So, this past week I received a certified letter from the company I left only three months ago. The gist of it being that the company is buying back my exercised stock options. I can’t say I’m surprised.
I started there about four years ago. Prior to that I’d had a job at a small company which does software for tier three autopart suppliers. That was more of an internship, though. I initially worked there for 60-70 hours a week with no pay. I saw it as a way to get my foot in the door.
When I first got the offer, I was ecstatic. Finally, I thought, I’m making some real money. And, wow, they’re giving me stock options! Stock options, can you believe it? This is great!
At that time, the company was a small, privately-held company with thirty or so employees. I’d presume everyone received approximately the same deal: 5,000 options vesting over three years, one third vesting for each year of employment.
To me, the options were gravy. I was just thrilled to have a salaried job. I’d graduated several years before (from a fairly prestigious school), but for various reasons I won’t bother with now, I’d kinda bummed around with odd jobs and mooched off my parents.
I quickly realized how demanding my new company was. There were a lot of great things about the place, but it certainly was not a low stress environment.
At the time, the oft repeated phrase was ‘We’ve never missed a launch’, meaning the company had never failed to deliver a website on time to its client. At the time, I thought this impressive. Later, however, having seen a website fail to launch and still hearing the management blathering that ‘We’ve never missed a launch’ it was a bit less so.
In any event, I quickly realized that my new job regularly required working late. Myself included, the software development team consisted of three people. We probably had enough work for six or seven guys. Yet, we got it all done. And made our deadlines.
Sadly, one of the members of the team left about four months after I’d started, leaving the company with a grand total of two software engineers and enough work for six or seven.
The other software engineer and I would work from 9am until 8 or 9pm every night. We’d work weekends more often than not too. We’d come in at 2am to get a little extra work done. And we each had ten different project managers all demanding to know the status of their project.
There were quite a few times after I started where I wondered if the whole software thing was just not for me. Hey, I could just ditch all this programming stuff and be a farmer. Nevermind that I hate nature and the outdoors.
Eventually, we hired another programmer. And things got a little better. Then another. Of course, the sales team quickly just dumped more gasoline on the fire. When we had four programmers, we had enough work for ten. When we finally had ten, we had enough work for fifteen.
Usually, there would be a brief period in which we actaully had a little extra capacity, but it was always short-lived.
A programmer’s daily ritual would consist of showing up and opening up a spreadsheet, which was basically a minute-by-minute breakdown of tasks to be done for the day. Sometimes they would be in as small as fifteen minute increments. IF you took a leak in there somewhere, you’d be screwed. Generally, we’d be allocated for seven or eight hours a day. What that really meant was you’d need to work ten.
There were some big shakeups. We changed buildings. We got new managers. There was one constant, though: stress and overwork. I can’t count the number of people who were fired or quit in the time I was there. It was pretty staggering.
It seemed almost weekly that someone would just disappear. I remember walking by the desk of one of the networking guys who’d worked there for several years and noticed he was gone.
“Where’s Alan?”, I asked.
“Oh, he was fired a few weeks ago.”
There was a period where I actually felt physically ill at the thought of coming into work. I mean literally nauseated. I would force myself out of bed, get into my car, an make the drive into work while trying futilely to fight off a combination of apathy and nausea.
It was at this point, I almost quit. After one particularly bad incident with my manager, I literally thought of simply walking out. No two weeks notice. No reason. Just a big ‘Fuck you’ with two middle fingers in the air. I didn’t care about burning bridges. But I didn’t do it. Nearly the entire software department was having “resume parties” on the weekend.
Two of my friends who worked there quit later that month. On the same day.
Luckily, not long after I was put on a new high profile project. I was made lead programmer and put in charge of the entire development team. Of course, it again necessitated late nights, weekends, and a lot of sacrfice. I will say that was the best time I ever had at the company and despite the hardship was a transformative event in my career. I will always treasure those moments. But it was an awful lot of hard work. And I never really was compensated monetarily for it. It was almost a year before I got any kind of raise. My bonus for the year was this: three grand.
Through all the tough times, through the sacrifices, I held onto those options they given me in my initial letter. I was underpaid, as was pretty much everyone from what little I knew. But, maybe I thought, maybe one day the options would pay out. They would be some small recompense for all the hard work, for all the sacrifice.
Of course, it clearly stated in my initial letter than if I ever left the company, they had the right to buy them back. It actually was part of the reason I stayed as long as I did. I had a lot of faith in the company and thought maybe in the not-too-distant future they’d provide the downpayment for a house. And I knew if I left, they’d buy them back.
That’s why, when several years into my employment the company announced a recapitalization (basically to reduce the number of outstanding shares and increase their value), I jumped at the opportunity. As it was explained at the time, anyone with vested options could exercise them and up to 50% to preferred shares (you had to sell the other 50%). These preferred shares were yours, just like a real stock. If you left, they’d remain yours—unless you wished to sell them.
So, to me, it was an insurance policy of sorts.
I converted the 1/3 of my shares that had vested. I continued to work for the company for several more years, only leaving about four months ago. Shortly after I left, the CFO was axed and a new one came in (Of course, as in all such instances it was a ‘parting of ways’, as the euphemism go). The new CFO appears to be trying to reclaim outstanding shares.
Which brings us back to my letter.
Basically, it states that company is exercising its right to buy back my four hundred or so options. Actually, before I left I made sure to exercise my remaining 3,333 options. I even waited until the check I gave them cleared before turning in my two weeks notice. Those weren’t included in the letter. In fact, they weren’t mentioned at all.
When I called, I was told it was oversight and to write up an email detailing that I’d given the check to them, etc. I then got an email response asking if it was alright if a lawyer for the company and one of the financial officers called me the next day. Hmm, that seems a bit fishy, I thought.
I would have suspected, they’d simply email me back, saying they’d correct the oversight.
The phone conversation went something like this: since the company had gone through a recaptilization my original grant of 3,333 shares really only converted to 1,690 units or so. About half the amount. Further, the 447 unit originally listed in my letter were my preferred shares and for the purposes of purchase were no different from my other units.
Huh.
So after four years of tireless service, the options I’d clung to, the options that helped to keep me at the company, that I’d viewed as some small recompense for the below average pay, the overwork, the sacrifice of my personal life. These options were worth: $1800. And I couldn’t keep a damn thing.
It’s very disappointing. But it’s not in anyway at odds with how I’d seen this company treat its employees over the years. People dismissed for minor mistakes, kicked to the curb when they’d outlived their usefulness, folks who given their all to this company, worked long hard hours, asked to dump their stuff in a little box, and escorted out of the building like criminals. So, the fact that the company is repurchasing my options and thus crushing my hopes without so much as a whoopsy daisy is hardly surprising.
Hey, I guess I’m lucky. There are a lot of folks still waiting for forty acres and a mule.
I started there about four years ago. Prior to that I’d had a job at a small company which does software for tier three autopart suppliers. That was more of an internship, though. I initially worked there for 60-70 hours a week with no pay. I saw it as a way to get my foot in the door.
When I first got the offer, I was ecstatic. Finally, I thought, I’m making some real money. And, wow, they’re giving me stock options! Stock options, can you believe it? This is great!
At that time, the company was a small, privately-held company with thirty or so employees. I’d presume everyone received approximately the same deal: 5,000 options vesting over three years, one third vesting for each year of employment.
To me, the options were gravy. I was just thrilled to have a salaried job. I’d graduated several years before (from a fairly prestigious school), but for various reasons I won’t bother with now, I’d kinda bummed around with odd jobs and mooched off my parents.
I quickly realized how demanding my new company was. There were a lot of great things about the place, but it certainly was not a low stress environment.
At the time, the oft repeated phrase was ‘We’ve never missed a launch’, meaning the company had never failed to deliver a website on time to its client. At the time, I thought this impressive. Later, however, having seen a website fail to launch and still hearing the management blathering that ‘We’ve never missed a launch’ it was a bit less so.
In any event, I quickly realized that my new job regularly required working late. Myself included, the software development team consisted of three people. We probably had enough work for six or seven guys. Yet, we got it all done. And made our deadlines.
Sadly, one of the members of the team left about four months after I’d started, leaving the company with a grand total of two software engineers and enough work for six or seven.
The other software engineer and I would work from 9am until 8 or 9pm every night. We’d work weekends more often than not too. We’d come in at 2am to get a little extra work done. And we each had ten different project managers all demanding to know the status of their project.
There were quite a few times after I started where I wondered if the whole software thing was just not for me. Hey, I could just ditch all this programming stuff and be a farmer. Nevermind that I hate nature and the outdoors.
Eventually, we hired another programmer. And things got a little better. Then another. Of course, the sales team quickly just dumped more gasoline on the fire. When we had four programmers, we had enough work for ten. When we finally had ten, we had enough work for fifteen.
Usually, there would be a brief period in which we actaully had a little extra capacity, but it was always short-lived.
A programmer’s daily ritual would consist of showing up and opening up a spreadsheet, which was basically a minute-by-minute breakdown of tasks to be done for the day. Sometimes they would be in as small as fifteen minute increments. IF you took a leak in there somewhere, you’d be screwed. Generally, we’d be allocated for seven or eight hours a day. What that really meant was you’d need to work ten.
There were some big shakeups. We changed buildings. We got new managers. There was one constant, though: stress and overwork. I can’t count the number of people who were fired or quit in the time I was there. It was pretty staggering.
It seemed almost weekly that someone would just disappear. I remember walking by the desk of one of the networking guys who’d worked there for several years and noticed he was gone.
“Where’s Alan?”, I asked.
“Oh, he was fired a few weeks ago.”
There was a period where I actually felt physically ill at the thought of coming into work. I mean literally nauseated. I would force myself out of bed, get into my car, an make the drive into work while trying futilely to fight off a combination of apathy and nausea.
It was at this point, I almost quit. After one particularly bad incident with my manager, I literally thought of simply walking out. No two weeks notice. No reason. Just a big ‘Fuck you’ with two middle fingers in the air. I didn’t care about burning bridges. But I didn’t do it. Nearly the entire software department was having “resume parties” on the weekend.
Two of my friends who worked there quit later that month. On the same day.
Luckily, not long after I was put on a new high profile project. I was made lead programmer and put in charge of the entire development team. Of course, it again necessitated late nights, weekends, and a lot of sacrfice. I will say that was the best time I ever had at the company and despite the hardship was a transformative event in my career. I will always treasure those moments. But it was an awful lot of hard work. And I never really was compensated monetarily for it. It was almost a year before I got any kind of raise. My bonus for the year was this: three grand.
Through all the tough times, through the sacrifices, I held onto those options they given me in my initial letter. I was underpaid, as was pretty much everyone from what little I knew. But, maybe I thought, maybe one day the options would pay out. They would be some small recompense for all the hard work, for all the sacrifice.
Of course, it clearly stated in my initial letter than if I ever left the company, they had the right to buy them back. It actually was part of the reason I stayed as long as I did. I had a lot of faith in the company and thought maybe in the not-too-distant future they’d provide the downpayment for a house. And I knew if I left, they’d buy them back.
That’s why, when several years into my employment the company announced a recapitalization (basically to reduce the number of outstanding shares and increase their value), I jumped at the opportunity. As it was explained at the time, anyone with vested options could exercise them and up to 50% to preferred shares (you had to sell the other 50%). These preferred shares were yours, just like a real stock. If you left, they’d remain yours—unless you wished to sell them.
So, to me, it was an insurance policy of sorts.
I converted the 1/3 of my shares that had vested. I continued to work for the company for several more years, only leaving about four months ago. Shortly after I left, the CFO was axed and a new one came in (Of course, as in all such instances it was a ‘parting of ways’, as the euphemism go). The new CFO appears to be trying to reclaim outstanding shares.
Which brings us back to my letter.
Basically, it states that company is exercising its right to buy back my four hundred or so options. Actually, before I left I made sure to exercise my remaining 3,333 options. I even waited until the check I gave them cleared before turning in my two weeks notice. Those weren’t included in the letter. In fact, they weren’t mentioned at all.
When I called, I was told it was oversight and to write up an email detailing that I’d given the check to them, etc. I then got an email response asking if it was alright if a lawyer for the company and one of the financial officers called me the next day. Hmm, that seems a bit fishy, I thought.
I would have suspected, they’d simply email me back, saying they’d correct the oversight.
The phone conversation went something like this: since the company had gone through a recaptilization my original grant of 3,333 shares really only converted to 1,690 units or so. About half the amount. Further, the 447 unit originally listed in my letter were my preferred shares and for the purposes of purchase were no different from my other units.
Huh.
So after four years of tireless service, the options I’d clung to, the options that helped to keep me at the company, that I’d viewed as some small recompense for the below average pay, the overwork, the sacrifice of my personal life. These options were worth: $1800. And I couldn’t keep a damn thing.
It’s very disappointing. But it’s not in anyway at odds with how I’d seen this company treat its employees over the years. People dismissed for minor mistakes, kicked to the curb when they’d outlived their usefulness, folks who given their all to this company, worked long hard hours, asked to dump their stuff in a little box, and escorted out of the building like criminals. So, the fact that the company is repurchasing my options and thus crushing my hopes without so much as a whoopsy daisy is hardly surprising.
Hey, I guess I’m lucky. There are a lot of folks still waiting for forty acres and a mule.
1 comment:
On a side note, I chatted with Alan the other day. He says he is feared and admired at his new job. Surprisingly machiavellian.
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