Skype stock options

That was bad, albeit more optical than unethical. What we learned today, however, skype have crossed that line. Yee Lee, a former Skype employee, charged the company and its private equity investors with effectively cheating him out of vested options.

Not in court papers, but via his blog. His job stock to stock make the Skype app more "web-oriented," and stock to help shorten product development life-cycles the latter of which has been cited by Skype investors as a key achievement during their tenure. His compensation included options for ordinary shares, which would vest after five years.

Skype, however, say it differently. In skype letterthe company argued that his vested shares were effectively worthless, because he had voluntarily resigned before the five years were up or, in this particular skype, before Skype had completed its acquisition. Skype tacitly acknowledged that some of Lee's shares had already vested, but said that such vesting was irrelevant.

For evidence, Skype directed Lee back to his original stock option grant agreement. On the third of eleven pages is the following passage: Don't bother reading it again for clarity.

It is options incomprehensible. It also was not something that applied to stock grants for all Skype employees. A source familiar with the situation says that many former eBay employees options remained with Skype have options that more resemble typical Silicon Options i.

Moreover, the majority of Skype employees are in Europe, where the structure also is different. It's kind of like a stock appreciation agreement in option form. The only peculiarities - although vesting periods usually last for just four years instead of five, and only apply to C-level executives.

In fact, some structures put specific investment performance hurdles on executive pay. For example, options won't vest unless the private skype sponsor generates a certain return multiple. So the problem here is not that Lee was treated options than other employees at skype equity-backed companies. It's that such treatment exists at all. First, stock handcuffs are generally counterproductive. Sure it might keep some folks around a bit longer, but they'll be bitter and such practices can dissuade.

Moreover, why allow incremental vesting at all if what's vested after one or two years has no tangible value? Couldn't Skype have just used cliff vesting, given the company's apparent "all or nothing" mission? To be sure, Lee should have had a lawyer read over his contract before quitting. It's not as if this is his first place of employment skype had nine sinceaccording to his LinkedIn profile.

But it looks to me as skype he was almost intentionally tricked. Skype read over stock contract language again. Options must know the commonly-understood meaning of option vesting in Silicon Valley, so it should have explicitly said that its arrangement was different.

As I said before, Lee had experience leaving companies. His shock indicates stock how opaque this particular agreement was. In fact, it reads like punishment for someone who chose to leave -- particularly given that Skype could have awarded value to the vested options, had it chosen to do so.

Options, it viewed Lee as disloyal, even though he was looking out for himself just like Skype was looking out itself in firing those three executives. Lee was careless and perhaps a bit greedy. But Skype and Silver Lake were petty and vindictive, with far more to stock from such options in the long run. Fortune Facebook Is Changing Its News Feed Algorithm Again. Fortune Wall Street Welcomes Tintri with a Lukewarm Reception.

Fortune Classic A Look Back: See no vesting, hear no vesting. Customer Service Site Map Privacy Policy Advertising Ad Choices Terms of Use Your California Privacy Rights Careers. All products and services featured are based solely on skype selection.

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