Preferred price for RSU
Is it legal for a private company (pre-ipo Uber, Airbnb) to give an offer w/ RSUs based on preferred share price vs 409a price? Most times, they say they can't disclose the 409a price.
My pre-ipo offer letter contained number of shares, not a price. Also, it contained what they could be potentially worth at different prices. So, in a way you kinda have to trust your recruiter on the price they quote.
Sorry, but for those not as well versed in this area... is the thinking that the preferred price is higher than the 409a, thus you’re given less shares? If not, I’m just curious what I might be missing.
Yes, preferred price is usually much higher than 409a price and the gap closes as the IPO gets close. You ideally want to use 409a price to compute your number of shares because you are getting common stocks instead of preferred ones.
If you look at your original contract it’s denominated in shares and is not priced. The recruiters gave you a price verbally, and in the unlikely event they put it in writing they probably mentioned the fact that it was preferred. It’s shady. It’s frustrating. I’d be surprised if it were something you can sue for. But if you could, more power to you. My first month on the job I had the same realization and was PISSED. I almost left, but decided to stay. When I made that decision I also decided I wasn’t going to fight over the pricing anymore. Best of luck to you. If you’re serious about it, go talk to an employment lawyer. If you do, please report back.
My condolences bro.