We need to rethink employee compensation • Hacker News Board

Re: We need to rethink employee compensation

#11

Post by JonFish85 » Wed, Jun 24, 2015, 6:37 PM UTC

drivingmenuts wrote: post #5

Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

But even if you're fully vested, if you can't sell your shares, they're essentially worthless (technically the term is probably "illiquid asset"). Until there's an "event" (IPO, acquisition, probably more), they can't be turned into real money.

Re: We need to rethink employee compensation

#12

Post by rco8786 » Wed, Jun 24, 2015, 6:37 PM UTC

markcerqueira wrote: post #8

drivingmenuts wrote: post #5

Earlier quoted context omitted.

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

"until they vest." Don't options typically vest after one year of employment? Is that "too far in the future?"

I think what he really meant is "until they are exercisable"

Re: We need to rethink employee compensation

#13

Post by tomcam » Wed, Jun 24, 2015, 6:37 PM UTC

markcerqueira wrote: post #8

drivingmenuts wrote: post #5

Earlier quoted context omitted.

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

"until they vest." Don't options typically vest after one year of employment? Is that "too far in the future?"

Almost never. My last package took 4.5 years

Re: We need to rethink employee compensation

#14

Post by buckbova » Wed, Jun 24, 2015, 6:38 PM UTC

markcerqueira wrote: post #8

drivingmenuts wrote: post #5

Earlier quoted context omitted.

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

"until they vest." Don't options typically vest after one year of employment? Is that "too far in the future?"

The last time I received options they vested over 4 years. I was lucky the company was acquired within 1 and I got paid out on all.

Re: We need to rethink employee compensation

#15

Post by mikeash » Wed, Jun 24, 2015, 6:38 PM UTC

Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

I wonder what the odds are that Mr. CEO was drawing an even crappier salary than what he offered you, since he no doubt had even more equity.

Re: We need to rethink employee compensation

#16

Post by wwweston » Wed, Jun 24, 2015, 6:40 PM UTC

drivingmenuts wrote: post #5

Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

> I tend to think of options as worthless, until they vest

This is a good idea, but I'm not sure it takes things far enough.

For the majority of developers, options are often not especially valuable even when they vest. The most common value outcome of a success/sale seems to be "modest bonus" (4 figures to low five figures) rather than a jump up to a different economic class. I suspect many devs could do as well by going out and getting new job offers every year or two, assuming reasonable negotiation skills.

Re: We need to rethink employee compensation

#17

Post by andrewvc » Wed, Jun 24, 2015, 6:40 PM UTC

Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

To employees options are a free lottery ticket.

You could work your ass off and make your company a huge success, but due to vesting and liquidity preference wind up with nothing. Unless you have enough skin in the game (read, you are an investor or founder), your options mostly useless.

Re: We need to rethink employee compensation

#18

Post by paymeyoumofo » Wed, Jun 24, 2015, 6:41 PM UTC

I start all jobs and approach compensation as simply: fuck you, pay me. Pay me a large salary. If you want to add discretionary bonuses on top? Nice. Additional equity? Great. Option? Ok. But first, big fat salary you mf. Once I have that, the rest if any are cherries on a cake. A big fat cake.

Re: We need to rethink employee compensation

#19

Post by toephu2 » Wed, Jun 24, 2015, 6:41 PM UTC

drivingmenuts wrote: post #5

Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

Even if options vest, they could still be viewed as worthless. E.g., Pre-ipo company, 4 years pass, all your shares vest, however Company might tank in the next 5 years, goes bankrupt, never gets bought out nor goes IPO, your vested shares are worthless.

Re: We need to rethink employee compensation

#20

Post by ryanSrich » Wed, Jun 24, 2015, 6:41 PM UTC

drivingmenuts wrote: post #5

Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

> Which is too far in the future to count on.

Actually you should count on them always being worth $0. Not only for compensation purposes but for your personal psychology. It's better to tie yourself to reality.