9 ms·

Thick, jewel-encrusted platinum handcuffs: > But there are a few catches. Those shares will fully vest over eight years with a one-year cliff, meaning employee

Thick, jewel-encrusted platinum handcuffs: > But there are a few catches. Those shares will fully vest over eight years with a one-year cliff, meaning employees get nothing if they leave before the first year. Because the stock grant contains a type of share called a long-term 50 — which gives employees startling voting power at 50 votes per share — employees need to notify the company of their intent to sell. They then must wait a minimum of 50 months to sell. So the soonest an employee could sell their first tranche is after five years. If an employee decides to quit, their shares stop vesting, but they can still sell their vested shares after 50 months. Overall, feels mutually beneficial, but why surprise everyone? SEC thing?

actually_a_dog 5y ago
Mutually beneficial? Forget the vesting schedule, the fact that these shares aren't sellable for 5 years means you get stuck with an illiquid asset you still have to pay taxes on at grant time. That doesn't sound like a good deal to me. With regular stock compensation, I can sell a portion of what I've been granted immediately to cover my taxes. With these, I can't.
twalla 5y ago
I'd be interested in what that intent to sell stuff looks like. Do I have to specify how many shares I intend to sell and when I intend to sell them? Can I change my mind about selling them down the line?
runnerup 5y ago
Those seem like pretty onerous restrictions compared to usual vesting schedules.
deleted 5y ago
[deleted]
curryst 5y ago
My guess is so that no one would get pissed off at the rules that come with the stock grant and use the extra comp to get an equivalent per-year salary from someone else. If you get a million dollar stock grant that vests over 8 years, that's $125,000 in stock per year. Startups don't usually pay super well, so I wouldn't be surprised if you could get something equivalent from Google or Facebook. Especially if you come in with the stock grant paperwork, effectively making that your current compensation. You could maybe even get a raise. They only have 140 employees; if 10 get pissed off an leave, that's 7% turnover right before their IPO, which is bad. This will still likely lock a lot of their employees in, without the risk of them quitting right before the IPO.

actually_a_dog 5y ago

Mutually beneficial? Forget the vesting schedule, the fact that these shares aren't sellable for 5 years means you get stuck with an illiquid asset you still have to pay taxes on at grant time. That doesn't sound like a good deal to me. With regular stock compensation, I can sell a portion of what I've been granted immediately to cover my taxes. With these, I can't.

twalla 5y ago

I'd be interested in what that intent to sell stuff looks like. Do I have to specify how many shares I intend to sell and when I intend to sell them? Can I change my mind about selling them down the line?

runnerup 5y ago

Those seem like pretty onerous restrictions compared to usual vesting schedules.

deleted 5y ago

[deleted]

curryst 5y ago

My guess is so that no one would get pissed off at the rules that come with the stock grant and use the extra comp to get an equivalent per-year salary from someone else. If you get a million dollar stock grant that vests over 8 years, that's $125,000 in stock per year. Startups don't usually pay super well, so I wouldn't be surprised if you could get something equivalent from Google or Facebook. Especially if you come in with the stock grant paperwork, effectively making that your current compensation. You could maybe even get a raise. They only have 140 employees; if 10 get pissed off an leave, that's 7% turnover right before their IPO, which is bad. This will still likely lock a lot of their employees in, without the risk of them quitting right before the IPO.