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25/year used to be the norm, but is less so these days. Now more and more are moving towards a heavier backloaded vesting schedule. Schedules that are 10/20/30

25/year used to be the norm, but is less so these days. Now more and more are moving towards a heavier backloaded vesting schedule. Schedules that are 10/20/30/40 or 15/25/25/35 are more and more common at big tech co. It can make sense as well, if it takes you a certain period of time to ramp up, once you've ramped up you contribute more value and they want to retain you more there. Yes it is a mechanism to lock you in, but it's not wrong to see why the employer would want to do it. Though yes, you can also get stuck in crap work because they know they can get away with it. Then it's up to you how much you want to deal with that.

Bartweiss 7y ago
On some level that makes a lot of sense. If you're several years from IPO (or expected acquisition), 10/20/30/40 won't do any harm to people who stick around until the stock has value, and it helps keep short-turnover employees from eating away at the total stock. Flat vesting sort of implies that four 1-year tenures are just as desirable as one 4-year tenure. And if people can get a better cash-compensation raise by switching jobs, then staying 4 years is probably less profitable than staying 2-3. (Of course, companies could also cure that by making internal raises competitive with job-transfer raises...) Although I do find .../30/40 a bit stranger. If somebody leaves at 3 years, you save 15% of their stock compared to flat vesting. But if the extra stock gets them to stick around, they're obviously going to leave after 4 when their effective compensation plummets. It's not obvious to me that pushing employees with no long-term intent to stick around and claim more stock is a winning move.
edmundsauto 7y ago
From my reading, Snap was already public when the author joined. Is that right? I've heard that 25/25/25/25 is the standard at most of the public tech companies.

Bartweiss 7y ago

On some level that makes a lot of sense. If you're several years from IPO (or expected acquisition), 10/20/30/40 won't do any harm to people who stick around until the stock has value, and it helps keep short-turnover employees from eating away at the total stock. Flat vesting sort of implies that four 1-year tenures are just as desirable as one 4-year tenure. And if people can get a better cash-compensation raise by switching jobs, then staying 4 years is probably less profitable than staying 2-3. (Of course, companies could also cure that by making internal raises competitive with job-transfer raises...) Although I do find .../30/40 a bit stranger. If somebody leaves at 3 years, you save 15% of their stock compared to flat vesting. But if the extra stock gets them to stick around, they're obviously going to leave after 4 when their effective compensation plummets. It's not obvious to me that pushing employees with no long-term intent to stick around and claim more stock is a winning move.

edmundsauto 7y ago

From my reading, Snap was already public when the author joined. Is that right? I've heard that 25/25/25/25 is the standard at most of the public tech companies.