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Comment by jacquesm | Hacker News Reader

It appears that they were fired just before their stock vested. That's why as an employee you should never agree to vest all your stock at the end of a multiple year period but in small chunks over time (annually, usually).

That still carries risk but not as much. Assuming you assign value to the stock at all.

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Did I miss the part of this story where they said they had nonstandard vesting? The industry standard is 4 year vesting, month by month, with a 1-year cliff. The traditional horror story is employees being fired just before they cliff.

No, I just think GGP is mis-interpreting the situation because of the article's unfortunate wording. Once the stock is vested it stays vested. Whether it is 'worth something' or not doesn't matter, if you've got it it stays unless you sell it. I suspect 'worth something' translates into 'something for which there is an easy market', merely whether or not you can easily sell it.

Whether this particular stock will go up or down after the IPO is any-body's guess.

My sense from the story is that they're being accused of ruthlessly terminating employees just prior to their cliff.

Yes, so before the first batch of stock vested.

As you well know, but to clarify for others, once the stock is vested - it stays vested unless you quit and don't buy it. Once you've vested the stock and purchased it - it stays "vested" as you own it - unless it's 83b early election of stock which is restricted, and that restriction retracts over time like vesting.

This is true in most cases, but watch out for clawback provisions, as was in the case of Skype: http://www.businessinsider.com/how-employees-get-totally-scr...

Yes, that was particularly dirty pool. Made me lose a lot of respect for the execs in that story.

I think that's becoming less of a norm. More and more companies seem to be moving to 4-year vesting, distributed annually.

I'm a vocal defender of vesting and cliffs, but even I think you shouldn't take a job somewhere where you vest in annual chunks after your cliff.

It's pretty normal though.

What does it cost to transfer stock in the US in a privately held company? Here in Europe it can be up to ~$1K to transfer stock in a GMBH or BV, other countries more or less depending on the local situation regarding notary public roles and rates. In a public company it is dirt cheap but this is prior to IPO.

That + accelerated vesting in case of wrongful termination or termination without cause can be reason enough to batch share vesting events.

There is no stock transfer or fees associated with the typical startup vesting schedule in the US. It's just written as an algorithm in legal documents like "...one fourth of which will vest after twelve months and blah blah blah..." The exercising is more paperwork on top of the vesting.

I would run away from any deal with a multi-year all at once vesting period. It's just too clever.

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