Explaining Equity and Executive Compensation with Goodwin Procter

#4: Equity, stock, options, and compensation; a complex topic that has essentially limitless negotiable options. We are going to be walking through the basics to lay a foundation and then we will break down the most common mistakes that people make in this area. If you need to know more about offer letters, vesting stocks, and managing exits this episode is for you!

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Lynda Galligan: Goodwin Profile
Anthony McCusker: Goodwin Profile

Full Show Notes:

• [0:00] Welcome to The Skip!
• [2:30] Introducing our guests Anthony McCusker and Lynda Galligan - Attorneys at Goodwin Procter
• [4:00] Our first example: Startup X offers you an equity package
• [10:00] What questions do you typically want to make sure that the employee just sort of understands when they're looking at compensation?
• [12:30] Is the number of shares in the offer important? Balance against the percentage of shares available
• [16:30] Tax liability when a company has more value on paper than reality
• [21:30] An 83B election
• [14:30] Vested options vs unvested options
• [27:30] Post-termination exercise periods
• [29:30] Incentive Stock Options or ISOs
• [37:00] Exploring rainy day scenarios
• [41:00] You have stock options but the market or company value is going down. What do you do?
• [43:00] Risks that are specific to private company scenarios
• [45:00] 409A evaluations
• [48:00] Important tax stipulations that disallow repricing the same option
• [49:30] A reminder that none of the conversation today should be regarded as legal advice
• [50:00] Thank you Anthony McCusker and Lynda Galligan!
• [51:30] Episode summary and wrap up with Nikhyl

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The Skip podcast helps tech professionals get ahead in their career. It’s hosted by Nikhyl Singhal, a successful founder, head of product, and executive. He coaches more than 100 executives, managers, and rising stars navigate important career decisions, management challenges, and personal crossroads to maximize their happiness and professional life.

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