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Company Equity

Discussion in 'Personal' started by jellycowfish, Aug 13, 2020.

  1. jellycowfish

    jellycowfish Occasional commenter

    Can anyone help please?
    My son has a Skype interview tomorrow for his potential first contract after leaving university. The company has asked if he is willing to take some of his salary in Company Equity. Neither of us have come across this before, but his friends are telling him that it might be a bit dodgy. If he was successful, he would only be given a 3 month contract anyway, so this practice seems like a bit of a rip off.
    Can anyone explain whether this is normal practice for employees, please?

    Thank you!
  2. needabreak

    needabreak Star commenter

    Depends on the company. It might be 'normal' for very senior staff in large Plc"s (pre covid).
  3. blazer

    blazer Star commenter

    I am sure I have heard stories of some of the early internet startups where talented folk worked for equity and did quite well out of it.
  4. jellycowfish

    jellycowfish Occasional commenter

    Thank you both for your replies. My concern is that it's only a 3 month contract, so he's unlikely to benefit from the minute amount of equity he'll acquire.

    It's a global company so presumably large. But he would go in at the very bottom level.
  5. Doitforfree

    Doitforfree Star commenter

    My son's company, which is not quite a start up but a small and growing one, proposed cutting everyone's pay by 20% and paying the rest in equity, to save money during Covid. Maybe this company is doing the same. It's a gamble. My brother in law earned his first million this way, by happening to join a company that did really well. And it may be that the company will extend the three month's contract too. These are uncertain times so there's no reason to dismiss it out of hand. He's not tied in for a long time if it doesn't work out, it's a job, and it's experience.
    Morninglover and jellycowfish like this.
  6. jellycowfish

    jellycowfish Occasional commenter

    Thank you, @Doitforfree. This explains it more clearly.

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