SpaceX requires employees to agree to some unusual terms related to their stock awards, which have a chilling effect on staff, according to sources and internal documents viewed by TechCrunch.
In public companies, it’s not really a scam. It’s a legitimate tool for these companies to get and keep the key people they need. The stock benefits are over and above their salary, after all, and equate to real money.
It’s the startups and private companies where this all gets a bit scammy, because there is no liquid market for these shares. And those companies are more likely to offer extra stock instead of a competitive salary, but that stock may not be able to be cashed out until the company goes public, forcing the employees to stay until the IPO, unless they give up that theoretical big payday.
As long as you exercise all the stock they give you one way or another, you can leave whenever you like. You still own the stock if you leave. The real scammy part that no one seems to mention is to give really long vesting periods
It is part of the calculus of employment. You get these shares and you deem if they are worth something (you think the company is compatently run and will IPO) or you think they are worthless.
You can talk about how pointless and probably predatory that is, but that is the current system we inhabit.
Fwiw I walked away from imaginary shares. My public company went private by a hedge fund. Honestly hedge funds are good at making short term cash so maybe that was a bad decision, but I wanted no part in the next year or more of layoffs. Plus my imaginary stock was still on a vest cycle so it would vest probably after the stock was skyrocketing.
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Sounds to me like the scam is to attract workers with stock benefits.
In public companies, it’s not really a scam. It’s a legitimate tool for these companies to get and keep the key people they need. The stock benefits are over and above their salary, after all, and equate to real money.
It’s the startups and private companies where this all gets a bit scammy, because there is no liquid market for these shares. And those companies are more likely to offer extra stock instead of a competitive salary, but that stock may not be able to be cashed out until the company goes public, forcing the employees to stay until the IPO, unless they give up that theoretical big payday.
As long as you exercise all the stock they give you one way or another, you can leave whenever you like. You still own the stock if you leave. The real scammy part that no one seems to mention is to give really long vesting periods
It is part of the calculus of employment. You get these shares and you deem if they are worth something (you think the company is compatently run and will IPO) or you think they are worthless.
You can talk about how pointless and probably predatory that is, but that is the current system we inhabit.
Fwiw I walked away from imaginary shares. My public company went private by a hedge fund. Honestly hedge funds are good at making short term cash so maybe that was a bad decision, but I wanted no part in the next year or more of layoffs. Plus my imaginary stock was still on a vest cycle so it would vest probably after the stock was skyrocketing.