“We don’t have enough work for our agents and support staff, and fewer sales leaves us with less money for headquarters projects,” Kelman wrote in the email announcing the layoffs on June 14.

The layoffs at Redfin and another real estate company, Compass, on the same day, came as the entire industry entered a cooling period last month, with surging mortgage rates pulling potential homebuyers out of the market.

But in an unfortunate twist, the layoffs were announced on the same day Redfin shareholders approved, on a non-binding advisory basis, the company’s executive compensation strategy in the so-called say-on-pay vote.

That the non-binding vote on executive compensation occurred on the same day layoffs were announced happened “coincidentally,” Alina Ptaszynski, corporate communications manager at Redfin, told Fortune, adding that shareholders had been made aware of executive bonus figures for 2021 months beforehand.

“The way that annual shareholder meetings work is that they’re scheduled often months in advance,” Ptaszynski said. “The proxy statements that the shareholders vote on are also shared with shareholders months in advance.”

Compensation package figures were given to shareholders in the spring of this year. The meeting was set for June 14 after Redfin’s finance team had calculated bonuses based on the company’s performance in 2021 and shareholders had viewed compensation packages, according to the company.

An SEC filing reveals that for performance in 2021, Redfin CFO Chris Nielsen received $2.3 million in base pay, stock options, and bonuses that amounted to $160,000; president of real estate operations Adam Weiner brought in a total of $2.7 million, of which $122,600 were bonuses; and CTO Bridget Frey earned a total of $2.2 million, including $160,000 from bonuses. Former chief people officer Ee Lyn Khoo—who left the company in January 2022—brought in $3.2 million in compensation, with $141,200 coming from bonuses. 

The SEC filing stipulates that the compensation packages are paid out “mostly via equity rather than cash,” that is tied to performance-based incentives. “[Executives] will realize meaningful portions of their compensation only if our company performs at a high level,” the filing read.

Ptaszynski said that a compensation committee decided on executive compensation and bonuses in April when compensation figures were sent to shareholders for approval, and that the procedure and timeline was “typical” for publicly traded companies.

“That’s the way that the process has always worked,” she added. “So there was nothing different about that process this year either.”

“It’s false and misleading to imply that 2021 executive compensation was in any way linked to 2022 layoffs. Attempts to make this connection reflect shoddy journalism and a deep misunderstanding of the SEC rules guiding publicly traded companies,” Ptaszynski told Fortune. “Redfin’s board of directors finalized 2021 executive compensation in April of 2022. At that time, there was no internal discussion of a layoff. Redfin made the difficult decision to eliminate jobs in response to a rapidly cooling housing market, brought on by a historic jump in interest rates.”

Although it announced layoffs on the same day as the non-binding say-on-pay vote by shareholders, these are not simultaneous developments, and Redfin is not alone in navigating the current turmoil in the housing market. The Redfin CEO-to-median employee pay ratio in 2021 was also much lower than some other rivals in the space, at four to one last year, according to an SEC filing from April of this year. For instance, the Redfin CEO received $299,341 in total compensation last year, and no stock options, per his own request. By comparison, Compass paid its CEO and co-founder Robert Reffkin $89.9 million in 2021, according to an SEC filing, although his base salary was comparable, at $400,000.

Layoffs and executive bonuses

Large executive compensation and bonuses during times of economic hardship, mass layoffs, and uncertainty over a company’s future are far from illegal or uncommon.

In 2005, Congress banned companies from paying out large retention bonuses to executives while under the process of filing for Chapter 11 bankruptcy, a practice the late Democratic senator Ted Kennedy said constituted “glaring abuses of the bankruptcy system by the executives of giant companies” in a statement accompanying the bill.

But while the ruling stopped companies from giving executives large payouts when filing for bankruptcy, it did nothing to stand in the way of bonuses being handed out during less dire times. 

Companies routinely issue large payouts to executives during times of economic distress. This practice became especially popular in the early days of the pandemic, when global lockdowns and upended markets led to one of the largest waves of layoffs in U.S. history. 

In March 2020, stockholders of telecommunications company AT&T approved a $32 million compensation for then CEO Randall Stephenson, a 10% rise from 2019, despite the company having laid off 20,000 employees in 2019 and around 3,300 in the first quarter of 2020. And in May 2020, car rental company Hertz approved retention bonuses worth $16 million for executives, days before filing for bankruptcy and only a month after laying off 10,000 of its staff.

While a cooler real estate market is by no means an indicator that Redfin is preparing to file for bankruptcy, layoffs at the company are a signal that Redfin’s rapid growth over the past few years might be cooling too.

June 23, 2022: This headline has been updated for clarification, and the story has been updated to reflect that the compensation committee decided on executive compensation and bonuses in April. Redfin’s CEO-to-median employee pay ratio has also been added, as has additional comment from Redfin and context around shareholder say-on-pay votes.