Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

DoorDash removing 1-year cliff for equity grants

blog.doordash.com

Post reply on HN
Print view View original

201–210 of 283 posts

Re: DoorDash removing 1-year cliff for equity grants

#201

Post by bogomipz »

glenngillen wrote: post #190
brutus1213 wrote: post #170

Earlier quoted context omitted.

The one year cliff is not that problematic to me since I would expect I am getting paid market, and the options are like a hiring bonus (which you often must return if you quit within a year). What am I missing? Is people really worried that a startup whose stock has risen will fire a productive employee? That said, I have seen 5 year vesting (which seemed like a red flag to me), and have heard of Amazon's schedule w…

Disclaimer: Ex-Amazonian, so discount as you see fit based on whatever brainwashing you might assume I’ve been subjected to ;) The rear weighted AMZN approach made sense to me in terms of both optimising retention and some proxy for reward to contribution. I say this also as someone who left after 2 years and as a result left most of their stock unvested. It definitely made the choice to leave much harder so I’d expe…

Can you say how does the "rear weighted" approach works? Is it just RSUs with a cliff?

Also I would curious what you left Amazon before those vested?

Re: DoorDash removing 1-year cliff for equity grants

#202

Post by hn_throwaway_99 »

borski wrote: post #11
hn_throwaway_99 wrote: post #7

Earlier quoted context omitted.

I totally agree with the above, and have commented on it many times before, but note the 90 day standard is because that is the maximum amount of time allowed for ISOs by the IRS. To allow for conversion after that time (e.g. 5-10 years seems to be what a lot of people are pushing for), the ISOs convert into non-qualified options. Still worth it in my opinion. Even better would be for the IRS to change the law (not s…

(Preface: IANAL) Only worth it if you aren’t early. ISOs provide preferential tax treatment, and early on are usually very very cheap, so many companies (mine included) also offer early exercise with ISOs, which is an unbeatable tax win (afaik). The issue occurs when options get expensive (aka the company is doing well) and then you have to do the math between ISOs or NSOs. The longer expiration may be better, but ce…

As others have said, the options are issued as ISOs which automatically convert to NSOs after 90 days after leaving the company.

Re: DoorDash removing 1-year cliff for equity grants

#203

Post by sneak »

crooked-v wrote: post #167
scribu wrote: post #164

Earlier quoted context omitted.

> I was surprised at how large a difference getting paid every week vs every 2 weeks makes. In what way?

While this isn't much of a company relationship thing: If you're getting paid every 2 weeks, sometimes you'll get paid the first/third week of the month and sometimes the second/fourth, which can be a pain if you're trying to keep a consistent amount in a checking account while also having bill pay and auto-transfers to savings/investment accounts. Or, tl;dr, it makes it easier to automate money without leaving a lar…

How is having an extra 2-4 weeks of income in checking "a large buffer of cash"?

This seems like a silly thing.

Re: DoorDash removing 1-year cliff for equity grants

#204

Post by fragmede »

endtime wrote: post #154
MattGaiser wrote: post #151

Earlier quoted context omitted.

I am so fascinated at how my grandfather would spend decades at a company, my Dad would spend a decade, and now people decline jobs over the expectation that they stay 1 year. And I was in my first job 51 weeks. I don't think you are wrong in doing so as the market in tech moves fast while employers move like slugs, it is just such a shift from what I grew up to expect.

The problem isn't necessarily that the employee expects to want to leave in under a year, so much as they don't want the company to have an incentive to let them go in under a year.

That's fascinating reasoning. It makes sense, but that's the same sort of logic where employers will give hourly employees 39.5 hours a week because if you give them 40 they become "full time". Has that kind of short sighted thinking really invaded the software engineering industry? That's scary.

Re: DoorDash removing 1-year cliff for equity grants

#205

Post by fragmede »

jamiequint wrote: post #158
kerng wrote: post #141

This is good progress. Just two months ago I declined an offer from a known and well funded startup because of a one year cliff on equity. The recruiter didn't seem to be able to discuss this matter and I asked them to make sure to bubble this sort of thing up their food chain. I never heard back afterwards. As an "old timer" in the industry a one year cliff makes absolutely no sense to me. Its like working for credi…

"I declined an offer from a known and well funded startup because of a one year cliff on equity" You might as well not bother interviewing at any startups if this is a deal-breaker for you. Whether you think it's fair or not this is an extremely standard term and no company is going to alter their employee stock grants on a one-off basis.

They will if they want you enough. Even Google can be talked out of the 1-year cliff. Doordash doing this means other employers will have to in order to compete if an employee has a competing offer from Doordash.

Re: DoorDash removing 1-year cliff for equity grants

#206

Post by dodobirdlord »

quelltext wrote: post #191
endtime wrote: post #154

Earlier quoted context omitted.

The problem isn't necessarily that the employee expects to want to leave in under a year, so much as they don't want the company to have an incentive to let them go in under a year.

Now they'd have an incentive to let them go in under a quarter, by that logic. Not sure if that's really their concern here. Companies don't just ditch reasonably well performing employees because they want to avoid compensating them. That would already mean that each time RSUs vest the company would have an incentive to fire.

Sure, and they do. It’s best to avoid that incentive by having stock grants vest frequently and fractionally. It’s essentially treated as salary, it might as well be paid out fractionally at the same frequency as salary so that no perverse incentives exist.

Re: DoorDash removing 1-year cliff for equity grants

#207

Post by chris11 »

joshuamorton wrote: post #192
chris11 wrote: post #184

Earlier quoted context omitted.

I'm not convinced. A salary drop from a cliff isn't great, but cliffs are overall good for employees. A front loaded offer arrives at that even comp by baking future stock growth into the offer. A normal four year equity grant arrives at even comp with no movement on equity. I'd much rather have a normal grant and get a cliff if the company does really well.

I think you're misunderstanding something. The Google offer hasn't changed at all[1], in terms of overall dollars provided. The distribution of the same dollars has changed. I'll illustrate with a relatively concrete example. A recent graduate joins Google on December 31[1] of this year, and gets a 100K initial grant ('22-'25). They then follow an above-average performance trajectory over the next few years, getting…

I'm not saying Google makes horrible offers, but I'm not sure how their recruiters marketing matches up with their internal calculations of target comp. I have read complaints on blind that Google is using it to show higher first year offers or to compete with other offers.

100k with frontloaded vesting at (33/33/22/11) is much better than 100k vesting at 25% a year. But 100k frontloaded wouldn't equal 132k vesting at 25%, only the first year would be equal.

So that answer would not be sufficient if I had a competing grant at 132k, and was worried a second year comp drop. It may be true that Google gives really good refreshers and my above average performance will increase my comp. But I think of that like depending on a percent bonus, it's less reliable than base and my initial equity grant. And if I start using refreshers, raises, and stock growth with Google, I should also use it when looking at competing offers.

> you don't ever feel like your compensation has flatlined.

Emotionally that may feel bad, but I think it's caused by employees getting lucky. I don't think it's a problem that needs to be solved.

1) It's objectively bad if I have a cliff because my employer hasn't increased my comp as my market value increases. I should probably look for a new job.

2) It's objectively good if my cliff is because the value of my initial grant exploded. The drop will be bad. But if it's such a noticeable difference I'm probably sitting on hundreds of thousands or even millions of dollars in profit from my initial grant.

Re: DoorDash removing 1-year cliff for equity grants

#208

Post by joshuamorton »

chris11 wrote: post #207
joshuamorton wrote: post #192

Earlier quoted context omitted.

I think you're misunderstanding something. The Google offer hasn't changed at all[1], in terms of overall dollars provided. The distribution of the same dollars has changed. I'll illustrate with a relatively concrete example. A recent graduate joins Google on December 31[1] of this year, and gets a 100K initial grant ('22-'25). They then follow an above-average performance trajectory over the next few years, getting…

I'm not saying Google makes horrible offers, but I'm not sure how their recruiters marketing matches up with their internal calculations of target comp. I have read complaints on blind that Google is using it to show higher first year offers or to compete with other offers. 100k with frontloaded vesting at (33/33/22/11) is much better than 100k vesting at 25% a year. But 100k frontloaded wouldn't equal 132k vesting a…

> I'm not saying Google makes horrible offers, but I'm not sure how their recruiters marketing matches up with their internal calculations of target comp. I have read complaints on blind that Google is using it to show higher first year offers or to compete with other offers.

I can certainly believe this, lots of companies play games to make first-year comp look higher, I certainly don't put it past my employer.

What I'm describing however, isn't anything to do with external hiring, its a common complaint made by existing google employees about how they feel comp drops in year 5. I agree with you that its not totally rational, but people aren't totally rational, and it wouldn't at all surprise me if doing something like this improved retention past the 4 year mark (but it also wouldn't surprise me if the better year 1 comp makes Google appear more competitive with Facebook. Two birds or something).

And yes, you should absolutely compare stock refreshes (if you can get data) when comparing offers! FWIW, I have no clue if Google's are particularly good or not.

Re: DoorDash removing 1-year cliff for equity grants

#209

Post by floodyberry- »

sergiotapia wrote: post #79
Animats wrote: post #62

This does not, of course, include the people who actually do the deliveries.

of course, they are not employees

I believe you meant to say "of course, they are not extremely smart at computers like me, so they do not deserve to live". Don't worry, everyone posting here agrees with you!

Re: DoorDash removing 1-year cliff for equity grants

#210

Post by Cerium »

throwaway09223 wrote: post #172
Cerium wrote: post #155

Earlier quoted context omitted.

Things are very different in a field with long product cycles. If it takes 5 years to get a product into the field then the company has a huge incentive to retain employees.

Sure, but if you're depending on the cliff for retention you're working against your own interests: Employees will leave the 53rd week, just after you've spent all that effort training them within your environment. Long term retention hinges on long term adequate compensation and long term quality environments. There's no need for cliffs.

Sure, there is no need for a cliff, but if you are attracting the right talent with adequate compensation (that keeps up with market changes!) the cliff does not matter.
Post reply on HN