4 ms·

As much noise as I hear about this, it's not really that simple. In my estimation, lengthening the exercise window just ensures that dilution will happen faste

As much noise as I hear about this, it's not really that simple. In my estimation, lengthening the exercise window just ensures that dilution will happen faster. If you have 5% of a company locked up by people who no longer work there, you have to find a way to reward current employees. Sure, cash is one way, but it might be easier to issue more stock, most likely of a different class. It might sound good on paper, but ultimately I really don't think this (edited: "this" = extending the window) will have any real positive impact for employees leaving the company.

ammon 11y ago
Sure it will. Keeping options is strictly better (for the employee) than not keeping options. Vested options are compensation for work that has been done. Everything you say can be true, but that does not mean that companies should not let their employees keep their options.
holman 11y ago
> If you have 5% of a company locked up by people who no longer work there, you have to find a way to reward current employees We need to get past this line of thinking. Why do companies not say the same thing for the salaries they've paid former employees? "Boy, I wish we could get back the $30,000 we paid Bob between July 2011 and October 2011." We don't say that because the employee earned that and once they've earned it, it's out of your account and into theirs. Stock, though a different mechanism, needs to be thought of the same way. If someone has worked there long enough to vest that stock, they should have the option available to own that stock. Just because they made the company successful enough to not be able to afford to exercise their options in time doesn't mean we should take that possibility away from them. Whether or not it was intended years ago when it became a norm, the 90 day exercise window, at this point, is a surrogate mechanism for companies to steal compensation from employees after the fact. That's horrible.
- khuey 11y ago
  People think that way because you can't claw back the salary but you can dilute the entries on the cap table.

ammon 11y ago

Sure it will. Keeping options is strictly better (for the employee) than not keeping options. Vested options are compensation for work that has been done. Everything you say can be true, but that does not mean that companies should not let their employees keep their options.

holman 11y ago

> If you have 5% of a company locked up by people who no longer work there, you have to find a way to reward current employees We need to get past this line of thinking. Why do companies not say the same thing for the salaries they've paid former employees? "Boy, I wish we could get back the $30,000 we paid Bob between July 2011 and October 2011." We don't say that because the employee earned that and once they've earned it, it's out of your account and into theirs. Stock, though a different mechanism, needs to be thought of the same way. If someone has worked there long enough to vest that stock, they should have the option available to own that stock. Just because they made the company successful enough to not be able to afford to exercise their options in time doesn't mean we should take that possibility away from them. Whether or not it was intended years ago when it became a norm, the 90 day exercise window, at this point, is a surrogate mechanism for companies to steal compensation from employees after the fact. That's horrible.

khuey 11y ago
People think that way because you can't claw back the salary but you can dilute the entries on the cap table.