Wait so you think it's reasonable to bank on some uncertain future benefit to pan out, and expect people to be 'heartbroken' when it doesn't go through? Come on, you don't mean that, do you?

When I worked for a startup, I only considered my salary in my financial decisions. This also meant that I could switch jobs and be reasonably certain that my standard of living wouldn't change. We were offered equity as well, and the agreement we had to sign had several provisions that I could only describe as being pro-founder/anti-employee. For example:

1. Upon termination of employment (for any reason), the company can buy back your shares at book price, whether you like it or not. In other words: You'll never see a big payout from your work if you go.

2. There should be no expectation of a market for the shares in the company, and there may never be one. Again, good luck selling those shares.

3. The founder has the right to sell his shares, but employees have no tag-along right. So even if the company is sold, you will probably not be able to cash in at that point, since your labor/skill are part of the sale.

4. The employees' shares are subject to dilution. How much dilution? Who knows, maybe 1%, maybe 99%, whatever's good in the view of the founders.

This stuff is pretty standard, too. What I don't get though is how people will make multi-decade (i.e. mortgage, kids) financial decisions on a benefit that's this uncertain. Instead of actual equity, they could just say "we'll give you more money later if we get rich and feel like it". At least it would be more honest.

I can't believe people are actually willing to sign those kinds of agreements. If you can't sell you shares and the company can basically buy them back at will, the ownership is just theoretical. It's like getting monopoly money with the added clause that you may exchange it for real money if the owners get rich and want let you perform the exchange.

Please tell me that at least some companies have reasonable agreements with their employees/shareholders. Otherwise it's like someone else said a few months ago, Silicon Valley is just overrun with sleazy leadership types who do their best to screw over their employees.

I couldn't believe it either, and left that place pretty quickly. I still talk to a lot of people that work there, and I get the feeling that they live in this bubble where they assume everything will work out for the best. To them, I'm just cynical.

I hope that this isn't the rule in most places, but I wouldn't know :/

A players get to negotiate stock option agreements. The average employee is given options as part of their compensation package, and there usually isn't much flexibility on management's part. At least that's my experience in the four dotcoms I've worked for.

I think you replied to the wrong comment?

Wow. Now THATS an ad hominem fallacy!

hyperbole much? all s/he said was that one situation reminded her/him of another. based on her/his comment you can't even tell how he feels about either!

Hopefully the parent just replied to the wrong comment, since I read over my comment a few more times and couldn't see how I potentially stepped out of bounds egregiously :(.

But anyways, the similarity I see is that in both cases, the individuals would have exercised poor financial decision making by assuming that non-realized or potentially temporary increases in income streams were real/permanent. I'd guess that financial professionals have experienced something similar, by assuming that the year end bonus would be size X when they actually only ended up getting X/2, or making purchases assuming job security until the end of the year but getting laid off.