10-Year Exercise Periods Make Sense
dangelo.quora.com
10-Year Exercise Periods Make Sense
1–10 of 149 posts
Re: 10-Year Exercise Periods Make Sense
#2I agree with Adam's post and intensely disagree with A16Z's post on this topic.
I don't think companies should take back stock compensation on a technicality. It'd be silly to even discuss taking back cash compensation when someone leaves a company!
I appreciate Adam starting this trend years ago.
Re: 10-Year Exercise Periods Make Sense
#3Wow I guess since employees should already value most stock options at near zero it's hard to value them any less.
Re: 10-Year Exercise Periods Make Sense
#4I followed this link expecting to see a comment about some sort of "encoding" of the human body relating to long-but-not-indefinite period of physical exercise. Instead it's about stock options.
As the article offered no background, I'm lost as to what is being discussed. In the last 20 years I've never had the same employer for 10 years, so can someone ELI5 what is being discussed? Thanks in advance!
Re: 10-Year Exercise Periods Make Sense
#5I agree with Adam's post and intensely disagree with A16Z's post on this topic. I don't think companies should take back stock compensation on a technicality. It'd be silly to even discuss taking back cash compensation when someone leaves a company! I appreciate Adam starting this trend years ago.
What's your opinion on how an employee should deal with a founder who clearly believes more in the A16Z stance on stock options more than the Adam's? Apart from obvious knee-jerk reactions like "stop working there."
Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all. It is just lost money, from their perspective, and probably annoying to have an employee leave (creating a headache in your life) and take a bunch of equity with them. (And it severely limits an employees negotiating power over time, which can be of benefit to the founder...)
What are some strategies an employee can use to make the point that Adam's perspective is a much more employee-friendly one and, thus, better for the company?
Looking for some perspective.
Re: 10-Year Exercise Periods Make Sense
#6[deleted]
Re: 10-Year Exercise Periods Make Sense
#7I followed this link expecting to see a comment about some sort of "encoding" of the human body relating to long-but-not-indefinite period of physical exercise. Instead it's about stock options. As the article offered no background, I'm lost as to what is being discussed. In the last 20 years I've never had the same employer for 10 years, so can someone ELI5 what is being discussed? Thanks in advance!
If a company grants you stock options as part of your compensation, you need still need to pay to get the stock. That's called exercising the options.
If you leave the company, there is a limited window of time to exercise the option. If you don't exercise it, the stock gets returned back to the company.
This post is favoring that window being long and is responding to blog post favoring that window being short.
Re: 10-Year Exercise Periods Make Sense
#8I followed this link expecting to see a comment about some sort of "encoding" of the human body relating to long-but-not-indefinite period of physical exercise. Instead it's about stock options. As the article offered no background, I'm lost as to what is being discussed. In the last 20 years I've never had the same employer for 10 years, so can someone ELI5 what is being discussed? Thanks in advance!
They're talking about the amount of time you have after leaving a company to exercise the stock options that you were granted, effectively purchasing them at par value. This has huge tax implications, and requires quite a bit of cash on the spot.
Traditionally, the period has been ~90 days, which makes it even harder to weigh your tax options and come up with the $$$$ to exercise the options. Since its expensive, and has a short window of execution, the practice has been viewed by many to be unfair. The Stock Options were a part of your compensation - part of the Risk vs Reward balance you choose when you worked for a startup, and now if you don't have thousands of dollars to spare on a gamble - you forfit those options back to the Company.
By extending the period to 10 years, you have the ability plan accordingly, see if the company will eventually exit, and exercise them when the time is right.
Re: 10-Year Exercise Periods Make Sense
#9I agree with Adam's post and intensely disagree with A16Z's post on this topic. I don't think companies should take back stock compensation on a technicality. It'd be silly to even discuss taking back cash compensation when someone leaves a company! I appreciate Adam starting this trend years ago.
What's your opinion on how an employee should deal with a founder who clearly believes more in the A16Z stance on stock options more than the Adam's? Apart from obvious knee-jerk reactions like "stop working there." Obviously it's in the founder's financial best interest (at least on the very surface level) for employees to not have the option to leave the company with shares at all. It is just lost money, from their…
I don't think anyone but a very early and very senior employee will be able to change a founder/company's perspective on this. The best attempt would be to walk away from the offer and explain explicitly why -- even if that doesn't work for the situation at hand, it will guide the market.
Re: 10-Year Exercise Periods Make Sense
#10I agree with Adam's post and intensely disagree with A16Z's post on this topic. I don't think companies should take back stock compensation on a technicality. It'd be silly to even discuss taking back cash compensation when someone leaves a company! I appreciate Adam starting this trend years ago.
>10-Year Exercise Periods Make Sense
>I agree with Adam's post
>I don't think companies should take back stock compensation on a technicality.
Isn't a 10-year period a technicality?
Anything that can take back compensation is a technicality.
Heh, can't even get a response without downmods.