Zach Holman wrote what may be my favorite post I’ve read in a very long time titled Firing People. The whole thing is fantastic and I highly recommend taking the time to read it all.
I’ve never been fired but I have been laid off as well as leaving on my own when things didn’t work out the way I had wanted. One was a failed product that I had invested so much of myself into but the company decided wasn’t worth continuing and the other was a role that I never quite figured out how to succeed at given the circumstances. In all those cases though, a lot of what Zach writes about really resonated with me.
One part in particular is knowing where you stand with stock options.
Unfortunately, vested unexercised ISOs are capped at 90 days post-employment by law, meaning that they disappear in a puff of smoke once you reach that limit. This poses a problem in today’s anti-IPO startups who simultaneously reject secondary sales, which limit all of the options available for an employee to exercise their stock (the implications of which for an early employee might cost hundreds of thousands of dollars that they don’t have, excluding the corresponding tax hit as well).
Another possibility that’s quickly gaining steam lately is to convert those ISOs to NSOs at the 90 day mark and extend the option window to something longer like seven or ten years instead of a blistering 90 days. In my mind, companies who haven’t switched to a longer 90 day window are actively stealing from their employees; the employees have worked hard to vest their options over a period of years, but because of their participation in the company’s success they’re now unable to exercise their options.
I’ve talked a lot about this in greater length in my aptly-titled post, Fuck Your 90 Day Exercise Window, as well as started a listing of employee-friendly companies with extended exercise windows. Suffice to say, this is a pretty important aspect to me and was a big topic in the discussions surrounding my separation agreement.
After 8 years at one company I had vested a lot of stock options. When I decided to leave it didn’t dawn on me until I got the formal paper work that it would cost me more then $8,000 to exercise all of the options I had vested and I only had 90 days to do it. There was no way I could spend that kind of money at the time so I lost a good portion of my options. I love the “Fuck Your 90 Day Exercise Window” quote. I burned a few bridges venting about my situation though I’ve since had some great conversations with the company’s founder and ex-CTO about it. If I’m ever in a situation again with stock options I’ll be sure to setup a savings account specifically for exercising them when the time comes without the shock of the price.
If you’re a company that does stock options, be sure you’re very open about how much your employees have vested and remind them of it often. Also be sure to let them know about exercising them in 90 days. I know more then one employee of that company that lost all their stock options because they didn’t know about the 90 day cutoff.
Another great idea Zach talks about it setting up an alumni group.
One of the very bright points from all of this is the self-organized GitHub alumni network. Xubbers, we call ourselves. We have a private Facebook group and a private Slack room to talk about things. It’s really about 60% therapy, 20% shooting the shit just like the old days, and 20% networking and supporting each other as we move forward in our new careers apart.
The same company I spent 8 years at has one and its great. Its not a very active group but when someone is looking for something new, or if someones new employer is hiring, it gets posted to everyone. When the company had a round of layoffs last year the alumni group welcomed them all in easily hitting that 60% therapy mark. It was great though. I really appreciate that group. In fact I’ll be heading to the early round games of the NCAA tournament tomorrow here in Denver with a former co-worker who was just laid off from another job last week. I can guarantee we will be talking about companies we’re looking at since we already have been.
There’s a lot of other great stuff in that post. You should really go read it.