I've been working for large private software company (the last round of investment was very, very large) and my offer letter told me I would receive X number of options as long as the board approved it.
It's been a year and I've been stonewalled on the option plan, strike price, any information and also haven't been told how to exercise my options (assuming a 1 year cliff).
I've sent multiple emails to HR and the controller, culminating with an email to the CFO (forwarded the same email multiple times to show the amount of months that no one has answered me). HR has gotten back to me and told me everything they could and seem like they want it resolved, but their hands are tied.
Has anyone seen this behavior before? Since I've been ignored, I don't even know if the board approved my grant. If they have approved my grant, I'm really pissed that they've effectively blocked me from exercising.
Can I send a letter and a check to the CFO with $100 to force the issue of exercising some amount of shares and determining the strike price that way?
I left this position soon afterwards, but what I pieced together from (2nd hand) rumors and my own speculation is the idea that the executives that were brought in with the additional influx of a massive round of funding, don't want to assign a value to the options because I think they got a very high appraisal when getting that funding. I don't understand how they will be able to get a lower appraisal by waiting (since they are doing very well).
I came to this conclusion because some senior leadership told me they are in the same boat and aren't able to exercise their options. It will be interesting if any senior
leadership decides to leave and can't get their equity.
If you haven't received paperwork for the options, you weren't granted them. If your offer letter says "subject to board approval," which it probably has to, then you probably don't have legal recourse.
There are a few things that might be going on here.
At this point the options you DO have are:
If you DO care about getting the options, I would not wait too long before acting. As the company valuation increases, the price at which your options will be granted will continue to rise, and the options will be less valuable.
That sounds like a really bad situation. You have to look around you and decide if this company is essentially dishonest ans runs like a scam, or if they are simply incompetent. You may be able to tell by looking at how they treat their customers for instance.
It looks like you already escalated the issue as much as you could. I assume you asked your direct manager, and the answer was that he didn't know either?
HR says their hands are tied? That's an amazing answer. First advice: save all those email exchanges somewhere outside the company's servers, so you can refer to them again should you ever get kicked out of the company. Based on your behavior, I'd guess you're close to the exit anyway. If I was an unscrupulous CEO, I would be thinking of ways to get rid of you or extract as much work as possible as quickly as possible before you are fired.
Unfortunately, "subject to board approval" is a common contingency for stock option grants. At this point, I'm not sure there is much you can do about it.
Last year I represented two founders whose small company was purchased by a large software company. A sizable portion of the payment price was in stock options, which had a board approval contingency. I asked the acquirer's lawyer, "What happens if the stock option grant is not approved?" A couple of days later, he forwarded a copy of the board's resolution approving the grant. It appears, regrettably, that your situation does not nearly give you that much clout.
Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.
"As long as the board approved it" means you can't count on ever receiving this as part of your compensation. Yes, it sounds like a bait and switch, and an honest company would have followed through. But I would have held off on accepting an offer that had contingencies on the compensation if you were counting on it.
Try this angle on the finance folks - "I've got some tax issues and I really need to know how the stock options will affect it." (or wording that fits your country's tax laws) It might be enough to get a sympathetic response from Finance. (And you probably do need to know the details/pricing/schedule of the options to figure out any applicable taxes to pay or budget for.)