HomeWinBuzzer NewsOpenAI Equalizes Stock Sale Rules for Current and Former Staff

OpenAI Equalizes Stock Sale Rules for Current and Former Staff

Former employees now at rival firms will be part of official tender offers, aligning their rights with other past employees.

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has modified its rules for secondary share transactions, now permitting both current and former employees to partake evenly in yearly tender offers, reports CNBC. The adjustment aims to improve liquidity options for shareholders.

Unified Sales Limits for Employees and Advisors

Following a surge in valuation post-ChatGPT launch in late 2022, OpenAI formerly restricted secondary share transactions, which led to uneven access to liquidity. According to CNBC-reviewed documents, the updated policy mandates, “all sellers (current and former service providers) will have the same sales limit,” embracing employees and advisors alike.

With OpenAI valued over $80 billion and without imminent IPO plans, shareholders mainly rely on secondary stock sales for liquidity. Previously, former employees encountered delays and lower sale caps compared to current employees, with some instances showing a $2 million cap for former employees against a $10 million cap for current staff.

Altered Redemption Rules

OpenAI has also made adjustments to a contentious provision enabling the company to buy back shares at fair market value under its sole discretion. The revised policy clarifies that the company “will not enforce any provision in employee equity documents that forces equity redemption at fair market value,” and commits to updating relevant documents.

Former employees now at rival firms will be part of official tender offers, aligning their rights with other past employees. Nonetheless, in cases of oversubscription, current employees will be given priority, potentially causing former employees to face a “cutback.”

Addressing Grievances

The policy changes come after reports cited potential equity clawbacks and controversial requirements for former employees to sign non-disparagement agreements to retain vested equity. Although the new policy addresses various concerns, it doesn't cover all issues. For example, donation rounds, which allow tax incentives for donating vested equity to charity, may still be confined to current employees.

A document titled “Overview and Recap of OpenAI's Tender Process” has been circulated by OpenAI, outlining previous and upcoming equity purchase procedures. This is part of broader efforts to reduce employee anxieties and ensure fair treatment in secondary share sales.

SourceCNBC
Markus Kasanmascheff
Markus Kasanmascheff
Markus is the founder of WinBuzzer and has been playing with Windows and technology for more than 25 years. He is holding a Master´s degree in International Economics and previously worked as Lead Windows Expert for Softonic.com.