4 ms·

I think the article misses the point: are we now in an era where you actually expect to get stock when you join a company? As a former Toptal employee: IMHO th

by bnt 7y ago

I think the article misses the point: are we now in an era where you actually expect to get stock when you join a company? As a former Toptal employee: IMHO the co-founder in question was widely regarded as a horrible manager, often pushing people to burnout and generally imposing a culture of secrecy and mistrust. The VPs they ousted were nothing better. I personally went through several burnouts while there, but also that was a springboard to a much better career afterwards. Yes, we've put in 9/9/6 for years in the founding years, but we were also compensated quite generously.

marcinzm 7y ago
>I think the article misses the point: are we now in an era where you actually expect to get stock when you join a company? If you join with the expectation of stock or are sold on stock as part of your package then yes. Based on the article, people were offered stock contingent on another funding round. That round never happened. If they were sold on promises of getting that stock and a round happening then they're right to be pissed. This has, as I read it, nothing to do with a company that just decides to not give out promises of stock in any form.
- derefr 7y ago
  > If they were sold on promises of getting that stock and a round happening then they're right to be pissed. Does a statement of the form "you'll get X if condition Y" imply "we will seek condition Y so that you can get your X"? I don't think that it does. For example: companies offer dividends if they make a profit. But that doesn't imply that the company will seek to make a profit in order to confer dividends. It's nice when they do, but there's no implied promise of working toward profitability just so that the dividend condition will apply.
  - marcinzm 7y ago
    That depends on what exactly the company said to candidates and how upfront they were about the terms. In my experience companies do far more selling than just sending out an offer. Furthermore, the offer in my experience doesn't include the paperwork for equity unless you request to review it.
    - tmarman 7y ago
      Every single employment offer I've sent or received that included equity stated so in the offer letter, expressed either as a % or an absolute number of shares.
      - marcinzm 7y ago
        Did it include the detailed paperwork for the equity which would include all terms such as requiring conversion to a corporation? Or was it just a number that you assumed didn't have any gotcha clauses attached?
ryandrake 7y ago
I’d say at about half of my jobs (tech) compensation included some equity and at about half it did not. I wouldn’t say it’s expected but it’s nice when you get it. When employees don’t have an equity stake, it can make for awkward moments. I’m reminded of a company all-hands, where the CEO announced a record quarter, and apparently the company’s stock just went up 60% or something. The handful of senior execs who did have equity cheered and did some lame hi-5’s while the rest of the employees shrugged and silently looked at each other like “should we be applauding now?” Awk—ward...!
decebalus1 7y ago
> are we now in an era where you actually expect to get stock when you join a company? Yes, the last time I checked we moved on from the feudal era, at least in principle. There should be at least the illusion that employees have skin in the game by giving them a stake in the company.
walshemj 7y ago
I would expect to get stock if I joined a FTSE 100 company, if not most of the FTSE 350 as well.
- tigershark 7y ago
  Why? I worked in some FTSE100 and Fortune 50 in UK and you just get salary. But you can usually buy stocks at a discount.
  - walshemj 7y ago
    Share Save schemes are very tax advantaged and zero risk share options in the UK I have made tens of thousands and made e made over 100,000 effectively tax free. I think you missed out there
ravitation 7y ago
Compensated quite generously in an absolute sense, but relative to other early employees, who worked just as hard, at companies with similar current valuations and who did get equity? That seems unlikely. Also, if I were an early employee at a startup, yes, I would expect equity.
- marcinzm 7y ago
  Most startups, by a large margin, fail either outright or equity wise (ie: sell for less than was put in). Many more sell for only a moderate amount which gives a relatively small equity payout (after dilution, etc.). The average compensation of employees at other similar companies was probably lower once you account for all that. You can't judge the outcome of buying lottery tickets by only looking at the winners.
zawerf 7y ago
I don't know if it's still true, but Netflix supposedly offers a really high base salary with no equity. I think the logic is that you can just buy the stock yourself with the higher salary if you believed in the company enough to want equity.
- the_watcher 7y ago
  Netflix still does this - they pay top of the market in cash, no stock, and encourage employees to bring them competing offers so that they have even more hard data on what the top of the market is for a Netflix employee. They also have an ESOP, so you do still have some privileged access to the stock.
- jedberg 7y ago
  That's not exactly how it works. They give you a total comp number, and then you choose the cash/equity ratio yourself, which you can change each year. A lot of people chose the all cash option because they didn't understand there equity option, so they changed it to give everyone a little bit of equity regardless, but you can still opt to get extra equity in lieu of cash, and change that election every year. I think it is an amazing plan. I was able to choose more equity because I had a working wife and no kids. Others chose more cash. One guy chose 100% equity, and is now retired.
  - hnbroseph 7y ago
    > One guy chose 100% equity, and is now retired. being able to choose 100% equity would suggest a particular level of financial independence before even starting. how long did they work without a salary? did they regularly sell equity as a salary-replacement?
    - chucksmash 7y ago
      Or perhaps a working partner and a willingness to get by on one income. Know a couple who did this in NYC for a couple of years on non-dev salaries and the trade-off definitely opened doors for them.

by bnt 7y ago

marcinzm 7y ago

>I think the article misses the point: are we now in an era where you actually expect to get stock when you join a company? If you join with the expectation of stock or are sold on stock as part of your package then yes. Based on the article, people were offered stock contingent on another funding round. That round never happened. If they were sold on promises of getting that stock and a round happening then they're right to be pissed. This has, as I read it, nothing to do with a company that just decides to not give out promises of stock in any form.

derefr 7y ago
> If they were sold on promises of getting that stock and a round happening then they're right to be pissed. Does a statement of the form "you'll get X if condition Y" imply "we will seek condition Y so that you can get your X"? I don't think that it does. For example: companies offer dividends if they make a profit. But that doesn't imply that the company will seek to make a profit in order to confer dividends. It's nice when they do, but there's no implied promise of working toward profitability just so that the dividend condition will apply.
- marcinzm 7y ago
  That depends on what exactly the company said to candidates and how upfront they were about the terms. In my experience companies do far more selling than just sending out an offer. Furthermore, the offer in my experience doesn't include the paperwork for equity unless you request to review it.
  - tmarman 7y ago
    Every single employment offer I've sent or received that included equity stated so in the offer letter, expressed either as a % or an absolute number of shares.
    - marcinzm 7y ago
      Did it include the detailed paperwork for the equity which would include all terms such as requiring conversion to a corporation? Or was it just a number that you assumed didn't have any gotcha clauses attached?

ryandrake 7y ago

I’d say at about half of my jobs (tech) compensation included some equity and at about half it did not. I wouldn’t say it’s expected but it’s nice when you get it. When employees don’t have an equity stake, it can make for awkward moments. I’m reminded of a company all-hands, where the CEO announced a record quarter, and apparently the company’s stock just went up 60% or something. The handful of senior execs who did have equity cheered and did some lame hi-5’s while the rest of the employees shrugged and silently looked at each other like “should we be applauding now?” Awk—ward...!

decebalus1 7y ago

> are we now in an era where you actually expect to get stock when you join a company? Yes, the last time I checked we moved on from the feudal era, at least in principle. There should be at least the illusion that employees have skin in the game by giving them a stake in the company.

walshemj 7y ago

I would expect to get stock if I joined a FTSE 100 company, if not most of the FTSE 350 as well.

tigershark 7y ago
Why? I worked in some FTSE100 and Fortune 50 in UK and you just get salary. But you can usually buy stocks at a discount.
- walshemj 7y ago
  Share Save schemes are very tax advantaged and zero risk share options in the UK I have made tens of thousands and made e made over 100,000 effectively tax free. I think you missed out there

ravitation 7y ago

Compensated quite generously in an absolute sense, but relative to other early employees, who worked just as hard, at companies with similar current valuations and who did get equity? That seems unlikely. Also, if I were an early employee at a startup, yes, I would expect equity.

marcinzm 7y ago
Most startups, by a large margin, fail either outright or equity wise (ie: sell for less than was put in). Many more sell for only a moderate amount which gives a relatively small equity payout (after dilution, etc.). The average compensation of employees at other similar companies was probably lower once you account for all that. You can't judge the outcome of buying lottery tickets by only looking at the winners.

zawerf 7y ago

I don't know if it's still true, but Netflix supposedly offers a really high base salary with no equity. I think the logic is that you can just buy the stock yourself with the higher salary if you believed in the company enough to want equity.

the_watcher 7y ago
Netflix still does this - they pay top of the market in cash, no stock, and encourage employees to bring them competing offers so that they have even more hard data on what the top of the market is for a Netflix employee. They also have an ESOP, so you do still have some privileged access to the stock.
jedberg 7y ago
That's not exactly how it works. They give you a total comp number, and then you choose the cash/equity ratio yourself, which you can change each year. A lot of people chose the all cash option because they didn't understand there equity option, so they changed it to give everyone a little bit of equity regardless, but you can still opt to get extra equity in lieu of cash, and change that election every year. I think it is an amazing plan. I was able to choose more equity because I had a working wife and no kids. Others chose more cash. One guy chose 100% equity, and is now retired.
- hnbroseph 7y ago
  > One guy chose 100% equity, and is now retired. being able to choose 100% equity would suggest a particular level of financial independence before even starting. how long did they work without a salary? did they regularly sell equity as a salary-replacement?
  - chucksmash 7y ago
    Or perhaps a working partner and a willingness to get by on one income. Know a couple who did this in NYC for a couple of years on non-dev salaries and the trade-off definitely opened doors for them.