Salary.com MySalary.comSalaryBenefitsAdviceSelf-TestsLearningCareerMoney
SEARCH Salaries Articles
 View HR Edition
Personal Salary Report
My Benefits
My Performance
Self-Test
Enter search criteria
Help
Back to Salary
Back to Advice
Series Home
 
Will getting paid biweekly instead of hourly hurt
Salary at Previous Job
Fix a Negotiation Mistake
Ask for Lower
Salary vs. Title
Lateral Move
Inflated Job Title
Backward Recruiting
Promotion without Raise
Disclosing Salary Expectations
Internal Pay Data
Docking Pay
Employer Doesn't Know Market Value
Salary Cap
Job Matching Process
Merit Increase
Extra Duties
International Salary on Resume
Pay in Specific Region
Work from Home
On-Call Pay
Bilingual Position
Librarians Need Degrees
Part-time vs. Full-time Rates
Paycheck Math
Typical Increase
Low Raise
Sales or Not?
International Travel
Deferred Compensation
Consultant to Full-Time
Part-Time Rate
Happy with TCC
Co-op to Full-Time
Negotiate When Paid Well
Your Next Raise
Nepotism in Pay Raises
Co-op to Contract
You Promised
Raise Too Small
Employer Rejects Counter
Paid Less Than the Wizard Says
Typical Interview Questions
Raise in a New Region
Paid More for Two Jobs
Returning a Signing Bonus
First Day Raise
Employee Paid More
Raise after Layoffs
Asking for a Raise
When Should I Be Reviewed
Three Percent Raise
Expected Raises
Raise with Promotion
Verbal Agreements
Lure Me Away
Underpaid
Disclosing Vital Statistics
Salary History
Exempt to Nonexempt
Meaning of Equivalent
Asking for More
Unvested Options
Management Material
Renegotiate after 90 Days
Disclose Seeing Pay Range
Part-Timers Make More
Per Diem
Rights Regarding Raise
Top of Pay Range
Headhunters
Degree Pays More
Promised Higher Raise
Salaried vs. Hourly Employees
Remind Employer About Review
Contract Work on Resume
Base Pay Lower than Incumbent
Time Off Affected Raise
No Experience
Disclosing Salary Requirements
Salaried vs. Hourly
Same Job, New Location
Company Car
Higher Cost of Living
Returning to Full-Time
Offer vs. Counteroffer
Pay-to-Stay Bonuses
Raise with HR Promotion
Sharing Your Paystub
Employer Reneges
Cap on Job
Executive Level Qualifications
Equity Adjustment vs. Promotion
Time Clock
Fired Because of Illness
Preparing for a Review
Holiday Bonus
Long-Term vs. Short-Term Incentives
Close to the Median
Temp Job Raise
Negotiating from the Other Side
Unions Using Compensation Data
No Degree in HR Job
Requesting Part-Time
Revising Job Description
Is the Grass Greener?
Second Negotiation
Legal to Decrease Pay
Aggressive Numbers
 
  Salary Talk: Will my company take back my unvested options if I get laid off?
Salary Talk
It is customary for a company to take back unvested options when an employee leaves the company for any reason. In fact, this is probably included in the stock option agreement you received when you were granted the options.
Will my company take back my unvested options if I get laid off?

Q. I was awarded 25,000 options at my last job. Recently, the company laid off 100 employees, including me. I was not vested at this time and the company took away all of my shares. Is this standard practice?

A. Yes. It is customary for a company to take back unvested options when an employee leaves the company for any reason. In fact, this is probably included in the stock option agreement you received when you were granted the options.

Sometimes, however, companies have a severance policy that provides special benefits (e.g., accelerated option vesting) for situations like layoffs. Be sure to find out whether your company has such a plan.

Companies use stock options to attract and retain talent, and to encourage employees to think like owners. Vesting schedules ensure that each employee has a financial incentive to stay with the company at least until the vesting period is over. But if, as in your case, the employer has an initial waiting period, you could forfeit this noncash incentive if the company falls on hard times before vesting begins. If the company failed, of course, those options or shares would be worthless anyway.

There's not much you could have done to prevent your employer from rescinding your options. It is sometimes possible to negotiate for a faster vesting schedule when you sign on with a new company. If you are being laid off close to an important vesting milestone, you can sometimes negotiate for a later end date. One tactic that occasionally works is to offer to take an unpaid leave of absence that ends the day you reach the next vesting milestone, then return to work for a short period before being officially terminated. Another approach is to negotiate to continue as a consultant or part-time employee so that your vesting can continue.

Note the distinction between taking back your options and taking back shares, as you wrote. If you are not yet vested in your options, or have not yet exercised your vested options, you do not own any shares. Once you own shares, they're yours. So although you may have lost the opportunity to buy shares subject to your option, you didn't lose any money out of your pocket.

Good luck.

- Erisa Ojimba, Certified Compensation Professional

<% strContentSiteID = "Salary" strAreaID = "SAL" dim strAccpPageName, strHeadPos, strAccpArea 'get full url and make it as lower case strAccpPageName = Lcase(Request.ServerVariables("SCRIPT_NAME")) 'response.write "
strAccpPageName: " & strAccpPageName & "*****
" 'get start position for area name strHeadPos = InStr(1, strAccpPageName, "/", 1) 'get strAccpArea = right(strAccpPageName, len(strAccpPageName) - strHeadPos) 'response.write "
strAccpPageName: " & strAccpArea & "=========
" 'get second position for area name strHeadPos = InStr(1, strAccpArea, "/", 1) 'remove strAccpArea = left(strAccpArea, strHeadPos - 1) 'response.write "
strAccpPageName: " & strAccpArea & "---------
" select case LCase(strAccpArea) case "aboutcompany" strArea = "ABU" case "advancedsearch" strArea = "ASE" case "advice" strArea = "ADV" case "benefits" strArea = "BEN" case "careers" strArea = "CAR" case "compensation" strArea = "COM" case "ecm" strArea = "ECM" case "enterprise" strArea = "" case "home" strArea = "HP" case "learning" strArea = "LRN" case "money" strArea = "MON" case "salary" strArea = "SAL" case "selftests" strArea = "SFT" case "sitesearch" strArea = "SSE" case "smallbiz" strArea = "" end select %>
Learn More to Earn More:
<% response.write "" & chr(13) response.write "
" %>
<% response.write "" & chr(13) response.write "
" %>
<% response.write "" & chr(13) response.write "
" %>
   Advertisement
<% strTargets = "/AAMSZ=160x600_RIGHT/SITE=SALARY/AREA=" & strArea & "/SJCOD=/SJCAT=/SMET=/SST=/SSAL=/PNAME=/POS=0" with Response 'make top ad call .Write "" end with %>
<% sub create_career_iframe_careerjournal (iCountJobTitle, _ strNarrowCode, _ strNarrowDesc, _ strJobCode, _ strJobTitle, _ strIframeWidth, _ strIframeHeight, _ strDisplayCharLen, _ strTableBorderWidth, _ strPageName) Response.Write "" Response.Write " " Response.Write " " Response.Write " " Response.Write "
" Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write "
" Response.Write " " Response.Write "
" Response.Write "
" end sub sub create_career_classfinder (strNarrowCode,strJobTitle) dim strAccpPageName, strHeadPos, strAccpArea 'get full url and make it as lower case strAccpPageName = Lcase(Request.ServerVariables("SCRIPT_NAME")) 'response.write "
strAccpPageName: " & strAccpPageName & "*****
" 'get start position for area name strHeadPos = InStr(1, strAccpPageName, "/", 1) 'get strAccpArea = right(strAccpPageName, len(strAccpPageName) - strHeadPos) 'response.write "
strAccpPageName: " & strAccpArea & "=========
" 'get second position for area name strHeadPos = InStr(1, strAccpArea, "/", 1) 'remove strAccpArea = left(strAccpArea, strHeadPos - 1) 'response.write "
strAccpPageName: " & strAccpArea & "---------
" select case LCase(strAccpArea) case "aboutcompany" strArea = "ABU" case "advancedsearch" strArea = "ASE" case "advice" strArea = "ADV" case "benefits" strArea = "BEN" case "careers" strArea = "CAR" case "compensation" strArea = "COM" case "ecm" strArea = "ECM" case "enterprise" strArea = "" case "home" strArea = "HP" case "learning" strArea = "LRN" case "money" strArea = "MON" case "salary" strArea = "SAL" case "selftests" strArea = "SFT" case "sitesearch" strArea = "SSE" case "smallbiz" strArea = "" end select dim intNumJobBoards dim arrayJobBanner redim arrayJobBanner(20) response.write "" & chr(13) response.write "
" response.write "" & chr(13) response.write "
" response.write "" & chr(13) response.write "
" intNumJobBanner = 3 Response.Write "" Response.Write "" Response.Write " " Response.Write "
" Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write " " Response.Write "
Learn More to Earn More:
" Response.Write "" for i = 0 to intNumJobBanner -1 Response.Write " " Response.Write " " Response.Write " " 'Response.Write " " next Response.Write "
" & arrayJobBanner(i) & "
" Response.Write "
" Response.Write "
" end sub %>
 
To find related articles, we suggest these keywords for our "Search Articles" function.
Keywords: employee granted stock option vest vested accelerated vesting severance unvested
Contact Us | Feedback | Glossary | Legal | Privacy | Site Map | Help
Copyright 2000-2005 © Salary.com, Inc.