DoorDash removing 1-year cliff for equity grants

This is good progress.<p>Just two months ago I declined an offer from a known and well funded startup because of a one year cliff on equity.<p>The recruiter didn&#x27;t seem to be able to discuss this matter and I asked them to make sure to bubble this sort of thing up their food chain. I never heard back afterwards.<p>As an &quot;old timer&quot; in the industry a one year cliff makes absolutely no sense to me. Its like working for credit, which seems very backwards.

Good, pro-employee move.<p>Next, I&#x27;d like to see pre-IPO startups offer longer periods to exercise shares when you leave. 90 days being standard is way too low.

&gt; Because we see equity as part of total compensation, we believe employees should receive equity as it’s earned — every quarter.<p>This reads to me like someone looked at the data and discovered that almost everybody who stays employed for a quarter goes on to stay for a year. So they decided to try to juice some marketing value out of a policy change that makes no functional difference to anyone.<p>Why else would they choose to have equity vest quarterly instead of with each pay period? Or monthly, which is already typical after the cliff? If you believe equity is part of total compensation why does it need a different schedule at all?

With Google doing front loading(33&#x2F;33&#x2F;22&#x2F;11) and other companies also shifting away from conventional 25% per year vesting to make first few years more attractive, they gotta catch up to stay competitive. Uber recently did the same of removing cliff.

Does DoorDash also grant RSUs based on fixed bonus amount and not number of shares? It&#x27;s hard to believe this would be pro-employee.<p><a href="https:&#x2F;&#x2F;www.teamblind.com&#x2F;post&#x2F;Lets-Boycott-Interviewing-at-Stripe-and-Instacart-after-their-New-RSU-Policy-fE5hpQPg" rel="nofollow">https:&#x2F;&#x2F;www.teamblind.com&#x2F;post&#x2F;Lets-Boycott-Interviewing-at-...</a>

Not surprised. I&#x27;m probably a fair bit older than the average HN reader (finished undergrad in 1995). This is the hottest job market I&#x27;ve seen since the height of the dotcom bubble (mid 1999 to early 2000), and if it continues along it&#x27;s current trajectory it will pass that by year end.

The 1 year cliff never really made sense...<p>It effectively gave the company a discount on employees who stayed only 364 days - or to look at it another way, a &#x27;trial period&#x27; of 1 year where the pay was substantially less.

If it&#x27;s clear to both parties a new hire isn&#x27;t going to work out, it&#x27;s in the company&#x27;s best interest (as well as the employee&#x27;s) for the employee to move on ASAP rather than sticking around for a one year cliff.

This is great!<p>Allows bad-fits to leave asap rather than hanging around till 366 days

Delaware should regulate this at the state level<p>and if you don&#x27;t like the statutory result, you can incorporate in at least one of 55+ other sovereign jurisdictions within the United States<p>People that really think they need a state-level business court system for their multinational unicorn, in a place they never physically will be, can just keep using Delaware for no reason, and their employees will subsequently have better earned securities laws.

This does not, of course, include the people who actually do the deliveries.

Note: DoorDash employs the labor of approximately 104,000 people. Of those, about 4,000 are classified as employees. Of <i>those</i>, only a portion (of unknown size) are &quot;equity-eligible.&quot;<p>Only equity-eligible roles classified as employees get equity. For everyone else employed by DoorDash, and on whose backs DoorDash is built, let them eat cake.

My company also does not have a 1 year cliff and it&#x27;s wonderful.<p>I switched a few months ago from a company that did. It was a farce how my old company, at the end of the year, would say your compensation for next year is $X but part of X was paid out over the next 4 years with a 1 year cliff each year. Just one of many reasons why I left.<p>My current company pays out equity every 3 months and it&#x27;s incredible.<p>The only good thing my old company did was pay every week instead of every 2 weeks. I know most companies do every 2 weeks; I was surprised at how large a difference getting paid every week vs every 2 weeks makes. Not sure why the extra week between is so impactful but it really is.

Great move. Joining a new company always involves a leap of faith, and this reduces the risk somewhat of the fit not being satisfactory. I hope that all companies that offer equity will do the same as DoorDash.

Depending on how you look at it. This is good for employees who dont have to wait till the cliff. But on the other hand, if your RSUs are based on a fixed amount (which I believe is the case for all the new hires in DD) and not no of units, then you&#x27;re missing out on stock growth. Since the compensation is capping the upside of stock.<p>Overall, this is not bad for a company that has already IPOed. I hope the startups that are on the verge of the IPO dont use this as a way to cap out giving RSUs to employees.

I have a tangential question. What is most people&#x27;s experience with additional options being awarded to employees beyond the initial grant?<p>Is there generally also a separate cliff for those additional option grants?<p>I ask because I interviewed with a startup recently and the recruiter told me that the company had just awarded everyone in the company additional options. I asked them if there was a cliff attached to those but they couldn&#x27;t answer that.

I was expecting a catch with the equity grant period shortening but it seems it’s still four years? If so this is great for employees.

The article seems to intentionally obscure whether the previous vesting period was quarterly or not.<p>My cynical read of this is that they are changing the vesting schedule to quarterly (instead of monthly, which is more typical), and burying the lede on that by painting this as a benefit to employees (when it really only impacts new employees).<p>Does anyone know if this is true or not?

In NYC my experience is that the equity vests in four years, with one year &quot;cliffs&quot; for four years. The three-year, the &quot;monthly&quot;, the other stuff I hear about is fantastical to me. And the equity isn&#x27;t ever really life-altering.<p>Maybe I&#x27;m on the wrong coast?

Have any of these food delivery companies actually reached profitablity?<p>What&#x27;s the endgame?

LOL contrast this with Uber&#x27;s offers in 2016:<p>Standard vesting schedule with 1-year cliff... but you would be prevented from selling any stock grant for the first year after it vests. Love it, thank you but no!

How is it that companies that don&#x27;t offer any equity can still compete in this market ?<p>Who joins Oracle&#x2F;IBM...etc&#x27; these days ?

hope more companies adopt this practice

awesome

&gt; Furthermore, we want the reward to reflect the work that our team does to realize DoorDash’s mission and empower the communities we serve.<p>What <i>is</i> the mission here? Is Doordash at all sustainable without continually funneling VC money into subsidizing services that no one would pay for at their breakeven cost?

It looks like DoorDash just put up a big banner at their front door saying if you want to stay less than a year and still get paid highly apply here.<p>Wouldn&#x27;t this move incentivize employees seeking short term employment thus diluting stocks given out to existing long term employees?

TBH I&#x27;d feel jittery working at door dash. COVID is going to end completely soon and the boom in deliveries is going to drop with it, probably along with their stock price. If was to go work there, I could start selling every month.<p>But they also don&#x27;t give you units of RSUs as stock comp, just cash equivalents, so that is another major downside working there.