HR · Startups

Will other big startups follow Pinterest's new employee tax rules?

Hannah Miller Founder of Modapp

March 26th, 2015

Recently read this post Pinterest told employees that if they have beenwiththe company for at least two years and choose to move on (or who are terminated), they now can hold onto their vested stock options for another seven years (post-departure) without exercising them. By doing so, Pinterest has removed a massive tax liability that haunts the dream of many successful startup employees.

Pinterest stops asking employees to make a difficult choice, will other top tech startups do the same? Will this means worse employee retention?

Chris Murphy Director of Corporate and Legal Affairs at E2open

March 27th, 2015

I definitely think it is great for employees and helps solve a pretty big dilemma for employees (which I have dealt with myself).  However, I don't know that all employees who are tempted to leave have lost a passion for working at a company - sometimes you just get a better offer, and this does make it a little harder to hold on to such an employee.  Also, this isn't as easy as it seems from a record keeping perspective, unfortunately.  I don't think it would justify in itself a reason not to do this, but it's not so simple as it might seem.  Lastly, any options would convert to NQSOs if they were ISOs if you really do wait to exercise (not necessarily an issue, but important to understand).

Jono Spiro Technical Lead at Carlypso

March 26th, 2015

I've been burned so many times by options. The company saves money on salary by offering you something that they're in total control of, that you probably can't afford, that probably won't ever be worth anything, and that they'll most likely get back 3 months after they let you go for whatever reason.

This sounds like a huge step forward, and a simple one. I wonder what negative benefits/consequences there are for the employer.

Amir Yasin Developer, Architect

March 26th, 2015

I don't know if they will but they should follow this example.  Do you really want people sticking around in your company who aren't there because they believe in what you're doing and want to help you get there faster?  Seems like a win for everyone.  They go off and do something they're passionate about and you get an open spot to find someone who's passionate about what you're doing.

Chandan Miskin Experienced CRM/Cloud/Strategy/Sales Professional

May 2nd, 2015

This is a very good move and shows benevolent attitude of the management there. I had to let go of stock of shares (substantial numbers in 000s) just because I decided to move on due to issue with the management. People remember every small gesture (& never forget bad memories for ages together) and this one will go a big way is promoting goodwill for the brand.