I've seen equity clawbacks in employment agreements. Specifically, some of the contracts I've signed have said that if I'm fired for cause (and were a bit more specific, like financial fraud or something) then I'd lose my vested equity. That isn't uncommon, but its not typically used to silence people and is part of the agreement they review and approve of before becoming an employee. It's not a surprise that they learn about as they try to leave.
Not clear what you mean.
Do you mean it is generic to do that in contracts? (Been a while since I was offered equity.)
Or do you mean that even OpenAI would not try it without having set it up in the original contract? Because I hate to be the guy with the square brackets ;-)
Normally a company has to give you new "consideration" (which is the legal term for something of value) for you to want to sign an exit agreement - otherwise you can just not bother to sign. Usually this is extra compensation. In this case they are saying that they won't exercise some clause in an existing agreement that allows them to claw back.
Joke aside - I'm saying "it must" the same way someone might say "surely".
I'm not surprised that they're rapidly backpedaling.
I guess these agreements mean that the property isn't full unrestricted property of the employee... and therefore income tax isn't payable when they vest.
The tax isn't avoided - it would just be paid when you sell the shares instead - which for most people would be a worse deal because you'll probably sell them at a higher price than the vest price.
It's a worse deal in retrospect for a successfull company. But there and then it's not very attractive to pay an up-front tax on something that you can sell at an unknown price in the relatively far future.
> Comp clawbacks are quite common in finance
Never seen anything that says money or equity you've already earned could be clawed back.
Or would that have been an "if you break the law" thing?
Seems unlikely that OpenAI are legally in the clear here with nice clear precedent. Why? Because they are backflipping to deny it's something they'd ever do.
Never negotiated on exit.
Why? OpenAI is a shitshow. Their legal structure is a mess. Yanking vested equity on the basis of a post-purchase agreement signed under duress sounds closer to securities fraud than anything thought out.