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Golden Handcuffs

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Re: Golden Handcuffs

#221

Post by midasuni »

alisonkisk wrote: post #163
alecbz wrote: post #159

Earlier quoted context omitted.

The more relevant factor IMO is not time vs. money but the proportional risk. A year of my time is a much larger fraction of my net worth than the typical VC's investment is a fraction of their net worth.

This is a Marxist labor theory of value argument, disregarding market forces. For a different supply-demand function, labor could get paid far more than investors (imagine a 0 interest rate environment while inflation is happening.)

Yet investors have made a fortune over the last year while there’s interest rates below inflation.

Re: Golden Handcuffs

#222

Post by dehrmann »

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…

> Do not support investor-focused comp models like backweighted vesting (Amazon)

This is from ~7 years ago, but my backweighted Amazon RSUs were balanced by a signing bonus, and another signing bonus a year later. Roughly, my total comp would be similar each year if AMZN stayed the same price, so it felt fair.

Re: Golden Handcuffs

#223

Post by bradlys »

sombremesa wrote: post #220
philosopher1234 wrote: post #212

Earlier quoted context omitted.

And thus… the system isn’t flawed? We can criticize the system and the rich without needing to apologize for it.

You’re right. The “system” is flawed. The poor knowingly enrich the wealthy and then whine about it. Seems to be happening more and more nowadays.

What is the alternative? Give up on all sports teams? Give up on all goods altogether?

I think the point people are making is that the system in general is so rigged and there are so many bad actors that it’s basically impossible to find something else that is more ethically managed while getting a very similar good/service/whatever.

Do I support the US giving Israel billions every year that then gets used to kill and rule over Palestinians? Nope but I still have to pay my taxes! If I decided to not pay because of that, I’d go to jail. So even though I’d like to not support such a system, the effects of not supporting such a system are too much of a cost for myself. (In the same way for others with goods or services or whatever - penalty for non-participation in whatever is too high)

Re: Golden Handcuffs

#224

Post by bradlys »

alecbz wrote: post #208
chris11 wrote: post #152

Earlier quoted context omitted.

> If the company goes up in value a lot over 4 years, then yeah, the employee may lose out This is horrible at pre-IPO unicorns like Stripe. One year vesting could cost normal employees millions if the company blows up. Sure, the stock might not move much, or it can go down. A temporary dip means good performers are more likely to get larger refreshers to get tc up to market rate. And if pay is your driving motivatio…

Stripe's last round was at like $100B. There's some growth being missed out on, sure, but I'm not sure for how many people that's gonna net out to be millions.

It could be a lot. 100B makes a lot of millionaires.

Even at 10B, lots of millionaires are created unless all hires were made at high valuation. I was getting 1m/yr at 5B and I wasn’t even that early of an employee or high up. Expand that same company to 100B? Everyone would be getting millions out of it - even the lowest ranking employees.

Re: Golden Handcuffs

#225

Post by bradlys »

titanomachy wrote: post #178
nineplay wrote: post #40

Earlier quoted context omitted.

Call me cynical, but they are supposed to be trying to recruit me. I say "That doesn't sound like more than I currently make, what about other forms of compensation?" If they say "well we're not sure...", I'm going to be pretty reluctant to jump in. For all I know they are "re-leveling" and those 400k paydays are going away.

I recently went through a job search, and no recruiter was willing to pitch big numbers to me up front. I used levels.fyi and word of mouth to figure out who would be most likely to negotiate. The market seems superheated compared to last time I did this (~3 years ago). Lots of capital flying around, and a lot of it ends up in tech. Hard not to feel like we're in some kind of bubble.

I’d say it’s not too hard to get offers right now but the offers are bad as far as I’ve seen. Especially at startups. Every startup I interviewed at completely lowballed the shit out of me on either salary or equity or both. Even public companies did the same - there is literally no interest in giving a good offer upfront. You need to pull teeth and have competing offers. Walking away isn’t enough! They want to hear companies and numbers and see proof.

I went with an offer in the 350-400k range like above. Hard to get above that without going into staff or getting lots of high competing offers. Even then, it’s risky.

Got a half dozen or so offers. It was a terrible time. So many startups withdrew at random stages because comp would come up and they realized they were too cheap to even bother sending an offer. Huge waste of time.

Great time to raise capital, terrible time to join a startup.

Re: Golden Handcuffs

#226

Post by WJW »

lumost wrote: post #204
rizzom5000 wrote: post #188

Earlier quoted context omitted.

| 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 a…

This presumes that early employees are getting a fair shake. In many cases they are being sold a lottery ticket with a value of only a few thousand dollars even when the company sells/IPOs.

Isn't that exactly what "risk" means in this context? Sometimes you get very rich (see the early google/microsoft employees), usually you get nothing or almost nothing. If you don't want to play the lottery there is nobody forcing you to work at startups.

Re: Golden Handcuffs

#227

Post by raffraffraff »

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…

> ...or outright fraud like a start-up giving you a stock offer with no percentage or no 409A

If you only get the FMV from something like Carta, is that "enough"? I mean, it tells you nothing about the % at all. You can guess that the strike price will fit within a band (greater than 4, less than 35, likely around 17)

Re: Golden Handcuffs

#228

Post by wuschel »

xyzelement wrote: post #144
benlivengood wrote: post #136

Earlier quoted context omitted.

> Second, and this is probably a bigger deal - lack of exact range often indicates flexibility in seniority, skillset and scope. The flexibility should be reflected in the job title or level; salary bands are vital to ensure that people at the same level are being compensated equitably and know what they're interviewing for up front. It's totally fine to tell candidates they're going to aim for a L4 position with the…

Jobs are less cookie cutter than your post implies though, especially at the higher levels. Personal example - my last job (hedge fund) really wanted me. It took them forever to find someone of my profile - a mix of background, technical skills, domain knowledge, and personality so they wanted to have me. The way they set my salary was like this: they looked at what I was making and added enough on top that I couldn'…

> a mix of background, technical skills, domain knowledge, and personality

What kind of position did you get hired for? An IT related role, or something more exotic? If it is the latter, I would be delighted to have a chat if you would be interested. See my contact details for my profile.

Re: Golden Handcuffs

#229

Post by KaiserPro »

TulliusCicero wrote: post #80

I don't see how 4-year stock grants that steadily vests are golden handcuffs at all, since if you switch to a similar company they'll just give you a new stock grant that also steadily vests. The only part that's like golden handcuffs is the 1-year cliff that's standard, but 1 year ain't bad.

Depends on how big it is.

For me, my base salary is quite enormous, but with some work I could find something within 20%. (I am exceptionally lucky, its not skill)

However, what I can't replace is the stocks. Depending on performance its ~3-5 times my already vastly over inflated annual wage. So I'm stuck here at the boring FAANG company not achieving very much, because to walk away from a small fortune would be madness.

There is no real incentive to work harder, because the difference between working a normal 35hour work week, and the 75 hour week required for promotion is another 10% on base.

Re: Golden Handcuffs

#230

Post by michaelt »

WJW wrote: post #226
lumost wrote: post #204

Earlier quoted context omitted.

This presumes that early employees are getting a fair shake. In many cases they are being sold a lottery ticket with a value of only a few thousand dollars even when the company sells/IPOs.

Isn't that exactly what "risk" means in this context? Sometimes you get very rich (see the early google/microsoft employees), usually you get nothing or almost nothing. If you don't want to play the lottery there is nobody forcing you to work at startups.

If you were promised 0.1% of the company and the company ends up worth $0, that's just the risk of taking equity.

If you were promised 0.1% of the company then some financial shenanigans with 'dilution' or 'liquidation preferences' mean the company gets acquired for $200,000,000 and you don't see any of it, then you got taken for a fool.

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