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You have to know some of the background Google poached windsurf employees and licensed their tech, paying out billions to upper management but apparently offer

You have to know some of the background Google poached windsurf employees and licensed their tech, paying out billions to upper management but apparently offering a fraction of the value of shares This employee chose to stick with windsurf instead of moving to Google Windsurf was then acquired by cognition for an unspecified but probably quite low amount So this employee is now at cognition

crazygringo 1y ago
Thank you, that helps! But so did he keep the shares or take the payout? Is the 1% payout an accurate reflection of Windsurf's value after having lost so many valuable employees? And why didn't he take the Google job? Was the 1% contingent on taking the Google job? But how could it be, since Google doesn't own Windsurf/Cognition? But if it did somehow, did it have a higher paycheck to compensate? Or was it contingent on staying at Windsurf/Cognition? This thing needs an in-depth blog post analysis. The tweet by itself isn't providing even close to the information necessary to understand what's actually going on.
- cyanydeez 1y ago
  the board strokes is: Google should have bought the company. They didnt. They basically bought the employees. They call it a "acquihire". Without these employees, the real value of the company fell, allowing cognition to buy the company. Had the employee taken employement with Google, it's likely their shares in windsurf would have been voided, or otherwise not vested. Who knows, these private corporations are often doing a bunch of shady things to dilute share ownership. In a private company, there's no "real" public valuation of a share, so an employee who has some kind of stake really only has two real options to dump their shares, either through a company buying it (cognition) or the company going public. Without either of these events, it's really difficult, even if there's no contract about it, to sell the shares. So the value of the company took a nose dive in the private market through the hiring of windsurfs principals, and the employee either kept his shares and went with the company, or took a job with google. So the two values are: 1. Stay with Cognition and retain the private market shares of Windsurf and salary 2. Leave cognition, forfeit(?) the shares, get whatever salary google offered So those are the payouts being compared.
  - crazygringo 1y ago
    Thank you very much! So it seems like the crux of the issue still isn't clear, because: > Had the employee taken employement with Google, it's likely their shares in windsurf would have been voided, or otherwise not vested. That doesn't make any sense. The shares are already vested, they legally own them. How could they have been voided? The idea of joining Google resulting in a "1% payout" doesn't seem to make any sense? Why would there even be any payout at all? And is it mandatory? How could it be? And then it also doesn't even seem obviously terrible. If the valuation of Windsurf tanked, then is keeping the shares (now presumably converted to Cognition shares at a rate determined by the purchase?) even a better financial outcome? I agree that Google acquiring the talent rather than buying the company seems shady. But the "1% payout" still isn't making much sense here and needs a lot more details. Because it's still not even clear if the payout is from Google (huh?) or Cognition (why?), or how it could be a mandatory condition of employment at Google.
    - stouset 1y ago
      Vested is not exercised. Options vest, but you have to exercise them to purchase the underlying shares. This is nominally cheap, but from the IRS’ perspective you have just spent $1 to purchase a share worth $100, so that’s $99 of income. Multiply by a large number of options and you can easily have a real multimillion dollar tax bill even though you have no way to sell the shares to recoup their value. Worse, if the company loses its value before you can sell, you’re still out those taxes with zero recourse. It’s an enormous risk. If you leave a company with vested but unexercised shares, you generally forfeit them.
      - crazygringo 1y ago
        Sure, but I'm not really clear on what that has to do with the situation described? And he calls them vested shares though, not vested options, though maybe he's incorrect. And it's not like you forfeit them instantly after leaving anyways. You usually have at least 90 days. And the fact that the value of the company is so much lower now is favorable, if you think the value will recover. But again, none of this has anything to do with the "1% payout" here that is still totally unexplained.
- stickfigure 1y ago
  > I won’t go into detail for legal reasons Probably indicates that there is a non-disparagement agreement as part of this deal. And usually they include a clause which prevents them from publicly acknowledging the existence of the non-disparagement agreement. So we have to read between the lines regarding how he actually feels.

crazygringo 1y ago

Thank you, that helps! But so did he keep the shares or take the payout? Is the 1% payout an accurate reflection of Windsurf's value after having lost so many valuable employees? And why didn't he take the Google job? Was the 1% contingent on taking the Google job? But how could it be, since Google doesn't own Windsurf/Cognition? But if it did somehow, did it have a higher paycheck to compensate? Or was it contingent on staying at Windsurf/Cognition? This thing needs an in-depth blog post analysis. The tweet by itself isn't providing even close to the information necessary to understand what's actually going on.

cyanydeez 1y ago
the board strokes is: Google should have bought the company. They didnt. They basically bought the employees. They call it a "acquihire". Without these employees, the real value of the company fell, allowing cognition to buy the company. Had the employee taken employement with Google, it's likely their shares in windsurf would have been voided, or otherwise not vested. Who knows, these private corporations are often doing a bunch of shady things to dilute share ownership. In a private company, there's no "real" public valuation of a share, so an employee who has some kind of stake really only has two real options to dump their shares, either through a company buying it (cognition) or the company going public. Without either of these events, it's really difficult, even if there's no contract about it, to sell the shares. So the value of the company took a nose dive in the private market through the hiring of windsurfs principals, and the employee either kept his shares and went with the company, or took a job with google. So the two values are: 1. Stay with Cognition and retain the private market shares of Windsurf and salary 2. Leave cognition, forfeit(?) the shares, get whatever salary google offered So those are the payouts being compared.
- crazygringo 1y ago
  Thank you very much! So it seems like the crux of the issue still isn't clear, because: > Had the employee taken employement with Google, it's likely their shares in windsurf would have been voided, or otherwise not vested. That doesn't make any sense. The shares are already vested, they legally own them. How could they have been voided? The idea of joining Google resulting in a "1% payout" doesn't seem to make any sense? Why would there even be any payout at all? And is it mandatory? How could it be? And then it also doesn't even seem obviously terrible. If the valuation of Windsurf tanked, then is keeping the shares (now presumably converted to Cognition shares at a rate determined by the purchase?) even a better financial outcome? I agree that Google acquiring the talent rather than buying the company seems shady. But the "1% payout" still isn't making much sense here and needs a lot more details. Because it's still not even clear if the payout is from Google (huh?) or Cognition (why?), or how it could be a mandatory condition of employment at Google.
  - stouset 1y ago
    Vested is not exercised. Options vest, but you have to exercise them to purchase the underlying shares. This is nominally cheap, but from the IRS’ perspective you have just spent $1 to purchase a share worth $100, so that’s $99 of income. Multiply by a large number of options and you can easily have a real multimillion dollar tax bill even though you have no way to sell the shares to recoup their value. Worse, if the company loses its value before you can sell, you’re still out those taxes with zero recourse. It’s an enormous risk. If you leave a company with vested but unexercised shares, you generally forfeit them.
    - crazygringo 1y ago
      Sure, but I'm not really clear on what that has to do with the situation described? And he calls them vested shares though, not vested options, though maybe he's incorrect. And it's not like you forfeit them instantly after leaving anyways. You usually have at least 90 days. And the fact that the value of the company is so much lower now is favorable, if you think the value will recover. But again, none of this has anything to do with the "1% payout" here that is still totally unexplained.
stickfigure 1y ago
> I won’t go into detail for legal reasons Probably indicates that there is a non-disparagement agreement as part of this deal. And usually they include a clause which prevents them from publicly acknowledging the existence of the non-disparagement agreement. So we have to read between the lines regarding how he actually feels.