While stealing the employee stock options is beyond pale, the real issue is what the working environment must be like there. I was in a similar situation many years ago with a completely corrupt management team. My boss and I got off on the wrong foot when he asked me to lie about another employee he wanted to fire and I refused (which led to him then trying to find people to dish dirt on me so he could fire me).
The CEO and president were fully aware this kind of stuff was going on but looked the other way because he was producing the results they wanted to see (they weren't exactly clean either and several years later were both indicted on criminal charges).
I saw multiple people break down in tears due to the pressure he put on them. Everyone was stressed out all the time. People were constantly in poor health due to the stress. Backstabbing was normal operating procedure just to stay off the hit list. People would doing anything to suck up to the boss so they could keep their job another week, or month, or quarter hoping things would get better.
After I left the company I couldn't believe I put up with that. My health was in the toilet. Mentally I was wasted. I remember at my next job constantly worrying that everyone who was being nice to me was setting me up. I parsed every word people said to me looking for a trap. It took me a full year before I could sleep more than four hours a night.
The ones who have left or were let go are the lucky ones. The stock can't be worth the physical and emotional damage.
I've worked in a lot of high pressure jobs before that one and since then but that place will always stand out as the most damaging period in my life.
Now, I read these accounts and I wonder, if this is how businesses are run, even a small fraction of them, how are they in business at all? Like, it seems 'business' is really forgiving in terms of staying alive, like turning a profit must be really easy if these morons can do it and stay afloat for any length of time. But you go on /r/entrepreneur or some threads on HN and it is made out to be just a real drag and really really hard to do. What am I missing here, why the disconnect?
I think you might be looking at it from the wrong angle. Some of the most morally bankrupt people I've ever met are crazy intelligent. You seem to equate being a sociopath with being a moron and that is more often than not a poor assumption.
The other aspect that I think you're overlooking is that people who are wired like this are often incredibly driven people. Sure, someone on /r/entrepreneur might be willing to give up everything to pursue their dream but a sociopath is willing to lie, cheat, and steal to get what they want.
Oh no, I agree, being an asshole and being smart are independent variables, it's a roll of the genetic dice. I meant: how are these folks who are both stupid and an asshole still kicking around?
There are bad reasons to quit a company and good ones, but there are few better ways to make an exit than on the spot when the CEO of your company personally and publicly berates a low-level employee in front of the team.
Easy to say, and I mostly agree, but it can be tough. I've seen a few of these cases of bully management and what you notice is that the team under the manager (and the teams around the manager) all already realize and communicate (sometimes just glances, sometimes quite openly) that the manager is a problem. So making a dramatic exit to make a point sometimes only makes an obvious point.
There are other factors too. Maybe you have a unique skillset and it takes some time to find similar employment, maybe you stay for family reasons, or for a (probably misguided) sense of loyalty to the team. In my last relevant personal experience, it was obviously a hostile work environment fairly early on but I had made an informal commitment to stay on for X amount of time when I joined.
Abusive managers often actually score big wins in short order and garner favor from higher management, but inevitably we see those managers burn out the systems they build and the systems around them. Employees start bouncing out at an accelerating pace and it's a compounding effect usually because an already overtaxed team is now smaller and has to pick up the slack of the departed.
It usually ends badly.
Which of course factors back into the decision not to make a public display of an exit -- karma usually finds a way to sort these things out.
I think it's probably the case that a lot of these managers are completely oblivious to their actions. I had one manager who proudly claimed (to the team) knowledge of sneaky political tactics and posted articles on fb about Machiavelli and corporate tactics for grabbing and wielding power. It's quite an awkward thing to watch and they're usually not fooling anybody.
Walking out instantly is a romantic idea for people who either have fat bank accounts to fall back on or little-to-no responsibility outside of work to worry about. For the rest of us something like that is indeed a reason to immediately seek other employment, but just because you don't walk out instantly doesn't mean you are supporting that behavior.
I am all of those things and I still can't just stand up and walk out. I have a wife, 2 kids and a house payment to think about. Prudence demands that I line up future employment before giving my current employer the finger.
Absolutism is counterproductive. There are millions of people who care about the environment but still use cars, electricity, shipping, and air travel to work towards making the world better for everyone.
Being an absolutist many times can lead to you only feeling smugly superior while not really making a difference.
Huh? Sure, the employee could sit through the CEO taking a dump on them in front of their coworkers, but if the employee has other options for employment, I'd say there isn't a usually solid reason to stick around a hostile work environment.
The bridge is already burned with the CEO, and your unlikely to burn the bridge any worse with your direct boss/coworkers by quiting immediately versus a few days/a week later. Might actually gain some respect from them which could net you a job later down the line at another firm one of your coworkers ends up at!
That being said, its all corporate politics, so it is hard to derisk it, and you should try to be aware of as much of the political situation as possible before making a move.
Ah, that makes more sense, was trying to figure that out. I've usually waited a bit before quitting so I could line up a new job when I've been an employee witnessing a coworker get beat down on by management needlessly.
If you've made up your mind, you can just tell them off and walk out. You can take your sweet time and interview while you still have a paycheck and benefits. You can wait until the cliff and leave the next day. You can give two weeks notice.
Last company I left I did working till the last minute, on my own unpaid time. I've been treated so well and we shared such a strong spirit of unity in the good and bad times that I can't regret it. No body was ever bullied. Main difference with other tech companies I worked for before:
Definitely, there are a ton of ways to end a relationship, whether it be an employment relationship or social one. I prefer short & definitive endings myself, so long as I'm ready for it to end.
Letting a bad relationship hang on is just bad for my health, I gain a ton of weight and stress!
This is precisely why I quit my job two jobs ago. The CEO yelled at one of my coworkers (for something petty) and made her cry in front of the entire company. I had a job interview scheduled for the next Monday before the end of the day. It took another 10 or so days before I actually quit, but they did not get a two weeks notice.
> One of the most unnerving aspects of life at Tanium is what's known internally as Orion's List. The CEO allegedly kept a close eye on which employees would soon be eligible to take sizable chunks of stock. For those he could stand to do without, Hindawi ordered the workers to be fired before they were able to acquire the shares, according to current and former employees.
Employees at startups generally take a below-market salary in exchange for equity compensation, so imagine the double humiliation of being fired because your first shred of equity is about to vest.
It appears that they were fired just before their stock vested. That's why as an employee you should never agree to vest all your stock at the end of a multiple year period but in small chunks over time (annually, usually).
That still carries risk but not as much. Assuming you assign value to the stock at all.
Did I miss the part of this story where they said they had nonstandard vesting? The industry standard is 4 year vesting, month by month, with a 1-year cliff. The traditional horror story is employees being fired just before they cliff.
No, I just think GGP is mis-interpreting the situation because of the article's unfortunate wording. Once the stock is vested it stays vested. Whether it is 'worth something' or not doesn't matter, if you've got it it stays unless you sell it. I suspect 'worth something' translates into 'something for which there is an easy market', merely whether or not you can easily sell it.
Whether this particular stock will go up or down after the IPO is any-body's guess.
As you well know, but to clarify for others, once the stock is vested - it stays vested unless you quit and don't buy it. Once you've vested the stock and purchased it - it stays "vested" as you own it - unless it's 83b early election of stock which is restricted, and that restriction retracts over time like vesting.
What does it cost to transfer stock in the US in a privately held company? Here in Europe it can be up to ~$1K to transfer stock in a GMBH or BV, other countries more or less depending on the local situation regarding notary public roles and rates. In a public company it is dirt cheap but this is prior to IPO.
That + accelerated vesting in case of wrongful termination or termination without cause can be reason enough to batch share vesting events.
There is no stock transfer or fees associated with the typical startup vesting schedule in the US. It's just written as an algorithm in legal documents like "...one fourth of which will vest after twelve months and blah blah blah..." The exercising is more paperwork on top of the vesting.
My friend worked for startup, here in India, that was doing work with drones and water level measurements or something like that. It was and still is a pre-VC startup. He had left a huge European MNC where did cutting edge research but was bored and needed the bleeding edge rush and excitement as he put it. He's awesome in his field and then excellent at coding too (not a CSE grad) he was paid really grand in that MNC.
So he was getting less than half of his MNC salary at this drone startup. He was totally immersed in making and breaking things with weekends stopping to exist for him and evenings and nights blurring. For pretty much 10 months.
He was asked to resign a day after demo day where potential investors raved about the product his team (3 people) had finished. Another team mate was also asked to leave within a week. Both of them were given a reason on the lines "excellent engineer but won't be a good fit in the culture and your product was not well appreciated". Only remaining team mate was a confounder who used to pass on requirements. Of course both ex employed didn't get anything. He said he needed at least 2 more months to get some stocks as he would get instalments after every completed year.
He took a break of around two months. Relaxing, slowly getting back to rhythm. Him being good and being from IITB meant he had literally hundreds of recruiter mails every week. But he calmly deleted any mail which had startup mentioned anywhere in it.
Sometimes back his previous manager recruited him back at the same European MNC with a substantial pay raise.
My point of writing isn't sharing a generic burnt by a startup anecdote with you. He tries to remain calm but I, and many other friends, can see that he has been deeply scarred by the deception and (I would call it) betrayal.
I've had something similar to this happen early in my career, it took two years out of my life and cost me what I thought was a good personal relationship but which turned out to be just predatory in retrospect.
Those are expensive lessons, your view of humanity will likely never be quite the same afterwards. The fact that the guy crashed and burned gives me no comfort at all.
Even so, I do realize I had a part in that, if I had been a little bit smarter I could have educated myself on this stuff before accepting. And that's where the world today is different than in the past: we now have world-wide networks of people in tech that can warn each other. So every story like the one you told here should help to keep other technical people safe from predatory behavior.
> I've had something similar to this happen early in my career, it took two years out of my life and cost me what I thought was a good personal relationship but which turned out to be just predatory in retrospect.
That is so damn close to me that it was eerie reading it.
I think quite often programmers who are good but early in their careers don't value themselves enough and the relationship ends up been exploitative.
I worked 80hr weeks for just slightly under 2 years for someone I thought was a both a friend and a boss for it all to go sideways.
The lesson was learnt on the spot and while I'm still gregarious these days I operate by the maxim "trust but verify".
> Good for you. And make sure you pass the lesson on to others so they don't have to learn it the hard way.
Already did that, I worked at a place where I was the 5th programmer on the team but the most experienced and the lead, the boss was not a nice guy and worked the two youngest programmers like dogs, I soon put a stop to that with the "If you don't turn your computers off, I'm going to go flip the breaker, it's 6pm on a Friday go home".
The thing I've learnt with bosses like that is most of the time if you stand up to them they either back down, respect you for it or fire you at some point in the future (assuming you haven't already left) but in any case your life improves.
The last job I had for someone I came in at 8:30am, left at 5:30pm and outside of work I didn't answer calls, emails or issues unless I was on call, this was despite the pressure to do so that many of the other programmers succumbed to.
Team pressure is a hard thing to fight against but I've seen enough to know that a team working (actually working, not screwing around on a computer all day) 12 hour days 6 days a week can do that for a month at most and then the damage sets in and each day is less productive till you end up getting less done in 12 hours than your team would normally get done in 6.
Employees who put their heart and soul to build something don't own it in capitalistic model. Only the owner by virtue of being owner of private property/company has right to it.
Treating people as means to an end, which capitalism encourages leads to this model.
I think economy dependent on human creativity will hit a ceiling, if they continue to remove ownership of content from the creators. The creators can be anything from a humble web developer or someone like your friend.
If generally an employee stock option pool is ~5% of the company, then why is it worth spending time optimizing for that by firing people before stock vests? I suppose it'd be possible that management/investors view the employee ownership as getting out of hand, but even if the options pool is 10-15% (which I think would be fairly ridiculously large), it's likely mostly held by early employees who may have already vested.
It just seems like a silly thing to spend time doing, monitoring who will be vesting soon to fire them. Sure, maybe for one or two executives who are vesting integer percents of stock, but beyond that, it's not worth the time, and definitely not worth the backlash.
Scott Kupor [managing partner at VC firm Andreessen Horowitz] wrote an article [1] suggesting that a 10 year exercise window for employees who leave:
" is really a direct wealth transfer from the employees who choose to remain at the company and build future shareholder value, to former employees who are no longer contributing to building the business/ its ultimate value."
This seems to suggest that the "investment" by early employees who leave shouldn't be treated like the early investments from VC's who decline to keep investing at some point.
Wait, so besides the culture of fear and abuse as detailed in the article, they also can't ship product?
Makes you wonder whether there's anything, at all, this company's management is competent at. I guess CEO (the founder's son) didn't go through the usual hiring process.
I went through a long drawn out sales engagement with them. It seemed like a cool product at its core (basically a sort of meshed set of interconnected nodes that you could do live "natural language" queries against predefined collected data (i.e. "what machines are running ntpd?") but the stuff they were trying to sell on top of it at the time like patch management ranged from half finished to promises for future releases to things that ended up simply... not being true.
My perception at the time was that it was a good product for what it did but maybe after the demos were over too many potential customers said "so now what?" and they were putting pressure on engineering to release way too soon. And it turns out they were probably right, even though it was an obviously useful product for live reporting, detection and triage those things aren't appealing to managers so we didn't buy it.
Yeah, I think Tanium's ultimate issues are their firing of employees to prevent vesting (and thus erosion of control of the company) and actions by the CEO whereby he berated an employee in front of the employee's team.
You piss off your lower level employees, that builds resentment and causes employee churn, and if it was a habit of the CEO the other execs would likely jump ship as fast as possible (as they've been doing).
It supposedly has some kind of peer-to-peer topology for executing queries and aggregating the responses, so--I believe, I'm not certain--it avoids having a centralized data store that gets DDOS'd from the agents or a linear machine-by-machine connect-and-query model. That allows it to scale to large networks. The company _definitely_ benefited from the a16z lead-gen (and investment). Tanium was the big shiny endpoint tech of 2016, but I'm not convinced they have a good handle on the use cases/domain.
Yeah, pretty much. osquery plus some gossip-based node communication layered on top. Unless osquery has that or something like it these days. It's been a while since I kicked the tires on it.
I'm getting sick of reports like this. Setting up unfair vesting schedules and firing people before their stock vests... somebody should vigorously investigate it and put the CEO in jail. Startups are fucking hard work and a CEO stealing glory is a crime not a culture issue. These guys need fear of God.
Its just another form of indenturing workers, by holding these ballooning stock vesting schedules over their heads in the uneven employer/employee relationship. The employer gets stability from the employee, while being able to fire the employee after a few years just before they vest, saving the company $$$ and maintaining control for the current shareholders.
Yeah, a fair vesting schedule should evenly vest as you work, ideally as often as possible (eg: every month or week). Its akin to compounding, as a savings account holder you want the interest on your account to compound as often as possible.
to keep it to the point it should come month by month along with the standard compensation, since you take a pay cut in exchange for stock it's only fair to have it delivered month by month, at most with a clause that after x year the stock trickle stops and you get an equivalent increase in your pay
sadly there's plenty sucker willing to gift their work away so any hint of people having a clue about the risks in cliffed vesting become unhirable troublemakers in most startups
It's already happening. Anyone who's worked at a startup before and has been burnt is unlikely to accept the vesting and the work conditions. That's in part why it's to hard for companies to recruit experienced tech workers.
At the same time, there is an endless stream of young people willing to break into the industry at any costs.
The age and experience of people in a place tells you a lot about what the company really value.
I've never gotten this stock options thing. I'm a consultant. I do stuff, invoice and get paid. The idea of accepting potential payment in some sort of play money, that I might get if things go well, and that might be worth something at some later date, seems crazy.
Sure, I know that a few founding employees have done very well. But has anyone done very well, recently?
I agree it's wrong and wish it could be stopped. But why do the employees trust that they will become vested? They can see the risk in their agreements and see what happens to their co-workers.
Whoever thought that calling 'Orions List' 'Schindlers List' was clever has no idea what Schindlers List was all about.
> The situation at Tanium underscores the risk of venture capitalists placing near-absolute power in the hands of a company’s creators.
That sentence does not make sense to me. It is a rule rather than an exception that VCs end up with minority shareholdings but usually favorable terms in case of liquidation. They don't 'place near-absolute power in the ands of a company's creators', they're simply later to the table and have correspondingly fewer shares bought at a significant premium.
The original founders call the shots and only if they dilute to the point that outside capital holds a majority does the equation change and even then there might still be different classes of shares to deal with.
For the most part VCs are along for the ride, they can make noise and they can try to win over the board but as long as the founders have 51% or more they call the shots.
The board does not change the shareholder agreement nor does the board change anything else to do with the shares. What the board can do - and will do - is fire the CEO if they are of the opinion the CEO is not functioning well, but if the CEO is also a shareholder and has majority control of the stock (or the confidence of the majority of the shareholders) he/she can call a shareholder meeting, get rid of the board and re-instate himself or herself.
Boards are not active at the level of shareholders, though many boards do have major shareholders as board members.
The board can change the bylaws, issue new shares to get a majority of each class, wash out founders with a forward and reverse split. Preferred shares have all kinds of rights not given to founders. 50.1% of shares outstanding means nothing by itself.
To me the parallel with Schindler's list is pretty obvious.
He was a nazi that put Jews names in a list for industrial workers to save them from concentration camps.
In this case we have a Jew that put workers in a list to steal their money.
For sure is not a good taste joke, but I can see the point.
After raising a Series B of $90 million, new employees would be getting probably, at most, 0.05% over four years, or vesting around 0.01% on their one-year cliff.
I can't imagine how the founders thought that firing tens of key employees in order to retain an extra fraction of a percentage point made financial sense.
> One of the most unnerving aspects of life at Tanium is what’s known internally as Orion’s List. The CEO allegedly kept a close eye on which employees would soon be eligible to take sizable chunks of stock. For those he could stand to do without, Hindawi ordered the workers to be fired... which would help Hindawi defend his ownership by limiting the number of stakeholders...
The suggests one of two things: Either Tanium has a really strange vesting schedule or Bloomberg blew the reporting here.
The typical vesting schedule is distributed over four years with a one year cliff. That means, with typical vesting, only <1 year old employees could possibly be on this list. Furthermore, only 25% of their grant would be at stake. With Tanium being a relatively mature $3.7B startup, we can infer that the typical grant size at this stage would not constitute more than a small fraction of a percent, even for fairly senior positions -- and we're talking 25% of that.
It thus is highly unlikely that firing right before the cliff would retain "sizable chunks of stock" big enough to materially affect the CEO's ownership. It's entirely possible that a List exists, but the stated motivation doesn't add up. Bloomberg should really follow up here with details on the vesting schedule.
Isn't a father-mother-son leadership team a massive red flag when choosing what company to work for? I mean, whether it's a car dealership or a tech startup, when you have family pride all mixed up in company culture it really tends to be a shitty place to work.
If anyone has any examples of where this type of setup has actually worked out well, would love to know of one.
There's a funny thing about that. Quite a few companies have been financially successful with that model, but a disproportionate number of them seem to be morally challenged. One of the first lists I was able to find included Wal-Mart, Cargill, and Koch as three of the top four. Price fixing, influence peddling, and several examples of private profit at public expense. I kind of don't care how much money they make, or how much I might make by going there. I still wouldn't touch them with a ten-foot pole.
Where is the evidence? Where are the quotes by previous employees making this claim? These employees were fired because they were failing to do their job. If you are running a company will sit aside and do nothing and continue to let anyone stay in the company that proved to miss their target repetitively? These claims are 100% false. This story is not only poorly written but it is full of false information crafted only for click bait. It's sad that I can no longer feel as though Bloomberg is a creditable source of news.
Well, it's a good thing that as a long-standing and valued member of the HN community, you are willing to make helpful, fact-filled, public statements under your own name to contradict the article. Oh wait....
The CEO and president were fully aware this kind of stuff was going on but looked the other way because he was producing the results they wanted to see (they weren't exactly clean either and several years later were both indicted on criminal charges).
I saw multiple people break down in tears due to the pressure he put on them. Everyone was stressed out all the time. People were constantly in poor health due to the stress. Backstabbing was normal operating procedure just to stay off the hit list. People would doing anything to suck up to the boss so they could keep their job another week, or month, or quarter hoping things would get better.
After I left the company I couldn't believe I put up with that. My health was in the toilet. Mentally I was wasted. I remember at my next job constantly worrying that everyone who was being nice to me was setting me up. I parsed every word people said to me looking for a trap. It took me a full year before I could sleep more than four hours a night.
The ones who have left or were let go are the lucky ones. The stock can't be worth the physical and emotional damage.
I've worked in a lot of high pressure jobs before that one and since then but that place will always stand out as the most damaging period in my life.