3 ms·

Speculation: option pools (at least pre-ipo) are generally a fixed %age and therefore relative size. With fewer engineers the ones left get a higher piece of th

Speculation: option pools (at least pre-ipo) are generally a fixed %age and therefore relative size. With fewer engineers the ones left get a higher piece of the pie? Just a guess.

pavlov 4y ago
But will that compensate for the almost inevitable outcome that the next liquidity event will be a massive downround compared to the $44B valuation of the acquisition? Maybe there’s only 25% of employees left to share the pie, but the pie itself is now only worth $10B. That’s not a great incentive when asked to work nights and weekends on capricious initiatives that come and go.
- 411111111111111 4y ago
  It is if stopping to work is equivalent with getting deported though. Great system the US created with h-1b
  - ghaff 4y ago
    The problem is that the following is what is was intended for: "The H-1B program allows companies and other employers in the United States to temporarily employ foreign workers in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent." Note, among other things, the word "temporarily" and the phrase :highly specialized knowledge." The real problem is that H-1Bs are often used by companies in very different ways than their stated purpose.
- texasbigdata 4y ago
  I’ve never received RSUs in a public company but can’t you basically set the strike price at whatever value you want? It’s just a financial instrument after all. NOTE, I’m not arguing for backdating.
  - toast0 4y ago
    RSUs have a strike price of $0 kind of by definition. And they're income when the restriction lapses, and that's complex when the stock is illiquid, so that's not ideal (sometimes, there's a dual restriction with time and liquidity, but that's messy as well) Stock options could have a strike price of whatever, but tax favored stock options need to be granted at fair market value. Granting non-favored options away from FMV needs to be treated as immediate income, which is messy.
eschneider 4y ago
Assume that's true. Ask yourself this question: Is Elon Musk the sort of person who'd fire you just before you vest so he didn't have to pay out?
- texasbigdata 4y ago
  Not sure, but I’d assume I’d be such a rounding error on the cap table that it probably wouldn’t be worth a milisecond of his processing time.
  - eropple 4y ago
    He spends his time complaining on Twitter and hosting faux polls to unban right-wing trolls while misquoting "vox populi, vox dei". He can almost certainly make time for spite.
lucideer 4y ago
That makes the incredibly naïve (but equally incredibly common) that employees are literal resources of equivalent value. In actual fact, excepting "cultural loyalty" (which is usually interrupted in any such large acquisition/disruption event) essential employees are typically the most transient/difficult to retain. Many are not as remuneration-driven (more likely to be comfortable & their competence is often driven by a more vocational motivating factor) & even those who are can negotiate good terms elsewhere with relative ease. This leads to a concentrated brain-drain where the fewer engineers remaining to partake in the pie aren't contributing as much value. That ain't protecting your core.

Speculation: option pools (at least pre-ipo) are generally a fixed %age and therefore relative size. With fewer engineers the ones left get a higher piece of the pie? Just a guess.

pavlov 4y ago

But will that compensate for the almost inevitable outcome that the next liquidity event will be a massive downround compared to the $44B valuation of the acquisition? Maybe there’s only 25% of employees left to share the pie, but the pie itself is now only worth $10B. That’s not a great incentive when asked to work nights and weekends on capricious initiatives that come and go.

411111111111111 4y ago
It is if stopping to work is equivalent with getting deported though. Great system the US created with h-1b
- ghaff 4y ago
  The problem is that the following is what is was intended for: "The H-1B program allows companies and other employers in the United States to temporarily employ foreign workers in occupations that require the theoretical and practical application of a body of highly specialized knowledge and a bachelor’s degree or higher in the specific specialty, or its equivalent." Note, among other things, the word "temporarily" and the phrase :highly specialized knowledge." The real problem is that H-1Bs are often used by companies in very different ways than their stated purpose.
texasbigdata 4y ago
I’ve never received RSUs in a public company but can’t you basically set the strike price at whatever value you want? It’s just a financial instrument after all. NOTE, I’m not arguing for backdating.
- toast0 4y ago
  RSUs have a strike price of $0 kind of by definition. And they're income when the restriction lapses, and that's complex when the stock is illiquid, so that's not ideal (sometimes, there's a dual restriction with time and liquidity, but that's messy as well) Stock options could have a strike price of whatever, but tax favored stock options need to be granted at fair market value. Granting non-favored options away from FMV needs to be treated as immediate income, which is messy.

eschneider 4y ago

Assume that's true. Ask yourself this question: Is Elon Musk the sort of person who'd fire you just before you vest so he didn't have to pay out?

texasbigdata 4y ago
Not sure, but I’d assume I’d be such a rounding error on the cap table that it probably wouldn’t be worth a milisecond of his processing time.
- eropple 4y ago
  He spends his time complaining on Twitter and hosting faux polls to unban right-wing trolls while misquoting "vox populi, vox dei". He can almost certainly make time for spite.

lucideer 4y ago

That makes the incredibly naïve (but equally incredibly common) that employees are literal resources of equivalent value. In actual fact, excepting "cultural loyalty" (which is usually interrupted in any such large acquisition/disruption event) essential employees are typically the most transient/difficult to retain. Many are not as remuneration-driven (more likely to be comfortable & their competence is often driven by a more vocational motivating factor) & even those who are can negotiate good terms elsewhere with relative ease. This leads to a concentrated brain-drain where the fewer engineers remaining to partake in the pie aren't contributing as much value. That ain't protecting your core.