Option Grants over Time

Option Grants Over Time

Several people have asked me over the years how we think about subsequent option grants (e.g., not the employee’s initial grant when hired), so I thought I would just share my standard answer here.  We give the following kinds of grants other than new employee grants:

• promotion grants – employees get the incremental grant between their existing grant and what someone being hired into the new position would get
• performance grants – once a year we give the top 10-15% of performers a grant that is equal to approximately 25% of their initial grant (so if they are a consistent superstar, they get twice as many options over the four years)
• refresh grants – we only give these when someone is fully vested (though there are plenty of companies who have overlapping grants) – the new grant is whatever someone being hired in at that level would get as of today, which is usually less than the person’s initial grant

I hope this is useful…fire away with any follow up questions in the comments