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November 27, 2012

Real Valley Stories: Rejecting the Closed Envelope

Editor's Note: Part 8 in an irregular series of stories from my 13 years in Silicon Valley. Part 7 talked about the leveraging your assets to get your way. This time, a real example of knowing when you're undervalued, and how to get what you deserve.

Not every Silicon Valley company has a smooth trajectory, and neither does the average career. Startups fail and career paths stall. You can run into bosses that don't get you, miss promotions, or find yourself excelling as a rare star at a company that simply isn't going anywhere. Fairy tale stories are often just that - fairy tales. In the real world, you need to be executing on what you've been asked, but constantly assessing your place, if you are rightly fit, or on a path to what you want to achieve.

Being a long-time employee for most of the last decade at a startup that went through many funding rounds and saw a practical carousel door in the VPs and CEO office, it probably comes as no surprise that I accrued a solid amount of company history and irreplaceable knowledge, but had to continuously reprove myself to new people who had just joined. Sometimes, the convincing was easy, through consistent work, but other times, it seemed nearly impossible, as if we were two people speaking a completely different language.

If explaining one's work product or role in a shifting company was hard, it was equally challenging to assess if an employee was compensated appropriately relative to their peers, if promotions had regularly taken place, and if one's stock options were valuable or worthless, depending when they came into the company, what round of funding we were aiming for at the time, or how well they had negotiated coming in the door.

After one recapitalization round, which had essentially wiped out our existing shareholders and started over, I found myself in a meeting with our VP of Marketing, talking about my job performance and how the company planned to reissue options to employees so we weren't completely underwater, having watched our existing stock reverse split to hell. As he tried to put me at ease that I was being taken care of, he reached forward, past his computer monitor, to a stack of white envelopes, the top of which had my name on it.


Inside the envelope, presumably, was the latest stock option grant - a new gift of shares in the company, which, once again, would maybe be worth something if we went public or were purchased, but were just as likely to expire worthless, as all the others had. As he lifted my envelope up and tried to give it to me, I interrupted and said, in a rare point of clarity, that I didn't want it, and no matter what it said, it wasn't what I deserved.

This startled him a bit, and I explained that I was familiar with how stock options were allocated, with the CEO and board of directors taking their share after the VCs had their stake, followed by the senior management team, the VPs, the Directors, and eventually, the working stiffs like me. I knew that my previous humility and hard work had set me up to get screwed, again, because I hadn't fought harder for a bigger title and all the rewards that came with it, from salary to stock.

Following on, I addressed the issue directly, saying I'd never been one to fight for promotions and titles, that I just wanted to do a good job, but that I had seen the only way one could get promoted or get a raise at the company was to solicit an offer from a competitor, only to rescind it later. I looked my boss straight in the eye, and coldly said, "Let's skip that step."

The move was a gutsy one, but one I felt I had every right taking, having committed untold hours and several years of my career already into the company, without being promoted, and getting the stock options others with higher job titles were no doubt getting. My boss and I spoke further, and he heard me loud and clear. The envelope went back on his desk, and we wrapped the meeting, my heart beating quickly, but my mind feeling steady. As I headed back to my desk, he did exactly what I had hoped he would, taking a two door trip down to the VP of HR's office to discuss the situation.

A few weeks went by, but shortly afterward, I was invited back into his office, this time with a plan that included a new envelope, with new numbers on it. In addition to the new stock options offer, I was given a promotion, and a plan to work my way into a second promotion the following year, that would see a commensurate salary increase and stock option bump. As time went on, true to his word, and due to my own efforts, of course, that too took place - as the company, with my VP, recognized the value I had brought for years, and continued to bring, and helped me take on more responsibility and finally be compensated the way I thought I should.

As I wrote in July about leveraging one's assets to get one's way, the risk I took was one where I was arguing from a position of strength. I was confident that I was delivering good work that I could be proud of, which could be measured. I had seen other great colleagues get stuck in their careers, and have to get alternative offers from competitors before seeing a career bump with our firm. I knew nobody wanted that headache, and that I could get other jobs if my brazen act went sideways. But it didn't. I knew the sealed envelope didn't have what I wanted, and I knew I was in the position to call them on it.

There are times to be humble, to keep your head down and do your work. There are sometimes economic realities at companies and industries which might prevent you from getting what you think you deserve. But if there's a mismatch between what you're delivering, and you see an opportunity, assess where you are and take the opportunity to make it right. Good people and good companies never want to see the strong talent go out the door, and happy employees usually end up working even harder and being more loyal. I'm glad I finally found a VP who got it and was willing to listen. And that's a real Valley story.