Posts from policy

Update On Stock Options/RSUs Issue

I just saw this on my twitter:

This means that the Senate has now made the tax reform bill a win for those who work in startups instead of a loss.

I’m thrilled and I want to thank all of you who called your elected officials and those in the Senate Finance Committee who clearly understand the importance of equity compensation to the startup model.

Don’t Tax Options And RSUs Upon Vesting!

The current draft of the Senate Tax Reform Bill would tax stock options and RSUs upon vesting.

Currently, stock options are taxed upon exercise and RSUs are taxed upon release of the underlying shares.

This is a HUGE deal to everyone who works in companies that partially compensate their employees with these two equity instruments.

What this would mean is every month, when your equity compensation vests a little bit, you will owe taxes on it even though you can’t do anything with that equity compensation.

You can’t spend it, you can’t save it, you can’t invest it. Because you don’t have it yet.

Taxing equity compensation upon vesting makes no sense.

I have seen many employees leave companies and not exercise their vested stock options. It happens all of the time.

That should be a clear enough example to the lawmakers that vesting should not be a taxable event.

But, sadly, I don’t think this is really about what makes sense. It is about politics.

The US Senate, particularly the Republican leadership, needs to hear from you, the employees who will feel the pain of this change, that it is wrong.

Otherwise, I think this provision could become law.

And that would be the end of equity compensation in startups as we know it.

If this provision becomes law, startup and growth tech companies will not be able to offer equity compensation to their employees. We will see equity compensation replaced with cash compensation and the ability to share in the wealth creation at your employer will be taken away. This has profound implications for those who work in tech companies and equally profound implications for the competitiveness of the US tech sector.

So, what can we do about this?

First, we have to move fast. The tax reform bill is moving quickly with a goal of getting it done before year end.

This particular provision, which was in the House bill and was taken out last week, will be considered by the Senate as soon as TODAY.

So, please reach out to your Senators and let them know that they “must remove Section III(H)(1) from the Senate Tax Cuts And Jobs Act”.

The best way to do that is to call their office and speak to the staffer who handles tax reform for them.

Here’s a short explanation of how to do that.

Please do it today. This is really very important to everyone who works in tech.

Guns And Mental Health

Another mass shooting and the outcries that we must do something return.

I do think we need to do something and I am a fan of more gun safety regulation.

But we also need to enforce the laws that are on the books already.

I would imagine that the Las Vegas shooter used an illegal weapon last night.

Why can’t we enforce the laws that are already on the books?

And the people who commit these horrible crimes are mentally ill.

Anyone who could turn a gun on innocent people is clearly not right in their head.

So while we fight for more gun safety laws, a fight that is hard and where little ground has been gained in recent years, we should also fight for better healthcare for mental illness.

GDPR

We have been spending a lot of time in Board meetings lately talking about GDPR.

GDPR stands for General Data Protection Regulation and is an EU regulation that, as written, will impact most Internet companies regardless of where they are located.

If you have not heard of GDPR and are running or working for an Internet company, you should wrap your head around it asap.

This Wikipedia entry does a pretty decent job explaining GDPR at a high level.

I heard someone explain GDPR as the “privacy equivalent of SOX.” I think that is a decent way to think about it.

This is serious regulation and complying is going to be hard and a lot of extra work. It will also impact product development and add overhead to that. The penalties for non compliance are massive and you cannot simply ignore this.

All that said, we did this to ourselves. The tech/Internet industry has run roughshod over user privacy for almost two decades now and we created the conditions for this regulation to pass.

The privacy equivalent of SOX.

So wrap your head around GDPR and prepare your company to comply. There is no other option.

A Nightmare

I don’t know why we call them Dreamers. Because they get to pursue the American Dream? Don’t we all?

These kids, or adults as many are now, were brought to America by their parents and have lived here for most of it.

That we would even think that they should not be here is abhorrent to me.

We can talk about their parents, who came to the US illegally, but we should not be talking about their kids.

These people did nothing wrong, broke no laws.

As my partner Albert, an immigrant, wrote on his blog yesterday:

The blame for this situation though rests with Congress and past Presidents who have failed to make any meaningful progress on immigration reform. Right now, it is worth remembering now that the DREAM act has been around for 16 years. There have been multiple attempts to pass it with at varying times support in the House and Senate, but never the two at the same time, including a bipartisan filibuster that included 8 Democrats. The opposition by Democrats often arose because they wanted comprehensive immigration reform or nothing.

We have our elected officials to blame for not addressing this issue and fixing it a long time ago.

I for one expect them to fix it, to put the other immigration issues aside, which they never seem to be able to do, and address this one.

This is about our morality, our decency, our humanity.

Fix it.

Video Of The Week: Who Has The Right To Police The Internet?

This week our portfolio company Cloudflare made news when they made an exception to their long-standing policy of not terminating customers for hate speech and terminated The Daily Stormer.

In this interview with Bloomberg, Cloudflare’s CEO Matthew Prince explains why he made that decision and why it bothers him so much that he and other CEOs have that power.

Net Neutrality Day Of Action

Today, July 12th, is the Net Neutrality Day Of Action.

More than 70,000 websites, online services, and Internet users are participating including Twitter, Amazon, Netflix, Kickstarter, Etsy, Reddit, OK Cupid, Airbnb, Facebook, Google, Spotify, Soundcloud, Mozilla and AVC.

The grassroots power of the Internet is how we won the strong net neutrality rules that are now in place and are threatened by the new leadership at the FCC. The big telcos have their people in power now. But we can keep fighting with our grassroots efforts. They have worked in the past and I hope they will continue to work to keep the Internet an open and level playing field for everyone.

If you want to participate with your website, blog, or social media profile, go here and join this online protest.

Video Of The Week: My Talk With David Kirkpatrick at Techonomy

Last wednesday morning, I went to Techonomy NYC and talked with my friend David Kirkpatrick for about 30mins.

That conversation is below.

There is one gross misrepresentation in the talk. David and I were talking about my efforts to ignore Trump and I said that the Gotham Gal spends “two to three hours a day on that stuff” which is not anywhere close to accurate. She reads the NY Times religiously in paper form every day and does pay a lot more attention to Trump than I do, but it’s not anywhere near two to three hours. I apologize to her for suggesting such nonsense.