There was a pretty active Ask HN a couple weeks ago about a very low quality employee in line for a vesting cliff. I think 0 people fessed up to "let them drop." Almost everyone said the only moral thing to do & the only thing that wouldnt make the rest of the company hate & distrust you was to offer a pretty generous buy out ahead of time, at basically the current value.

Ask HN: Firing an employee under a month before vest?

https://news.ycombinator.com/item?id=33186789.

(135 points, 295 comments)

I've seen a number of those. In one case, the CEO fired the CTO right before the one-year cliff in order to get more equity, then invited them back on in an advisory role for 1/10th of the equity compensation. (they did not accept)

This is an amateurish and exceptionally stupid strategy, and a poor way to conduct business. It amounts to acting in bad faith, "Gotcha, hahaha!"

What goes around comes around. Reputation and trust are valuable, if not everything. They're easy to break and difficult to regain.

All to save a few bucks, when he is the world's richest person? Seems just a tad greedy to rip-off / shortchange the proles.

I've never seen it come around to bite those who do it though. The problem is one of power - the people affected typically are those earlier in their careers with less opportunity to say "no" to what looks like good employment, only to have part of their pay calculation ripped out with no warning.

In the case of the CEO/CTO, it was even worse as the company was in talks for acquisition and the firing for equity ended up netting the CEO an additional six figures within a few months. And they certainly seem to be doing fine.

I know some people who worked for a company which got acquired a while back. The CEO walked away with over $11 million. Every single other employee's stock was worthless (common vs preferred). He could have paid them all out 5 figures and still had millions left over for himself.

When you find a solid leader who isn't a sellout, I suggest sticking with them. They are an anomaly.

It has been my experience that in the vast majority of the cases, the VCs and the acquirers behave honorably, and do the right thing.

This is due to several factors: 1. They are ethical and/or more concerned about their reputation, esp. for future transactions. 2. The decision makers do not personally gain from such poor behavior (the $ flow to the organization, not to them). 3. The decision makers on the acquiring side are concerned about making enemies with others from the acquired companies.

You know what's classy? Including the entire sentence from the article, instead of cutting it off to support your point.

Here's the actual sentence from the article:

"By laying off workers before that date, Mr. Musk may avoid paying the grants, though he is supposed to pay the employees cash in place of their stock under the terms of the merger agreement."

A half-truth is still a lie.

That said, this is the part I find disturbing:

Ross Gerber, the chief executive of Gerber Kawasaki Wealth and Investment Management, said he was told by Jared Birchall, the head of Mr. Musk’s family office, that layoffs were coming at Twitter. “I was told to expect somewhere around 50 percent of people will be laid off,” he said.

Yeah, no thank you.

Always a good grounding question44r4 to ask oneself.