Fuck Your 90 Day Exercise Window
zachholman.com
zachholman.com
I certainly didn't know that asking for a longer exercise
window was an option when I started at my current work.
Large companies are usually unwilling to make changes, but smaller companies are often more flexible. I've argued over multiple employment contracts, hit rate for changes is about 50%. Microsoft most certainly did not budge, smaller consultancies were fine.
In any case, I feel like talking about my options when they come up for a refresh is a lot easier since the company has a lot more invested in me at this point.
Literally anything about your terms of employment is open for negotiation. The worst they can do is say no and rescind any offer / end negotiations because they don't like a question you ask. But if someone would reject you merely for asking whether something is possible you should be grateful because you're dodging a huge bullet.
In my experience, I've had employers, including one start-up, do all kinds of things, such as (not all at the same place): (1) give me accelerated vesting schedule, (2) reduce the time-frame of the initial cliff from 1 year to 6 months, (3) grant a small severance benefit, (4) put in writing and send an email from my manager to me, CC'd to HR, stating exactly what the terms are for working from home each week, (5) significantly raise the offered salary, (6) put in writing and send an email from my manager CC'd to HR describing specific terms about budget and scheduling for annual conference attendance, (7) raise the amount of vacation time, (8) significantly alter large sections of boiler plate intellectual property restrictions and clauses from the company handbook to exclude certain open source projects I worked on and also to exclude any work I might do in my spare time towards starting my own business, so long as it was not materially competing with the business unit I worked for within the company (this was actually at a very large education technology company, and I was very surprised how willing they were to re-write their standard, legal-approved IP documents).
Amazingly, there is only one aspect of my job that I've never been able to successfully negotiate at any employer: working in a private office instead of an awful open-plan space. And, unfortunately, this is probably one of the top 3 preferences for me when choosing a job, because open-plan offices are such a hindrance to productivity. But, physical office layouts can't easily be changed, and companies are often more willing to give hidden status signals, like higher pay, than public status symbols, like a nicer office, because the public signals cause more damage to the internal hierarchy. I have been able to get significant concessions about working from home, though, to supplement the dispreference for open-plan spaces.
What really changed for me was reading this: < http://www.kalzumeus.com/2012/01/23/salary-negotiation/ > and basically just no longer being afraid of someone saying no. I've had three different episodes where I made it to the stage of receiving a formal offer, tried to negotiate, and was told "no." And so I walked away, turned down the jobs. Employers have to learn one way or another that we're not going to work just to get out of the rain. We expect to be paid fairly like anyone else.
Long story short -- if they actually value talent, then anything about a specific employment agreement is negotiable. If they don't value talent, then just nope out of there and work somewhere else where they do value talent.
I've even passed up on options in the past also when given the chance between them and alternative compensation. Whenever I hear about my friends finally getting compensated, it is in the 2-3k range, except for the few that were at the top. But, even better than monetary compensation is working on a product or project or for a company that excites you.
"What’s the difference between an ISO and an NSO?" - http://www.startupcompanylawyer.com/2008/03/05/whats-the-dif...
Even reading that, it's still not clear to me whether there would be tax implications at the time of conversion when converting incentive stock options (ISOs) to non-qualified stock options (NSOs).
For ISOs, you don't have to pay tax at exercise, but you may be subject to Alternative Minimum Tax (AMT) especially if you have a large spread between your strike price and the fair market value at the time of exercise. (http://employeestockoptions.com/amttax/ for more information about AMT)
This seemed like an extremely good-faith maneuver on my company's part: they acknowledged that my options were a reward for past work, and they didn't want me to miss out on the benefit of those just due to some tax-related time pressure. They also knew it was really no skin off their nose if the investors got to acquire more shares at a price they deemed fair.
I first thought Pinterst was the first one to extend the exercise period to a great length, but I discovered that it was in fact Quora who was first. They have a 10 year exercise period. Pinterest was followed by Coinbase.
First time founders will have a hard time rocking he boat because of the great fear of not being able to raise capital. Thus it's really on the shoulders of the late stage companies and repeat founders to lead the way.
I think people expect too much. Companies don't owe their employees anything. They are businesses which aim to make money and/or to accomplish some goal, but that goal is almost always not "make your employees happy and wealthy".
You may work your ass off, but if you do, do it because it is the right thing to do and you want to do it. If you do that, you'll never be disappointed unless you let yourself down. Don't do it because of options.
If you do take options, because you have to or just want to, you are gambling. You might be able to keep the upper-hand if you know what you are doing, but even owners/partners get screwed sometimes (often).
Lana Kane style noooope. Do it for a wage/equity/benefits/vacation package that is satisfactory in helping you achieve your goals. In fact, if you accept anything less than that, you're not just doing yourself a disservice, but also all of your peers because you're sending a market signal that you currently devalue your own labor. If you reached that decision through careful thought and really determined such lesser forms of compensation were OK for you, given other trade offs, then fine, so be it, that is your market price. But that's not usually what happens. Usually it's an inexperienced engineer who had no way to know any better because she/he had never been exposed to the important points of stock options, never knew what or how to ask, and followed some dopey advice like "just work hard because it's the right thing to do" because someone seemingly older/wiser/with more authority kept telling them to stop whining for more compensation and just do the work.
It's precisely because a business doesn't have the explicit goal of making employees any wealthier than it has to that we have to be vigilant to demand our full market compensation, whether it means negotiating a better exercise window, or better accelerated vesting terms, or a real wage instead of a but-we're-a-startup wage, and so on.
Your advice effectively says to ignore your non-work life goals that cost money because only your work-goals-productivity will make you happy. I doubt this very much, and certainly know that it's not true for anyone I've ever worked with.
I've been near the top of band of my particular subfield for the last few years, after working for years at a bog-standard SDE comp package, and IMO there are some pretty compelling reasons to demand better compensation beyond, well, having the money.
For one thing people stop fucking with you when you're getting top of market comp, for a lot of reasons - many of which are bullshit, but hey. The perceived quality of your work is higher because you're demanding (and getting) more for it - and people are more willing to treat your professional judgment seriously.
In general companies and the people in them want very much to believe that they're getting what they paid for, so being known for being at the top of market (quite unjustifiably, of course) raises the default perception of your work.
It also opens the window for alternative arrangements - work from home, more vacation, all that is considerably more on the table when you're perceived as a top-dollar high performer.
Conversely, willingness to accept less than market seems to signal to management that you can be pushed around on other matters (true or not), and even if you're well capable of fending off this jerkish behavior, why not just avoid it and get paid more? I've personally seen founders' dispositions toward me improve, and just get more professional respect in general, by naming a high price and sticking with it.
This isn't to say that one should take a horrible job because it pays top dollar, but in the current state of the industry you can have your cake and eat it too - you can work with good people on interesting stuff while staying within the top decile of your niche.
This may be true for some, but here is what I've seen and experienced personally + family members and friends I've talked with:
1. You are a full-time employee who is either very skilled or not as skilled but getting paid in the top 5-10% as a senior or principal software engineer. For a while you get to work on whatever you want to as long as it makes the company better, so you write open source projects, etc. Then, something happens. Either your company gets outside investment, or is bought-out/merges/buys another company, or they fall on hard times, or there is competition, or someone in management reads some new book or goes to some conference, or you just get different management, and now you all of a sudden either have been driven to cut corners which leads to a mess, or morale sucks or people buy into management's crappy philosophy which which leads to no innovation and suddenly it feels like no one else is using the crappy libraries and frameworks you had been using, or things for some other reason just suck.
In this case, you're still making a lot of money. Happy now? Sure you could have found a new job, but wait hold on a second- you are in the top 5-10% so jobs that pay that well may not come as easily. Looks like you're fucked.
2. You work your ass off as an independent, grow the company, and are doing well working for large company X in NYC. You had an awesome time putting your family through hell in the beginning for peanuts, but somehow you managed to make it past all that.
And now, what do you have? You're making a lot and have several guys/gals depending on you and you are still working your ass off and now you feel like if you quit, you take all of them down with you. Maybe even you're still on your own, but if you quit to take a break, your family will suffer because they won't have what they did.
What I suggest: do what you believe in as long as you can survive and meet the needs of your family. Push hard or don't, but be happy if you can. This will make the world a better place. You may end up making too much and getting into the same predicament, but if you're lucky, you'll at least not be focused on more money than you need. And if you do get more money than you need- share it. Much good in the world has come from those with money sharing what they have.
^^^ this*1000
You can work for options, but if you can't guarantee their value, won't that be a let down? Why not work to do something good, that you believe in, and/or to better yourself at least so that you may continue to do well?
And then it turns out that their value is greatly overstated and people get upset.
Yeah, people should know better. But it sure would help if companies would stop misleading people.