year. Watson sometimes yelled at employees, they said. For long stretches, the company didn’t have a dedicated human resources manager to air complaints to, one person said.
Ozy’s reporters were expected to produce three to four in-depth features each week, a pace that many said they found to be unsustainable. Now that the allegations have tarnished Ozy’s image, some former employees said they worry about facing a stigma for having worked there.
“Thinking of all the OZY journalists, some of the most hardworking, passionate and ethical people I know, whose talent was so often used and abused until they burnt out and left,” Nick Fouriezos, a former political reporter at Ozy, tweeted.
©2021 Bloomberg L.P.