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Post-termination exercise window (PTE), the amount of time an employee has to buy their options after leaving a company, is a critical part of every hiring agreement. Recently companies have been moving away from restrictive 90-day periods to longer, more employee friendly windows.
Here are five companies who have led this charge since 2013 and we expect this trend to continue in the coming years:
They were one of the first companies to embrace longer PTE periods. They called the standard 30-day window “golden handcuffs” and switched to a 7-year PTE period after 2 years of service.
Michael DeAngelo, Pinterest’s Head of People stated,
It takes creative, inspired people to make something creative and inspired. But it’s hard to feel this way if you’re only staying because you feel trapped.
Expensify followed suit not long after Pinterest. They changed their PTE policy from 30 days to a 2-year period. You didn’t need to extend all the way to a 7-year period to be a leader in better PTE periods.
Coinbase took the same route as Pinterest and switched to a 7-year PTE policy. For Coinbase, longer PTE was a good system to create better employee culture.
As CEO, Brian Armstrong, stated,
By saying ‘you are free to leave at any time’ we hope to create a better culture of people who really want to be here.
Buffer took a unique approach. In addition to extending PTE, Buffer offers new employees the option to have either a $10,000 higher salary or a 30% higher equity stake. Buffer wants employees who are invested in their company for the long term and longer PTE complements this belief.
Mixpanel is the most recent company to choose to extend its PTE, opting to extend to a 5-year period after 2 years at the company. Mixpanel notes that this change is critical in the new business climate where private companies are taking longer and longer to go public.
Why does this matter?
We are reaching a tipping point in the PTE debate. For a long time companies have discussed the desire to extend PTE to create a more fair environment for employees. With companies staying private longer and new software solutions making PTE extensions easier than ever, we expect to see a lot more companies, joining the pioneers above in creating more employee-friendly PTE plans.
And while we respect the companies above who have trail blazed new PTE models, we believe the future will be full of even more nuanced PTE plans. At Carta we set our PTE to equal our vesting timeline to reflect our internal culture of incremental rewards based on a long term commitment to our mission.
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