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In the past a lot of options would expire if you didn’t exercise them within eg. 90 days of leaving. And exercising could be really expensive. Speculation: may

In the past a lot of options would expire if you didn’t exercise them within eg. 90 days of leaving. And exercising could be really expensive. Speculation: maybe the options they earn when they work there have some provision like this. In return for the NDA the options get extended.

NewJazz 2y ago
Options aren't vested equity though.
- PNewling 2y ago
  ... They definitely can be. When I worked for a small biotech company all of my options had a tiered vesting schedule.
  - NewJazz 2y ago
    They aren't equity no matter what though? They can be vested, I realize that.
  - _heimdall 2y ago
    Options aren't equity, they're only the option to buy equity at a specified price. Vesting just means you can actually buy the shares at the set strike pice. For example, you may join a company and be given options to buy 10,000 shares at $5 each with a 2 year vesting schedule. They may begin vesting immediately, meaning you can buy 1/24th of the total options each month (or 614 shares). Its also common for a delay up front where no options vest until you've been with the company for say 6 or 12 months. Until an option vests you don't own anything. Once it vests, you still have to buy the shares by exercising the option at the $5 per share price. When you leave, most companies have a deadline on the scale of a few months where you have to either buy all vested shares or forfeit them and lose the stock options.
    - teaearlgraycold 2y ago
      > buy all vested shares The last time I did this I didn't have to buy all of the shares.
      - lazyasciiart 2y ago
        I think they mean that you had to buy all the ones you wanted to keep.
        ergocoder 2y ago
        That is tautological... You buy what you want to own???
        StackRanker3000 2y ago
        The point being made is that it isn’t all or nothing, you can buy half the vested options and forfeit the rest, should you want to.
        Hnrobert42 2y ago
        Wait, wait. Who is on first?
        d4704 2y ago
        We’d usually point people here to get a better overview of how options work: https://carta.com/learn/equity/stock-options/ https://carta.com/learn/equity/stock-options/
        Taniwha 2y ago
        There can be an advantage to not exercising: it causes a taxable event the IRS will want a cut of the difference between your exercise value and the current valuation, it requires you to commit real money to buy shares that may never be worth anything .... And there are advantages to exercising: many (most?) companies take back unexercised shares a few weeks/months after you leave, it kicks in a CGT start date, so you can end up paying a lower CGT tax when you eventually sell You need to understand all this stuff before you make a choice that's right for you
  - quickthrowman 2y ago
    Re-read the post you’re replying to. They said options are not vested equity, which they aren’t. You still need to exercise an option that has vested to purchase the equity shares. They did not say “options cannot get granted on a tiered vesting schedule”, probably because that isn’t true, as options can be granted with a tiered vesting schedule.
- deleted 2y ago
  [deleted]
brudgers 2y ago
My unreliable memory is Altman was ( once? ) in favor of extending the period for exercising options. I could be wrong of course but it is consistent with my impression that making other people rich is among his motivations. Not the only one of course. But again I could be wrong.
- resonious 2y ago
  Wouldn't be too surprised if he changed his mind since then. He is in a very different position now!
  - brudgers 2y ago
    Unless a PTEP (Post Termination Exercise Period) beyond the ordinary three months was on offer, there probably wouldn't be a story because the kind of people OpenAI hires would tend to be adverse to working at a place with a PTEP less than three months. Or not, I could be wrong.

NewJazz 2y ago

Options aren't vested equity though.

PNewling 2y ago
... They definitely can be. When I worked for a small biotech company all of my options had a tiered vesting schedule.
- NewJazz 2y ago
  They aren't equity no matter what though? They can be vested, I realize that.
- _heimdall 2y ago
  Options aren't equity, they're only the option to buy equity at a specified price. Vesting just means you can actually buy the shares at the set strike pice. For example, you may join a company and be given options to buy 10,000 shares at $5 each with a 2 year vesting schedule. They may begin vesting immediately, meaning you can buy 1/24th of the total options each month (or 614 shares). Its also common for a delay up front where no options vest until you've been with the company for say 6 or 12 months. Until an option vests you don't own anything. Once it vests, you still have to buy the shares by exercising the option at the $5 per share price. When you leave, most companies have a deadline on the scale of a few months where you have to either buy all vested shares or forfeit them and lose the stock options.
  - teaearlgraycold 2y ago
    > buy all vested shares The last time I did this I didn't have to buy all of the shares.
    - lazyasciiart 2y ago
      I think they mean that you had to buy all the ones you wanted to keep.
      - ergocoder 2y ago
        That is tautological... You buy what you want to own???
        StackRanker3000 2y ago
        The point being made is that it isn’t all or nothing, you can buy half the vested options and forfeit the rest, should you want to.
        Hnrobert42 2y ago
        Wait, wait. Who is on first?
        d4704 2y ago
        We’d usually point people here to get a better overview of how options work: https://carta.com/learn/equity/stock-options/ https://carta.com/learn/equity/stock-options/
        Taniwha 2y ago
        There can be an advantage to not exercising: it causes a taxable event the IRS will want a cut of the difference between your exercise value and the current valuation, it requires you to commit real money to buy shares that may never be worth anything .... And there are advantages to exercising: many (most?) companies take back unexercised shares a few weeks/months after you leave, it kicks in a CGT start date, so you can end up paying a lower CGT tax when you eventually sell You need to understand all this stuff before you make a choice that's right for you
- quickthrowman 2y ago
  Re-read the post you’re replying to. They said options are not vested equity, which they aren’t. You still need to exercise an option that has vested to purchase the equity shares. They did not say “options cannot get granted on a tiered vesting schedule”, probably because that isn’t true, as options can be granted with a tiered vesting schedule.
deleted 2y ago
[deleted]

brudgers 2y ago

My unreliable memory is Altman was ( once? ) in favor of extending the period for exercising options. I could be wrong of course but it is consistent with my impression that making other people rich is among his motivations. Not the only one of course. But again I could be wrong.

resonious 2y ago
Wouldn't be too surprised if he changed his mind since then. He is in a very different position now!
- brudgers 2y ago
  Unless a PTEP (Post Termination Exercise Period) beyond the ordinary three months was on offer, there probably wouldn't be a story because the kind of people OpenAI hires would tend to be adverse to working at a place with a PTEP less than three months. Or not, I could be wrong.