Christine McCarthy, an executive compensation partner in Orrick’s Silicon Valley office, recently spoke with the Daily Journal regarding the growing number of private technology companies that are considering extending the time employees have to exercise their stock options. McCarthy advised Pinterest on such a decision, adding that companies of varying maturity are showing interest in doing so.
"We've had a lot of calls from current clients and other companies have been reaching out and asking a lot of questions," McCarthy said. "I feel like it comes up on a daily basis from one company or another."
According to McCarthy, due to the intense competition for engineering talent in Silicon Valley, adopting an extended option program can offer advantages, particularly when it comes to employee morale and recruitment. For instance, she noted, with an extended window, workers have much stronger assurances that they can eventually realize some liquidity in the company, which has been increasingly important as many tech companies decide to wait longer before launching initial public offerings.