11 ms·

Tanium is facing employee unrest and an executive exodus

158 points by pinewurst 10y ago

pdog 10y ago
> One of the most unnerving aspects of life at Tanium is what's known internally as Orion's List. The CEO allegedly kept a close eye on which employees would soon be eligible to take sizable chunks of stock. For those he could stand to do without, Hindawi ordered the workers to be fired before they were able to acquire the shares, according to current and former employees. Employees at startups generally take a below-market salary in exchange for equity compensation, so imagine the double humiliation of being fired because your first shred of equity is about to vest.
- jacquesm 10y ago
  It appears that they were fired just before their stock vested. That's why as an employee you should never agree to vest all your stock at the end of a multiple year period but in small chunks over time (annually, usually). That still carries risk but not as much. Assuming you assign value to the stock at all.
  - meddlepal 10y ago
    I would run away from any deal with a multi-year all at once vesting period. It's just too clever.
  - tptacek 10y ago
    Did I miss the part of this story where they said they had nonstandard vesting? The industry standard is 4 year vesting, month by month, with a 1-year cliff. The traditional horror story is employees being fired just before they cliff.
    - jacquesm 10y ago
      No, I just think GGP is mis-interpreting the situation because of the article's unfortunate wording. Once the stock is vested it stays vested. Whether it is 'worth something' or not doesn't matter, if you've got it it stays unless you sell it. I suspect 'worth something' translates into 'something for which there is an easy market', merely whether or not you can easily sell it. Whether this particular stock will go up or down after the IPO is any-body's guess.
      - tptacek 10y ago
        My sense from the story is that they're being accused of ruthlessly terminating employees just prior to their cliff.
        jacquesm 10y ago
        Yes, so before the first batch of stock vested.
      - late2part 10y ago
        As you well know, but to clarify for others, once the stock is vested - it stays vested unless you quit and don't buy it. Once you've vested the stock and purchased it - it stays "vested" as you own it - unless it's 83b early election of stock which is restricted, and that restriction retracts over time like vesting.
      - mavelikara 10y ago
        This is true in most cases, but watch out for clawback provisions, as was in the case of Skype: http://www.businessinsider.com/how-employees-get-totally-screwed-in-private-equity-deals-2011-6 http://www.businessinsider.com/how-employees-get-totally-scr...
        jacquesm 10y ago
        Yes, that was particularly dirty pool. Made me lose a lot of respect for the execs in that story.
    - pcl 10y ago
      I think that's becoming less of a norm. More and more companies seem to be moving to 4-year vesting, distributed annually.
      - tptacek 10y ago
        I'm a vocal defender of vesting and cliffs, but even I think you shouldn't take a job somewhere where you vest in annual chunks after your cliff.
        jacquesm 10y ago
        It's pretty normal though. What does it cost to transfer stock in the US in a privately held company? Here in Europe it can be up to ~$1K to transfer stock in a GMBH or BV, other countries more or less depending on the local situation regarding notary public roles and rates. In a public company it is dirt cheap but this is prior to IPO. That + accelerated vesting in case of wrongful termination or termination without cause can be reason enough to batch share vesting events.
        CyrusL 10y ago
        There is no stock transfer or fees associated with the typical startup vesting schedule in the US. It's just written as an algorithm in legal documents like "...one fourth of which will vest after twelve months and blah blah blah..." The exercising is more paperwork on top of the vesting.
        deleted 10y ago
        [deleted]
- skrebbel 10y ago
  Wait, so besides the culture of fear and abuse as detailed in the article, they also can't ship product? Makes you wonder whether there's anything, at all, this company's management is competent at. I guess CEO (the founder's son) didn't go through the usual hiring process.
  - skrebbel 10y ago
    TOO LATE TO EDIT: I replied the above to the wrong comment, please ignore. Sorry for the noise. Moderators, feel free to delete.
- balladeer 10y ago
  My friend worked for startup, here in India, that was doing work with drones and water level measurements or something like that. It was and still is a pre-VC startup. He had left a huge European MNC where did cutting edge research but was bored and needed the bleeding edge rush and excitement as he put it. He's awesome in his field and then excellent at coding too (not a CSE grad) he was paid really grand in that MNC. So he was getting less than half of his MNC salary at this drone startup. He was totally immersed in making and breaking things with weekends stopping to exist for him and evenings and nights blurring. For pretty much 10 months. He was asked to resign a day after demo day where potential investors raved about the product his team (3 people) had finished. Another team mate was also asked to leave within a week. Both of them were given a reason on the lines "excellent engineer but won't be a good fit in the culture and your product was not well appreciated". Only remaining team mate was a confounder who used to pass on requirements. Of course both ex employed didn't get anything. He said he needed at least 2 more months to get some stocks as he would get instalments after every completed year. He took a break of around two months. Relaxing, slowly getting back to rhythm. Him being good and being from IITB meant he had literally hundreds of recruiter mails every week. But he calmly deleted any mail which had startup mentioned anywhere in it. Sometimes back his previous manager recruited him back at the same European MNC with a substantial pay raise. My point of writing isn't sharing a generic burnt by a startup anecdote with you. He tries to remain calm but I, and many other friends, can see that he has been deeply scarred by the deception and (I would call it) betrayal.
  - laughingman2 10y ago
    This is direct result of capitalism. Employees who put their heart and soul to build something don't own it in capitalistic model. Only the owner by virtue of being owner of private property/company has right to it. Treating people as means to an end, which capitalism encourages leads to this model. I think economy dependent on human creativity will hit a ceiling, if they continue to remove ownership of content from the creators. The creators can be anything from a humble web developer or someone like your friend.
  - jacquesm 10y ago
    I've had something similar to this happen early in my career, it took two years out of my life and cost me what I thought was a good personal relationship but which turned out to be just predatory in retrospect. Those are expensive lessons, your view of humanity will likely never be quite the same afterwards. The fact that the guy crashed and burned gives me no comfort at all. Even so, I do realize I had a part in that, if I had been a little bit smarter I could have educated myself on this stuff before accepting. And that's where the world today is different than in the past: we now have world-wide networks of people in tech that can warn each other. So every story like the one you told here should help to keep other technical people safe from predatory behavior. I wrote about my experience here: https://jacquesmattheij.com/the-start-up-from-hell https://jacquesmattheij.com/the-start-up-from-hell Apologies for the pictures not working, I still need to fix that after the latest domain shuffle.
- JonFish85 10y ago
  If generally an employee stock option pool is ~5% of the company, then why is it worth spending time optimizing for that by firing people before stock vests? I suppose it'd be possible that management/investors view the employee ownership as getting out of hand, but even if the options pool is 10-15% (which I think would be fairly ridiculously large), it's likely mostly held by early employees who may have already vested. It just seems like a silly thing to spend time doing, monitoring who will be vesting soon to fire them. Sure, maybe for one or two executives who are vesting integer percents of stock, but beyond that, it's not worth the time, and definitely not worth the backlash.
  - chrisbennet 10y ago
    Greed isn't always rational. Scott Kupor [managing partner at VC firm Andreessen Horowitz] wrote an article [1] suggesting that a 10 year exercise window for employees who leave: " is really a direct wealth transfer from the employees who choose to remain at the company and build future shareholder value, to former employees who are no longer contributing to building the business/ its ultimate value." This seems to suggest that the "investment" by early employees who leave shouldn't be treated like the early investments from VC's who decline to keep investing at some point. [1] http://a16z.com/2016/06/23/options-timing/ http://a16z.com/2016/06/23/options-timing/
    - gkop 10y ago
      Wow. Remind me never to be an employee at one of Scott's portfolio companies.
sheeshkebab 10y ago
This sums up nicely why working for someone else's dream (the dipshit Orion's in this case) is a bad idea.
jacquesm 10y ago
Whoever thought that calling 'Orions List' 'Schindlers List' was clever has no idea what Schindlers List was all about. > The situation at Tanium underscores the risk of venture capitalists placing near-absolute power in the hands of a company’s creators. That sentence does not make sense to me. It is a rule rather than an exception that VCs end up with minority shareholdings but usually favorable terms in case of liquidation. They don't 'place near-absolute power in the ands of a company's creators', they're simply later to the table and have correspondingly fewer shares bought at a significant premium. The original founders call the shots and only if they dilute to the point that outside capital holds a majority does the equation change and even then there might still be different classes of shares to deal with. For the most part VCs are along for the ride, they can make noise and they can try to win over the board but as long as the founders have 51% or more they call the shots.
- bobsil1 10y ago
  The key is board majority, not common shares majority. Because board can change the rules.
  - jacquesm 10y ago
    The board does not change the shareholder agreement nor does the board change anything else to do with the shares. What the board can do - and will do - is fire the CEO if they are of the opinion the CEO is not functioning well, but if the CEO is also a shareholder and has majority control of the stock (or the confidence of the majority of the shareholders) he/she can call a shareholder meeting, get rid of the board and re-instate himself or herself. Boards are not active at the level of shareholders, though many boards do have major shareholders as board members.
    - bobsil1 10y ago
      The board can change the bylaws, issue new shares to get a majority of each class, wash out founders with a forward and reverse split. Preferred shares have all kinds of rights not given to founders. 50.1% of shares outstanding means nothing by itself.
tptacek 10y ago
There are bad reasons to quit a company and good ones, but there are few better ways to make an exit than on the spot when the CEO of your company personally and publicly berates a low-level employee in front of the team.
- posguy 10y ago
  Huh? Sure, the employee could sit through the CEO taking a dump on them in front of their coworkers, but if the employee has other options for employment, I'd say there isn't a usually solid reason to stick around a hostile work environment. The bridge is already burned with the CEO, and your unlikely to burn the bridge any worse with your direct boss/coworkers by quiting immediately versus a few days/a week later. Might actually gain some respect from them which could net you a job later down the line at another firm one of your coworkers ends up at! That being said, its all corporate politics, so it is hard to derisk it, and you should try to be aware of as much of the political situation as possible before making a move. Edit: added last paragraph to clarify.
  - tptacek 10y ago
    I'm not talking about the CEO's victim. I'm talking about every employee that watched him victimize a team member.
    - posguy 10y ago
      Ah, that makes more sense, was trying to figure that out. I've usually waited a bit before quitting so I could line up a new job when I've been an employee witnessing a coworker get beat down on by management needlessly.
  - CalChris 10y ago
    There must be 50 ways to leave your lover. If you've made up your mind, you can just tell them off and walk out. You can take your sweet time and interview while you still have a paycheck and benefits. You can wait until the cliff and leave the next day. You can give two weeks notice. It's your choice just as it's their choice.
brazzledazzle 10y ago
I went through a long drawn out sales engagement with them. It seemed like a cool product at its core (basically a sort of meshed set of interconnected nodes that you could do live "natural language" queries against predefined collected data (i.e. "what machines are running ntpd?") but the stuff they were trying to sell on top of it at the time like patch management ranged from half finished to promises for future releases to things that ended up simply... not being true. My perception at the time was that it was a good product for what it did but maybe after the demos were over too many potential customers said "so now what?" and they were putting pressure on engineering to release way too soon. And it turns out they were probably right, even though it was an obviously useful product for live reporting, detection and triage those things aren't appealing to managers so we didn't buy it.
- posguy 10y ago
  Yeah, I think Tanium's ultimate issues are their firing of employees to prevent vesting (and thus erosion of control of the company) and actions by the CEO whereby he berated an employee in front of the employee's team. You piss off your lower level employees, that builds resentment and causes employee churn, and if it was a habit of the CEO the other execs would likely jump ship as fast as possible (as they've been doing).
- tptacek 10y ago
  So... osquery?
  - brazzledazzle 10y ago
    Yeah, pretty much. osquery plus some gossip-based node communication layered on top. Unless osquery has that or something like it these days. It's been a while since I kicked the tires on it.
  - jonstewart 10y ago
    It supposedly has some kind of peer-to-peer topology for executing queries and aggregating the responses, so--I believe, I'm not certain--it avoids having a centralized data store that gets DDOS'd from the agents or a linear machine-by-machine connect-and-query model. That allows it to scale to large networks. The company _definitely_ benefited from the a16z lead-gen (and investment). Tanium was the big shiny endpoint tech of 2016, but I'm not convinced they have a good handle on the use cases/domain.
mvpu 10y ago
I'm getting sick of reports like this. Setting up unfair vesting schedules and firing people before their stock vests... somebody should vigorously investigate it and put the CEO in jail. Startups are fucking hard work and a CEO stealing glory is a crime not a culture issue. These guys need fear of God.
- posguy 10y ago
  Its just another form of indenturing workers, by holding these ballooning stock vesting schedules over their heads in the uneven employer/employee relationship. The employer gets stability from the employee, while being able to fire the employee after a few years just before they vest, saving the company $$$ and maintaining control for the current shareholders.
  - jacquesm 10y ago
    > while being able to fire the employee after a few years just before they vest Never ever agree to a vesting schedule where it takes longer than a year to get your stock. 1 year cliff maximum.
    - posguy 10y ago
      Yeah, a fair vesting schedule should evenly vest as you work, ideally as often as possible (eg: every month or week). Its akin to compounding, as a savings account holder you want the interest on your account to compound as often as possible.
      - LoSboccacc 10y ago
        to keep it to the point it should come month by month along with the standard compensation, since you take a pay cut in exchange for stock it's only fair to have it delivered month by month, at most with a clause that after x year the stock trickle stops and you get an equivalent increase in your pay sadly there's plenty sucker willing to gift their work away so any hint of people having a clue about the risks in cliffed vesting become unhirable troublemakers in most startups
anon42387 10y ago
Where is the evidence? Where are the quotes by previous employees making this claim? These employees were fired because they were failing to do their job. If you are running a company will sit aside and do nothing and continue to let anyone stay in the company that proved to miss their target repetitively? These claims are 100% false. This story is not only poorly written but it is full of false information crafted only for click bait. It's sad that I can no longer feel as though Bloomberg is a creditable source of news.
- reimertz 10y ago
  How do you know these claims are 100% false? Assuming they have no valid quotes are just silly. I think it's pretty clear why, the huge risks of retribution.
- jacquesm 10y ago
  > It's sad that I can no longer feel as though Bloomberg is a creditable source of news. I feel the same way about novelty accounts.
- diminoten 10y ago
  If you've got contradictory information you're willing to share, it would be interesting to hear about it.
  - anon42387 10y ago
    https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-sphr-ryt https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-...
- snsr 10y ago
  > Where is the evidence? > These claims are 100% false. hmm
- djrogers 10y ago
  Well, it's a good thing that as a long-standing and valued member of the HN community, you are willing to make helpful, fact-filled, public statements under your own name to contradict the article. Oh wait....
calcsam 10y ago
After raising a Series B of $90 million, new employees would be getting probably, at most, 0.05% over four years, or vesting around 0.01% on their one-year cliff. I can't imagine how the founders thought that firing tens of key employees in order to retain an extra fraction of a percentage point made financial sense.
bertlequant 10y ago
The father goes around apologizing for his son's behavior? I'm pretty sure that's not helping anyone.
metaphorm 10y ago
yet another sorry story of a man being driven to the brink of madness by the greed monster.
leroy_masochist 10y ago
Isn't a father-mother-son leadership team a massive red flag when choosing what company to work for? I mean, whether it's a car dealership or a tech startup, when you have family pride all mixed up in company culture it really tends to be a shitty place to work. If anyone has any examples of where this type of setup has actually worked out well, would love to know of one.
- notacoward 10y ago
  There's a funny thing about that. Quite a few companies have been financially successful with that model, but a disproportionate number of them seem to be morally challenged. One of the first lists I was able to find included Wal-Mart, Cargill, and Koch as three of the top four. Price fixing, influence peddling, and several examples of private profit at public expense. I kind of don't care how much money they make, or how much I might make by going there. I still wouldn't touch them with a ten-foot pole.
papabrown 10y ago
While stealing the employee stock options is beyond pale, the real issue is what the working environment must be like there. I was in a similar situation many years ago with a completely corrupt management team. My boss and I got off on the wrong foot when he asked me to lie about another employee he wanted to fire and I refused (which led to him then trying to find people to dish dirt on me so he could fire me). The CEO and president were fully aware this kind of stuff was going on but looked the other way because he was producing the results they wanted to see (they weren't exactly clean either and several years later were both indicted on criminal charges). I saw multiple people break down in tears due to the pressure he put on them. Everyone was stressed out all the time. People were constantly in poor health due to the stress. Backstabbing was normal operating procedure just to stay off the hit list. People would doing anything to suck up to the boss so they could keep their job another week, or month, or quarter hoping things would get better. After I left the company I couldn't believe I put up with that. My health was in the toilet. Mentally I was wasted. I remember at my next job constantly worrying that everyone who was being nice to me was setting me up. I parsed every word people said to me looking for a trap. It took me a full year before I could sleep more than four hours a night. The ones who have left or were let go are the lucky ones. The stock can't be worth the physical and emotional damage. I've worked in a lot of high pressure jobs before that one and since then but that place will always stand out as the most damaging period in my life.
- Balgair 10y ago
  Now, I read these accounts and I wonder, if this is how businesses are run, even a small fraction of them, how are they in business at all? Like, it seems 'business' is really forgiving in terms of staying alive, like turning a profit must be really easy if these morons can do it and stay afloat for any length of time. But you go on /r/entrepreneur or some threads on HN and it is made out to be just a real drag and really really hard to do. What am I missing here, why the disconnect?
  - droopyEyelids 10y ago
    You've built some sort of just-world hypothesis in your head, where kindness and 'goodness-as-a-person' relates to business success. In recorded human history, exploitative actors have often been successful in business. I know you've heard about slavery before.
abalone 10y ago
> One of the most unnerving aspects of life at Tanium is what’s known internally as Orion’s List. The CEO allegedly kept a close eye on which employees would soon be eligible to take sizable chunks of stock. For those he could stand to do without, Hindawi ordered the workers to be fired... which would help Hindawi defend his ownership by limiting the number of stakeholders... The suggests one of two things: Either Tanium has a really strange vesting schedule or Bloomberg blew the reporting here. The typical vesting schedule is distributed over four years with a one year cliff. That means, with typical vesting, only <1 year old employees could possibly be on this list. Furthermore, only 25% of their grant would be at stake. With Tanium being a relatively mature $3.7B startup, we can infer that the typical grant size at this stage would not constitute more than a small fraction of a percent, even for fairly senior positions -- and we're talking 25% of that. It thus is highly unlikely that firing right before the cliff would retain "sizable chunks of stock" big enough to materially affect the CEO's ownership. It's entirely possible that a List exists, but the stated motivation doesn't add up. Bloomberg should really follow up here with details on the vesting schedule.
anon42387 10y ago
https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-sphr-ryt https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-...

158 points by pinewurst 10y ago

pdog 10y ago

> One of the most unnerving aspects of life at Tanium is what's known internally as Orion's List. The CEO allegedly kept a close eye on which employees would soon be eligible to take sizable chunks of stock. For those he could stand to do without, Hindawi ordered the workers to be fired before they were able to acquire the shares, according to current and former employees. Employees at startups generally take a below-market salary in exchange for equity compensation, so imagine the double humiliation of being fired because your first shred of equity is about to vest.

jacquesm 10y ago
It appears that they were fired just before their stock vested. That's why as an employee you should never agree to vest all your stock at the end of a multiple year period but in small chunks over time (annually, usually). That still carries risk but not as much. Assuming you assign value to the stock at all.
- meddlepal 10y ago
  I would run away from any deal with a multi-year all at once vesting period. It's just too clever.
- tptacek 10y ago
  Did I miss the part of this story where they said they had nonstandard vesting? The industry standard is 4 year vesting, month by month, with a 1-year cliff. The traditional horror story is employees being fired just before they cliff.
  - jacquesm 10y ago
    No, I just think GGP is mis-interpreting the situation because of the article's unfortunate wording. Once the stock is vested it stays vested. Whether it is 'worth something' or not doesn't matter, if you've got it it stays unless you sell it. I suspect 'worth something' translates into 'something for which there is an easy market', merely whether or not you can easily sell it. Whether this particular stock will go up or down after the IPO is any-body's guess.
    - tptacek 10y ago
      My sense from the story is that they're being accused of ruthlessly terminating employees just prior to their cliff.
      - jacquesm 10y ago
        Yes, so before the first batch of stock vested.
    - late2part 10y ago
      As you well know, but to clarify for others, once the stock is vested - it stays vested unless you quit and don't buy it. Once you've vested the stock and purchased it - it stays "vested" as you own it - unless it's 83b early election of stock which is restricted, and that restriction retracts over time like vesting.
    - mavelikara 10y ago
      This is true in most cases, but watch out for clawback provisions, as was in the case of Skype: http://www.businessinsider.com/how-employees-get-totally-screwed-in-private-equity-deals-2011-6 http://www.businessinsider.com/how-employees-get-totally-scr...
      - jacquesm 10y ago
        Yes, that was particularly dirty pool. Made me lose a lot of respect for the execs in that story.
  - pcl 10y ago
    I think that's becoming less of a norm. More and more companies seem to be moving to 4-year vesting, distributed annually.
    - tptacek 10y ago
      I'm a vocal defender of vesting and cliffs, but even I think you shouldn't take a job somewhere where you vest in annual chunks after your cliff.
      - jacquesm 10y ago
        It's pretty normal though. What does it cost to transfer stock in the US in a privately held company? Here in Europe it can be up to ~$1K to transfer stock in a GMBH or BV, other countries more or less depending on the local situation regarding notary public roles and rates. In a public company it is dirt cheap but this is prior to IPO. That + accelerated vesting in case of wrongful termination or termination without cause can be reason enough to batch share vesting events.
        CyrusL 10y ago
        There is no stock transfer or fees associated with the typical startup vesting schedule in the US. It's just written as an algorithm in legal documents like "...one fourth of which will vest after twelve months and blah blah blah..." The exercising is more paperwork on top of the vesting.
        deleted 10y ago
        [deleted]
skrebbel 10y ago
Wait, so besides the culture of fear and abuse as detailed in the article, they also can't ship product? Makes you wonder whether there's anything, at all, this company's management is competent at. I guess CEO (the founder's son) didn't go through the usual hiring process.
- skrebbel 10y ago
  TOO LATE TO EDIT: I replied the above to the wrong comment, please ignore. Sorry for the noise. Moderators, feel free to delete.
balladeer 10y ago
My friend worked for startup, here in India, that was doing work with drones and water level measurements or something like that. It was and still is a pre-VC startup. He had left a huge European MNC where did cutting edge research but was bored and needed the bleeding edge rush and excitement as he put it. He's awesome in his field and then excellent at coding too (not a CSE grad) he was paid really grand in that MNC. So he was getting less than half of his MNC salary at this drone startup. He was totally immersed in making and breaking things with weekends stopping to exist for him and evenings and nights blurring. For pretty much 10 months. He was asked to resign a day after demo day where potential investors raved about the product his team (3 people) had finished. Another team mate was also asked to leave within a week. Both of them were given a reason on the lines "excellent engineer but won't be a good fit in the culture and your product was not well appreciated". Only remaining team mate was a confounder who used to pass on requirements. Of course both ex employed didn't get anything. He said he needed at least 2 more months to get some stocks as he would get instalments after every completed year. He took a break of around two months. Relaxing, slowly getting back to rhythm. Him being good and being from IITB meant he had literally hundreds of recruiter mails every week. But he calmly deleted any mail which had startup mentioned anywhere in it. Sometimes back his previous manager recruited him back at the same European MNC with a substantial pay raise. My point of writing isn't sharing a generic burnt by a startup anecdote with you. He tries to remain calm but I, and many other friends, can see that he has been deeply scarred by the deception and (I would call it) betrayal.
- laughingman2 10y ago
  This is direct result of capitalism. Employees who put their heart and soul to build something don't own it in capitalistic model. Only the owner by virtue of being owner of private property/company has right to it. Treating people as means to an end, which capitalism encourages leads to this model. I think economy dependent on human creativity will hit a ceiling, if they continue to remove ownership of content from the creators. The creators can be anything from a humble web developer or someone like your friend.
- jacquesm 10y ago
  I've had something similar to this happen early in my career, it took two years out of my life and cost me what I thought was a good personal relationship but which turned out to be just predatory in retrospect. Those are expensive lessons, your view of humanity will likely never be quite the same afterwards. The fact that the guy crashed and burned gives me no comfort at all. Even so, I do realize I had a part in that, if I had been a little bit smarter I could have educated myself on this stuff before accepting. And that's where the world today is different than in the past: we now have world-wide networks of people in tech that can warn each other. So every story like the one you told here should help to keep other technical people safe from predatory behavior. I wrote about my experience here: https://jacquesmattheij.com/the-start-up-from-hell https://jacquesmattheij.com/the-start-up-from-hell Apologies for the pictures not working, I still need to fix that after the latest domain shuffle.
JonFish85 10y ago
If generally an employee stock option pool is ~5% of the company, then why is it worth spending time optimizing for that by firing people before stock vests? I suppose it'd be possible that management/investors view the employee ownership as getting out of hand, but even if the options pool is 10-15% (which I think would be fairly ridiculously large), it's likely mostly held by early employees who may have already vested. It just seems like a silly thing to spend time doing, monitoring who will be vesting soon to fire them. Sure, maybe for one or two executives who are vesting integer percents of stock, but beyond that, it's not worth the time, and definitely not worth the backlash.
- chrisbennet 10y ago
  Greed isn't always rational. Scott Kupor [managing partner at VC firm Andreessen Horowitz] wrote an article [1] suggesting that a 10 year exercise window for employees who leave: " is really a direct wealth transfer from the employees who choose to remain at the company and build future shareholder value, to former employees who are no longer contributing to building the business/ its ultimate value." This seems to suggest that the "investment" by early employees who leave shouldn't be treated like the early investments from VC's who decline to keep investing at some point. [1] http://a16z.com/2016/06/23/options-timing/ http://a16z.com/2016/06/23/options-timing/
  - gkop 10y ago
    Wow. Remind me never to be an employee at one of Scott's portfolio companies.

sheeshkebab 10y ago

This sums up nicely why working for someone else's dream (the dipshit Orion's in this case) is a bad idea.

jacquesm 10y ago

Whoever thought that calling 'Orions List' 'Schindlers List' was clever has no idea what Schindlers List was all about. > The situation at Tanium underscores the risk of venture capitalists placing near-absolute power in the hands of a company’s creators. That sentence does not make sense to me. It is a rule rather than an exception that VCs end up with minority shareholdings but usually favorable terms in case of liquidation. They don't 'place near-absolute power in the ands of a company's creators', they're simply later to the table and have correspondingly fewer shares bought at a significant premium. The original founders call the shots and only if they dilute to the point that outside capital holds a majority does the equation change and even then there might still be different classes of shares to deal with. For the most part VCs are along for the ride, they can make noise and they can try to win over the board but as long as the founders have 51% or more they call the shots.

bobsil1 10y ago
The key is board majority, not common shares majority. Because board can change the rules.
- jacquesm 10y ago
  The board does not change the shareholder agreement nor does the board change anything else to do with the shares. What the board can do - and will do - is fire the CEO if they are of the opinion the CEO is not functioning well, but if the CEO is also a shareholder and has majority control of the stock (or the confidence of the majority of the shareholders) he/she can call a shareholder meeting, get rid of the board and re-instate himself or herself. Boards are not active at the level of shareholders, though many boards do have major shareholders as board members.
  - bobsil1 10y ago
    The board can change the bylaws, issue new shares to get a majority of each class, wash out founders with a forward and reverse split. Preferred shares have all kinds of rights not given to founders. 50.1% of shares outstanding means nothing by itself.

tptacek 10y ago

There are bad reasons to quit a company and good ones, but there are few better ways to make an exit than on the spot when the CEO of your company personally and publicly berates a low-level employee in front of the team.

posguy 10y ago
Huh? Sure, the employee could sit through the CEO taking a dump on them in front of their coworkers, but if the employee has other options for employment, I'd say there isn't a usually solid reason to stick around a hostile work environment. The bridge is already burned with the CEO, and your unlikely to burn the bridge any worse with your direct boss/coworkers by quiting immediately versus a few days/a week later. Might actually gain some respect from them which could net you a job later down the line at another firm one of your coworkers ends up at! That being said, its all corporate politics, so it is hard to derisk it, and you should try to be aware of as much of the political situation as possible before making a move. Edit: added last paragraph to clarify.
- tptacek 10y ago
  I'm not talking about the CEO's victim. I'm talking about every employee that watched him victimize a team member.
  - posguy 10y ago
    Ah, that makes more sense, was trying to figure that out. I've usually waited a bit before quitting so I could line up a new job when I've been an employee witnessing a coworker get beat down on by management needlessly.
- CalChris 10y ago
  There must be 50 ways to leave your lover. If you've made up your mind, you can just tell them off and walk out. You can take your sweet time and interview while you still have a paycheck and benefits. You can wait until the cliff and leave the next day. You can give two weeks notice. It's your choice just as it's their choice.

brazzledazzle 10y ago

I went through a long drawn out sales engagement with them. It seemed like a cool product at its core (basically a sort of meshed set of interconnected nodes that you could do live "natural language" queries against predefined collected data (i.e. "what machines are running ntpd?") but the stuff they were trying to sell on top of it at the time like patch management ranged from half finished to promises for future releases to things that ended up simply... not being true. My perception at the time was that it was a good product for what it did but maybe after the demos were over too many potential customers said "so now what?" and they were putting pressure on engineering to release way too soon. And it turns out they were probably right, even though it was an obviously useful product for live reporting, detection and triage those things aren't appealing to managers so we didn't buy it.

posguy 10y ago
Yeah, I think Tanium's ultimate issues are their firing of employees to prevent vesting (and thus erosion of control of the company) and actions by the CEO whereby he berated an employee in front of the employee's team. You piss off your lower level employees, that builds resentment and causes employee churn, and if it was a habit of the CEO the other execs would likely jump ship as fast as possible (as they've been doing).
tptacek 10y ago
So... osquery?
- brazzledazzle 10y ago
  Yeah, pretty much. osquery plus some gossip-based node communication layered on top. Unless osquery has that or something like it these days. It's been a while since I kicked the tires on it.
- jonstewart 10y ago
  It supposedly has some kind of peer-to-peer topology for executing queries and aggregating the responses, so--I believe, I'm not certain--it avoids having a centralized data store that gets DDOS'd from the agents or a linear machine-by-machine connect-and-query model. That allows it to scale to large networks. The company _definitely_ benefited from the a16z lead-gen (and investment). Tanium was the big shiny endpoint tech of 2016, but I'm not convinced they have a good handle on the use cases/domain.

mvpu 10y ago

I'm getting sick of reports like this. Setting up unfair vesting schedules and firing people before their stock vests... somebody should vigorously investigate it and put the CEO in jail. Startups are fucking hard work and a CEO stealing glory is a crime not a culture issue. These guys need fear of God.

posguy 10y ago
Its just another form of indenturing workers, by holding these ballooning stock vesting schedules over their heads in the uneven employer/employee relationship. The employer gets stability from the employee, while being able to fire the employee after a few years just before they vest, saving the company $$$ and maintaining control for the current shareholders.
- jacquesm 10y ago
  > while being able to fire the employee after a few years just before they vest Never ever agree to a vesting schedule where it takes longer than a year to get your stock. 1 year cliff maximum.
  - posguy 10y ago
    Yeah, a fair vesting schedule should evenly vest as you work, ideally as often as possible (eg: every month or week). Its akin to compounding, as a savings account holder you want the interest on your account to compound as often as possible.
    - LoSboccacc 10y ago
      to keep it to the point it should come month by month along with the standard compensation, since you take a pay cut in exchange for stock it's only fair to have it delivered month by month, at most with a clause that after x year the stock trickle stops and you get an equivalent increase in your pay sadly there's plenty sucker willing to gift their work away so any hint of people having a clue about the risks in cliffed vesting become unhirable troublemakers in most startups

anon42387 10y ago

Where is the evidence? Where are the quotes by previous employees making this claim? These employees were fired because they were failing to do their job. If you are running a company will sit aside and do nothing and continue to let anyone stay in the company that proved to miss their target repetitively? These claims are 100% false. This story is not only poorly written but it is full of false information crafted only for click bait. It's sad that I can no longer feel as though Bloomberg is a creditable source of news.

reimertz 10y ago
How do you know these claims are 100% false? Assuming they have no valid quotes are just silly. I think it's pretty clear why, the huge risks of retribution.
jacquesm 10y ago
> It's sad that I can no longer feel as though Bloomberg is a creditable source of news. I feel the same way about novelty accounts.
diminoten 10y ago
If you've got contradictory information you're willing to share, it would be interesting to hear about it.
- anon42387 10y ago
  https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-sphr-ryt https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-...
snsr 10y ago
> Where is the evidence? > These claims are 100% false. hmm
djrogers 10y ago
Well, it's a good thing that as a long-standing and valued member of the HN community, you are willing to make helpful, fact-filled, public statements under your own name to contradict the article. Oh wait....

calcsam 10y ago

After raising a Series B of $90 million, new employees would be getting probably, at most, 0.05% over four years, or vesting around 0.01% on their one-year cliff. I can't imagine how the founders thought that firing tens of key employees in order to retain an extra fraction of a percentage point made financial sense.

bertlequant 10y ago

The father goes around apologizing for his son's behavior? I'm pretty sure that's not helping anyone.

metaphorm 10y ago

yet another sorry story of a man being driven to the brink of madness by the greed monster.

leroy_masochist 10y ago

Isn't a father-mother-son leadership team a massive red flag when choosing what company to work for? I mean, whether it's a car dealership or a tech startup, when you have family pride all mixed up in company culture it really tends to be a shitty place to work. If anyone has any examples of where this type of setup has actually worked out well, would love to know of one.

notacoward 10y ago
There's a funny thing about that. Quite a few companies have been financially successful with that model, but a disproportionate number of them seem to be morally challenged. One of the first lists I was able to find included Wal-Mart, Cargill, and Koch as three of the top four. Price fixing, influence peddling, and several examples of private profit at public expense. I kind of don't care how much money they make, or how much I might make by going there. I still wouldn't touch them with a ten-foot pole.

papabrown 10y ago

While stealing the employee stock options is beyond pale, the real issue is what the working environment must be like there. I was in a similar situation many years ago with a completely corrupt management team. My boss and I got off on the wrong foot when he asked me to lie about another employee he wanted to fire and I refused (which led to him then trying to find people to dish dirt on me so he could fire me). The CEO and president were fully aware this kind of stuff was going on but looked the other way because he was producing the results they wanted to see (they weren't exactly clean either and several years later were both indicted on criminal charges). I saw multiple people break down in tears due to the pressure he put on them. Everyone was stressed out all the time. People were constantly in poor health due to the stress. Backstabbing was normal operating procedure just to stay off the hit list. People would doing anything to suck up to the boss so they could keep their job another week, or month, or quarter hoping things would get better. After I left the company I couldn't believe I put up with that. My health was in the toilet. Mentally I was wasted. I remember at my next job constantly worrying that everyone who was being nice to me was setting me up. I parsed every word people said to me looking for a trap. It took me a full year before I could sleep more than four hours a night. The ones who have left or were let go are the lucky ones. The stock can't be worth the physical and emotional damage. I've worked in a lot of high pressure jobs before that one and since then but that place will always stand out as the most damaging period in my life.

Balgair 10y ago
Now, I read these accounts and I wonder, if this is how businesses are run, even a small fraction of them, how are they in business at all? Like, it seems 'business' is really forgiving in terms of staying alive, like turning a profit must be really easy if these morons can do it and stay afloat for any length of time. But you go on /r/entrepreneur or some threads on HN and it is made out to be just a real drag and really really hard to do. What am I missing here, why the disconnect?
- droopyEyelids 10y ago
  You've built some sort of just-world hypothesis in your head, where kindness and 'goodness-as-a-person' relates to business success. In recorded human history, exploitative actors have often been successful in business. I know you've heard about slavery before.

abalone 10y ago

> One of the most unnerving aspects of life at Tanium is what’s known internally as Orion’s List. The CEO allegedly kept a close eye on which employees would soon be eligible to take sizable chunks of stock. For those he could stand to do without, Hindawi ordered the workers to be fired... which would help Hindawi defend his ownership by limiting the number of stakeholders... The suggests one of two things: Either Tanium has a really strange vesting schedule or Bloomberg blew the reporting here. The typical vesting schedule is distributed over four years with a one year cliff. That means, with typical vesting, only <1 year old employees could possibly be on this list. Furthermore, only 25% of their grant would be at stake. With Tanium being a relatively mature $3.7B startup, we can infer that the typical grant size at this stage would not constitute more than a small fraction of a percent, even for fairly senior positions -- and we're talking 25% of that. It thus is highly unlikely that firing right before the cliff would retain "sizable chunks of stock" big enough to materially affect the CEO's ownership. It's entirely possible that a List exists, but the stated motivation doesn't add up. Bloomberg should really follow up here with details on the vesting schedule.

anon42387 10y ago

https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-sphr-ryt https://www.linkedin.com/pulse/working-tanium-stacey-ruesch-...