4 ms·
It's also an incentive for the company to fire all of those 15 employees.
by zck 13y ago
It's also an incentive for the company to fire all of those 15 employees.
- lucisferre 13y agoI have a feeling this would be ill advised outside of at-will states.
- the_watcher 13y agoIf the employee isn't adding value that is >= to their compensation, there is always an incentive to fire them. The point of this is to encourage those providing a value greater than the value of the DSP to stick around.
- notahacker 13y agoThere's unique factors at play here, like the fact that an early-hire CTO can increase his personal equity stake by 50% a couple of months before IPO by persuading the board that five of the first few developers who've worked at sub-market salaries for the past six years are superfluous to requirements. The whole point of options and a vesting schedule is the assumption that employee number 5 contributes a lot more to the value of the company in those early years than they get paid for it. This system incentivises the firing of people who add proportionally less value to a 1000 person company than they did to a 10 person; i.e most developers, including those who have more than justified their compensation in the past and totally deserve their current salary.
- danielrhodes 13y agoThere could easily be a trigger for this where if the company cancels their end of the at-will agreement, the equity is deemed to vest at a certain rate.
- deleted 13y ago[deleted]
- johnrob 13y agoThat just turns it into what we were getting away from: vested option grants.
- mherdeg 13y agoOf course that incentive is not unique to this equity structure — see "Zynga Leans On Some Workers to Surrender Pre-IPO Shares", Wall Street Journal, 10 November 2011.