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Why Does Sift Offer Equity?
At Sift, we believe in the power of ownership. Equity isn't just an additional perk; it's a way to align our team with the company's long-term success. We offer equity as part of our total compensation package because we want every team member to feel invested in Sift's future. Understanding the basics of equity can help you appreciate the potential benefits and make informed decisions about your future with us.
Here’s why we think equity is a compelling part of your compensation at Sift
Ownership Stake
Equity means you own a piece of the company. Your success is directly tied to Sift’s success.
Participation in Success
If Sift does well, the value of your equity can increase significantly.
Incentive for Long-Term Commitment
Equity typically vests over time, encouraging you to stay and contribute to our growth as a committed team member.
We Believe That Compensation Is A Personal Decision
At Sift, we believe that every person is driven by their own unique situations. Compensation is personal and we do our best to meet the needs of our current and future Employees.
Offer Process
As part of the offer process, you’ll be given an opportunity to talk to our Recruiting Team about your preferences between cash and equity.
Participation in Success
As part of the offer process, our recruiting team will walk you through how your equity compensation can grow as Sift progresses through its natural stages. We'll make sure you understand how equity works, what it could be worth under different outcomes, and answer any questions you have so you can make an informed decision.
Equity Education
In extending previous offers, we’ve discovered that not all candidates fully understand how equity works. To address this, we proactively created this Equity 101 Page, ensuring that candidates interested in Sift have the information they need to make informed decisions.
What Are Stock Options?
Stock options give you the right to purchase a certain number of shares of Sift’s stock at a predetermined price (the exercise price). You’re not officially a stockholder until you exercise these options. Essentially, equity compensation like stock options incentivizes employees with payments tied to the company's value. Once you exercise your options, you become a partial owner of Sift. Understanding how stock options work economically and the associated tax implications is crucial.
Equity Basics: Common Terms and Acronyms
How Do Options Work?
- Grant: Sift grants you stock options as part of your total compensation package. This gives you the right to purchase shares at a set price (strike price) in the future. The grant date is when the options are awarded, and the strike price is usually the current FMV of the stock.
- Vesting: Options vest over time according to a vesting schedule. At Sift, it’s 4 years with a 1-year cliff. This means 25% will vest after 1 year, with the rest vesting monthly over the next 3 years.
- Exercising: Once options are vested, you can purchase your shares at the strike price. You usually have a 10-year window from the grant date to exercise options before they expire.
- Selling: After exercising, you own actual shares which you can hold or sell. For private companies like Sift, selling opportunities may be limited to specific events like an acquisition or IPO.
Reading and Interpreting Your Stock Options Agreement
Equity compensation can have significant tax implications. Speak with your tax professional to understand how exercising and selling your options may affect your taxes.
Remember, stock option agreements can be complex legal documents. If unsure about any terms or implications, consult with a financial advisor or lawyer who specializes in equity compensation. Equity is a long-term investment in the company’s potential that comes with risks. It’s important to speak with a financial advisor to understand these risks.
Tax Implications
Equity compensation can have significant tax implications. Speak with your tax professional to understand how exercising and selling your options may affect your taxes.
Shared Growth, Shared Rewards
At Sift, we believe in the power of shared success. By offering equity, we aim to create a workplace where everyone is invested in our journey and benefits from our growth. Understanding how equity works can help you make the most of this opportunity. We look forward to building something great together!
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