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I get this in theory, but there are also tax implications here, and it requires a lot of extra effort. I am not trying to excuse companies from not doing this,

I get this in theory, but there are also tax implications here, and it requires a lot of extra effort. I am not trying to excuse companies from not doing this, but its not as easy as just saying you will. Options are typically ISOs, but by law, you have a max of 90 days to exercise an ISO after you leave. The only way around this is to instead offer NSOs, which have higher tax implications. Third, you could offer ISO's, then convert them into NSOs when you leave, but its a lot of extra effort and paperwork.

birken 6y ago
What about all the extra work every departing employee (either voluntarily or not) has to do in the 90 days after they leave to decide whether or not they want to exercise their options, and if so be forced to spend and risk potentially lots of their own money to do it. Founders spend a lot of time and effort making sure their equity is right and structured they way they want it, they should at least put in the minimal amount of effort to ensure their employees' stock compensation is structured in a way so it isn't going to waste.
deleted 6y ago
[deleted]
foobiekr 6y ago
"A lot" really is relative. Relative to health care, office space, etc. etc. this is not that big a deal, and you put most of this onto your law firm, which has done it 100 times. There's some cost, but not that bad. The reality is companies don't do this because they don't want to. It's not actually that different from setting up a (decent provider, with or without match) 401k plan. Companies that don't do it are like that because they didn't care.