

What if the Zynga situation was reversed? - earbitscom
http://earbitscom.posterous.com/what-if-the-zynga-situation-was-reversed

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kls
The analogy is flawed if you walk you forfeit the stock, you did not uphold
the deal so you forfeit the cosideration of the contract. The employer has
already participated in the up side, because from the time you where there you
worked for less than market compensation, looked at from a purely economic
standpoint you are actually doing the employer a favor because you took on the
risk and then walked away with that risk on your back, while abandoning the
reward. That is the portion you continue to fail to see, the employee meets
his obligation from day one and continues to every day they remain, the
employer on the other hand promises to meet their obligation to reward them
for the risk they took and are taking in the future. It's not the same and a
parallel cannot be drawn because one assumes risk immediately while the other
does not. You can't reverse the roles because to do so does not draw a true
parallel. It would be more akin to you telling the company that any ideas you
have in the future are their intellectual property, then you hit a good one
and then you threaten to walk if they don't renegotiate that agreement to give
you a better cut of your idea.

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earbitscom
In my case (a true story, not an analogy) I walked with no stock. I could have
walked with 2 years of stock and I'd be taking half of the payment for half of
the risk I agreed to bear. People do it all of the time. If my employer had
the attitude you're describing, they'd say, "Hey...I gave you that first half
with the understanding that you'd be staying four years. You've reneged on the
agreement, I want that first half back." As we all know, that would be
ridiculous.

 _> one assumes risk immediately while the other does not._

That's not true. The company immediately assumes the risk that the stock will
be worth way more than the normal compensation of that employee. Zynga took
this risk for several years and the employees have made a ton of money - way
more than they would have elsewhere. Why should Zynga keep assuming that risk
when there is no reason to anymore?

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kls
Every contract I have signed has said, if I walk I loose everything, totally
shit out of luck, no do-overs. I was fine with that and would expect it, if
you walk you loose it I am amazed that their are contracts out there in
original form that would state differently. If it where my company and my
contract, it would absolutely state all options revert back to the company in
the event of resignation. From the perspective of an employee I would be and
have been more than happy to sign to that agreement. If it is not going to be
a fit, one side generally figures that out early on and in such case I would
not feel entitles to options if I where the one deciding to leave. Conversely
if I am not the one deciding to leave, I need to be compensated for the risk
that I took, seeings how I am now being denied the ride to the finish line. It
cuts both ways.

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earbitscom
I would be very interested to work at the places you have. When you vest
stock, those are your options. You can leave anytime and keep whatever has
vested so far. Otherwise, there would be no reason to vest over time. The
whole thing would just vest at the end.

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kls
I should clarify a bit, all of the pre-IPO, pre-exit companies I worked for.
With Marriott it followed a typical vesting schedule but that is a totally
different animal. A fortune 100 and a start-up are apples to oranges when it
comes to how options are dealt with. But it sounds to me like some companies
are using a more "big company" traditional option grant scheme. I would never
sign up for the same contract I took with Marriott with a start-up, totally
different issues and risks to use an options contract like that.

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spitfire
“If your boss demands loyalty, give him integrity. But if he demands
integrity, give him loyalty.” ~COL John Boyd

