What happens to cruise employees compensation with GM's new deal?
Context: https://finance.yahoo.com/news/gm-shuts-door-cruise-ipo-173252316.html Can someone explain to me how stock compensation works for a private startup company like Cruise which has yet to IPO, but got acquired? And now they're never going to IPO. So if an employee was given 400K equity over 4 years when they joined, does all of that get converted into GM stock now? i.e is this considered a liquidity event. #ipo #equity TC: 200K@ Amazon, L5
Stake holders will be paid out. Many funding round investors have liquidation preferences so everyone will be paid out their multipliers and then the remainders will be split proportionally in the employee pool. Employees may get next to nothing
I'm a noob about these things. But wouldn't the employees atleast get what they were given according to their compensation when they joined? For eg. If an employee joined and got an offer for 100K in stocks (based on the valuation of the company when they joined), wouldn't they now be able to liquidate those "stocks" and get their 100K?
Knuckles9 has made the dumbest and least helpful reply to this thread. You are wrong and bitter due to Affirm’s stock being absolute trash. Our TC is now liquid and we get to sell however much we want of vested stock each quarter. It’s not GM stock, they are Cruise common shares tied to our valuation.
Read the article -they are hosting “Recurring Liquidity Opportunity”. Employees will be able to sell stock periodically without worrying about IPO.
Read article?
I did but I didn't understand what that meant. What stock do they have now and who are they selling it to? Is all their stock just GM and they can now sell it in the public market?
You can get paid by gm for your cruise rsu's when they vest. This means each vesting is now a taxable event. They are having a third party provide quarterly valuations. This means your rsu's have some liquidity, but you'll never see a huge increase in value. So treat it like cash with it's current value
Thanks for your reply. How much is the average cruise engineer going to be making with these vests in a year? For eg. - an employee who joined 4 years ago was given cruise stocks worth “x” according to the valuation at the time. How much do you think the valuation will change compared to then?
Let's look at upcoming Mobileye IPO. This will be a good estimate.
The board of directors sets the price, so you’re just going to get whatever cheap value they claim the RSUs have, right? It’s like having HR decide how small your bonus will be this year.
Incorrect. It’s cruise RSUs which are now liquid.