
Waymo case reveals Levandowski got $250M in Uber stock for Otto - openmosix
https://techcrunch.com/2017/05/03/waymo-case-reveals-levandowski-got-250-million-in-uber-stock-for-otto/
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openmosix
"An Uber spokesperson said that the stock grant was issued around the time of
the Otto acquisition in August 2016, and that it is common for vesting deals
to back-date to the formation of an acquired startup." Common? Till 5 minutes
ago, I thought stock options backdating was just illegal[1].

[1]
[https://en.wikipedia.org/wiki/Options_backdating](https://en.wikipedia.org/wiki/Options_backdating)

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nostrademons
These are different situations: the practice of options backdating you linked
to refers to the _strike price_ of _employee_ stock options, while the article
refers to the _vesting date_ of founder shares in an _acquired company_. (If
you don't understand vesting, it basically means that you don't actually
receive the shares and gain the ability to sell them until the vesting date
occurs. Typically stock options are granted at hire, but they might vest over
a 4-year calendar, with you receiving 1/4 of the shares at the 1 year mark and
1/48 of the shares each month thereafter.)

When a company is acquired, it's often structured as a stock swap where all
the founders/investors/employees of the acquisition forfeit their stock in the
startup, and in return receive stock in the acquiring company, worth whatever
the acquisition price is. It is common for vesting dates on the acquirer's
stock to be backdated to the date of employment at the acquisition (which for
a founder would be the date of company formation). If they didn't do this,
think of how screwed founders & employees would be with every acquisition: you
thought you owned $X worth of stock in the company, but actually you own
nothing, and you have to work at the acquirer for 4 years to earn back the
stock you previously had. (Oftentimes, there might still be a cliff anyway,
where you have to work at the acquirer for 6 months or a year anyway to
receive the shares you thought you owned.)

