Cooper: Tesla grants smaller initial equity, favoring larger performance refreshers later
Scott Kupor · a16z Podcast | Beyond One Size Fits All for Startup Employee Options · Jan 2, 2019 · at 9:27
Scott Cooper, executive at Andreessen Horowitz, contrasts Tesla's tenure- and performance-based option grant model with traditional Silicon Valley equity practices.
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“And one of the things that Tesla does is, instead of the typical practice, which is most people get a very significant grant, you know, the day they join the company, and then over time, they might get some refresher grants, but those refresher grants are often a fraction of what their initial grant was. Tesla kind of reverses that and says, hey, we don't really know that much about the employee day one when they come here. We'll know more over years one, two, three, as they actually perform, and so what they often do is give a smaller package up front and actually give people who perform well more options later in their tenure to recognize the fact that, you know, their contribution is much better known at that point in time, and therefore it makes more sense to have, you know, an option package that reflects their actual contribution to the business.”
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