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Purely from a self serving point of view what message does it send. By the time it reaches every else the guy/gal was the best employee in the world and you fired them to save a few bucks. I'd never work there if I heard that story.

Absolutely. Moreover, usually in these situations, the person wasn’t fired earlier because the team thought either they needed the person to get things done or that disrupting things and hiring a replacement was more costly than keeping them on. Which indicates that even if this person was a poor performer, they were deemed valuable enough to keep on for quite some time. But now that it’s weeks from vest, suddenly it’s more valuable to let them go with nothing.

As an employee or an investor, that’s a red flag to me about management style.

This year has been a rough one for layoffs. In my now former company, one thing that helped keep survivors feeling better about the company was that it treated laid-off employees reasonably well, including accelerated vesting. It'll cost you the equity, but demonstrating that you treat people well will help the rest of the team.

"I’m sorry, but you need to pay it out" ...If the behavior is so egregious/borderline criminal/a legitimate HR crisis (think Andy Rubin stuff), that’s one thing"

It shouldn't be that black or white. I would say pay it out if they are just a poor performer but tried to work in Good faith because then it is your fault to not fire them for performance earlier.

However, I wouldn't pay anything if the employee acted in bad faith and was slacking off on purpose or doing anything that brings the entire team's morale down. I would fire them immediately and you don't owe anyone anything then. May be unpopular opinion but as founders, you don't have time to deal with bad actors. Startups are not charity.

They are not a charity. But the time to fire was months earlier. The failure of the founder to do that is on them. When you’re weeks away from a vest (under a month is what OP says), to me, that’s your fault. Again, a senior executive or senior leader would be paid out in almost every instance. Why should it be different for the first hire who took a chance on you and your startup?

If we’re talking 2 or 3 months, fine. But if we’re taking 3 weeks or less? Sorry, you waited too long and the employee shouldn’t pay for your poor choices. If they were good enough to stick around because you needed a warm body and it was too hard to hire, then they should be good enough to earn the 11.5 months or whatever they’ve put into your company.

Yes like I said, pay out if the employee was just a bad performer. But I wouldn't pay if they acted in bad faith and knowingly did a worse job (which we can tell as founders/managers). So it depends. I am not paying out a bad faith employee just because I kept them a bit longer than I should have.

> which we can tell as founders/managers

Honestly? No. No you can’t.

Unless you know everything going on in the employee’s life, and their every thought, you have no basis for being able to tell if an employee is acting in “bad faith” by “slacking”. Even just defining “slacking” is next to impossible.

By your standards? Maybe. But maybe you just have too high standards. Or maybe the employee is going through a particularity rough patch in their personal lives. Maybe they’re burned out. Maybe they lost a loved one and are still grieving. Maybe you never told them they’re underperforming and they have no idea. Maybe you just are so tunnel visioned on a particular thing you don’t realize the additional things the employee is doing outside their job.

There are a plethora of reasons for why someone’s performance may not match your expectations, and the amount that are in bad faith is already small and hard to differentiate from just being a bad performer. So no, unless you were an omniscient being, you likely don’t know what’s going on in the employees head, let alone if they’re intentionally slacking.

Where does it stop tho ? If one month before the vesting deadline means "only few weeks before the deadline, so it is not acceptable to fire without giving the vesting benefits", isn't 2 month before the deadline only "one month before the period on which you give the vesting anyway, so don't fire it's bad" ?. What about 3 month ? 6 ? a year ? Where is the cutoff ?

Actually, the vesting period is exactly that cutoff - and it's a known, agreed upon one ! It's the deadline after which you should benefit from the growth of the company even if you are fired, and the deadline before which is acceptable to fire without giving benefits. Simple and transparent for both parties.

If it has been going on for months, they should have already been on a PIP and fired. That doesn’t seem to be the case here.

If a PIP was in place, fine. Don’t pay out the vest. But if they weren’t because of your bad decisions as a leader, that’s on the founder.

And to me, the cutoff very clearly seems to be under a month. Weeks.

Agree. Someone who stopped working hard months before hitting the cliff has showed you how much he cares. If there was a personal issue that caused the problem that would be worth finding out. But if he just started phoning it in, don't feel bad about sticking to the terms of his employment.

Rule of three. That’s why it’s always 2 weeks notice, or 2 months severance etc

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I agree with everything you said.