Maybe the agreement is "we will accelerate vesting of your unvested equity if you sign this new agreement"? If that's the case then it doesn't sound nearly so coercive to me.
They're really lending employees equity, subject to the company's later feelings as to whether the employee should be allowed to keep or sell it.
They're not required to sign anything other than a general release of liability when they leave to preserve their rights. They don't have to sign a non-disparagement clause.
But they'd need a very good lawyer to be confident at that time.
In general, an agreement to agree is not an agreement. A requirement for a "general release" to be signed at some time in the future is iffy. And that's before labor law issues.
Someone with a copy of that contract should run it through OpenAI's contract analyzer.
What a horrific medium of communication. Why anyone uses it is beyond me.
all this said, in bigger picture I can understand not divulging trade secrets but not being allowed to discuss company culture towards AI safety essentially tells me that all the Sama talk about the 'for the good of humanity' is total BS. at the end of day its about market share and bottom line.
Perhaps as an example of the blurred line; Pre-nup agreements sprung the day of the wedding, will not hold up in a US court with a competent lawyer challenging them.
You can try to call it 'economic' duress but any non-sociopath sees there are other factors at play.
I have seen a lot of companies put unenforceable stuff into their employment agreements, separation agreements, etc.
> They don't share the equivalent of a Cap Table with employees, so there's no way to tell what sort of ownership interest a PPU represents
It is known - it represents 0 ownership share. They do not want to sell any ownership because their deal with MS gives MS 49% ownership and they don't want MS to be able to buy up additional stake and control the company.
> And of course, it's unlikely OpenAI will ever turn a profit (which if they did would be capped anyway). So this is all just play money anyway.
Putting aside your unreasonable confidence that OAI will never be profitable, the PPUs are tender offered so they can be sold to institutional investors up to a very high limit, OAIs current tender offer round values them at ~$80b iirc
Are there any?
Granted, that might be most of the profit they have made, but still, they're probably at at least 0.7T$ so far. I bet they'll break $1T eventually.
> PPUs also are restricted by a 2-year lock, meaning that if there’s a liquidation event, a new hire can’t sell their units within their first 2 years. Another key difference is that the growth is currently capped at 10x. Similar to their overall company structure, the PPUs are capped at a growth of 10 times the original value. So in the offer example above, the candidate received $2M worth of PPUs, which means that their capped amount they could sell them for would be $20M
> The most recent liquidation event we’re aware of happened during a tender offer earlier this year. It was during this event that some early employees were able to sell their profit participation units. It’s difficult to know how often these events happen and who is allowed to sell, though, as it’s on company discretion.
This NDA wrinkle is another negative. Honestly I think the entire OpenAI compensation model is smoke and mirrors which is normal for startups and obviously inferior to RSUs.
i know for a fact that these bits are inaccurate, but i don't want to go into the details.
the profit share is not known but you are told what the PPUs were valued at the most recent tender offer
Not a sociopath, just know the law.
Wrong. We know - it is 0, this directly contradicts your claim.
> this is all just play money anyway.
Again, wrong - because it is sellable so employees can take home millions. Play money in the startup world means illiquid options that can't be tender offered.
You're making it sound like this is a terrible deal for employees but I personally know people who are able to sell $1m+ in OAI PPUs to institutional investors as part of the tender offer.