Right, and if you are going to take a significant pay cut over market, make sure that equity vests every month. You are being compensated in equity in these arrangements. Make sure the equity is not a future promise for sacrifices today.
That's just not how it works. Pretty much every startup uses the 1 year cliff. And rightly so, because for a very early employee 1/48 of the employee's options is not a trivial amount of equity. You could hire a guy that comes in and works for a few months and then leaves and takes .3% or whatever of the company. That is just as bad of a screwjob as what happened to the OP, and companies are right to protect themselves.
Anyway, the right answer here is to work for someone who doesn't pull crap like this. And if the OP was competent at his job, I would hope the other employees have seen what happened and are properly aware of their employer's shady ethics. In any regard, this is just bad business and likely killed morale to some degree.
The deals for early employees are much more flexible than for later employees. If he took a significantly below-market salary in exchange for equity, asking for a shorter cliff is not unreasonable.
Right, anytime I take reduced compensation my cliff becomes very short. If it does not then it is not the deal for me. Any other arrangement leaves you in a position to hold the bag. Now there are a multitude of way that that vesting can be scheduled for example an introductory 3 month window where there is no vesting and then a sliding scale where each month compounds until fully vested at 12. I am sorry but any deal where you take reduced compensation with no equity until 12 months is a bad deal. This post being a prime example of why.
I really wish I had taken this track back in the day.
OP, listen to kls...now that you've seen how this can go you will really be a lot stronger when you negotiate your next job. There's different kinds of options available too, but unless you ask about which kind you get, you'll just be given the default (i.e. cheaper for the company).
No that is the standard for companies, it is not the rules, you can negotiate any terms that you are comfortable with. Me personally, I am not comfortable taking reduced compensation for a year before I earn the replacement of that forgone compensation. To me it would be no different then someone saying to me, hey we are going to pay you half of market and then at the end of the year we will give you a bonus that pays the other half of your rate. My response to that would be, and if I am terminated you prorate that bonus and issue me the prorated bonus on termination. I would allow for a 3 month window but that is as far as I am willing to risk reduced compensation for a future promise.
