
The CEO of billion $ startup is firing employees before their stock options vest - lladnar
http://www.sfgate.com/technology/businessinsider/article/The-CEO-of-a-3-7-billion-startup-is-allegedly-11072615.php
======
merricksb
Heavily discussed 2 days ago:

[https://news.ycombinator.com/item?id=14111923](https://news.ycombinator.com/item?id=14111923)

------
DenisM
This is why I'm skeptical of cliffs: it creates incentive for the employees to
quit the day after vesting, and for the employer to fire them the day before.

~~~
jwilliams
Well in the former case, the employee has stuck it out and really is fully
entitled to the shares -- and in most scenarios, has to pay tax on them right
then and there.

Most likely in that scenario they got a better offer and probably did a good
job. Arguably the cliff worked in keeping them around just a little longer.

I can't imagine many scenarios where the company firing at 364 days purely to
avoid the vesting makes sense. Why hang on to someone so long if they're not
adding value?

~~~
dvogel
As the story alleges, they might be adding value but enough value to offset
your loss of majority control.

~~~
jwilliams
Ah. Yes, completely right -- I was musing more on the top comment relating to
cliffs and the practice in general.

In most cases if you're hiring where options are seen as necessary to get that
talent - seems like it's going to be an odd (but not impossible) case where
you're happy to walk that talent out the door too.

------
tabeth
Why not give employees a % of their amortized stock options per day of
employment? Any other scheme is nonsensical and the power balance is clearly
on the side of employers. If you're worried about the employee not adding
value then maybe they shouldn't be hired to begin with.

A challenge anyone who doesn't like this to explain why they think it is bad.

~~~
punkdudez
Because of the reason why they introduced "cliff". To avoid "job" hoppers that
try to gather stock options from multiple startups in the hope, at least one
will go IPO or Unicorn basically, without even doing any substantial effort
themselves. And propably for various other reasons...

~~~
xref
That's an argument for amortization, not against it

------
jessaustin
TFA says, "The full Bloomberg story, with all the details, is worth a read »"
[0] I agree; what a greedy insecure entitled shithead!

[0]
[https://www.bloomberg.com/news/articles/2017-04-13/tanium-s-...](https://www.bloomberg.com/news/articles/2017-04-13/tanium-
s-family-empire-is-in-crisis)

------
peter_retief
Somebody designed a financial instrument to make money, in a zero sum game
somebody has to lose for somebody to make money. I would rather shake
someone’s hand and agree to commit to an outcome. It has always worked out
well for me

------
clebio
So... is it potentially illegal?

------
alain94040
"On multiple occasions, the firings came within weeks of an employment
anniversary, when workers’ stock options were due to vest"

Birthday paradox? The title doesn't seem to match the Bloomberg detailed
article. The CEO looks like a really bad manager though, but firing near
vesting seems to be the least of his flaws.

~~~
rm999
I don't think the birthday paradox is relevant here.

A decent statistical test would be to gather all firings within some radius
around work anniversaries (let's say 6 weeks), and see if there's a
statistically higher chance of the firing happening before the anniversary
than after. If it's egregious, you'll see a lot more before than after.

