What if the Zynga situation was reversed? | Hacker News Reader

What if the Zynga situation was reversed?

earbitscom.posterous.com

9 pointsearbitscom6 comments

The analogy is flawed if you walk you forfeit the stock, you did not uphold the deal so you forfeit the cosideration of the contract. The employer has already participated in the up side, because from the time you where there you worked for less than market compensation, looked at from a purely economic standpoint you are actually doing the employer a favor because you took on the risk and then walked away with that risk on your back, while abandoning the reward. That is the portion you continue to fail to see, the employee meets his obligation from day one and continues to every day they remain, the employer on the other hand promises to meet their obligation to reward them for the risk they took and are taking in the future. It's not the same and a parallel cannot be drawn because one assumes risk immediately while the other does not. You can't reverse the roles because to do so does not draw a true parallel. It would be more akin to you telling the company that any ideas you have in the future are their intellectual property, then you hit a good one and then you threaten to walk if they don't renegotiate that agreement to give you a better cut of your idea.

In my case (a true story, not an analogy) I walked with no stock. I could have walked with 2 years of stock and I'd be taking half of the payment for half of the risk I agreed to bear. People do it all of the time. If my employer had the attitude you're describing, they'd say, "Hey...I gave you that first half with the understanding that you'd be staying four years. You've reneged on the agreement, I want that first half back." As we all know, that would be ridiculous.

>one assumes risk immediately while the other does not.

That's not true. The company immediately assumes the risk that the stock will be worth way more than the normal compensation of that employee. Zynga took this risk for several years and the employees have made a ton of money - way more than they would have elsewhere. Why should Zynga keep assuming that risk when there is no reason to anymore?

Every contract I have signed has said, if I walk I loose everything, totally shit out of luck, no do-overs. I was fine with that and would expect it, if you walk you loose it I am amazed that their are contracts out there in original form that would state differently. If it where my company and my contract, it would absolutely state all options revert back to the company in the event of resignation. From the perspective of an employee I would be and have been more than happy to sign to that agreement. If it is not going to be a fit, one side generally figures that out early on and in such case I would not feel entitles to options if I where the one deciding to leave. Conversely if I am not the one deciding to leave, I need to be compensated for the risk that I took, seeings how I am now being denied the ride to the finish line. It cuts both ways.

I would be very interested to work at the places you have. When you vest stock, those are your options. You can leave anytime and keep whatever has vested so far. Otherwise, there would be no reason to vest over time. The whole thing would just vest at the end.

I should clarify a bit, all of the pre-IPO, pre-exit companies I worked for. With Marriott it followed a typical vesting schedule but that is a totally different animal. A fortune 100 and a start-up are apples to oranges when it comes to how options are dealt with. But it sounds to me like some companies are using a more "big company" traditional option grant scheme. I would never sign up for the same contract I took with Marriott with a start-up, totally different issues and risks to use an options contract like that.

“If your boss demands loyalty, give him integrity. But if he demands integrity, give him loyalty.” ~COL John Boyd

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