Leadership (Kyle Vogt) lied to us employees about the facts of the accident Cruise had last month and Cruise also lied to regulators. Then, GM claimed our stock was still worth a lot, since they were still lying about the accident, sent us the Greek gift of vested stock, incurring a tax liability based on the large stock valuation, and just afterwards claimed the stock wasn’t worth what they said before and they cancelled the stock buyback program. This is leaving most employees with a huge tax due next year for worthless shares. They’re either incompetent or Mary Barra is intentionally fucking us employees over since she had to compromise with the auto workers in the strike. I’ve been through a lot of shitty situations in tech startups and in FAANG. But this takes the cake. “There will be layoffs, your equity is no longer worth anything, and here’s a huge tax bill.” I knew GM was pretty hostile to its auto workers but didn’t realize the robber-barons would literally be robbing the employees and trying to inflict maximum damage, as if layoffs aren’t enough to remind us that we aren’t billionaires. Crazy to burn down the company and punish any employees who helped build it. Why don’t these rich people ever go to prison when they lie to regulators and defraud employees?
American automobile industry leadership is just full of motherfckrrs and they are the reason why great cities like Detroit went to decline. They are also the reason why USA has a shameful public transportation system and the railway went to rust. Their greed, selfishness and evilness are beyond words and they are the most disgusting people in the world. Even Elon Musk is 100x kinder and honest than them. Don’t ever work for GM, Ford or alike.
Lee Iacocca will bless them in the next life brother
Were employees given the option to sell their shares from the time of the incident, to when the buyback programme is scheduled to pause? If not, it's very shady indeed.
Nope. After the incident they said “your stock is worth $x/share” and recorded that vesting amount on our paystubs as actual earned income. There was no opportunity to sell and not even an opportunity to avoid a crazy huge upcoming tax bill.
Boohoo, poor me. You work for a startup, what do you expect. Not many startups offer this type of equity liquidity program that Cruise had. You will not be the first to pay taxes on illiquid shares. You cannot have it both ways. You wanted the high reward without the high risk. Many Cruisers were willing to put up with a lot and horrible WLB as long as the cash kept rolling in. Employees at many startups had to wait a decade to sell their shares, if at all.
The liquidity is not there but the tax bill still is. What is the point of taxing paper money. People in other start-ups don't have to pay tax on paper money.
I wouldn’t have joined this shitty rug-pull company if they didn’t offer to buy shares at vest time. They absolutely didn’t represent that there was financial risk to working there. Note that they unilaterally made up a fake share valuation, after having an accident and lying about it to regulators, and then told IRS I “made” this absurd amount of money that was a complete fabrication. I never agreed to work for stock that didn’t have a way to sell shares to cover tax — they told me i could sell shares to cover any tax burden. I didn’t sell naked calls on GME — I was just fucking working for my employer, not expecting them to be able to assign me an unbounded arbitrary tax bill. Should not be legal for simply reporting to work to expose me to unbounded financial risk. What the fuck. If you support this crap I don’t know what is wrong with you.
Calm down. It’s not unbounded. They withheld/paid the tax already assuming a 22% tax rate, didn’t they? You are on the hook only for the difference between 22% and your effective tax rate. Let’s say your tax rate is 32%. That’s what, $20K, upper bound, on $200K of vested equity? People who work for the big boys pay a lot in taxes come tax time. Cruise pretended to be a big boy, when it is not.
It was unbounded, structurally. Cruise/GM could (and did) make up any arbitrary “share value” desired before the rug-pull. Absolutely nothing could have prevented them from saying my stock was worth $10M, for example. Or $100M. There’s no regulator that I know of auditing the random number they picked out of a hat (while covering up the accident details which they knew would drive down the fair price). In my case with the $24 value they fabricated per share, the delta over 22% leads to around a $100k tax bill.
In california, the tax burden is pretty big. Example, For 700 TC it’s like 45%. So even if OP has around 450k stock vesting this year and 22% has already been deducted, that still leaves a little over 100k to be paid in taxes based on 45% rate. (45% of 450k is 202k) Can totally imaging the stressful environment at Cruise at this time :(
45% includes California tax right? Then there is extra 10.23% withholding for ca taxes
Dude is talking like he had five offers and he chose a lower one just because. At the end of the day, he was tempted to take a higher offer (which cruise typically offers) and didn’t factor in the reality of private stock options. Just suck it up man, people have been burnt out in startups. Go find another job.
I can handle the paper money vaporizing. What I am angered by is the random unfair tax burden that forces me to give IRS $100k of my savings for no reason. If I were higher level this could easily have been 500k or $1M.
Really you will pay 100k of savings. 22% was deducted automatically. Assuming your tax rate is 44% (which im sure you are not), you saying your rsu for first year is 450k? Your total equity award is 2 mil over four years. This means you are at least director level. Do you think people in blind will have sympathy for someone earning 500 ish in base, 300 in bonus and 500 in stock? You thought a company with 0 revenue is worth 30bn. You are too stupid to be at your level - literally no business sense.
Op, you have a very easy solution available to you today. You can reach out to HR and decline the vested stock for this year. They do not report anything to the IRS until year end. This will adjust your income and your taxes
They asked us to “accept” the vested stock a few weeks ago to be able to receive it and sell in the RLO. It’s already transferred. Not clear to me that it can be declined otherwise I would for sure.
It can be declined after vesting. Just reach out to HR. You will save them money (the 22% withholding they fork over to the IRS). They will save you money at tax time. Win win. Just don’t come back crying here if the company pulls through and you realize you returned a bag full of cash. You can’t have it both ways, all the upside and zero downside.
Let me get this straight, you DON’T HAVE to exercise the vested options shares even you have to leave the company or your option is expiring , correct? not that I am speaking in favor of Cruise/GM, but (exercising) startup options is ALWAYS risky, I myself got burned once. If it is RSU, you always sell more shares than what is needed to cover the tax, personal finance 101.
They aren't options, they are RSU. And the whole point is they CAN'T sell shares to cover the tax. Cruise/GM won't let them now. Clueless post.
Right — what bardy said. These are not options, but RSUs instead. What you described is how RSUs work in sane companies. Cruise explicitly doesn’t let us sell to cover the tax! I had already clicked the box to sell all shares on vest but they cancelled all sales and left the tax liability in place.
Preach! We all got fucked by the tax bill, some a lot worse than others.
For context, can you tell me how much it could be, at least in your case?
Cruise was offering upto $1m (4 year vest) in equity to L6 software and ML folks 2-3 years back. Stock value would have grown since then, so go figure, this could be easily annual best of $300-$400k for some people, less or more for others and a 40-45% tax burden (~22% is deducted at source) with the cash value evaporating suddenly the balance is quite significant Example: Check out this post! "GM withdrew Cruise share buy offer (Tech Industry)" https://www.teamblind.com/us/s/f5xRTZ0K