5 ms·

Many (if not most) companies do stock refreshes annually, don't they?

cbanek 9y ago
There's refreshes and then there's the speed of the vesting schedule. Some places offer a bunch to start, but very little after that, which means people tend to leave once they have vested all their options/RSUs. After the first year, sometimes your vesting schedule will be monthly, quarterly, twice a year, or once a year. As to why they don't allow everyone to be monthly - it's probably because they get to claw back a fair amount of the equity if people leave.
- objclxt 9y ago
  > As to why they don't allow everyone to be monthly - it's probably because they get to claw back a fair amount of the equity if people leave. I may be being a little cynical, but if you vest annually or bi-annually you can get a pretty good idea of when your employees are going to leave and use that to plan your crunch periods accordingly. People are rather unlikely to quit the month before the annual vesting date.
  - cbanek 9y ago
    I think if companies could actually predict crunch times I'd agree with you, but scheduling is not an easy science.
  - logicfiction 9y ago
    To double down on the cynicism, you also need to be sure your employees value your options for this to be relevant.
maxxxxx 9y ago
From what I know the refreshes are typically pretty small.
objclxt 9y ago
Yes, but after the initial grant has vested entirely your opportunities for growth are limited. Here's an example - say I'm hired with 1000 units of stock over four years. Each year I receive a refresher grant of 250 units of stock, again vesting over four years. Once I reach Year 4, my stock compensation stabilizes, assuming my refreshers remain the same (I'm am obviously grossly simplifying - you could be promoted and get larger grants, the company could do badly and your dollar value be significantly reduced). But what you can do, and what the parent is alluding to, is jump ship around year 3-4 and get the company you're going to match your current amount of outstanding stock, meaning your initial grant becomes much higher, and your refreshers do too. At least, that's the idea. It's worked for me. Additionally, although personally I did very well on my refresher grants I know other people at my employer did not. So that's another factor.
- kobeya 9y ago
  Normally refresher grants are not based on your starting grant, but what you might receive if you were hired for the same position today.
- shostack 9y ago
  Are you able to put any actual dollar or % amounts against this?
  - loeg 9y ago
    It's meaningless alone. It'll need to be higher at roles with a lower base salary or can be lower at roles with a high base salary. Total annual compensation is what you should pay attention to.
- deleted 9y ago
  [deleted]
ryandrake 9y ago
I've never seen it myself. My understanding is that it's pretty rare.
mercutio2 9y ago
Some companies do small refreshes to almost everyone. Others do performance based refreshes, so job hoppers often think they’re never getting more stock, because they had their eye on the next gig or their side hustle or whatever.
hinkley 9y ago
My memory is fuzzy but the one place I got options that were worth anything, it would have taken me about 8 years to double the stock grant I was given when we were acquired. So I had this big block of initial options of which hundreds of shares vested every quarter, and then dozens of shares of the subsequent grants came due at a slightly different time. To me, the first rule of rewarding someone is to make sure the recipient did all of the work before the reward. If you make them work afterward then it sours the desserts. I would end up holding onto those little blocks until the next batch of original stocks vested because I had to push a bunch of buttons like a monkey (in a UI designed by monkeys) for a couple hundred bucks. Which just reminded me that I could be making more money and a bigger impact working just about anywhere else. And then they cancelled the only project that any of us thought had any strategic value to the company. So my direct manager quit. Then someone else quit. Then I gave about 3 weeks notice, but was the 5th one out the door because 2 other people resigned in the week after I gave mine. In all about 8 people left in something like 12 weeks. Because we all quit right after the end of the fiscal year, we were all owed a bonus from the previous one. When we got the bonus check (mine was a little over 2 month's pay, but the majority of the others got better reviews so got bigger payouts) we went out for beers. Someone, probably me, asked if it was worth it to stay for the last four+ months when things started going sideways. Only one person said yes, out of eight.
- sokoloff 9y ago
  > To me, the first rule of rewarding someone is to make sure the recipient did all of the work before the reward. If you make them work afterward then it sours the desserts. For executives and directors, I disagree completely. The shareholders are paying them to make and execute decisions that will grow the company (and share price) over a long period of time. The share-based compensation plan should reflect (and help align) that they are being paid to make long-term decisions. Those are inherently "promise/award before the hard work is done" type of grants as I see it. (Why would I pay you more for a decision you've already made or work you already did, unless we're just talking about a modest spot bonus for a job well done?)
  - hinkley 9y ago

There's refreshes and then there's the speed of the vesting schedule. Some places offer a bunch to start, but very little after that, which means people tend to leave once they have vested all their options/RSUs. After the first year, sometimes your vesting schedule will be monthly, quarterly, twice a year, or once a year. As to why they don't allow everyone to be monthly - it's probably because they get to claw back a fair amount of the equity if people leave.

objclxt 9y ago
> As to why they don't allow everyone to be monthly - it's probably because they get to claw back a fair amount of the equity if people leave. I may be being a little cynical, but if you vest annually or bi-annually you can get a pretty good idea of when your employees are going to leave and use that to plan your crunch periods accordingly. People are rather unlikely to quit the month before the annual vesting date.
- cbanek 9y ago
  I think if companies could actually predict crunch times I'd agree with you, but scheduling is not an easy science.
- logicfiction 9y ago
  To double down on the cynicism, you also need to be sure your employees value your options for this to be relevant.

maxxxxx 9y ago

From what I know the refreshes are typically pretty small.

objclxt 9y ago

Yes, but after the initial grant has vested entirely your opportunities for growth are limited. Here's an example - say I'm hired with 1000 units of stock over four years. Each year I receive a refresher grant of 250 units of stock, again vesting over four years. Once I reach Year 4, my stock compensation stabilizes, assuming my refreshers remain the same (I'm am obviously grossly simplifying - you could be promoted and get larger grants, the company could do badly and your dollar value be significantly reduced). But what you can do, and what the parent is alluding to, is jump ship around year 3-4 and get the company you're going to match your current amount of outstanding stock, meaning your initial grant becomes much higher, and your refreshers do too. At least, that's the idea. It's worked for me. Additionally, although personally I did very well on my refresher grants I know other people at my employer did not. So that's another factor.

kobeya 9y ago
Normally refresher grants are not based on your starting grant, but what you might receive if you were hired for the same position today.
shostack 9y ago
Are you able to put any actual dollar or % amounts against this?
- loeg 9y ago
  It's meaningless alone. It'll need to be higher at roles with a lower base salary or can be lower at roles with a high base salary. Total annual compensation is what you should pay attention to.
deleted 9y ago
[deleted]

ryandrake 9y ago

I've never seen it myself. My understanding is that it's pretty rare.

mercutio2 9y ago

Some companies do small refreshes to almost everyone. Others do performance based refreshes, so job hoppers often think they’re never getting more stock, because they had their eye on the next gig or their side hustle or whatever.

hinkley 9y ago

My memory is fuzzy but the one place I got options that were worth anything, it would have taken me about 8 years to double the stock grant I was given when we were acquired. So I had this big block of initial options of which hundreds of shares vested every quarter, and then dozens of shares of the subsequent grants came due at a slightly different time. To me, the first rule of rewarding someone is to make sure the recipient did all of the work before the reward. If you make them work afterward then it sours the desserts. I would end up holding onto those little blocks until the next batch of original stocks vested because I had to push a bunch of buttons like a monkey (in a UI designed by monkeys) for a couple hundred bucks. Which just reminded me that I could be making more money and a bigger impact working just about anywhere else. And then they cancelled the only project that any of us thought had any strategic value to the company. So my direct manager quit. Then someone else quit. Then I gave about 3 weeks notice, but was the 5th one out the door because 2 other people resigned in the week after I gave mine. In all about 8 people left in something like 12 weeks. Because we all quit right after the end of the fiscal year, we were all owed a bonus from the previous one. When we got the bonus check (mine was a little over 2 month's pay, but the majority of the others got better reviews so got bigger payouts) we went out for beers. Someone, probably me, asked if it was worth it to stay for the last four+ months when things started going sideways. Only one person said yes, out of eight.

sokoloff 9y ago
> To me, the first rule of rewarding someone is to make sure the recipient did all of the work before the reward. If you make them work afterward then it sours the desserts. For executives and directors, I disagree completely. The shareholders are paying them to make and execute decisions that will grow the company (and share price) over a long period of time. The share-based compensation plan should reflect (and help align) that they are being paid to make long-term decisions. Those are inherently "promise/award before the hard work is done" type of grants as I see it. (Why would I pay you more for a decision you've already made or work you already did, unless we're just talking about a modest spot bonus for a job well done?)
- hinkley 9y ago