Introducing Progressive Equity – Increase employee ownership as company grows

Re:Introducing Progressive Equity – Increase employee owners... by kak9 on Tuesday April 07, 2015 @04:25PM (#9336921)

This is really interesting, and I always like rethinking of equity distribution--since it's so lopsided currently.

Some questions off the top of my head

- Since employees leaving don't receive from the kicker pool. Doesn't this incentivize people who are unhappy and want to leave to stay? There are some benefits to this, but seem like a ton of costs too (and part of what Pinterest's change was addressing)

- How is the kicker pool redistributed? Equally or along the lines of people's current distributions of equity?

- Curious if you have opinion on where the threshold should be set? And if it eventually makes sense to do tiers of thresholds? Or if you think the simplicity makes it make sense not to.

But think this sounds like a great thing, and would love to hear updates on it as it develops.

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Re:Introducing Progressive Equity – Increase employee owners... by andrew on Tuesday April 07, 2015 @06:44PM (#9337671)

> - How is the kicker pool redistributed? Equally or along the lines of people's current distributions of equity?

Along the lines of current (fully vested) distribution. So if there are three employees - Lisa, Erin, and Aaron, and Lisa has 5%, Erin has 2% and Aaron has 3%, then Lisa would get 50% of the kicker pool.

> Curious if you have opinion on where the threshold should be set?

I do have an opinion, if the 18 year old version of myself heard it, he'd want to punch the 34 year old version of me in the face, so I'm going to let you guys figure out your own number and not put myself in a position of defending a position that I'm semi ashamed of anyway.

> And if it eventually makes sense to do tiers of thresholds? Or if you think the simplicity makes it make sense not to.

We decided to keep things simple treat financial independence as a binary state, but you could definitely do tiers if you wanted to.

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Re:Introducing Progressive Equity – Increase employee owners... by JoshTriplett on Tuesday April 07, 2015 @04:46PM (#9337033)

> Doesn't this incentivize people who are unhappy and want to leave to stay?

So does any other kind of "golden handcuff" stock option or time-vested stock grant.

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Re:Introducing Progressive Equity – Increase employee owners... by kak9 on Tuesday April 07, 2015 @05:21PM (#9337255)

Agreed. But to different degrees. In its current form this would be the strongest--since you can never leave if you want any of those shares.

Also, consider this. Someone who joined one month before IPO would get more from the kicker than someone who worked for years and then left 1 month before IPO.

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Re:Introducing Progressive Equity – Increase employee owners... by nathan_f77 on Wednesday April 08, 2015 @12:17AM (#9338762)

Yep, I think that's a big problem. It shouldn't matter if you're still at the company when the redistribution happens, it should just be based on how many shares you own.

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Re:Introducing Progressive Equity – Increase employee owners... by digikata on Tuesday April 07, 2015 @07:05PM (#9337758)

If you want to reduce the "golden handcuff" effect, then you can keep an account of each employees 'kicker shares', but continue to issue shares on an x every time period basis. This causes inflation in the currency of 'kicker shares'. If you stay on continuously, then you keep your percentage of the kicker. If you leave, then those shares you earned slowly deflate in value.

You could even recognize higher risk of earlier employees by issuing special shares which have some mechanism by which if they leave, those shares may still deflate, but at a slower rate than later ones. e.g. for every time-period distribution of shares, these shares receive some fraction of the new distribution.

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