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Ask HN: What happens with stock grants for Twitter employees?

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Re: Ask HN: What happens with stock grants for Twitter employees?

#61

Post by xyzzy21 »

binarymax wrote: post #18
helsinkiandrew wrote: post #3

https://www.nytimes.com/2022/04/25/technology/twitter-employ... "At the meeting with employees on Monday, executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits p…

This is the best source, however I’m hardened and cynical and what execs “assure” in a meeting has no bearing on what they’ll do in 6 months.

Just as the board and executives has fiduciary obligations to shareholders, employee option holders fall into that population as well. There are legal incentives/threats against not handling it fairly.

The rule of law is a good thing.

Re: Ask HN: What happens with stock grants for Twitter employees?

#62

Post by pc86 »

simonebrunozzi wrote: post #39
sofixa wrote: post #19

Earlier quoted context omitted.

If they're even there in 6 months. Musk can just fire them all and do whatever.

YMMV, but that's what lawyers are for. Not the action of a single individual necessarily, but a group of disgruntled employees can pool their resources and hire a law firm to right a wrong. It's usually worth it when the "wrong" is big enough.

There has to actually be a wrong, though. Nobody at Twitter is entitled to their job for any period of time beyond today - anyone except probably the CEO and a few other C-suite folks can be let go with about ten seconds notice. And I'm 100% sure there are clauses in everyone's RSU contracts detailing what happens in the event of an acquisition.

Re: Ask HN: What happens with stock grants for Twitter employees?

#63

Post by ergocoder »

newswasboring wrote: post #60
vrc wrote: post #23

Earlier quoted context omitted.

I’d assume it would allow Musk to restructure Twitter along longer-term goals. My sense is that he will eventually take it public again, but it’s a hard road to make huge changes to a company’s trajectory when your “fiduciary duty” relies on quarterly earnings reports. For example, killing bots will decimate DAU and would tank the stock. But do that and wait a year or two and perhaps Twitter flourishes as a true p2p…

Is "fiduciary duty" defined by the company in it's by laws or is there a law outlining it?

Fiduciary duty doesn't seem to mean much.

People kept saying that, if board didn't accept, then they would violate fiduciary duty.

Then, board accepted the first offer without further negotiation. Who does that in a large deal like this? At least, they should have got a few billions more.

Re: Ask HN: What happens with stock grants for Twitter employees?

#64

Post by ghaff »

semiquaver wrote: post #36
rmbyrro wrote: post #17

Most agreements have a liquidity event (i.e. an acquisition) clause. They this sort of thing happens, your unvested options can be vested and exercised immediately.

Twitter already had a liquidity event, the IPO. A going-private transaction is unlikely to be contemplated in any existing options or RSU agreement. Unvested options are technically worthless, being an option to purchase securities that will no longer exist (TWTR). In practice it would be very silly to do this to employees unless your explicit goal was to massively reduce headcount.

Lawyers contemplate lots of things in multi-page agreements that most people don't read :-) The two times I've been acquired (by a public company but I think cash deals), unvested stock has been converted to the acquiring company's stock at the equivalent value and on the same vesting schedule. Of course, this will be a private company so the situation is different.

Re: Ask HN: What happens with stock grants for Twitter employees?

#65

Post by helsinkiandrew »

johnmorrison wrote: post #27
recuter wrote: post #22

Earlier quoted context omitted.

Well that's just impossible bud. The number of twitter employees in 2018 was 4000 and it is about double that now. What on earth do you think they've all been doing? You can't possibly run something like twitter with just 2000 employees like you suggest. The fail whale might reappear.

You can run something like Twitter with 500 good employees. That is, unless, you mean the massive manual censorship organization needed to "run" the current "algorithm", which Twitter will no longer be needing.

No offence but that sounds a little naive. Twitter isn't just the app and feed algorithm - I imagine there's more that 500 people needed to run the advertising side of the business alone (multiple countries, different tax regimes, payment processing, big customer relationship managers etc). Even the low level data centre, network engineering will number into the hundreds.

And they'll still have some kind of 'manual censorship organization' to enable them to operate legally in different countries, handling people posting illegal content and responding to law enforcement requests, bot detection, reports of harassment etc - that's going to be more than 500 people, for a company with the number of users Twitter has.

Re: Ask HN: What happens with stock grants for Twitter employees?

#66

Post by shawnb576 »

deepGem wrote: post #54
bko wrote: post #25

Earlier quoted context omitted.

My limited experience in engineering organizations, I have found that the core task can be accomplished with probably 25% fewer engineers. The rest are working on products that are going nowhere or are generally inefficient at their jobs. It's not even "50% of the people don't do anything, we just don't know what 50%". It's pretty obvious to everyone. Is this the norm? Are there any eng orgs that exist without this p…

25% is if the organization is ultra efficient. I think most organizations other than select FAANG/Stripe are at 75%+. I think pmarca quoted the number to be something like 1:4 which makes the efficiency at 25%, 75% dead weight. FAANG is probably at 50%. The good big companies are overstaffed by 2x. The bad big companies are overstaffed by 4x or more. https://twitter.com/pmarca/status/1515195878604087297

This is all theoretical tho.

In a situation like this you likely won’t retain those 25%, assuming you can identify them (it’s not always clear who is really making things happen and why).

Those are top performers used to equity based comp. Many will leave.

Scale like Twitter does takes a lot of people to keep it running. You can always trim low performers but that too has a major morale implications. See: Uber

Re: Ask HN: What happens with stock grants for Twitter employees?

#67

Post by shawnb576 »

ghaff wrote: post #49
saagarjha wrote: post #34

Earlier quoted context omitted.

There will be no stock in three years if the acquisition goes through. My understanding is that effort is being made to compensate employees in a roughly equivalent manner, albeit without appreciation or deprecation being involved since Twitter will cease to be a public company.

A lot of people in public firm tech have effectively normalized not just large RSU grants but the assumption that they'll significantly rise in value. Twitter may, depending upon the agreements and Musk's wishes if this goes through, pay out unvested shares cash equivalents on their current schedule at the acquisition price. But there will presumably be no further rise and no further RSUs. Presumably the treatment of…

This is correct.

And there will need to be some other mechanism to replace vested with payouts over time.

Just saying “you’ll keep vesting” isn’t good enough. People will say ok I’ve got a good grant in 2023 and then my comp falls off a cliff.

They’ll either leave when that vest happens or sooner.

Re: Ask HN: What happens with stock grants for Twitter employees?

#68

Post by Aeolun »

newswasboring wrote: post #57
thaeli wrote: post #42

Earlier quoted context omitted.

Very lean eng orgs that rely heavily on offshoring. Every software engineer at my work, I know what they do and they're important to our core tasks. But probably 95% of our actual dev is done by offshore project teams, so the eng org itself is very senior/lead heavy and primarily supervises rather than writing a lot of code themselves.

Doesn't it scare you that your actual product is written by someone else? As i am moving away from what is called IC positions in silicon valley, i am increasingly afraid of this. The projects i am passionate about and responsible for are actually developed by other people. And these are people whom I know are at least as good at if not better at the job than me.

Given what the product is. Not particularly.

Re: Ask HN: What happens with stock grants for Twitter employees?

#69

Post by newswasboring »

ergocoder wrote: post #63
newswasboring wrote: post #60

Earlier quoted context omitted.

Is "fiduciary duty" defined by the company in it's by laws or is there a law outlining it?

Fiduciary duty doesn't seem to mean much. People kept saying that, if board didn't accept, then they would violate fiduciary duty. Then, board accepted the first offer without further negotiation. Who does that in a large deal like this? At least, they should have got a few billions more.

No I meant it in a broader sense. Whenever I ask someone why companies are so hyperfocused on growth every single quarter they usually cite fiduciary duty or something. I am not sure if it's a law or a company by law

Re: Ask HN: What happens with stock grants for Twitter employees?

#70

Post by ryandrake »

unnouinceput wrote: post #14
helsinkiandrew wrote: post #3

https://www.nytimes.com/2022/04/25/technology/twitter-employ... "At the meeting with employees on Monday, executives tried to assure employees that they wouldn’t be shortchanged by Mr. Musk’s acquisition. Mr. Agrawal told employees that their stock options would convert to cash when the deal with Mr. Musk closes, which he estimated would take between three and six months. Employees would receive their same benefits p…

Heh, we all know the truth, hence why the question pop-up in the first place. Elon will cut deep in left and right among employees within an year. I guess only 30% of existing ones will still work at Twitter in a year after deal is done.

And if I were a Twitter employee who survived the cuts, I'd still be worried that now I'm working for Elon Musk. Suggest all Twitter employees reach out to the engineering teams at Tesla and ask them how their work-life balance, energy level, and burnout level is. How do decisions get made there, how frequently are they over-ruled? How chaotic are things? How frequent are the angry outbursts? How's overall satisfaction? Do they feel they work in a nice place?

I admire Elon's companies and the achievements they've made, but he has an extreme reputation of riding his employees like horses.

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