Golden Handcuffs

fredwilson
fredwilson
0xB833
May 14th, 2021

Stock-based compensation plans throughout the startup and tech sector are based on “golden handcuffs” – the idea that an employee can’t leave because they would be giving up too much money if they do.

I’ve never loved that concept. It feels like staying in a bad marriage for the kids.

So I have been involved in a number of efforts to rethink that practice and one of those efforts came to light earlier this week when Coinbase, where I am on the board and compensation committee, blogged about their new compensation strategy.

This line in particular stands out to me as a powerful way to think about retaining employees:

Some may say eliminating 4-year new hire grants could hurt retention; we disagree. We don’t want employees to feel locked in at Coinbase based on grants awarded 3 or 4 years prior. We want to earn our employees’ commitment every year and, likewise, expect them to earn their seat at Coinbase.

We operate in an open market for talent. We all know that. Letting that market operate efficiently and not trying to game it makes a lot of sense to me.

Arweave TX
dM2RK59ZeIFxU5N3-BW0ZKQmnzs7nlO5ZbhNplOvs4Q
Ethereum Address
0xB8332710AB60A1B2e8FE6D775d83524C9E0cE136
Content Digest
LI9SRPSKa-21WKJDQTPiRlBi0R4TqLHuxgFkJxDqPQ0