DoorDash removing 1-year cliff for equity grants • Hacker News Board

Re: DoorDash removing 1-year cliff for equity grants

#221

Post by pmh » Thu, Jul 08, 2021, 3:39 AM UTC

bogomipz wrote: post #201

glenngillen wrote: post #190

Earlier quoted context omitted.

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?

It's RSUs vesting at:

- 5% after 1yr

- 15% at 2yrs

- 20% every 6 months for years 3 and 4

The 401k match also has a 3 year cliff.

But as they said, years 1-2 you typically get a signing bonus

Re: DoorDash removing 1-year cliff for equity grants

#222

Post by kerng » Thu, Jul 08, 2021, 3:42 AM UTC

fragmede wrote: post #205

jamiequint wrote: post #158

Earlier quoted context omitted.

"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.

Google has no cliff.

Re: DoorDash removing 1-year cliff for equity grants

#223

Post by kerng » Thu, Jul 08, 2021, 3:42 AM UTC

tedmiston wrote: post #212

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…

A 1-year cliff / 4-year vest has been standard as long as I remember. Is this not the case anymore?

No, most big companies don't have cliffs anymore (Google, Facebook, etc...). They pay out monthly or quaterly. At least if you already worked for a while elsewhere (because they have to buy you out basically).

Why would you otherwise take the risk?

I'm curious about Microsoft- anyone know if Microsoft has a cliff on RSUs?

Re: DoorDash removing 1-year cliff for equity grants

#224

Post by bkjelden » Thu, Jul 08, 2021, 3:49 AM UTC

If it's clear to both parties a new hire isn't going to work out, it's in the company's best interest (as well as the employee's) for the employee to move on ASAP rather than sticking around for a one year cliff.

Re: DoorDash removing 1-year cliff for equity grants

#225

Post by ErikVandeWater » Thu, Jul 08, 2021, 3:58 AM UTC

fragmede wrote: post #204

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.

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.

Why would avoiding paying employees benefits be short-sighted thinking? If anything it was short sighted of the US government to ban increased wages during WWII - leading to employers paying benefits which gums up the labor market.

Re: DoorDash removing 1-year cliff for equity grants

#226

Post by ErikVandeWater » Thu, Jul 08, 2021, 4:00 AM UTC

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.

This isn't complicated. If an employee is having a bad first year or the company is performing poorly it incentivizes firing.

Re: DoorDash removing 1-year cliff for equity grants

#227

Post by ErikVandeWater » Thu, Jul 08, 2021, 4:03 AM UTC

davidgay wrote: post #176

crooked-v wrote: post #167

Earlier quoted context omitted.

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…

And in other parts of the world, they just pay monthly. Avoids that problem...

Or daily. That's probably the best option.

Re: DoorDash removing 1-year cliff for equity grants

#228

Post by worker767424 » Thu, Jul 08, 2021, 4:05 AM UTC

thrwn_frthr_awy wrote: post #181

jamiequint wrote: post #158

Earlier quoted context omitted.

"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.

It is standard at FAANGs as well.

Facebook has no cliff. You still have to wait a little over a quarter, though.

Re: DoorDash removing 1-year cliff for equity grants

#229

Post by sergiotapia » Thu, Jul 08, 2021, 4:07 AM UTC

elil17 wrote: post #214

sergiotapia wrote: post #79

Earlier quoted context omitted.

of course, they are not employees

Only due to a legal loophole DoorDash is exploiting in order to skirt labor laws

Aren't doordash workers 1099 and can take jobs as they see fit? I thought that was their model.

Are you implying doordash delivery guys actually work 39 hours/week to skirt full-time employment? (that would be fucked up I agree)

Re: DoorDash removing 1-year cliff for equity grants

#230

Post by gnicholas » Thu, Jul 08, 2021, 4:13 AM UTC

breck wrote: post #51

RussianCow wrote: post #23

Earlier quoted context omitted.

Am I the only one that doesn't see that as unreasonable? It's not like you aren't accruing equity during that time; you still get the full year's worth of options at the 365 day mark. And the ramp-up time with new engineers can be so long that the first year isn't nearly as productive as consecutive ones. A buddy of mine who worked at a giant company (not strictly tech but you'd recognize it) said he heard from his b…

I think the larger the company the longer it takes to ramp up, but at a small startup you can have a big impact in month one. I've always found the one year cliff funny, since investors don't have a cliff. I've been hoping startups would start doing this for a while, and think DD is really a pioneer here and think this will become a trend. I know personally I turned down a few opportunities at promising startups simp…

> I've always found the one year cliff funny, since investors don't have a cliff.

Investors don’t have a cliff because they give their money upfront. How would a cliff work in that situation?