Palantir Buyback Plan Shows Need for New Silicon Valley Pay System • Hacker News Board

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#91

Post by mandevil » Thu, Jun 30, 2016, 3:39 PM UTC

lmm wrote: post #58

gonehome wrote: post #33

Earlier quoted context omitted.

Just because a company isn't public doesn't make it a 'dark market' (not sure what that is). The 409A valuations are real and there are rules surrounding how exercise happens. You can't just sell them outside of that and not pay taxes. You could theoretically sell the shares once exercised to some other private investor if you can find one, but you'd still have to follow the same exercise rules.

Feels like there should be some kind of "shotgun clause" equivalent. The government wants to value your illiquid asset at $x for tax purposes? Fine, but if you disagree with that valuation you get a corresponding right to sell that asset to the government for 90% of $x and make it their problem.

What on earth would the government do with a stake in a privately held company? Buy and hold investment? How would they use the voting power?

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#92

Post by mrep » Thu, Jun 30, 2016, 3:59 PM UTC

daemin wrote: post #55

soup10 wrote: post #51

Earlier quoted context omitted.

You can only cash out 12.5%. 12 month non-compete for a small cash out is a pretty double edged deal.

But if you are still working there and do not plan to move then being able to liquidate up to $500,000 worth of shares seems like a very good offer.

If you can liquidate $500,000 worth of shares, that means you still have at least $3,500,000 worth of shares in a company that has no plans to ever go public.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#93

Post by st3v3r » Thu, Jun 30, 2016, 4:48 PM UTC

lmm wrote: post #57

argonaut wrote: post #22

Earlier quoted context omitted.

There's a huge tax hit. Giving shares is taxed as ordinary income.

All of these things should be taxed as ordinary income. Companies shouldn't be able to do an end-run around taxation by giving you valuable stuff instead of giving you money directly.

And now we're back to the same problem we have with the 90 day window.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#94

Post by st3v3r » Thu, Jun 30, 2016, 4:48 PM UTC

humanrebar wrote: post #77

rplst8 wrote: post #68

Earlier quoted context omitted.

> Companies shouldn't be able to do an end-run around taxation by giving you valuable stuff They already do in the form of health and retirement benefits.

And tying an individual's future (health insurance, retirement, immigration status) to an employer is a bad thing.

Sure it is. But Universal Health Care in the US isn't gonna happen anytime soon, so this is what we've currently got to work with.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#95

Post by st3v3r » Thu, Jun 30, 2016, 4:51 PM UTC

abalone wrote: post #75

sverige wrote: post #6

Earlier quoted context omitted.

Indeed it is. I particularly like the 'no longer contributing to the business' part, as if the work done by the original employees isn't what the current business was built on, at a discounted rate if their stock options are worthless. And as if the stock options were the only reason they're having trouble attracting quality talent. Stock options seem attractive as a form of compensation, since the hope is that you'r…

Kupor's mentality stems from dealing with co-founders who leave right after they complete their 4 year vest, well before IPO/acquisition.[1] While they certainly laid a foundation for the company, there's a lot of work still to be done to get to a liquidity event. Is it fair for them to leave with a huge stake and let the other co-founder(s) and employees figure it out? This is where he gets to phrases like "no longe…

If that's the case, is it fair for founders and VCs to take such a huge stake, considering all of the actual work is done by the other people who work there?

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#96

Post by st3v3r » Thu, Jun 30, 2016, 4:53 PM UTC

_9vpl wrote: post #18

pmiller2 wrote: post #11

Earlier quoted context omitted.

Anybody who thinks this offer is meant to benefit employees isn't looking much beyond the surface. The fact that it includes a release of claims, a noncompete clause, and an NDA is a solid clue that this move is intended to benefit Palantir and not employees. Edit: forgot noncompete clause.

That's all standard stuff. If I was at a company for 11 years, I'd sure as hell want to cash out. Whether their offer is a good price or not, who knows.

Being standard doesn't mean it's not shitty.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#97

Post by st3v3r » Thu, Jun 30, 2016, 4:54 PM UTC

ryporter wrote: post #70

pmiller2 wrote: post #11

Earlier quoted context omitted.

Anybody who thinks this offer is meant to benefit employees isn't looking much beyond the surface. The fact that it includes a release of claims, a noncompete clause, and an NDA is a solid clue that this move is intended to benefit Palantir and not employees. Edit: forgot noncompete clause.

Why can't both benefit? Palantir merely offered the deal, and employees (and ex-employees) accepted.

It's a pretty crappy deal. It was only accepted because otherwise these people would be sitting on worthless shares, waiting for an exit/IPO that doesn't look like it's coming anytime soon.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#98

Post by dreaminvm » Thu, Jun 30, 2016, 6:39 PM UTC

stale2002 wrote: post #44

freditup wrote: post #36

Earlier quoted context omitted.

Curious what your estimate of a 50th and a 99th percentile developer salary is for a new grad? And do you mean a 50th percentile CMU grad, or a 50th percentile CMU grad developer, or just overall?

Perhaps I exaggerate with the 99 percentile number, but the people I know who work at a top(high paying) company like Uber or Jane Street will get something like 150k easy (and maybe a signing bonus), and Palantir is more middle of the road with 100k base salary or less, and stock options of dubious value.

Are you saying 150k salaries for new grads or total comp?

ASAIK, Goog/Uber/FB starting salaries are closer to 110k base with $40-50k RSUs vesting per year (refreshes each year), performance bonus 10-15% salary and sometimes a generous signing bonus.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#99

Post by zxcvvcxz » Thu, Jun 30, 2016, 6:42 PM UTC

>Palantir's repurchase offer

Yes, it's an offer. I don't see why everyone is so up-in-arms over an offer. People can reject offers just like they can make them. Other similar offers include employment offers. I'm going to comment more generally on this issue between founder and employee deals:

Here's what I think. HN is mostly of the employee class and so there's a politicized negative sentiment about companies not leaning the way of the employees.

Or maybe people think these offers and deals are bad for both the company founders and the employees. So here is my proposition if you believe that. Start your own company and enact whichever agreements you think are best. Do what Palantir does, or what YC advises, or whatever you make up. Give a 20 year exercise period if you want. Your call.

But you have to actually found a company.

I find it hard to believe in a moral "good and bad" on this issue. We're just talking about deals and contracts between people. And if people act with agency with regards to accepting and declining offers, and inventive individuals can come up with new systems and agreements that work better for everyone, then it will be fine. A moral bad would be something like Google and Apple and Facebook colluding behind closed doors to keep engineer pay below a certain threshold.

For the employees who will have to negotiate: you can't get a deal that's good for you if you aren't prepared to walk.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

#100

Post by aninhumer » Thu, Jun 30, 2016, 7:29 PM UTC

lmm wrote: post #58

gonehome wrote: post #33

Earlier quoted context omitted.

Just because a company isn't public doesn't make it a 'dark market' (not sure what that is). The 409A valuations are real and there are rules surrounding how exercise happens. You can't just sell them outside of that and not pay taxes. You could theoretically sell the shares once exercised to some other private investor if you can find one, but you'd still have to follow the same exercise rules.

Feels like there should be some kind of "shotgun clause" equivalent. The government wants to value your illiquid asset at $x for tax purposes? Fine, but if you disagree with that valuation you get a corresponding right to sell that asset to the government for 90% of $x and make it their problem.

You could also have the market do this, by allowing public bids on anyone's assets, and considering the highest refused bid as the tax valuation.