- Rewarding employers with stock shares is a trademark of tech start-ups and Silicon Valley employers. But one roadblock for companies that have not yet gone public is that the stock can't be turned into cash.
- With that as context, the New York Times reports that some employers, like Pinterest and SpaceX, are offering workers a chance to sell their start-up shares. There is a caveat, however, as the sales are dependent on restrictions on the stock shares that go unsold.
- The Times mentions that an anonymous source said that Airbnb offered employees an opportunity to sell a percentage of their company stock, and Airbnb employees had to agree to specific, well-defined limits on remaining stock.
According to the Times, the emerging trend signals that Silicon Valley start-ups are looking for ways to keep employees happy once they attract them with the promise of a rich, stock-driven pay day. That's not always enough, however, as the time drags on before a company goes public (and the shares can be sold).
Even with the appearance of a fair exchange, one expert told the Times that the hope is "these deals will be one of those rare win-win situations, where employees get the money and companies can create opportunities to invest in a more controlled way."
For most employers, it's not even on the radar—although traditional stock purchase plans and equity-based rewards can provide a good way to boost employee engagement and loyalty. But for Silicon Valley start-ups, the idea makes complete sense for those managing the compensation planning strategy, whether a formal HR function exists or not.