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Comment by pengaru | Hacker News Reader

That can't possibly be the outcome Argo.ai engineers were hoping for, since any stock/options they had in Argo presumably vanished and all they got in the end was a job @ Ford.

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Someone I know was rehired to Ford from Argo and got an extremely generous offer. He seems pretty happy about it.

Numbers? I’m curious what AI comp looks like these days.

North of 700 TC*

*Anecdata

What does that mean?

700k total comp, so probably between 150-300k base salary, 50k bonus, and the rest in stock comp, usually vesting in batches over four years.

Anecdata just means anecdotal data, i.e data points I know from people personally but not a representative sample.

Ahhh thanks! I figured "TC" was "total compensation" but wasn't sure how to interpret 700 since $700k/yr seemed enormous, but if it's salary for a year plus a chunk of stock that vests over a few years that makes more sense.

Well..... It's still an enormous chunk. Assume you're making 350 cash comp (300+50 bonus), that's another 1.4m in stock vesting over 4 years (350/y)

Oh they're getting the stock yearly? Yeah that's a lot. Well, good on them I suppose!

That’s fucking ludicrous

Yes, but it's also not farfetched when you think about who owns most of the talent and what's needed to peel that talent away. It's not as absurd as it was e.g when waymo was comping employees so heavily on milestones that they just straight-up quit because they made enough to retire.

700k total compensation* not sure how over how long though.

When people say total comp they are referring to yearly.

if the company was not profitable, stocks/options don't really seem that valuable. if the company folds, there's 0 value to them. so it's not like they "lost" anything.

also, if a company closes and you're on the brink of having no job, a job "@ Ford" seems like a pretty fancy parachute to me.

> if the company was not profitable, stocks/options don't really seem that valuable. if the company folds, there's 0 value to them. so it's not like they "lost" anything.

Plenty of unprofitable startups have worthwhile acquihire-style exits. But it requires the leadership actually doing their jobs in marketing the company to potential buyers and getting some competing offers. Just because you're unprofitable doesn't mean there's nothing of value. Are there patents? Is the team proven to work well together and ship state of the art product? Are there any customers?

The conversation in this thread makes it sound like argo.ai was basically functioning like a Ford business unit already. If I were an argo.ai team member with stock/options that became worthless when the company's funding dried up, then Ford conveniently shows up to hire everyone after their stakes are worthless, I'd not be a happy camper and would be seriously questioning if argo.ai leadership acted in good faith on behalf of the employees/shareholders.

But I know nothing of what went on here. Just what I'm seeing here on HN...

Note to all startup employees: If your company closes or sells for less than the total amount of funding the company took, you (almost always) get nothing from your equity. People should really understand this, because it drives home the point that taking a ton in funding rounds sets the bar that much higher for your equity to be worth anything.

That is, startup investors almost always have at least 1x preferences, which means they get paid back first before common stock has any value at all. Thus, if part of your compensation is common stock options, you should absolutely demand to see information from the cap table about how much investors have already put in (and remember, of course, they may always add more in later rounds).

I don't know all the details of what happened with Argo.ai, but given that Ford took a $2.7 billion impairment charge, my guess is they would have never been able to sell for more than their total funding.

Look at comps then: Aurora has a market cap of $1.6B with approximately $0.9B cash on hand ($1.1B as of 12/31, burning $200M per quarter). In short: It's trading for less than 2x cash-on-hand. Argo was underwater -- certainly not above a $1B liquidation preference.

Given the timing of their investments and the extreme valuation they had during the bubble, it’s likely that most recent hires’ option packages would be worthless in today’s market.

The startup options market has become very skewed against regular employees in recent years. I wouldn’t be surprised if the bulk of the cap table and preference stack was captured by early management hires and investors. Other comments in this thread suggest that leadership wasn’t acquired into Ford, so maybe wiping them all out and giving the employees good jobs at a real company with real stock is the best outcome for the current market.

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