Two Companies, Two Outcomes: The New York Times on Equity Compensation
Executive Director
In the last week of 2015, the New York Times ran two articles featuring the equity compensation plans at two very different companies. The first article noted that the company Jet.com is aiming to take on Amazon, both by competing with it and by following a radically different employee relations strategy. While Amazon has a reputation for driving its employees hard, Jet.com's CEO Marc Loren says, "I'm constantly asking people at Jet if they are happy." Amazon once had a broad-based stock option plan, but it no longer does. Jet.com provides options to all of its employees. Jet is also committed to measuring job satisfaction. Its first employee survey found that 87% of employees rated the company as a great place to work, an unusually high response for this kind of question (a recent Deloitte survey said half of employees would not even recommend their employer).
The second article told about the fate of employee stock holders at Good Company. Many employees there received stock grants of common shares. The company had planned an IPO, but ended up being bought by Blackberry for an amount that valued common shares at $0.44 per share, down from the prior year price of $4.32 per share. Although the specifics at Good Company are unclear, many experts recommend that private companies with equity compensation plans be designed to ensure that equity awards be liquid after exercise.