61–70 of 106 posts
Earlier quoted context omitted.
heads up, your math is a little buggy - 1% of $90b is $900m, not $90m
FRACK! Fixing, now. Thanks :)
Thanks to @p45c41 (on Twitter) and many others here for telling me simultaneously.
Perhaps it's a bit evil for me to suggest this, but I have the feeling that distributing that much wealth to so many employees in these super exits that they might not be inclined to work any longer. If I were a 4th level worker at your company implementing some important but invisible part of the core product, and suddenly the kicker pool rewards me with a couple of million, I might seriously consider quitting. Who…
When is it "too late" to set this up? Does it have to be set up around the time initial shares are allocated (a/k/a company incorporation)?
Unique, glad this is being shared. I've always looked towards the Wealthfront Equity Plan of Early Evergreen Grants [1] as a good example. It is arguably more performance-oriented than this Progressive Equity. I really like the concept of giving everyone financial independence, but it must take the right combination of culture, investors, and valuation to make it more motivating than it is inhibiting. Also, could the…
In principle, I love the idea of weighting the distribution of an employee equity pool away from up-front grants and toward follow-on grants. It solves what I think is an even bigger challenge of equity grants, which is that someone's financial outcome is largely dependent on a guess you make about their impact before they've even worked a day. In practice though, I think it's hard for a lot of companies, because unl…
If anyone has questions about how this works, let me know!
Perhaps it's a bit evil for me to suggest this, but I have the feeling that distributing that much wealth to so many employees in these super exits that they might not be inclined to work any longer. If I were a 4th level worker at your company implementing some important but invisible part of the core product, and suddenly the kicker pool rewards me with a couple of million, I might seriously consider quitting. Who…
The assholes leave, the people that you want to work with stay.
When the compensation model at MS shifted away from equity (because of an essentially flat share price) in the '00s, then it became correspondingly more valuable to game the promotion system, and so the assholes become political and the rest is history...
I wonder how the tax consequences work with this.
This incentive plan is structured as restricted stock units that are paid out as shares upon an IPO or trade sale (called in the doc, the "Initial Vesting Event").
Tax laws in the U.S. will impose ordinary income tax on the fair market value of such shares when they are issued, which for clarity, is at the Initial Vesting Event.
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For the record, I am a bit peeved that the word "tax" is being used to describe aspects of this plan, as it may make looking up actually startup tax matters harder.
Earlier quoted context omitted.
Ah, great minds think alike. We were doing the same thing at the same time. I backtested the process against Facebook's IPO so it could feel a bit more real http://kapuno.com/conversation/bblc6nqbe6qte
Besides some math errors (I checked D'angelo's number and got about $348M "tax", not $23M; Zuckerberg's checked out though) -- I don't understand this: "Although the model may seem fair on the onset, it can be criticized the same way we criticize a flat tax. Those at the threshold are "punished" the most." It seems to me that because it's a "progressive" tax this criticism doesn't apply. Edit: math checks out now, I…
Does that clarify it @cespare?
Here is an example I made to help me understand it. Say SuperAwesomeStartup had a system like this, and the threshold was an ungodly high amount of 50 million dollars. The company IPOs and is worth 100 billion dollars. Founder X owns 10%, Founder Y owns 8%, Founder Z owns 6%, Early Employee A owns 1%, Early Employee B owns 0.5%, Early Employee C owns 0.25% And there are 5,000 employees of the company Before After Fou…
> have little impact on founders
really?