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I assume that stock was in the form of restricted stock units that vest over the course of a few years. I've seen this kind of thing play out at a few big tech companies over the years and have seen people lose literally hundreds of thousands of dollars in delayed payout.
They offer these as a "loyalty incentive" so the employee wants to stay while of course offering no loyalty in return when they decide to execute layoffs.
Plays out in small tech companies too, albeit in a slightly different way.
Got that carrot dangled in front of me at a past job. Company was past start-up phase; self-supporting and doing ok, but not outrageously well. Promises of riches should the company be "noticed" and bought for an outrageous amount.
Of course none of that accounted for the CEO (founder and 85% shareholder) being an absolute crazy person, who would change the development roadmap into making a vastly different product than the one we (the techies) believed in, TURN DOWN THE OUTRAGEOUS SUM BECAUSE HE THOUGHT HE COULD GET A BETTER OFFER, basically run the company into the ground, and wind up selling it for a pittance (which would have made the employees' share a pittance of a pittance).
I mean most of us had already left by that point, but finding out around 4 years after that he'd turned down about $150M and wound up selling out for $3M, that stung a little.
Reminds me of a place I worked for in the 90s. We were the premiere catalog of contemporary radio drama in the country. It was niche, but doing okay. One day, this company comes up to us and says that they're starting a satellite radio network and if we work on a commission basis, the company will make a lot of money. Only about five people worked there and we all begged and pleaded with the owner to take the offer, but he was nuts and kept saying things like, "there's GOT to be a catch!" So he ended up passing.
Yes, that was Sirius, which became XM.
Fucking moron.
Hey, I worked there!
Sounds familiar to me too.
Sounds like just another way to avoid paying people. A share that’s never paid out might as well just be Monopoly money.
One of the worst instances was one year that virtually all "merit increases" were instead replaced with RSUs that vested in a year. When I had to bring that to my team and tell them what they were getting... Well, not a single one of us expected to see that money. Sure enough, layoffs happened and that potential money evaporated before any of us saw a cent. None of us were unprepared or surprised, but obviously still unhappy.
That seems insane to agree to, like it incentivizes the company to fire people the day before their stock is fully vested.
You're not wrong
RSUs can be a great bonus, but agreed, you definitely shouldn't consider RSUs part of your total compensation unless they vest quarterly to yearly. If they take a full four years to start vesting you definitely shouldn't count on that income.
Except these were never meant to be paid out. Bungee isn’t about to give away their company to their employees.
It’s a plastic carrot.
Yes, I am certain that was the case. It was the case in my examples too... Every now and then someone gets through and gets a couple units to vest, but the majority are gone and so is that compensation. It's disgusting.
I assume they have to cash in some. Or else the SEC comes sniffing around like “you guys have given out 3 million shares over ten years but no one has ever cashed a singled one out, hmmmmm”. So those are likely the rare few. And a few units tracks because they aren’t giving $2m in stock to some entry level tech.
I always liken those practices to the same shit they flash musicians or sports figures during negotiations. Wave a mansion, Lambo, gold, some ladies making all kinds of promised. But in the end, some contractual loop hole says that you’re just “borrowing” it all. Fake money.
Leaving people with healthcare for a singular day is just evil
“Though not health insurance”
Healthcare wasn't affected, thankfully.
Plus, COBRA would come into play also. I've been in a similar situation and health insurance is luckily one of the least scary parts.
Cobra might as well not even exist for most people.
The two layoffs I've been through, Cobra was offered as an option and in both cases it was wildly unaffordable. Like...I couldn't have afforded it even if I still had the job I had just lost, let alone while unemployed.
In both cases I just basically only had the option to cross my fingers and hope I didn't need healthcare while letting it lapse completely until I found a new job. Thankfully in the first case I was only unemployed about 3 weeks, but the other time, it was about 6 months.
What eventually came through for me was my state's version of Medicaid in that situation. Basically it was only available to people earning less than XYZ, but any funds you received as aid from the state didn't count toward that, meaning that unemployment was exempt and as such, my income was zero. Of course there was like an 8 week waiting period and then it took several more weeks for all the paperwork to go through, but eventually it did kick in.
WHAT! This is very scummy, especially on the company shares part. Basically robbing employees of their money.
I really don't understand in what universe this is not considered theft?
Wage theft is #1 in terms of total $ amount stolen out of all forms of theft, but business owners own government so.... 🤷
What a dick move, especially the second one. Really goes to show that management seems to forget they're dealing with actual humans and not machines being turned off at an assembly line. So dehumanizing.
Yet another reason the entire sector should be unionized.
Cue: "mysterious fires at Sony HQ, responders say likely many simultaneously acts of arson"
Fired bungie employees: "oh no! anyway"
