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
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.
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?
Following the successful trial, Reliable transitioned into a full implementation with Sift. This integration will enable high-velocity, data-driven decision-making that's crucial to Reliable's mission. Reliable plans to leverage Sift's telemetry management solutions across all their simulation, test, and flight assets, streamlining data into a unified system for comprehensive analysis and review.
- 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!
