If they exercised their stock options before they left the company, they receive all details (including executive comp). But they wouldn’t know what the other offer was.
Btw this applies to those who are still employees too (if they explicitly bought vested options)
My advice to anyone joining a startup - if you have the negotiating power, insists that you must pre-exercise and purchase all options immediately when you start your job. You must put some money, but if you don’t believe in the company, why spent years there. Most companies don’t like this and their VC will object. This is why I said “if you feel you have the power to ask that”. If you can’t do that, exercise as soon as they vest
Edit: to clarify - this isn’t same as accelerated vesting. Vesting rules still apply - but you become a shareholder with appropriate rights.
It's my understanding that early exercise is mainly only useful for tax purposes. You still won't be a shareholder until at least 1 share vests, which for a new employee, likely won't be for a year. Is that incorrect?
that's the risk of investing in equity. The employee needs to come to terms with it - there's no situation where this risk can be mitigated (without someone else taking a hit).
Yes, you are right about that. This situation is slightly better with AMT bracket moving up with Trump tax changes. But the basics still apply.
I corrected by saying "vesting rules still apply". But the tax consequence (AMT or otherwise) will discourage one to exercise as the estimated stock price becomes bigger and bigger as the company grows.
If you do month 1: Strike price = $1. Pre-exercise, file 83-b with tax. Pay 0 AMT. You quit after 2 years, get to keep half the shares, company might pay you back the principal for the lost half (yes, there is a risk there)
If you do this 2 year when you quit, may be perceived value of stock is $10. Now you out-of-pocket cost = $1 + AMT tax on (income + $9). Moreover, you probably hate the company when you leave, so even more unlikely you will want to buy your options. I have friends who have lost $100k+ with that attitude.
These days, AMT cut off is much higher, but this could apply to some of the valley's sought after engineers.
It does depend on the cash you have on hand, though. If you can afford to pay that AMT, you'll get most of it back in credits over the following years. But I suspect many people wouldn't be able to cover that tax bill without selling those shares that they can't sell.
Wei and Zhang are asking the court to order Zoox to open its books “in order to determine whether it is appropriate to pursue litigation against all or some members of the Board and/or Company management or others based on the apparent wrongdoing in connection with the Acquisition.”
As shareholders they may have a right to certain acquisition information, even if they aren't still employed. At the very least, current employees cannot be stopped from sharing such information with shareholders.
They can, actually. Almost all employees are required to sign an NDA as a prerequisite to employment. Disclosing company confidential information would at least be grounds for termination, at worst could expose the employee to a suit for damages.
