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Golden Handcuffs

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Re: Golden Handcuffs

#81

Post by rawtxapp »

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.

More likely than not, your current stock has appreciated significantly (at least at FAANG), so you would be leaving all the paper gains on the table. And it's not guaranteed that you're getting vesting stock at the next company.

Re: Golden Handcuffs

#82

Post by itake »

darod wrote: post #75

Is he misusing the definition for "golden handcuffs"? From my understanding, the issue is that an employee has 90 days to exercise one's options. Most can't afford to do so if the company isn't public due to the cost to exercise and the tax burden. I'm not sure how this new options structure addresses that.

There are many forms of golden handcuffs.

Public companies gives you X dollars worth of shares at the current price of your start date over 4 years. Meaning if today the shares are worth $1 and they want to give you $100k of shares, then you get 100k shares over 4 years.

If after 2 years, the unvested shares (50k) 3x in value, ($150k) you have to stay to continue to earn the same number of shares, but are worth 3x what they originally were.

Re: Golden Handcuffs

#83

Post by solidasparagus »

choppaface wrote: post #55
kemitche wrote: post #46

Earlier quoted context omitted.

Did Amazon return to back-weighted comp? The offer I received two years ago had comp that shifted from "cash focused" to RSUs over 4 years, and had equivalent cash value over the 4 years. Obviously, by year 3/4 when comp was mostly/all RSUs, the stock could have gone up or down significantly. Given that the year 1 cash could be used to buy stock if I really wanted, it didn't seem an unreasonable approach to comp to m…

The Zoox acquisition offers are all back-weighted. There are several posts on Blind recently disclosing back-weighted new-hire grants. The mean tenure time at AMZ is 2 years and most engineers I know do NOT vest 50% at the 2 year mark.

The mean tenure time is a terrible measure for any company that is growing at the rate Amazon does. If you double your team every year, the average tenure is going to be really low even if not a single person quits.

Re: Golden Handcuffs

#84

Post by ghaff »

trompetenaccoun wrote: post #63
akarma wrote: post #17

Earlier quoted context omitted.

> If a hiring manager really wants someone and they can't pay them more, they can hire them at a higher level. Yes, this is how it should work! Their role will then involve a higher level of responsibility and expected output that they better be prepared for, and they'll be compensated more for that. It makes much more sense than people getting higher/lower compensation for the same level of responsibility and expect…

Exactly. I find it incredible that there are so many comments defending shady behind-closed-doors negotiations. Maybe a lot of the HN demographic are the type of people who benefit from this but for everyone getting a sweet deal there's someone else getting paid less. This is a step in the right direction, if you're actually worth so much more you can prove it and work your way up. No one should get a high salary off…

>more dedicated to their jobs than me

Is that actually a relevant metric? Were they also more effective at their jobs than you?

I'm often not sure what productivity means in this context. If you can produce better results in 4 hours a day, go for it.

Re: Golden Handcuffs

#85

Post by dalyons »

lostdog wrote: post #39

Both this VC's post and coinbase's post ignore the 90-day exercise window on stock options, so they're getting rid of the "golden" but keeping the "handcuffs."

Well coinbase is RSUs now(and for quite awhile), so exercise window doesn’t apply

Re: Golden Handcuffs

#86

Post by bashang »

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…

> live in your thoughts rent-free

What does this cliché mean? "To be thought about?" It sounds like the kind of corny garbage I fled reddit to avoid.

Re: Golden Handcuffs

#87

Post by smilekzs »

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 are ready to let their contributions speak for themselves.

I'm sorry but that's a self-contradiction (even oxymoron). "highly competitive package" these days is after negotiation, period. If you're 100% firm on the offer when asked, then people seeking "highly competitive package" (after balancing all other factors of course) can and will simply walk.

As for the "let their contributions speak for themselves": For (especially early stage) startups, any promise to raise the compensation later *cannot be trusted*, period. It's not written on your offer (except for maybe "guaranteed/target bonus"), and the management could always come up with "budgets" --- basically handing out far less than what would make up for the initial compensation deficit, maybe except for a few people in the "inner circle". Having been both in and out of the "inner circle" myself, this difference can be significant over time. Also as the startup goes through funding rounds, company policy will change and the people who "promised" you will inevitably leave, etc. etc.

Re: Golden Handcuffs

#88

Post by the_only_law »

joshuamorton wrote: post #67
908B64B197 wrote: post #65

Earlier quoted context omitted.

Anything other than the rate at the main campus is not a serious offer.

Why? Say you live in or near Atlanta, the rate paid to (on site) employees in Atlanta is less than the rate paid to (on site) employees in SF (I think this is true for pretty much every FAANG). Why should a remote employee in Atlanta make more than an onsite one?

Will I at least make the same insane TC CoL adjusted? Or am I more likely to be paid what an average developer in Atlanta can take home or just a bit more?

Re: Golden Handcuffs

#89

Post by heavyset_go »

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…

> 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 table should a business go under. What is ignored, or outright dismissed, is the risk borne by those who invest their time and labor in a business for little to no equity.

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.

Workers sacrifice time that they can never get back working for one business when they could have spent that time working at another. While money invested can be earned back, employees can never earn their time back. Sometimes, those workers are paid below market rate while they help make a business successful, but don't see much or any equity as a result.

It seems to me that there is more risk on the shoulders of employees than those of investors, and they should be compensated accordingly.

Re: Golden Handcuffs

#90

Post by joshuamorton »

the_only_law wrote: post #88
joshuamorton wrote: post #67

Earlier quoted context omitted.

Why? Say you live in or near Atlanta, the rate paid to (on site) employees in Atlanta is less than the rate paid to (on site) employees in SF (I think this is true for pretty much every FAANG). Why should a remote employee in Atlanta make more than an onsite one?

Will I at least make the same insane TC CoL adjusted? Or am I more likely to be paid what an average developer in Atlanta can take home or just a bit more?

> Will I at least make the same insane TC CoL adjusted?

There's enough disagreement about what this means that its difficult to say. If your goal is to buy a house, you'll be making more CoL adjusted. If you're happy to rent, its less clear cut but still probably close.

> Or am I more likely to be paid what an average developer in Atlanta can take home or just a bit more

More.

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