Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Wealthfront Equity Plan

480,266 views

Published on

Learn how do you attract and retain the best employees with stock options & equity grants.

  • DOWNLOAD THIS BOOKS INTO AVAILABLE FORMAT (2019 Update) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { https://soo.gd/irt2 } ......................................................................................................................... Download Full EPUB Ebook here { https://soo.gd/irt2 } ......................................................................................................................... Download Full doc Ebook here { https://soo.gd/irt2 } ......................................................................................................................... Download PDF EBOOK here { https://soo.gd/irt2 } ......................................................................................................................... Download EPUB Ebook here { https://soo.gd/irt2 } ......................................................................................................................... Download doc Ebook here { https://soo.gd/irt2 } ......................................................................................................................... ......................................................................................................................... ................................................................................................................................... eBook is an electronic version of a traditional print book THIS can be read by using a personal computer or by using an eBook reader. (An eBook reader can be a software application for use on a computer such as Microsoft's free Reader application, or a book-sized computer THIS is used solely as a reading device such as Nuvomedia's Rocket eBook.) Users can purchase an eBook on diskette or CD, but the most popular method of getting an eBook is to purchase a downloadable file of the eBook (or other reading material) from a Web site (such as Barnes and Noble) to be read from the user's computer or reading device. Generally, an eBook can be downloaded in five minutes or less ......................................................................................................................... .............. Browse by Genre Available eBooks .............................................................................................................................. Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, ......................................................................................................................... ......................................................................................................................... .....BEST SELLER FOR EBOOK RECOMMEND............................................................. ......................................................................................................................... Blowout: Corrupted Democracy, Rogue State Russia, and the Richest, Most Destructive Industry on Earth,-- The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company,-- Call Sign Chaos: Learning to Lead,-- StrengthsFinder 2.0,-- Stillness Is the Key,-- She Said: Breaking the Sexual Harassment Story THIS Helped Ignite a Movement,-- Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones,-- Everything Is Figureoutable,-- What It Takes: Lessons in the Pursuit of Excellence,-- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money THIS the Poor and Middle Class Do Not!,-- The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness,-- Shut Up and Listen!: Hard Business Truths THIS Will Help You Succeed, ......................................................................................................................... .........................................................................................................................
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • 11:11 - A Message From The Universe? People all of the world keep seeing the repeating numbers "11:11." Discover the POWERFUL guidance the Universe wants everyone to know! ◆◆◆ http://scamcb.com/manifmagic/pdf
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • 7 Sacred "Sign Posts" From The Universe Revealed. Discover the "secret language" the Universes uses to send us guided messages and watch as your greatest desires manifest before your eyes. Claim your free report.  http://t.cn/AiuvUMl2
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • The "Magical" Transformation That Happens When Two Brain Technologies Combine! ♣♣♣ http://scamcb.com/manifmagic/pdf
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here
  • DOWNLOAD THAT BOOKS INTO AVAILABLE FORMAT (2019 Update) ......................................................................................................................... ......................................................................................................................... Download Full PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download Full doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download PDF EBOOK here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download EPUB Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... Download doc Ebook here { http://bit.ly/2m6jJ5M } ......................................................................................................................... ......................................................................................................................... ................................................................................................................................... eBook is an electronic version of a traditional print book that can be read by using a personal computer or by using an eBook reader. (An eBook reader can be a software application for use on a computer such as Microsoft's free Reader application, or a book-sized computer that is used solely as a reading device such as Nuvomedia's Rocket eBook.) Users can purchase an eBook on diskette or CD, but the most popular method of getting an eBook is to purchase a downloadable file of the eBook (or other reading material) from a Web site (such as Barnes and Noble) to be read from the user's computer or reading device. Generally, an eBook can be downloaded in five minutes or less ......................................................................................................................... .............. Browse by Genre Available eBooks .............................................................................................................................. Art, Biography, Business, Chick Lit, Children's, Christian, Classics, Comics, Contemporary, Cookbooks, Manga, Memoir, Music, Mystery, Non Fiction, Paranormal, Philosophy, Poetry, Psychology, Religion, Romance, Science, Science Fiction, Self Help, Suspense, Spirituality, Sports, Thriller, Travel, Young Adult, Crime, Ebooks, Fantasy, Fiction, Graphic Novels, Historical Fiction, History, Horror, Humor And Comedy, ......................................................................................................................... ......................................................................................................................... .....BEST SELLER FOR EBOOK RECOMMEND............................................................. ......................................................................................................................... Blowout: Corrupted Democracy, Rogue State Russia, and the Richest, Most Destructive Industry on Earth,-- The Ride of a Lifetime: Lessons Learned from 15 Years as CEO of the Walt Disney Company,-- Call Sign Chaos: Learning to Lead,-- StrengthsFinder 2.0,-- Stillness Is the Key,-- She Said: Breaking the Sexual Harassment Story That Helped Ignite a Movement,-- Atomic Habits: An Easy & Proven Way to Build Good Habits & Break Bad Ones,-- Everything Is Figureoutable,-- What It Takes: Lessons in the Pursuit of Excellence,-- Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!,-- The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness,-- Shut Up and Listen!: Hard Business Truths that Will Help You Succeed, ......................................................................................................................... .........................................................................................................................
       Reply 
    Are you sure you want to  Yes  No
    Your message goes here

Wealthfront Equity Plan

  1. Wealthfront Equity Plan Playbook for Owners wealthfront.com
  2. How do you attract and retain the best employees?
  3. CHALLENGING WORK ENVIRONMENT ENGAGING CULTURE COMPELLING EQUITY INCENTIVES 1 2 3 ATTRACT RETAIN
  4. Equity incentives must both ATTRACT NEW EMPLOYEES RETAIN OUTSTANDIN G EMPLOYEES AND
  5. Plan approach must be RATIONAL & EQUITABLE
  6. Over the past 25 years… 6  Our founder Andy Rachleff designed a plan that accomplishes both goals at a level of dilution that is quite tolerable  That plan has become known as the Wealthfront Equity Plan  What follows is a detailed recipe for how to implement this plan
  7.  Company – Consumer Internet – 50 employees – San Francisco Bay Area  Staffing Goal – Grow employee base to 100 by end of next year Let’s Start With An Example Company 7 2X
  8. A compelling equity compensation plan has four types of grants: PROMOTIONS PERFORMANCE EVERGREENNEW HIRES
  9. Let’s first focus on new hires: PROMOTIONS PERFORMANCE EVERGREENNEW HIRES
  10.  List all functions and expected number of people to be hired  Next, determine the market rates to hire these individuals – Consult the Wealthfront Startup Compensation Tool – Let’s look at some examples New Hires 10 Function Hires Software Engineer – Level 3 10 Software Engineering Manager 1 Product Management - Level 3 2 Design – Level 3 4 Technical Support – Level 1 10 Technical Support Manager 1 Marketing – Level 3 5 Marketing Manager 1 Admin – Level 1 6 Sales – Rep 3 4 Finance – Level 2 4 Business Development – Level 3 2
  11. 11 CASH $ in Thousands SF Bay Area Per centile Sala ry Equ ity 75 th $1 30k 0.1 05% 25t h $11 4k 0.0 36% Startup Compensation Tool: Example 1 Software Engineer Level 3 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 Average 0. 07% EQUITY % of Company
  12. 12 CASH $ in Thousands SF Bay Area Per centile Sala ry Equ ity 75 th $1 28k 0.1 05% 25t h $1 03k 0.0 12% Startup Compensation Tool: Example 2 Product Management Level 3 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 Average 0.0 8% EQUITY % of Company
  13. 13 CASH $ in Thousands SF Bay Area Per centile Sala ry Equ ity 75 th $2 33k 0.0 86% 25t h $1 05k 0.0 04% Startup Compensation Tool: Example 3 Sales Rep 3 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 Average 0.0 4% EQUITY % of Company
  14. Repeat This Process for All Hires Listed Create an “Equity Budget” to Calculate Total Dilution for New Hires 14 Function Hires % Per Employee Dilution Software Engineer – Level 3 10 0.07 0.70 Software Engineering Manager 1 0.10 0.10 Product Management - Level 3 2 0.08 0.16 Design – Level 3 4 0.04 0.16 Technical Support – Level 1 10 0.01 0.10 Technical Support Manager 1 0.06 0.06 Marketing – Level 3 5 0.04 0.20 Marketing Manager 1 0.06 0.06 Admin – Level 1 6 0.02 0.12 Sales – Rep 3 4 0.04 0.16 Finance – Level 2 4 0.01 0.04 Business Development – Level 3 2 0.06 0.06 x =
  15. Next, let’s focus on promotions: PROMOTIONS PERFORMANCE EVERGREENNEW HIRES 1.92%
  16.  Need to give employees who have been promoted the amount of stock necessary to get them to the market rate for their new position.  If the person being promoted is already over the market rate, then grant an amount equal to the difference between the market rate of new position and the old position. Promotions
  17. 17 CASH $ in Thousands Promotion Scenario 1: Below Market Software Engineer Manager 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 EQUITY % of Company Originally hired at 0.06% equity Per centile Sala ry Equ ity 75 th $1 54k 0.1 34% 25t h $1 34k 0.0 66%Average 0.10 5% Promoted Position Rate Grant the difference between promoted rate and original grant: 0.045%
  18. 18 CASH $ in Thousands Per centile Sala ry Equ ity 75 th $1 30k 0.1 05% 25t h $11 4k 0.0 36% Promotion Scenario 2: Above Market Software Engineer Manager 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 Average 0.07 % EQUITY % of Company Early employee, hired at 0.15% equity Current Position Rate Per centile Sala ry Equ ity 75 th $1 54k 0.1 05% 25t h $1 34k 0.0 36%Average 0.10 % Promoted Position Rate Grant the difference between promoted position and current position rate: 0.03%
  19. Example Promotion Increase 19 To Be Promoted Starting Equity Market Rate for Promoted Position Additional Grant Engineering Manager 0.06% 0.105% 0.045% Scenario 1: Current Equity is Below the Promoted Position Equity To Be Promoted Current Equity Market Rate for Current Position Market Rate for Promoted Position Additional Grant Engineering Manager 0.15% 0.07% 0.10% 0.03% Scenario 2: Current Equity is Above the Promoted Position Equity # of Promotions Average Incremental Grant / Promotion Total Dilution 5 0.1% 0.5% Total Equity Dilution for All Promotions x =
  20. Now let’s focus on performance: PROMOTIONS PERFORMANCE EVERGREENNEW HIRES 1.92% 0.5%
  21.  Give equity bumps to a limited number of people to make it seem special – Only the top 10-20% employees  Need to give a bump that feels large but maintains equitable nature of the whole plan  We propose an amount equal to 50% of what they would get hired at today Performance
  22. 22 CASH $ in Thousands SF Bay Area Per centile Sala ry Equ ity 75 th $1 75k 0.1 76% 25t h $11 8k 0.0 45% Performance Scenario Product Management Manager 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 Average 0.11 % EQUITY % of Company Grant 50% of the average: 0.055%
  23. Example Performance Increase 23 High Performer Today’s Market Rate Additional Grant (50%) Software Engineer 0.11 0.055 # of Top Performers Average Incremental Grant / Performer Total Dilution 5 0.05 0.125% Total Equity Dilution for Performance Equity Dilution for Our Example x =
  24. Finally, let’s focus on evergreen: PROMOTIONS PERFORMANCE EVERGREENNEW HIRES 1.92% 0.5% 0.125%
  25.  Goal: retain employees for the long term  Avoid vesting cliffs so they don't look around for new opportunities Evergreen
  26. 26 CASH $ in Thousands SF Bay Area Per centile Sala ry Equ ity 75 th $1 30k 0.1 05% 25t h $11 4k 0.0 36% Evergreen Scenario Software Engineer Level 3 51 - 100 SF Bay Area JOB FUNCTION JOB LEVEL COMPANY SIZE REGION Try it Now » This Tool is intended to be used as a guide and not as a predictor or guarantor of future job market conditions or salaries. Results should be used as one source of information among others and not as the final word in compensation negotiations or decision-making. Source: 2013 data for 14,720 non-executives in 235 privately held technology companies. Updated: September 4th, 2013 Average 0. 07% EQUITY % of Company Grant 25% of the average each year starting at 2.5 years: 0.018%
  27.  Start offering additional stock at 2.5 years  Give 1/4 of current market offer for their current job each year on anniversary of first evergreen grant Evergreen: Smooth Out Grants & Avoid Cliffs  In this case, we grant 0.018% per year (0.07% ÷ 4)  Each grant vests over 4 years  Granting small amounts every year avoids cliffs Initial Grant EQUITY TENURE years
  28. Example Evergreen Increase 28 Level Evergreen Grants Average Incremental Grant / Level % Granted Per Year Additional Grant Executives 4 1.0 0.25 1.0 Non Execs 16 0.1 0.25 0.4 Total 20 1.4% Evergreen Role Market Rate for Current Position % Granted Per Year Additional Grant Software Engineer 0.07 0.25 0.0175 Total Equity Dilution for Evergreen Employees Equity Dilution for Our Example x =x
  29. Add up all grant dilution PROMOTIONS PERFORMANCE EVERGREENNEW HIRES 1.92% 0.5% 0.125% 1.4%+ + +
  30. (well within acceptable range of 3–5%) Total Dilution: 3.945%
  31. Wealthfront.com

×