When I joined Yahoo In 2008, I received a small number of options. I don’t remember how many–it was very few–but I do know my strike price was r

Downturn career decisions.

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2022-07-06 19:00:13

When I joined Yahoo In 2008, I received a small number of options. I don’t remember how many–it was very few–but I do know my strike price was roughly $16. I don’t remember that because my strike price was particularly lucrative, but rather because some of my coworkers would complain about their underwater strike prices in the $50s. Given the stock was trading at roughly $18, it was easy to understand why the folks on my team were a bit perturbed. As best I can tell, those options held by my coworkers remained out of the money until they expired.

I was thinking about Yahoo recently during a few discussions with folks who expected their company to reprice their options given the economic turmoil of 2022. The answer to “when will your company reprice your options" is almost always, “never” but it’s a natural topic in an environment where a company like Klarna has dropped from a $45B valuation last year to raising their next round at $6.5B.

Option repricing remains an exceptionally rare occurrence. It does happen: Google repriced in 2009 after falling from $747 to $308, and Zenefits repriced in 2016 after changing CEOs and losing half their value. Even in those cases, it’s not necessarily a great employee outcome. Employees’ vesting schedules typically get reset. Those three years of vesting you’ve already completed? They never happened.

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