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I work for a small startup, with the usual startup incentives. I only have a very vague idea of how the company is doing. I enjoy my job and I have no intention of leaving. But knowing the company's financials would help me plan the next few years of my career. Moreover, when and whether to take advantage of any options.

However, I don't know how to ask the CEO this without it sounding like I am considering my position (which I'm not).

What is the best way to ask if they would be willing to share the fundamental financials with the company's employees, ideally in a way that will convince them that this is a good idea?

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    Are you a partner, director, department head, manager or something else? If it's the first two (maybe three) of those, is it more important that you know the information, or that it's shared with other employees? (If it's the first two, you should probably already have access to financial information and it would be suspicious if you didn't.) Commented Aug 21, 2023 at 10:33
  • Something else. It's important for me to assess whether to exercise options and also my plans for the next few years. I don't think the company needs me to have the information, but some companies share it anyway (my last place did). Commented Aug 21, 2023 at 10:44
  • "meaning whether you should look for a new job or not?" - in a few years, yes. But the most important reason for me, at the moment, is whether to exercise stock options. Commented Aug 21, 2023 at 10:59
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    If the company gives out options, they should also give financial updates at least after board meetings when the the new (internal) share price is set? Do they not do this?
    – Hilmar
    Commented Aug 21, 2023 at 12:15
  • What is your role in the company ? The CEO may share it if he thinks it is relevant to your daily job or daily tasks. Commented Aug 21, 2023 at 20:19

2 Answers 2

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Moreover, when and whether to take advantage of any options.

That should be start and end of your argument.

Startups always want you to take stock options to keep you motivated, feel part of the business, and often enough simply undercut your salary for no risk. Very few of them then will sit you down and walk you through all the finances, business planning and basic understanding of options, taxation etc required to fully appreciate value of them.

So explain exactly that, you have options but you don't really understand their value, how and when can you execute them (that startup I presume is not a publicly traded company, so execution options is likely not something you can do easily), and in what type of event they will be worth what. For example if the business plan is to raise money in 3 years at valuation XYZ, what does that mean for your options? Can you execute them? What will that look like exactly and in detail? What will be the taxes you have to pay on it, and when?

Just top level questions you ask about, and all require for the company to be extremely open not only about it's finances, but also future plans.

If the CEO doesn't give concrete answers to the above, for whatever reasons, I would seriously not put any value in the options, as they likely are worthless.

Important note: this applies for options in private companies, options in public traded ones are a whole other ball of fun.

As personal view, every time I hire someone with options involved in their packet, we schedule a long 1:1 call where we go over this in fine detail. And we go over this as many times we have to until the new hire fully understands and appreciates how the options work. This includes me asking them to explain few bits back to me when they calim they got it.

Why? Because I want them to be invested, and understand exactly how much money we are all going to make if things to as planned, and see it as whole picture, with even personal taxes accounted for. So the options are not some "vague promise of maybe in magical land", but more of "if this happens, this is what you make from them".

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  • It is actually not the end. There is a more fundamental issue. If you get options as part of your pay, you are an investor. As an investor, you have a legal right to see the financials and all other financial information made available to investors. As in: LEGAL RIGHT.
    – TomTom
    Commented Aug 25, 2023 at 7:55
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    @TomTom citation needed
    – Aida Paul
    Commented Aug 25, 2023 at 8:04
  • Nope. COMMON SENSE and what law you want? I mean, this is common in all jurisdictions.
    – TomTom
    Commented Aug 25, 2023 at 8:43
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    @TomTom I didn't realize there was so much in common between new york and saudi arabia law, sounds fascinating! Maybe make your own answer and explain it in detail?
    – Aida Paul
    Commented Aug 25, 2023 at 8:45
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Since your last employer shared financial information with staff, this could be a way to introduce the subject eg. "We used to have a annual meeting where everyone was told how the company was doing" (it doesn't have to be a meeting, or annual - it could be information on an intranet of any number of alternatives). You could add why you liked that, and if your previous company explained why they did it, this would be good additional information.

There are some good reasons here why sharing financial information might be beneficial for a company, but one that's always worth mentioning is the idea of employees being able to consider themselves to be stakeholders in the company. People will always be more motivated if they feel they're part of something.

If the idea of communication to everyone doesn't gain any traction with the CEO, it sounds like you have an excellent argument for receiving more information. If stock and stock options are part of your remuneration package, there would be nothing strange in wanting to know what these are, or might in future be, worth.

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