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Handcuffed to Uber

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Re: Handcuffed to Uber

#101

Post by kelukelugames »

hkmurakami wrote: post #90
kelukelugames wrote: post #29

Earlier quoted context omitted.

I read the Pinterest policy last year and ask my CEO about doing something similar during a company meeting. He just laughed. Then he apologized the next meeting for misunderstanding the question and still said no. I left the company.

Frankly institutional investors still have leverage over founding teams, and unless the company is a "darling" that has investors fighting for cap space, being "nonstandard" will be a possible liability. Laughing at the question is obviously uncalled for, but there are legitimate cause for concern for adopting such policies. Currently, late stage high growth companies and YC companies are the two segments best positi…

Employees should have more rights. I wish we could make this standard.

Re: Handcuffed to Uber

#102

Post by dmnd »

hkmurakami wrote: post #94
dmnd wrote: post #62

Earlier quoted context omitted.

Here's a list of such companies with extended exercise windows: https://github.com/holman/extended-exercise-windows Disclaimer: I work at Flexport which has a ten-year window.

I recently learned that Instacart has a 7 year exercise window, and they are not on this list.

Send a PR?

Re: Handcuffed to Uber

#103

Post by redshirtrob »

jsprogrammer wrote: post #19
adam-a wrote: post #3

I've not been in the position of buying options before, but is that really how the tax system works? I understand you have to pay tax on income from shares, but if you're buying shares you haven't had any income from them at that point right? I would have thought you'd just pay tax on any money you received when you sold the shares. Curious to know if that's how it works in the UK as well as the US, anyone have any p…

The problem isn't with the tax system, but the corporate system. Companies are giving out time-limited stock buying privilege to employees instead of direct ownership. Additionally, some companies can even revoke the privilege through termination of employment agreements. If employees were treated as full owners, there wouldn't be a problem.

I don't disagree with you that the problem is with the corporate system, but it's also made significantly worse by the unfavorable tax treatment.

If the IRS didn't require you to realize gains on the spread when exercising, then a lot of these issues would dissolve. That's not to say folks wouldn't find other ways to restrict employee ownership.

Re: Handcuffed to Uber

#104

Post by toomuchtodo »

kelukelugames wrote: post #101
hkmurakami wrote: post #90

Earlier quoted context omitted.

Frankly institutional investors still have leverage over founding teams, and unless the company is a "darling" that has investors fighting for cap space, being "nonstandard" will be a possible liability. Laughing at the question is obviously uncalled for, but there are legitimate cause for concern for adopting such policies. Currently, late stage high growth companies and YC companies are the two segments best positi…

Employees should have more rights. I wish we could make this standard.

YC could use their leverage to do so, if they were so inclined. The only other option is for tech employees not to take jobs at firms with less-than-ideal equity terms.

Re: Handcuffed to Uber

#105

Post by adrenalinelol »

iamleppert wrote: post #73

What happens if they decide to keep the company private? Travis, the CEO of Uber, has stated many times he feels like going public isn't needed anymore because of all the extreme amounts of capital available in the private market. And, they have found a spigot on the economy that can provide for returns for these private equity investors. So why even go public? To me, this just seems like a well thought out plan to k…

Given Uber's general demeanor towards its drivers this wouldn't surprise me they'd try something like this towards its engineering/business talent.

Re: Handcuffed to Uber

#106

Post by giaour »

xiaoma wrote: post #75
ploxiln wrote: post #72

Earlier quoted context omitted.

"indentured servants"? That's ridiculous - startup tech workers are paid well compared to the average person, and they face no financial penalties for leaving their jobs if they do not exercise their stock options. They do face the gnawing possibility that they could be rich , if only they could sell immediately, or keep the options for later, or or or ... if only! But they can always just find another reasonably int…

You disagree in terms of diction. It was an analogy, after all. History doesn't repeat itself. It rhymes. Do you actually support the practice from an ethical standpoint? Employees are recruited to start-ups with equity. That's a core part of their compensation for their work (for which they likely could have received more salary from Google, Amazon, Facebook, etc). Then after they've already done the work , that com…

Options are inherently risky and should be accepted as compensation with the knowledge that there is a non-zero chance that they might turn out to be worth nothing. What's described in the article is an interesting way for those options to be effectively worthless, but it's not materially different (for an option-holding employee without unlimited means) from Uber going bankrupt or having all unvested options cancelled as part of an acquisition.

If an employee wants guaranteed compensation, they can negotiate for a cash-only package. If they want stock-based compensation that is not vulnerable to this particular loophole, they can go work for a publicly traded company that hands out RSUs.

Re: Handcuffed to Uber

#107

Post by zenlikethat »

xiaoma wrote: post #95
CamperBob2 wrote: post #88

Earlier quoted context omitted.

You disagree in terms of diction. No, there really is a pretty massive material difference between a startup employee and an indentured servant. It takes extreme naiveté or extreme privilege to confuse these two concepts.

They weren't literally "handcuffed" either. Have you ever used the term "piracy" to describe unauthorized copying rather than attacking and plundering ships on the high seas?

Actual indentured servants were / are treated far far worse than the average startup employee. Besides that, no one forces employees to accept equity in lieu of decent salary. Comparing startup employees to indentured servants is a horrifyingly privileged way to frame the topic.

Re: Handcuffed to Uber

#108

Post by giaour »

xiaoma wrote: post #81
gogopuppygogo wrote: post #77

Earlier quoted context omitted.

As long as the employee's enter into the agreement with full transparency that this is how the compensation works then it's completely fair. This isn't the result of some kind of secret court deciding that it's how a company should pay employees. Adults are consenting to this arrangement. There is only so much "fair" to be had in business. It's not like there aren't 1,000 other "mini ubers" that want to own the marke…

> "As long as the employee's enter into the agreement with full transparency that this is how the compensation works then it's completely fair." That's literally the logic that was used to justify indentured servitude.

I don't think anyone believes that the issue with indentured servitude is that it was enforced by contract. As a society, we have decided that there are certain things you can't sign away (e.g., your freedom) and there are certain things you can (e.g., your right to exchange an illiquid asset for cash).

The GP's point is that calling this arrangement "indentured servitude" is more than a little dramatic.

Re: Handcuffed to Uber

#109

Post by giaour »

xiaoma wrote: post #95
CamperBob2 wrote: post #88

Earlier quoted context omitted.

You disagree in terms of diction. No, there really is a pretty massive material difference between a startup employee and an indentured servant. It takes extreme naiveté or extreme privilege to confuse these two concepts.

They weren't literally "handcuffed" either. Have you ever used the term "piracy" to describe unauthorized copying rather than attacking and plundering ships on the high seas?

Yes, they were literally handcuffed.

Re: Handcuffed to Uber

#110

Post by zenlikethat »

kelukelugames wrote: post #101
hkmurakami wrote: post #90

Earlier quoted context omitted.

Frankly institutional investors still have leverage over founding teams, and unless the company is a "darling" that has investors fighting for cap space, being "nonstandard" will be a possible liability. Laughing at the question is obviously uncalled for, but there are legitimate cause for concern for adopting such policies. Currently, late stage high growth companies and YC companies are the two segments best positi…

Employees should have more rights. I wish we could make this standard.

Employees have plenty of rights, you're talking about giving them additional privileges. No one forces people to take equity compensation instead of salary and as long as employees continue to do so the practice will continue.
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