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Is he misusing the definition for "golden handcuffs"? From my understanding, the issue is that an employee has 90 days to exercise one's options. Most can't a
by darod 5y ago
Is he misusing the definition for "golden handcuffs"? From my understanding, the issue is that an employee has 90 days to exercise one's options. Most can't afford to do so if the company isn't public due to the cost to exercise and the tax burden. I'm not sure how this new options structure addresses that.
- itake 5y agoThere are many forms of golden handcuffs. Public companies gives you X dollars worth of shares at the current price of your start date over 4 years. Meaning if today the shares are worth $1 and they want to give you $100k of shares, then you get 100k shares over 4 years. If after 2 years, the unvested shares (50k) 3x in value, ($150k) you have to stay to continue to earn the same number of shares, but are worth 3x what they originally were.
- compiler-guy 5y agoThe term isn't very precise, but is generally taken to mean "promised future compensation". The 90-day rule for exercising illiquid options absolutely is one form of promised future compensation, but so are future options clearly in the money, or even highly-appreciated real shares about to vest. So he isn't misusing the definition, just using the broadest possible sense of the term.
- ska 5y ago> Is he misusing the definition for "golden handcuffs"? No; in general "golden handcuffs" refer to any situation where future financial compensation counterbalances any desire to leave. You give one example, but there are lots of scenarios (it could as easily be pension qualification, or earn-out rights, or whatever).