The one year cliff is not that problematic to me since I would expect I am getting paid market, and the options are like a hiring bonus (which you often must return if you quit within a year). What am I missing? Is people really worried that a startup whose stock has risen will fire a productive employee?
That said, I have seen 5 year vesting (which seemed like a red flag to me), and have heard of Amazon's schedule where you mainly vest in later years. These were bigger red flags for me than a 1 year cliff.
Depends on the company. I joined Twitter in 2016. The stock, which was circa 1/3rd of my total comp, had a one year cliff. 7 months in, one executive got the upper hand in a power struggle, pushing out my boss and laying off the people he hired, me included. I don't think they did it because of the stock. But I'm sure it didn't hurt. I'm still mad about it.
Disclaimer: Ex-Amazonian, so discount as you see fit based on whatever brainwashing you might assume I’ve been subjected to ;)
The rear weighted AMZN approach made sense to me in terms of both optimising retention and some proxy for reward to contribution. I say this also as someone who left after 2 years and as a result left most of their stock unvested. It definitely made the choice to leave much harder so I’d expect it to skew more heavily toward retention benefits than a typical schedule. A typical schedule has a linear growth of what you’ve vested. I’d expect the value of contribution of a person to grow over time though. More context, more experience, more everything. Hopefully that means the you 3 years from now is making a more significant contribution than the you they hired. Typical schedules hope that the increase in valuation accounts for that compounding return. AMZN have shifted it to the vesting schedule.
That said they always talk about “total compensation”. So for the stock you’re not getting in the first two years you typically get as cash via a “hiring bonus” anyway. You could always just use that cash to go buy the equivalent amount in stock, no vesting required.
I feel like amazon-style vesting helps remove some perverse incentives.
It makes "stay 53 weeks and cash out" less appealing, it makes "stay 6 more months to hit the next cliff" less appealing, and it rewards long-haulers (who are underpaid almost everywhere else in tech).
Yes, that was my hope also. As it becomes more common to not have a cliff.
It was just strange that the recruiter couldnt discuss this further or at least give an offer with a nice cash compensation that would be paid out monthly (sort of like how Amazon does it) to compensate for cliff.
Really? I'm surprised. My employer just removed cliffs for new offers, it does seem to becoming more popular. But my assumption is the cliff is something I couldn't easily negotiate as an individual.
It’s happened multiple times for me, all with extremely well known VC backed companies. Once at later stage, but applying for a very senior role, and another at an early stage, where there was a good fit.
It can be a tough sell, and recruiters are trained to just say no, but persistence pays off. Same thing applies to getting jobs in general. If you aren’t persistent in your application process and aggressive in your negotiation process, you simply won’t have the best outcomes. It just becomes easy to turn you down.
brutus1213|4 years ago
That said, I have seen 5 year vesting (which seemed like a red flag to me), and have heard of Amazon's schedule where you mainly vest in later years. These were bigger red flags for me than a 1 year cliff.
wpietri|4 years ago
glenngillen|4 years ago
The rear weighted AMZN approach made sense to me in terms of both optimising retention and some proxy for reward to contribution. I say this also as someone who left after 2 years and as a result left most of their stock unvested. It definitely made the choice to leave much harder so I’d expect it to skew more heavily toward retention benefits than a typical schedule. A typical schedule has a linear growth of what you’ve vested. I’d expect the value of contribution of a person to grow over time though. More context, more experience, more everything. Hopefully that means the you 3 years from now is making a more significant contribution than the you they hired. Typical schedules hope that the increase in valuation accounts for that compounding return. AMZN have shifted it to the vesting schedule.
That said they always talk about “total compensation”. So for the stock you’re not getting in the first two years you typically get as cash via a “hiring bonus” anyway. You could always just use that cash to go buy the equivalent amount in stock, no vesting required.
umanwizard|4 years ago
danielheath|4 years ago
It makes "stay 53 weeks and cash out" less appealing, it makes "stay 6 more months to hit the next cliff" less appealing, and it rewards long-haulers (who are underpaid almost everywhere else in tech).
kerng|4 years ago
It was just strange that the recruiter couldnt discuss this further or at least give an offer with a nice cash compensation that would be paid out monthly (sort of like how Amazon does it) to compensate for cliff.
pottertheotter|4 years ago
chris11|4 years ago
jamiequint|4 years ago
spotman|4 years ago
It can be a tough sell, and recruiters are trained to just say no, but persistence pays off. Same thing applies to getting jobs in general. If you aren’t persistent in your application process and aggressive in your negotiation process, you simply won’t have the best outcomes. It just becomes easy to turn you down.