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Golden Handcuffs

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Re: Golden Handcuffs

#181

Post by zuhayeer »

choppaface wrote: post #4

The C-level to IC comp ratio is still way too astronomical. If a VC is telling you he feels there’s a better way to comp, he has a financial interest in ensuring your loss. Do not support investor-focused comp models like backweighted vesting (Amazon) or outright fraud like a start-up giving you a stock offer with no percentage or no 409A. Employees deserve high-quality equity on par with investors. The OP’s suggesti…

Agreed. Also C-levels get parachutes and a bunch of custom clauses to help ensure they are compensated even in some pretty lopsided scenarios.

Re: Golden Handcuffs

#182

Post by titanomachy »

988747 wrote: post #107
cddotdotslash wrote: post #36

Can we just link directly to the Coinbase post [1] instead of this 8-sentence blog spam? [1] https://blog.coinbase.com/how-coinbase-is-rethinking-its-app...

Maybe I'm too cynical, but this "Eliminating negotiations from the hiring process" feels like they are saying "we are going to underpay you, severely" Negotiations are normal part of the process, if they try to eliminate it, they will simply not receive applications from the top candidates. Blaming it all on "women and minorities would end up underpaid" is a brilliant excuse.

Even companies that "don't negotiate" will often find ways to make exceptions for people they really want.

They want equitable policies, and they want to take candidates' leverage, but ultimately they hate to lose someone they've decided they want.

Re: Golden Handcuffs

#183

Post by zuhayeer »

Some more on single year equity grants here: https://www.levels.fyi/blog/one-year-equity-grants-vesting-s...

This seems like something more later stage, high growth companies are adopting. It’s simply much cheaper for the company to give out single year grants. Basically a challenge to the whole "rest and vest" culture.

Re: Golden Handcuffs

#184

Post by titanomachy »

alecbz wrote: post #169
smilekzs wrote: post #87

From the linked article on Coinbase's compensation ( https://blog.coinbase.com/how-coinbase-is-rethinking-its-app... ): > Because our standard offers are world-class, we are officially eliminating negotiations on salary and equity from our recruiting process. > We are OK if we lose some candidates due to this decision — the best candidates for Coinbase are those who are looking for a highly competitive package and ar…

On the one hand I want to agree, having to trust that a company will Definitely For Sure pay you more once you've earned it is a really hard pill to swallow. But on the other hand, it does seem off for so much of your compensation to be based on how well you perform in a five hour interview or how well negotiate it as opposed to your actual work.

They also have the option of firing you quickly if it turns out that you're not as good as the interview led them to believe. You'd still get paid for the time you work, but they get the signing bonus back and get to keep all their equity.

Re: Golden Handcuffs

#185

Post by titanomachy »

rickspencer3 wrote: post #121
drewg123 wrote: post #22

One of the things that I love about working for Netflix is that they just pay you every 2 weeks and that's basically it. There are no RSUs that are stacking up, no yearly bonus, etc. No smoke and mirrors. No internal websites to calculate the value of your compensation like at Google. I remember how much trouble the yearly bonuses caused when I worked at Google. In the fall, some people would become much less active…

From what I have seen, if you can be well paid, and put a significant portion of your salary into index funds, over the years, you will generate a modest nest egg, and have choices in your late middle age or retirement. This is a different path than betting on a startup you joined, and hoping that your options end up paying out, but, it is not a bad path.

That's true, if by "late middle age" you mean 38 years old. Netflix pays very well.

Re: Golden Handcuffs

#186

Post by logicslave »

joshuamorton wrote: post #103
logicslave wrote: post #44

Earlier quoted context omitted.

Yeah but they arent though. 350-400k is actually somewhat low for senior. They have been paying this for a long time. Its great money remote. I really dont understand the issue

> Yeah but they arent though. 350-400k is actually somewhat low for senior. I wouldn't say this. It's solidly middle of the road for a Google or FB senior, and high/unreachable for an Amazon or Microsoft Senior. Its probably(?) on the lower side for Netflix. This is all before stock growth. Someone who has been a Senior for 5 years at Google or Facebook will be vesting shares that doubled in value, so the take home p…

Actually Amazon commonly beats Google comp, and matches FB. Senior employees at Amazon see the highest comp in the industry. Its less discussed, and really only at the lower levels that Amazon gets its reputation for being cheap and having lower talent. AWS Senior Engineers are top talent bar none.

Re: Golden Handcuffs

#187

Post by ec109685 »

I don’t get this spin. In the old way, you had golden handcuffs because your stock had appreciated so much, it made financial sense to stick around until your options fully vested.

In the new way, all that potential upside comp is eliminated, so employees will earn less and feel better about leaving.

Seems like first option is far better for employees. Please give me those golden handcuffs.

This was also the best way for normal employees to “strike it rich”, which isn’t a bad thing.

Re: Golden Handcuffs

#188

Post by rizzom5000 »

daveidol wrote: post #123
heavyset_go wrote: post #89

Earlier quoted context omitted.

> Employees deserve high-quality equity on par with investors. There is no reason that labor and time couldn't build equity, it's just that our current system favors those who use capital to build wealth over those who need to sell their time and labor to build wealth. A common reason I hear for the fact that investors get more equity is because of the "risk" they take on, as if losing some money is the only risk on…

> When a business goes under, the employees have just lost their abilities to feed themselves, keep a roof over their heads, see doctors, buy medicine and provide for their families. Yes, but that's always the risk of working at any company (and it's a risk the investor may also have if the company goes under). You can typically just get a new job and get these things back. I think an even more compelling argument he…

| Early startup tech employees not only invest their time but also lose out on real money they would have earned at another (bigger) company.

Isn't that by design? With greater risk comes the potential for greater reward. If someone doesn't want the startup risk, they can choose to pursue a job at FAANG. If your goal is to minimize risk, then choose a job as a schoolteacher or the post office. That's the nice thing about freedom of choice.

https://www.linkedin.com/pulse/charlie-ayers-made-millions-c...

Re: Golden Handcuffs

#189

Post by colin_mccabe »

A lot of companies stop issuing stock options when they get to a certain size. Part of the thinking is that the company is now a "safe bet" so there's no need to give employees a potentially large upside in exchange for staying around.

Another reason for doing this is that stock options don't work well when the stock price (and company valuation) is already high. You end up with a big tax bill betting on growth that often doesn't come for already-highly-valued companies.

You could spin this as being employee-friendly, but it's more about being pragmatic about the fact that the company probably won't be able to 10x its valuation like in the old days, and now views itself as "safer."

Re: Golden Handcuffs

#190

Post by nuclearnice1 »

nonameiguess wrote: post #131
heavyset_go wrote: post #89

Earlier quoted context omitted.

> Employees deserve high-quality equity on par with investors. There is no reason that labor and time couldn't build equity, it's just that our current system favors those who use capital to build wealth over those who need to sell their time and labor to build wealth. A common reason I hear for the fact that investors get more equity is because of the "risk" they take on, as if losing some money is the only risk on…

The more amusing (or disturbing thing) is that we have created an environment where, practically speaking, investors have less risk than everyone else. We were just hit with one of the largest global disasters of the past century last year and the immediate reaction was flood equity markets with $3 trillion to prop up financial markets. Owners of capital cannot lose. Even before these last few years of craziness, wha…

Saul Katz is the east coast Frank McCourt. Many years of mismanaging the Mets. Suspicious involvement with Bernie Madoff. All floated a long with generous debt finance. Sold the team last year for $2.4B
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