After 18-month delay, OpenAI finally lets staff donate equity
What's the story
OpenAI has finally allowed its current and former employees to donate their equity to charity. The move comes after years of frustration among staffers over the company's refusal to let them make such donations. An email from the company's equity team confirmed that eligible shareholders can now participate in this initiative, The Verge reported.
Financial impact
Equity donation could mean millions for employees
The new policy could allow employees who received six-figure equity deals in 2019 to donate millions to charity. However, the company is said to be nearly 18 months late in implementing this promise. This delay is particularly concerning as OpenAI has previously used charitable equity donations as an incentive for new hires amid rising competition for AI talent.
Participation challenges
Short turnaround time for donation decisions
The new policy comes with a quick turnaround time for employees to decide on their donation amount and specifics. This is much shorter than the minimum SEC-mandated period for other types of liquidation decisions, such as 20 business days for a tender offer. The short notice has made it difficult for some employees to participate in this initiative, especially those who have fewer units due to an indefinite hold on past plans.
Equity apprehensions
Employee concerns over equity control and donation opportunities
There are rising employee concerns over OpenAI's control over their equity as its valuation skyrockets and corporate structure changes. The company has been criticized for its restrictive approach, with fears that it could reclaim vested equity if employees breach non-disparagement agreements. This year, employees have openly expressed their frustrations in Slack threads and all-hands meetings about the lack of donation opportunities.
Corporate changes
OpenAI's restructuring and share value increase
Last month, OpenAI announced the completion of a restructuring process it had been negotiating with California and Delaware's attorneys general for over a year. The company was established as a nonprofit research lab in 2015. Since last month, when employees sold their equity in a tender offer for around $430 per unit, OpenAI's share value has also increased significantly to about $483 per unit.