3bproblem

Stripe does this, and Coinbase's move to annual equity grants also has a similar effect. There are a lot of tradeoffs in all directions, but the fundamental one is that the reduction in risk naturally carries an equivalent reduction in ability to participate on the upside (eg table at the bottom here: https://www.aeqium.com/post/a-survey-of-equity-refresh-progr...).

You can also argue that it's not good for employees, because downside is capped (stock goes to $0, you keep your salary) but upside is unlimited (Shopify becomes the next Microsoft, you're still driving a Kia).

If anyone ever learns how to actually stop comparing themselves to others I'd love to hear it. Many of the most well-adjusted, pleasant people that I know still compare themselves to others naturally, it feels like a subconscious behavior almost at the level of breathing or getting hungry. (I liked the article though)

This game was fun enough that I could see there being some real money to be made here if you play it right, good luck!

https://www.nytimes.com/2022/01/31/business/media/new-york-t...

I'd love to see a culture of pentest results being more standardized and widely published for apps to help inform consumers.

I hear you, although for better or worse teams somewhat need to manage to their employees' expectations and perceptions as well as the statistics on startup survival and liquidity. There's also a wide spectrum for the probability of a profitable liquidity event based upon scale, market, stability, etc...

Yeah I'm with you. A lot of companies are unfortunately going to have a very rough time going forward.

This issue impacts both private and public companies, although indeed my comment did reference a private company scenario. However, you could just as easily replace that language with something like "with RSUs granted last summer" or similar. The issue is going to impact anyone who has a major equity grant set during prior_market_conditions who is now vesting that equity during current_very_different_market_conditions.

Also as you called out the problem is largely worse for private companies.

Yup and that's your prerogative, but practically speaking there are many people in the market who do put the expected value of their equity above $0, and they're going to present a retention risk if their total compensation inclusive of equity gets too low. Fwiw this problem exists for public companies too.

This is exactly right. In some situations it's a matter of practicality not morality. Anyone compensated in equity in large part needs to be willing to accept some share price volatility, but at a certain point people are going to leave and the company has to be proactive about that.

This is a solid post, and setting comp is both important and nuanced.

One really important topic that isn't addressed here as part of Compensation Reviews is re-evaluation of equity grants – particularly at times like these when tech equities are falling rapidly. A scenario that I think we will unfortunately see a lot of:

* Employees have equity grants worth $100k/year in equity, with the value based on a fundraise from last summer (not uncommon for senior engineers in tech) * Tech co valuations from last summer were white hot. 50x, 70x, 100x ARR * The market has cooled significantly with valuations at say 6x, 10x, 15x ARR * As a result, the "true" value of employee equity will be way lower than expected * With comp that far below market lots of people will quit

Of course, there's the question of what to do as a manager. Topping up all employees or raising cash comp for all is more fair but also increases burn, which is _exactly_ what VCs or public markets don't want to see right now. Behind closed doors many companies will top-up high performers and tacitly encourage low performers to leave the company.

I was also a bit surprised to see that this post didn't discuss how companies think about and create bands beyond percentiles (example of how many companies approach the creation of bands: https://www.aeqium.com/post/how-to-create-compensation-bands). Using percentiles to determine pay can work, but is typically a lagging indicator, as these sorts of comp benchmarks are based off of surveys that only go out so often. This is especially true in times of considerable compensation volatility like right now –comp for roles like engineering, design, product management, data science have all increased dramatically in the last 3-4 quarters, but this growth will probably slow significantly or even reverse given the current tech market downturn. That's very unlikely to get captured by percentile-based assessments.

It's considered a huge success because it returned a ton of money to shareholders

If someone in NYC came up to me and started acting friendly on the street I'd assume they were trying to scam me, sell me something, or get me to sign a pamphlet. It's more considerate to offer the help with no ceremony.