options (IF) let go right before options vest?
Mar 30, 2020
5 Comments
With everything going on, I was wondering what options I have if I happen to be let go 2 months (example) before the first 25% of my options best.
I heard that happened to someone in Tesla and he sued. What are my options?
Also, when other big companies and FAANG offer stock or equity as part of compensation. Is that stock? or is it like me, I got options with a strike price I have to buy at.
#layoff #equity #stock #compensation
comments
FAANG and other public companies and late stage private companies will give RSUs without a strike price and no exercise. The same vesting schedule and cliff will apply (standard 4 year vesting with 1 year cliff - beside Amazon which is backloaded) though you wouldn't have to make a decision to exercise anything after your cliff.
But if employees are let go or leave before their cliff ends, they will not have vested any RSUs and will leave with nothing.
The cliff is there to protect the company in case they made a bad hire but it shouldn't be 1 year anymore IMO, but that's another story.
I'm sure you could try to sue if it's obvious that they fire you right before your cliff though but not sure π€·π»ββοΈ
Overall we should be making much more progress on equity the future will be:
- no cliff
- 10 yr exercise window
- liquidity anytime
https://news.crunchbase.com/news/heres-what-you-need-to-know-about-equity-if-youve-been-laid-off/