I am approaching the end of my vesting term of 4 years. The vesting plan follows a typical 4 year term, with 1/48th of the total options vesting every month (after the initial year-long cliff).
After the term ends, I will no longer be vesting any options, so my effective monthly compensation will decrease by 1/48th of the total value of the options.
- Am I thinking about this correctly? If I'm just being greedy here, let me know.
- Should this be brought up during salary negotiations with my company? For example, should I make an attempt to value the options and request an equivalent salary increase? Alternatively, could I request a new contract which basically continues vesting options at the same rate for another couple years?
I work at a startup which has scaled - considerably but not dramatically - over the last few years. The company has more income, the odds of an exit event are greater, etc. 1% equity (made up number) in my company is worth more now than it was when I signed the contract. But it's very hard to quantify any of this even remotely accurately, except for the revenue which I do have some insight into.
I understand that stock options are, among other things, a way for startups to attract talent without being able to pay market rates for salary. To be crude about it, that part of the attraction finishes once the options are vested, except to the extent that continuing my work at the company will make the options worth more. But as the company expands, my ability as an individual contributor to increase the company's valuation diminishes.
So if the company doesn't share the view that a salary increase is warranted after the vesting period, that makes me more inclined to move to a bigger company, or find another startup, where I could command the same or better salary and maybe begin vesting options with them. However, I like working at my current company so I'd like to find a way to be content, either by negotiating a raise or by convincing myself I don't deserve one. I appreciate any insight on my thought process here.