I deal with employee share options frequently. Mostly from a valuation perspective, but also from structuring performance and vesting conditions to retain an incentivise key staff. Now I can’t say these decisions are never controversial, but without fail the intention of the employer is to provide a fair deal to staff.
That is until I heard about Skype’s apparent shenanigans. Not only does it appear they may have fired several executives prior to the purchase by Microsoft (allegedly to escape paying on unvested options as part of typical corporate takeover provisions in Employee Share Option agreements), but if you read this article about Skype employees who left and received no value for in-the-money, vested options, you start to wonder whether anyone will ever work for or with Silver Lake again.
The original blog post from Yee Lee outlines his take on the situation at Skype and more generally how private equity deals are sometimes structured to the disadvantage of the very people who create the value. It doesn’t sound healthy. Then again, this is from someone who left so naturally his perspective may be different from those happy Skypers who have stayed with the company.