Isn’t this the exact opposite of how an incentive plan should work? Common sense would dictate the following assumptions. From the point of view of the employer…
1) We’ll pay you a salary based on how good we think you are.
2) If you do a really good job and hit your goals we’ll give you some extra money once a year.
3) We’ll give you some stock too. This is another incentive to make sure you’re motivated to do a good job. You own a piece of the thing you’re running. Do a good job and your share will be worth more.
4) However, we’re not going to give you all that stock right up front. You have to stay with the company for a while before you get it. This gives you a reason to stay with the company for a while.
5) If you do a bad job you don’t get your bonus.
6) If you do a bad job your stock won’t be worth as much.
7) If you do a really terrible job we can fire you. This means you stop working for the company and we stop paying you money. Any unvested stock is forfeit too. It doesn’t matter if you resigned or were fired. You didn’t make it to the vesting date so no stock. Yes, we realize being fired can be a big inconvenience for you. Welcome to real life. Not being fired is another reason to try to do a good job.
In his defense you might say at that level of job it can take a long time to find employment again. Much longer than for ordinary people. Surely he needs some extra money to get him through that time. I still wouldn’t feel sorry for him. If you’re making more than 1 million dollars a year in salary then there’s no excuse not to have enough saved away to live on for length of a job search. Nobody should be guaranteed an indefinite lavish lifestyle if they’re not providing enough value to their employers/clients/audience/whatever to justify it.
