Suppose a (private startup) company issues 1k shares that vest over 4 years. If I leave after a year, do I still keep them 250 units? What happens when the company goes public in 5 years? How does it work?
I don’t think so - you loose them. But Re-read your contract.
lol this is wrong
If you get options don't you have to exercise within 30 days of leaving or something?
You keep vested shares, that’s what the word “vest” means. They can be held or sold like any other shareholder’s equity (so in a privately-held company, you have to hold until a liquidity event happens, like a merger). But read the fine print, I’m no lawyer.
They are chopped into gruel and served to the CEO’s kids for dinner
I guess company will buy back those vested shares from you since it is still a private company. You surely cant keep it, vested or unvested.
A private company could craft a stock agreement like that, but few do because they’d have to constantly track valuation which is subjective (and therefore would create more dissent/conflict than it’s worth). And they’d have to spend cash on buying back shares of departing employees. So I doubt the OP’s company would have such a provision. If it were an incentive stock option plan, it’d work about the same except that ISO vesting confers a right to purchase stock rather than an actual grant of stock. It’s typical that an ISO plan requires that vested options be exercised within 30 days of employment termination, or the options expire. That does not apply to RSU programs.
What the hell.... does that mean that they’re trying to keep me trapped??
You will be paid though for your vested rsus
be clear OP. it depends on whether they’re options (ISOs) that need to be exercised or RSUs
RSU
then you keep the stock units that have vested. once you leave, you can sell them once a liquidity event has happened (an IPO)
Cool thanks
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should be defined in your contract, but typically they vest every pay period. so say you get paid 2 times a month, that is 24 times a year, 96 times in four years. so if you stay for exactly a year, you’d keep 24/96 (1/4).
My question was what happens to the vested stocks if you leave the company?
You keep shares that have vested