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If You're Working For Stock, Read the Fine Print
cratermoon writes with a story of interest to anyone interested in working at a start-up, or compensated even partly in company stock: "Former Skype guy Yee Lee finds out that for people working at companies controlled by private equity firm Silver Lake, 'vested' doesn't mean what you think it means, and gets no money from the stock options he thought he could exercise. 'Skype spokesman Brian O'Shaughnessy said, "You've got to be in it to win it. The company chose to include that clause in the contract in order to retain the best and the brightest people to build great products. This individual chose to leave, therefore he doesn't get that benefit."' Fortune also has the story." Some of the commentary on the confusing language surrounding the stock grant says the company was doing nothing out of the ordinary, but it seems that's because opaque language is the norm.
This is not an example of working for shares of stock, but rather of working for stock options. Options contracts work differently from shares of stock. Why is this such a big deal? Are people just now waking up to the reality that times have changed, and that companies don't give them actual shares of stock anymore?
Palm trees and 8
You are the employee and you cost money. The profit is already money and therefor that is what is protected. If you want to assure you will be protected, read what you sign. Everyone wants to keep their slice of the pie. Every slice costs money. And even worse, lawyers will be making a piece from each part of the action.
When the foot seeks the place of the head, the line is crossed. Know your place. Keep your place. Be a shoe.
It wouldn't be if you people would quit signing things you don't understand.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
"Confusing" language often means open to interpretation (ie, ambiguous). Anyone who thinks they may have a claim because the language in their contract can be read in multiple ways is probably well-advised to talk to a lawyer and sue.
Any guest worker system is indistinguishable from indentured servitude.
Just another way to screw the little man.
"We are just a war away from Amerikastan. When god vs god the undoing of man." Dave Mustaine
I worked for a startup, was given stock options, then the company went public. After about a month my options were worth about $1M on paper but I couldn't exercise them because that would have diluted the company founder's share value as they busily unloaded their shares. In the end I wrote a check for $24k to the IRS and ended up with nearly worthless options while the company founders cashed in and took their millions off to another startup to repeat the process.
If you're working for stock options you're going to get screwed.
It's really not that complicated to know what is the right thing to do here. Harsh terms in a contract, fine. The person you're negotiating with can take it or leave it. Opaque and intentionally misleading terms, not okay.
To repeat: nothing wrong with both parties in a transaction negotiating vigorously on their own behalf. When the one party, which has the support of teams of lawyers skilled in writing opaque legal sourcecode that no ordinary person can read, uses that to their advantage, it may be legal, but it's wrong.
Karma: pi (Mostly due to circular reasoning in posts).
"If you've already made so much money, why do you have to squeeze every ounce of flesh out of every person?" he asks.
Wow, how naive. The recurring argument in the article of "you made a lot of money, why can't you just give some away?" is ironic, given the idea that the whole thing is about stock options in the first place.
Welcome, for better or for worse, to corporate America. Apparently you haven't been here long.
I was in a startup, had a ton of stock options. CEO sold the company, but just before doing so... he granted himself a million options at a penny strike price. This diluted the shares so that anyone else made $0 because they were worth less than the strike price everyone else had. This was all after working there for years and putting in a lot of OT, and creating a product that gave the company real value it would not have had otherwise.
True story. I opt for cash now, and will take options if they give them but do not consider them as part of my compensation no matter how much my bosses try to give them to me in lieu of increases.
Here's the letter the OP received from skype:
http://framethink.files.wordpress.com/2011/06/lee2.pdf
Clearly Lee had 90 days to exercise after his termination. This is the same across most companies. He claims that this arrangement is some kind of Skype trap, but that's incorrect. Every company I've worked at with options lets you vest options at a standard rate which gives you the right to exercise those options. If you leave the company, it's pretty standard for a 90 day window to exercise. Lee is just pissed that he didn't know that.
The only mention that the company had the right to buy if he left in less than five years came in a single sentence toward the end of the document that referred him to yet another document, which he never bothered to read.
For someone who works the startup circuit jumping from job to job every year, you would think that reading your employment contract would be a no brainer.
"I would have never gone to work there had I known," [Lee] says.
In other words, he never had any intention of staying with the company. He was only there for the minimum amount of time necessary for some options to vest, then he planned to cash in any windfall and move on to the next startup.
Sorry, but I have no sympathy for him.
'The tyrant will always find pretext for his tyranny.' - Aesop's Fables
If you read the legalese in the Fortune article it looks like it also applies to shares from options that have already been exercised. That is, they've exercised the options and are holding actual shares but then leave before five years are up.
You're a septic, right?
If I had an Ass, I'd call it Fanny Bottom, then I could slap my Ass; Fanny Bottom, on the Arse.
Hey, that's really easy to understand. Why wasn't that kind of language in the option agreement? I hope the judge decides to send a message about legalese so dense even extremely bright college graduates have to hire lawyers (for more $$) to interpret. What in the world is an "options vesting schedule" supposed to mean?
If that's his attitude, perhaps his former employees should kill him and steal his possessions. If "winning" is all that really matters, that is.
What's bad is to have such a rule but hide it from people.
--Greg
FUCK THEM BACK.
I don't see any mention of the Wired article "Downgrading Skype and Silver Lake to ‘Evil’" in the comments, so here it is.
Nothing odd about the exercise & repurchase part, except for the price of repurchase. After termination and exercise, Lee holds stock, that stock has no awareness of the history of the options it came from. The company repurchases the stock by force at an arbitrary price, but this transaction has to be at the then current valuation. If the company has an offer from Microsoft, or even a term sheet, it cannot pretend that the valuation is as it was when the options were issued.
Someone should verify that the company paid appropriate taxes; after all they got his shares which were clearly worth millions for pennies: they owe taxes.
There's not really any questions that they robbed him, my expectation is that he would prevail in court.
The documentary sleaziness (if it even exists and this is not 100% fraud) is that the abnormal repurchase price is stated in another document.
I'd say at least half the companies I've received options from had clauses just like this. It may not be par for the course with private venture-funded companies, but it sure is close.
You should always assume that options or common shares of private companies are going to be worthless to you. Never include them in your compensation evaluation. Even if you are in a company that lets you keep options without buyback if you leave, you still have common stock and they can play games and absorb the equity event's value entirely or almost entirely in the preferred shares. Or they can recapitalize the company prior to acquisition, re-issue stock to existing employees and investors and cut the rest out.
Making money off an equity event in a private company is like winning the lottery. Pretty nice if it happens, but you're not being rational about it if you think you're going to win just because you played.
Are the only two things I would work for on top of salary.
Stocks are worthless.
-Hack
Got Geometrodynamics? Awe, too hard to figure out? Too bad.
Spot on :-)
If I had an Ass, I'd call it Fanny Bottom, then I could slap my Ass; Fanny Bottom, on the Arse.
Umm, what part of "I worked for a startup, was given stock options" did you not understand? The FOUNDERS did exactly what any normal company would do - hire people to do WORK for COMPENSATION. Of which part of that was apparently detrimental stock options - stock options that are meant to reward the WORKERS of THEIR hard work building the company. I've worked both sides of the "My company" and "someone else's company" - the concept of ownership and compensation really isn't that hard to understand.
duh.. and a "not" too much in last sentence killed the whole point
When I bought my house, I read through everything, and there were three places where I requested changes to the contracts. In each case, they made the change on the spot. When I was hired for one job, I said the non-compete agreement was insane, pointed out where, and the boss tore it up on the spot. Once I was hired, he asked me to help re-write it to something more reasonable. If you don't read before signing, you're still responsible.
The options weren't worthless. He had the right to sell them at grant(exercise) price back to the company or let them expire after he quit. That was what he agreed to in his contract. He can try to spin anyway he wants but that's what he signed. He would have only paid 26-28%(AMT) taxes(he was vested less than a year) on the call if it was more than than the exercise price, which it was, prior to quitting(not the case here because he quit). It wasn't because of the contract he signed, so he would have paid $0 in taxes for selling them back at the same price he acquired them. He's just an idiot and apparently believed HR instead of talking to an accountant. They are called ISOs(incentive stock options) they differ from regular stock options in that they are regulated by the IRS. (see Internal Revenue Code 421(a) and 422).
The contract basically said you loose all of your ISOs if you quit. It's no different than people needing to return work uniforms/clothing, vehicles, credit cards, etc if they quit. The company is saying, "You are a quitter, you shouldn't profit further from us other than your salary."
It seems a large number of people here think that it is, though. Idiocy, or trolls. Do people really have so little sympathy? Contracts are intended to be a fair, bindings agreement between two parties. There are countless examples of unfair or weasel worded contracts failing in court, but apparently that would be news to some. What about loan sharks? What if someone snuck in a paragraph of mind bending legalize which amounted to "we can kill you"?
Oh, of course, they should have read the contract, and in case it was too confusing, they should have hired a really expensive lawyer to read it for them.
Bullshit. While I have diminished sympathy for Lee for not double and triple checking his termination clause, I do not have none. I also suspect, as pointed out in another comment here, that Skype should be liable for a lot of taxes by effectively buying back his options for nothing rather than their grant price. This probably still represents a net win for Skype, but at least then it's not "free" for them to exercise this clause.
In any case, it's still a particularly nasty thing for Skype to have done. Options generally have a "30 day" clause so you're not screwed in case of termination. This is supposed to add potential value to the options: you don't constantly run the risk of losing them all at the whim of the company. Skype effectively has a termination clause which takes away all your options any time they want. The difference is huge: I currently work on the assumption that my options are "safe" and I don't have to worry about them vs termination. My employer has written their options clauses to effectively say "we cannot be a dick - we are bound to allow you a grace period". Skype didn't. Their employees must treat options as directly bound to their employment, and if they're working under an "at will" contract, they can be gone in an instant. Skype took away a vast amount of value in their options due to the buy-back clause.
Companies should of course be free to offer compensation incentives on terms that fit their business needs. It's best for everyone if the incentives are expressed in plain language up front, so nobody feels tricked or taken advantage of later.
I stopped including stock options into what I consider adequate compensation for a job a long time ago. I look at the dollar salary or hourly contractor pay as the only factor in judging compensation. Stock options are a nice to have, but in the end I never count on them paying off. I've been around when stocks fall below the price they were when I started somewhere (companies can gain market share but fickle markets do funny things... e.g. they've maxed out the market so can't grow any more but even though they are making the same profit year over year we don't think they are worth as much since they can't grow as fast as before.... etc etc etc) or when companies want to put clauses like this into the package. So I don't let them wow me with phrases like, "but we offer great stock options" when talking to the recruiters. I prefer the "show me the money" conversation. Now-a-days I believe "stock options" are just a way to pay you less and to try to rope the naive into staying at shitty companies.
-- I ignore anonymous replies to my comments and postings.
I should still have a skype account somewhere... should look it up then cancel it. Not that it matters as I wasn't using it, but it still sends a tiny message.
When you leave a company, you have to excersize your options. That is, you have to BUY the stock in the company. If you don't do that, the options are forefit.
This is pretty common knowledge, and EVERY company does this. After all, the whole point of options is to incentivize employees, not to make employees rich and have them quit.
It amazes me that people will never read through important documents like stock option agreements before signing them.
Learn to hate the man like the rest of us, of course until you learn your lessons and *become* the man. Then you have to learn to live with yourself. The only way to get rich in the world is to leverage others, venture capital is the name of the game, not social capital (where somehow everyone gets printed money and also mulligans for their dumb ass decisions or lack of experience/education). Consider this a 70K lesson you learned, something they never teach you in the 30K community college degree program you took.
No dog ever accepted company stock as a reward.
Dogs will only accept tangible rewards of immediate value (preferably something they can eat)
Humans should learn from the wisdom of their canine friends
If your children ever found out how lame you are, they'd murder you in your sleep
If you think hiring a lawyer is too expensive, try not hiring a lawyer.
The FOUNDERS did exactly what their title says, they founded the company. Just because you were, frankly, too stupid to profit from THEIR hard work doesn't mean that they are at fault. Fuck you idiot statists who want to drag down all the smartest people around you because you want money for doing none of the real work needed to build a company. *THIS* is why I am a Libertarian, because fucking assholes like YOU want to live off MY hard work.
Did someone hold a gun to the "FOUNDERS" head and make them offer him stock options? I'm going to assume that they didn't.
You'll also note that the OP didn't suggest that the "FOUNDERS" had any moral obligation to him. He merely observed that it turned out to be a poor deal for him. He's quite entitled to do that.
It's funny how many people assume that because someone is free to accept or reject the terms of a deal (and does so) that they have no moral right to criticise that deal or the party who offered it. Wrong.
Assuming that you're not simply trolling, I'm really not sure what point you're trying to make here.
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
Depending on jurisdiction, there may be laws that make such fine print unenforcable. In Germany, for instance, surprising and unusual clauses in "standard contracts" are always in danger of being thrown out by the courts.
So the former Skype employees might want to talk to a lawyer...
C - the footgun of programming languages
I worked for a (private) company many years ago that offered stock options with a very low strike price. I was employee number 5 and I received approximately 2% of the company in stock options, with the understanding that I would work at less than typical market salary in exchange. The company did well (the employees were motivated by their options to work hard!) and after 4 years had grown to over 100 employees. The early employees had all stayed with the company the entire time and when news of a sale cropped up we were all excited (newer employees obviously had less shares). Days before the sale closed, the owner and a "senior" VP received massive stock options and essentially diluted the value of all the employee stock options by almost 100-fold. My shares ended up being worth less than the strike price. Needless to say I quit immediately. The sad part is, even though I didn't have to pay any taxes since I never exercised my options, I had essentially given the company more than $200k by working for less than market rate for four years.
I will never consider stock options as part of an employment package again.
Why not instead of working for cash, work only for stock, eg common shares. The company has to buy the shares back from the market to give them to you.
I've worked for one company with restricted stock options. I sold my stock below the value it was "worth" when I got them (it's now worth 30% more, who gives a care.) I was able to make that money back in one day with the proceeds of the sale by buying BofA for a few hours.
The point is, if the company is worthless, then eventually all the public stock will be purchased back by the company and it will be worth more in the end, or the only shareholders will be employees. If the company is actually of value, then the employees will have no incentive to sell the stock, and the liquidity in the market will come entirely from the automated trading blackboxes at Citigroup, JPM and Goldman Sachs that will scoop up any shares sold within one second of hitting the market.
But seriously, paying people by the hour to not care about the company is detrimental. If they won't accept stock, then they shouldn't be hired. Everyone who works for a company should have a vested interest in the company's success, and one way of doing that is by giving them stock in the company. If I ran a publicly traded company, I would require everyone to work for 1$ and only pay them the equivalent in non-voting stock as their salary, and additional voting shares if they are available for each quarter they meet performance metrics.
Outsourcing services has been nothing short of detrimental to companies operating in the USA. It ruins customer goodwill when outsourcing customer support, and by putting a communications barrier between the head office and the outsourcer, you don't know how bad your company is being tarnished by the outsourcer. Manufacturing outsourcing is a bit different, all things considered, whoever has the least amount of taxes and bureaucracy becomes the most attractive place to manufacture. For office jobs, no such thing applies, as it's just as easy to have everyone work from home and that costs much less than outsourcing. Outsourcing has it's place (generally anything that is not a business function, eg janitorial, food preparation(non-restaurant), and shipping) but I believe there's been some incredible destruction of job opportunities by doing so. In the 50's it was within reason that you could get your foot in the door by taking the jobs that nobody really wants and work up. Nowadays everyone wants you to waste 4 years at college and skip the jobs nobody want (or have illegal immigrants do it.)
....Lawyers suck. With that said, if you sign a contract of any kind without passing it by a lawyer, you're being an idiot. I didn't RTFA so I have no clue if this individual did this or not, but this is common sense. Don't trust anyone else to look out for your own best interest, ever.
According to this, Google might have started building a Skype alternative a year ago.
May 18, 2010
Google announced today that it has made a cash offer to acquire Global IP Solutions (GIPS).
A leader in the real-time VoIP processing space for both voice and video, GIPS doesn’t have any consumer-facing products; instead, it provides services that work on the backend for products like Yahoo! Messenger, Citrix and WebEx.
This is an interesting acquisition for Google, who already has a number of consumer products that could benefit from GIPS technologies. Not only does GIPS provide voice processing for VoIP calls that could potentially improve gTalk and Google Voice, GIPS also has a large focus on real-time video transmissions, both on the client and mobile side.
Our first thought when looking at this announcement was that Google could provide some really formidable competition to Skype.
http://mashable.com/2010/05/18/google-acquires-global-ip-solutions/
"It is not enough to succeed. Others must fail." - Gore Vidal
I really doubt that forced repurchase clause is even remotely legal. The whole point is for the vesting period to be the carrot, and not anything else. If shares had vested and he elected to exercise the options (within typically 90 days of employment if terminated, for any vested options), then he owns the shares free and clear and Skype can't steal them back. Unvested shares are typically lost, and that is standard.
Contracts often have a right of first refusal, that is if an employee owns stock on a company which has not gone public yet and that employee wishes to sell those shares to another person in a private transaction, the company has a right to purchase those shares at that same price first.
But I've never heard of a company being allowed to force a shareholder to sell shares back to the company at a price determined by the company. I really doubt that would stand up in court, because prior to going public it is the company itself that sets the fair market value for the shares (not the public market). It would be ripe for fraud otherwise.
I think this person has a real case if they decide to go to court. Skype should never have put such a clause in their employment contract, I don't know what they hell they were thinking.
-Matt
who exactly are the people who pay for all this.
oh ya'll will pay for it all right, the people's justice is swift, permanent, and not terribly precise
Meh, sounds like you have a bee in your bonnet you were just looking for an opportunity to vent on. The OP said nothing that would suggest the involvement of the state, only that he thought it was a crap deal.
Your only apparent reason for labelling him "statist" appears to be that he didn't accord the founders of the business the appropriate backside-licking respect. Nothing about libertarianism requires him to do that. They ran a company for their own self-interested reasons, he offered his services for (presumably) his own self-interested reasons, they employed him for their own self-interested reasons (doubt they were a charity, they wouldn't have employed him if they hadn't thought he was worth more to the business than he cost). He thought the deal was crap in retrospect. Sounds pretty free to me.
If you want to worship those people, that's your choice, just don't kid yourself that it's an integral part of libertarianism nor that anyone who doesn't do it is automatically a "statist".
"Slashdot - News and Chat Sites Deviant". (Click "homepage" link above for details).
In the early days of Apple Computer, many engineers employed from 1977-1979 had greatly disparate stock grants. Many had options granted at .02 a share, some at $2 a share, some grants had undergone multiple 2-1 and 4-1 splits.. A few weeks before Apple went public in 1980, Woz stepped in and personally offered to sell a quarter of a million shares of his own Rule 144 founder's stock to any of the engineers at Bandley III for $7 a share. It went public at $22 a share. In other words, Woz willingly gave away several million dollars because he wanted the engineers to get a fairer shake among their options. Why is it I never hear about this in the history of Apple?
How do I know this? I was the engineer who volunteered to help Woz collect the $1,000,000 from fellow engineers and transfer it and the Rule 144 forms to Apple Corporate finance for the stock transfer book back in the fall of 1980.
Compared to Steve Jobs, who I was told reneged on a promise of a stock grant to an early tech support person at Apple and explained that fact he forgot after the IPO as "the [engineer] should have asked again." The two-digit tech support guy never did get his promised stock. Not very classy, Steve.
Woz is even a more generous person that is commonly known.
He really did it for the lulz; I have great respect for him even after 30 years.
(Nor do I hear about his exploits of taking his own jet (a Mooney, I think) to LA to make VHS and Betamax copies from the Empire Strikes back theater master reels a day before its release. He didn't do it for money, he did it just to set up a duplication station in Bandley III so that anyone who wanted to watch the Empire before it was released could. Sorry RIAA guys, statute of limitations for copyright infringement has expired for this escapade. LOL)
I don't necessarily agree with read the fine print (personally).
My counter proposal: see a legal (or financial adviser), and have professionals read the fine print for you, if you are signing a contract, or taking conditional compensation of any sort, not just stock.
My reason for this counter proposal, is the average person on the street may not be sufficiently equipped to fully understand all implications of the fine print.
It's complicated enough that you may need a legal review of your contract by a lawyer to tell you what the fine print actually means.
And you need a review to help determine/have explained to you the possible/probable tax consequences of signing the deal also, so you can make an informed decision. For example, based on what kind of options you are receiving, based on the contract, do these count as qualified stock options, or are they going to be treated by the gov't as non-qualified -- do you have an immediate salary/employee tax liability when you receive the options, or do you have the employee tax and social security liabilities for the options when you exercise them?
Etc. All questions that have to be answered by your financial advisers working for you, and ultimately effect what income you have to report.
I question whether many of you using that word have any idea what it means. At least in this case, it's irrelevant. The gov't was only tangentially involved in this, in writing the laws that the legal system goes by. Kneejerk slander, ad hominems, preaching to the choir, yada yada yada. You're proud of this behaviour? Why?
Have you spent any time on reason.org? Read any Rothbard or Hayek or von Mises? Can you prove you understand any of them? I doubt it. I suspect you've heard a little about Ayn Rand and are attributing her more controversial stuff to anything you think smells of libertarians. News: she vehemently disagreed with libertarian philosophy and their goals.
Or does [Ll]ibertarian == "Tea Party" in your world view? If so, go back to reading comprehension class for a refresher. Please.
Thank goodness an idea is not responsible for those who hold it.
"Tongue tied and twisted, just an Earth bound misfit
Don't ever work for stock options. It's okay to get some as a bonus as part of a compensation package, but basically you don't have control over options and no rights. If you work for equity in lieu of a wage, then you want stock, not options. If you leave the company there are a million ways for them to screw you over, leaving you without compensation for the months or years you invested. You own nothing. It's just plain idiotic to accept stock options as your primary compensation. (And founders who offer it are either clueless or try to rip you off. Regardless, RUN don't walk.)
It's shit like this that makes me *NOT* feel sorry when some employee leaves a present of some malicious code when they leave. Hopefully, now, some current employee will: 1) exorcize their stock options; 2) split; 3) leave behind some programs that will shut them down.
I know if I worked there, and heard about this shit, I'd be awfully tempted.
It's absurd to think that you can find all of the loopholes in things like options contracts, and this is a prime example. Of course you trust that your employer will take care of you, or else the options are no kind of incentive at all. Firms like Silver Lake can exploit that trust for short term gain, but it's obviously destructive in the long term. They're being parasites on the general Valley ecosystem.
There's little legal remedy for this, but there is social censure. To that end, here are the companies that Silver Lake is involved with, as listed on their web site:
Allyes, Ameritrade, Avago, Avaya, Business Objects, Flextronics, Gartner, Gerson Lehrman Group, Instinet, Intelsat, Interactive Data Corporation, IPC Systems, MCI, Mercury Payment Systems, MultiPlan, the NASDAQ OMX Group, NetScout, Nobao Renewable Energy, NXP, Sabre Holdings, Seagate Technology, Serena Software, Skype, Spreadtrum Communications, SunGard Data Systems, Thomson, UGS, and Vantage Data Centers.
There are a lot of big names here. If you work for any of these, think carefully about your position. One of your employers has just demonstrated bad faith. If they screwed Bill Lee and the fired Skype execs, they can screw you.
PR like this is fatal. The general populace may care little, but the tech world is small. Silver Lake should probably change their name and re-organize.
These are employee stock options, and remain valid only as long as you are an employee. Once you resign or you are fired, you get a grace period to exercise them. Vested stock options means, you can exercise them before the expiry date or within 90 days of resigning from the company, whichever is earlier. I had such options in my company, I stuck with the company, my friends and colleagues left. They were told they had 90 days to exercise. I knew it long back that was the deal. So I did not have to read the fine print. It was common knowledge.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
Many comments to this post say "You should have read the fine print, tough luck." Or another variation: "I'd never trust a corporation enough to work for shares." Or "When you left the company you should have expected that this would happen."
Why do we as people allow big corporations with large legal staff to just add "gotcha" clauses into their contracts? In theory, this country and this law system are supposed to be tools to ensure that everyone participates on a level playing field. Why can't both sides of people who signed a contract deserve equal justice? Why should it always be the huge corporation who gets to leverage their advantage in a contract?
It's not a good idea to constantly blame individual people for their failure to anticipate these problems in advance. Do we really want to create a "gotcha" society where people who fail to read every single line of fine print can get horrendously screwed at the last minute? Should each corporation be allowed to insert a "gotcha" clause into their contract to reclaim everything they promised? How about if GM had a gotcha clause that allowed them to repossess cars if they were ever forced to declare bankruptcy?
Gotcha clauses in contracts aren't nice and they really shouldn't be legal. Contracts between a company that handles hundreds of similar contracts each year and an employee that does one contract in a lifetime aren't likely to be fair unless there are some rules in place. I am okay with capitalism having rules.
no one is a moron to work their asses over their entire life studying hard and delicate things to whore their lives off to fat asses sucking off the profits on top of their heads.
you either start paying percentages to engineers, or fat asses will have to descend from their high throne in directors' executives' rooms and start doing the engineering themselves.
http://slashdot.org/comments.pl?sid=2239622&cid=36447432
"Confusing" language often means open to interpretation (ie, ambiguous).
Not necessarily - it can also mean language which can really only be interpreted one way when read carefully but if not read carefully may give a different impression. For example "the company has the right to repurchase the options at cost" and then three pages earlier have a sentence which says "the cost of options is defined as the share price when the option was issued". If you do not read it carefully you might think that the "cost" of the option was the current share price and only if you remember the definition would you know that it was not. Hence this is confusing but not ambiguous.
Anyone who ends up working for a company that has a Private Equity partner needs to learn about what it means. There are plenty of tricks and trade secrets in private equity designed to reduce risk for the PE Firm and increase their upside. If you’ve worked in PE, these things are obvious, but even for very experienced business people, they aren’t so obvious.
If you want to know more of the tricks to how PE makes money, you should read Private Equity Secrets Revealed. It’s not just about employee contracts, but everything about PE tries to extract value as quickly as possible from investee companies. You’ll be interested to know that a PE Firm can make millions even when a company doesn’t grow. You can find the reading here:
http://www.theprivateequiteer.com/privat e-equity-secrets-revealed
Direct quote from the article.
How is this "opaque?"
I am very small, utmostly microscopic.
If I had know I wouldn't have started working there. In which case he would have gotten exactly what he ended up with. No stock.
Anyone in first-year law school will learn about contracts. The first question is this: why should the government enforce contracts at all? Why shouldn't every "contract" just be an illusory promise, not "legally binding"?
Obviously it is not a very deep question, and a moment's reflection will show you that society does require courts to enforce contracts to function.
This point is lost on all of these posters here who are saying "if you agree to options, you WILL be screwed". They are basically saying, "Ask to see the cash!" That is an extremely naive viewpoint, and would put American law back to pre-Colonial times in social terms. Come on, people.
New trend in HR: Pup-peroni and Beggin' Strips as Recruitment and Retention Tools!
Welcome to the Panopticon. Used to be a prison, now it's your home.
I had a job that could only be described as "crummy", but it was management, of an eBay store. I read the contract, and realized I didn't understand it. It SOUNDED like I had no rights (except to walk away, and then lose the right to work at competitors, loosely defined), and my employer had every right. I asked an old friend who is a lawyer to read it, and he was shocked at how blatant it was. I marked up the contract and took it back, and my employer was enraged! He had spent A LOT OF MONEY to get this contract written up. I told him that I understood, that he had paid his lawyer, and thus the contract only protected his rights. I wanted a contract that protected some of mine, too. Because it was such a picayune job, with lousy pay, he took my changes.
Moral of the story? They who pay the lawyers to draft the contract are paying them to take as much from you as possible, and to make it as hard to understand as possible. You have to have your own lawyer read it. It's all grand and emphatic to curse lawyers, but it's stupid. Just make sure you have one of your own.