Vesting: Thinking Short vs Long Term

Conventional wisdom says that it’s in the company’s best interest to vest/defer the proceeds of an acquisition. It keeps the person incentivized to work on the company’s problems as the person unlocks their value over time.  The vesting schedule is usually 1-3 years, with payments being made monthly, quarterly, or sometimes annually.

Companies spend too much time worrying about locking you down for your vesting period and too little thinking what happens after that. We discussed it at length with Shopify, and at the end of the day, it was completely irrelevant. We’re here to work on challenging problems. Otherwise, we wouldn’t have done the deal in the first place.

Paying vested proceeds in a timely manner is in the best interest of any company. It allows the person to set down roots and invest in the city around them. Who is a bigger flight risk: someone who’s bought a house, started a family, and invested in local companies, or someone who is completely liquid and has no ties to the city?

Employees take up the mindset of the company. If the company thinks short term, the employee will too. If the company displays a long term vision, the employee will invest in it.