Mine have been within 60 days of close in the US. It’s all well handled if the acquirer has acquired businesses in the past.<p>The worst thing I’ve seen is when the leadership team of majority shareholders colluded to water down the rest of the employee-level shareholders in anticipation of the acquisition. Everyone got paid out, but it wasn’t at the levels people expected based on their previous knowledge of their equity value.<p>This isn’t as bad, but another common tactic was the leaders shift personal value towards themselves with high earn-out packages in lieu of a lower price tag for the acquisition. This applies more to smaller acquisitions.<p>The reality of a non-voting shareholder is that you don’t have much say in how the deal is done. My word of advice is to make sure you work for ethical leaders that truly care for people. This will help ensure that their good judgement is applied outside of just their own family and personal financial interests.
I went through this 6 months ago. A few things I learned (applies to the US)<p>The equity payout happened within a few days of the official close. It was a wire transfer. Understand that the public announcement is often different than the actual close.<p>You are asking about equity but make sure you actually have that. I’m constantly surprised by people saying they have “stock” in a company when it’s only options.<p>If you have actual equity, check if it meets the requirements for Qualified Small Business Stock (QSBS)<p>If you have equity, you may not get all the payout immediately. Often a percentage of the purchase price of the company is held in escrow for some period of time usually 12 to 24 months, to handle various things that come up. Everyone who owns actual equity has that same percentage of their payout withheld. Depending on what happens you may not get any of that money. Even if you get it all payed out in 24 months time, no interest is paid<p>If you have stock options, the acquiring company may just buy them out. Basically instead of you having to exercise your options, cut the purchased company a check to buy them, only to have the acquiring company cut you check for your shares, they just buy out your shares for the per share price, minus your strike price. The net financial result to you is the same, with less paperwork. This is not a decision individuals in the company make themselves. Its defined as part of the acquisition. If so this payment comes in via direct deposit like normal compensation.<p>Depending on your situation consider using a CPA for your taxes for the tax year the acquisition occurs in. You don’t want to mess this up.<p>Find a CPA that has worked with people who have had equity events. Most CPAs have never dealt with something like this. If you are high enough to have been part of due diligence you met the lawyers for your company. They can usually recommend a CPA who can handle it<p>A few other thoughts:<p>Fight the temptation to ask other people how they did in the acquisition. There will always be people that made more than you. If you learn specific numbers for others, you can try hard to not be jealous, but it can be corrosive. It’s better not to know.<p>There are many good articles on managing a windfall. Read them and follow the advice that works for you
The pre-IPO company I worked at was acquired by a large public company. The deal was closed about two months after it was announced.<p>Exercised options and vested RSUs were paid out at a certain price per share.<p>Unvested RSUs and options were converted to options and stock of the acquiring company, at proportional unit and strike price, with the same vesting terms.<p>People with vested, but unexercised options were given a choice between exercising their options and getting cash after close, or holding on to their options and getting options of the acquiring company.<p>The money transaction was handled by Computershare.<p>Expect a large tax bill.<p>You might get to learn how much stock top management owns. Except some unhappiness in the troops right after that announcement.<p>Happy to answer other specific questions.
One “gotcha” are retention agreements. Last company I was at that was acquired there were lucrative retention offers after 2 years to most engineers.<p>In addition to the (very generous) retention bonus, It seemed various options were paid out slowly over the first few years of acquisition.<p>People did pretty well (in the $100ks range). But it did see the company pretty much decided to pay out the employees “equity” on its own schedule. I think depending on the vehicle used to own “equity” the acquired company has a lot of flexibility when negotiating with the acquiring company in terms of payment schedules, etc so people don’t all suddenly quit the day after acquisition.
For a small non-public company getting acquired by a huge public company:<p>Days before the acquisition, the acquiring company gave us all interest-free loans to purchase the stock that we had options for. (we just signed the paperwork, and did not need to directly deal with the stock or money) At the moment of acquisition, that stock was all purchased by the acquiring company. We then got the money for that pretty quickly.