Open

Employer Spotlight

Recruit Gen Y Stars

You need new tools to attract the new breed of talent - Experience will help you build your team with Gen Y stars.

Go

Ease of Use

Our management dashboard helps you easily post jobs, pinpoint targeted candidates and manage your talent pipeline.

Go

All Needles, No Hay

Don't wait for the best candidates to come to your door - with Experience, you can proactively target top talent.

Go

Build Your Experience

Experience is your most important asset - we're here to help you find that next opportunity.

Go

Tell Your Story

You're so much more than just your resume. Showcase your Experience.

Go

Connections Matter

Introductions are made easy when you have Experience -- connect with alumni, mentors and industry insiders.

Go
Forgot?

Use eRecruiting by Experience on campus?
Find your school here.

Home  > Article

Will my company take back my unvested options if I get laid off?

Salary.com

It is customary for a company to take back unvested options when an employee leaves the company for any reason. In fact, this is probably included in the stock option agreement you received when you were granted the options.

Q. I was awarded 25,000 options at my last job. Recently, the company laid off 100 employees, including me. I was not vested at this time and the company took away all of my shares. Is this standard practice?

A. Yes. It is customary for a company to take back unvested options when an employee leaves the company for any reason. In fact, this is probably included in the stock option agreement you received when you were granted the options.

Sometimes, however, companies have a severance policy that provides special benefits (e.g., accelerated option vesting) for situations like layoffs. Be sure to find out whether your company has such a plan.

Companies use stock options to attract and retain talent, and to encourage employees to think like owners. Vesting schedules ensure that each employee has a financial incentive to stay with the company at least until the vesting period is over. But if, as in your case, the employer has an initial waiting period, you could forfeit this noncash incentive if the company falls on hard times before vesting begins. If the company failed, of course, those options or shares would be worthless anyway.

There's not much you could have done to prevent your employer from rescinding your options. It is sometimes possible to negotiate for a faster vesting schedule when you sign on with a new company. If you are being laid off close to an important vesting milestone, you can sometimes negotiate for a later end date. One tactic that occasionally works is to offer to take an unpaid leave of absence that ends the day you reach the next vesting milestone, then return to work for a short period before being officially terminated. Another approach is to negotiate to continue as a consultant or part-time employee so that your vesting can continue.

Note the distinction between taking back your options and taking back shares, as you wrote. If you are not yet vested in your options, or have not yet exercised your vested options, you do not own any shares. Once you own shares, they're yours. So although you may have lost the opportunity to buy shares subject to your option, you didn't lose any money out of your pocket.

Good luck.

- Erisa Ojimba, Certified Compensation Professional


Copyright 2000-2004 © Salary.com, Inc.






More Related Articles


Find The Job You Want
If you're looking for the perfect job, you might as well stop right now: there's no such thing.

If my responsibilities increased after a layoff, should I make more?
Inevitably the people left behind after layoffs take on additional responsibilities. Despite the sensitivity of layoffs, it may be possible to have your job reevaluated once the dust settles.

Did I get a big enough raise with this promotion?
Sometimes even a big raise doesn't feel like enough. But if you don't know how big is big, how can you be disappointed with 11.5 percent?



Google Web Search
Didn't see what you were looking for?
 
powered by Google
Copyright ©2017 Experience, Inc Privacy Policy Terms of Service