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Should esops component be mentioned in offer letter?

Hello All, I interviewed with a startup recently and some of their policies around esops was something I encountered for the first time in my career, so wanted the expert advice of the community on next steps. Surprise one: ESOPs will be allocated post probation period of 3 months and vesting starts from there and not the date of joining, I was surprised on this but upon discussion with the company POC I was given a reason of the legal fees involved, which sounds fair but the vesting schedule is it employee favourable? Surprise two: They shared an offer letter with only the fixed component and said ESOPs will be evaluated post completion of probation period basis performance. Upon further discussing in this I was informed that this is a standard format their VC(sequoia, a16z and elevation) have approved. Is this true because I asked around few of my friends and all of them said esops are an integral part of the startup compensation and all of my and their offer letters historically had esops mentioned along with their value. Wrt to point 2 an I asking too much or some practice has changed in the industary which I’m unaware about. Also esop value post probation evaluation, is it employee friendly as the employee is in non negotiable position, isn’t it ?

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AITookMyJob

Startup

a year ago

They're being extremely unfair. How would you evaluate their offer and compare with others if they don't share ESOP details - for point 2. For point 1, it is fine if they're allocated 3 months later but what will be the vesting start date? It should be your joining date.
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MaturePut38

Atlassian

a year ago

For point 1 they mentioned the vesting start date as date of allotment and not joining date. Upon question this, the company started red flagging me.
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AITookMyJob

Startup

a year ago

Don't factor in their ESOPs while evaluating the offer. They want to hoard them and probably will not let you exercise. There are 100 ways to screw employees over ESOPs (I've seen my fair share of them) so don't count on it. If they're so clingy right at the start of your employment when they should be attracting you, they sure as hell won't make it easy for you at the end of your employment to exercise your options. Ask for more cash comp in place of ESOPs if you want. You can state that the ESOPs aren't valuable to you if the details aren't clear so you want cash instead.
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RealKingfish

Apna

a year ago

I have always had ESOPs and this is not the standard. 1. ESOPs are mostly worthless, unless the company plans to buyback or go public. So try to get as much cash instead of ESOPs. 2. ESOPs are always part of the offer letter. If they are not adding now in the letter, very high chance they will reneg after the probation. 3. Accepted vesting is like this- Let’s say you get 4x in ESOPs. You will get x each year, vested across 4 years. The first vesting however happens after 12 months, no ESOPs before that. Then monthly amount of x/12 is vested. 4. They will give you access to a portal like carta where you can see your ESOPs. But ESOPs are approved by the board so you well get the allotment at least 2-3 months after joining, but does not matter since there’s a 12 month gap in the first vesting.
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MaturePut38

Atlassian

a year ago

Thanks. After talking to few more folks in my network I declined the offer as more and more red flags are emerging.
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