pjbooks Chapter 270 Extravagant Spending
Chapter 270 Extravagant Spending
Chapter 270 Extravagant Spending
As December begins, Silicon Valley's attention is inevitably focused on the core city of San Jose.
Nobody cares about media exposure. Silicon Valley is a code zone, and programmers don't care whether they're on TV or not.
If you tell a programmer who's debugging in front of their computer screen that you're in the news, they'll most likely reply without even looking up, "Can you fix this bug for me?"
But if you mention that his salary has increased this month, he will immediately stop what he is doing and his eyes will light up like a monitor.
For them, the keyboard represents their dreams, while the numbers in their accounts are the core foundation that supports those dreams.
So when YueDong Games was about to announce important news and it quietly spread among the employees, everyone's ears perked up involuntarily, and their eyes were filled with undisguised anticipation, just like a group of squirrels waiting to be fed.
Night slowly enveloped the streets of San Jose. Most company lights had already been turned off, and employees had long since begun their journey home.
Inside the building of the Leap Games company, however, a completely different and bustling scene unfolded.
The lights were so bright they rivaled daytime; the corridors and offices were bustling with employees, their voices low as they chatted.
The occasional tapping of the keyboard and the barely suppressed whispers intertwined, like a grand party about to begin.
Ryan Ruiz stood in the center of the lobby on the first floor. His usually meticulous lips were now curved upwards, and his eyes were almost crescent-shaped with laughter. His voice was full of amusement. "Everyone, tonight we're going to announce Xi Yao's news. I bet you all know it perfectly well, even better than I do. I won't ramble on here, lest you think I'm delaying things."
"Next, let's bring our company's cash cow, Josh Green, to the stage."
As soon as he finished speaking, all the employees' eyes immediately turned to the center of the hall.
There was no stage; it was just the open space where Ryan Ruiz had just been standing.
But in the eyes of the employees at YueDong Games, this ordinary open space was more dazzling than a Hollywood awards stage at this moment.
As Josh Green slowly walked forward, his usually tense face softened considerably, making him the most dazzling star in the entire room.
As soon as he stood still, the hall erupted in deafening cheers and applause, so loud it seemed to lift the ceiling off the building.
Josh Green shook his head helplessly, his face losing its usual seriousness when facing financial statements. He raised his hand and gestured for everyone to be quiet. After the cheers subsided slightly, he spoke, "Everyone, please calm down. I am now announcing the specific plan for the stock option award for employees of YueDong Games Company as follows!"
As soon as he finished speaking, the hall fell silent. Everyone held their breath, their eyes fixed on Josh Green, afraid of missing a single word.
They all craned their necks, their mouths agape in uncontrollable smiles, practically screaming "I'm so excited!"
Josh Green glanced at the document in his hand and read it clearly: "The company has granted a total of 338 million stock options, covering 176 employees."
"The exercise price is $14.5 per share, with exercise in three tranches."
After glancing at the anxious looks on the employees' faces, he continued, "Employees with 12 months of service can exercise 30% of their rights, another 30% after 24 months, and the remaining 40% after 48 months."
At this point, Josh Green suddenly raised his voice, his tone full of encouragement, "That means if you can work diligently at Leap Games for four years, you can get all the stock options."
The lobby instantly became lively again, with employees whispering among themselves.
Those who will receive stock option awards this time are all from the company's earliest and most established employees. Excluding management, each employee will receive an average of 10,000 stock options. Although the first tranche only includes 3,000 shares, this is already enough to make everyone happy.
If we calculate based on the company's future offering price of $50 per share, these 3,000 stock options would be worth $150,000. Even after deducting the cost of purchasing the options, it would still be equivalent to getting $100,000 for free.
$100,000 is enough for a decent down payment on a house in San Jose, if not enough to buy it outright. If used to improve one's lifestyle, it can certainly make life much more comfortable.
Moreover, everyone has full confidence in YueDong Games, after all, the company's game products are getting better and better in the market, the number of users is constantly increasing, and the stock price will definitely continue to rise.
If I manage to acquire all 10,000 shares and the stock price breaks through $100, that's a million-dollar reward!
Thinking about this, many employees couldn't help but laugh out loud, already planning how to celebrate.
Those employees who hadn't been with the company long enough to receive the stock option rewards weren't discouraged at all.
Seeing the happy faces of the veteran employees, they not only offered their blessings but also looked on with anticipation.
They all knew in their hearts that as long as they worked hard at the company, such rewards would definitely come to them in the future; it was just a matter of time.
Josh Green coughed twice, and the hall fell silent again, with everyone's attention returning to him.
"I just talked about stock options, now let's talk about a more tangible cash bonus. And this bonus is available to all employees of the company."
"Wow!" A cheer erupted in the hall, even more enthusiastic than when they heard about stock options.
Some employees even shouted, "Ernst, I love you."
In fact, Ernst's efforts to secure benefits for all employees had already spread within the company several days earlier.
Previously, everyone was already quite satisfied with the 8% employee stock options, but the $80 million cash bonus was an unexpected surprise.
Josh Green and the others calmed down a bit. "According to the discussion among the company's management, this $80 million cash bonus will be distributed according to everyone's length of service and the size of their contributions to their positions."
"The highest-paid person could receive a reward of $100,000, while the lowest would receive at least $60,000."
He glanced at everyone, and seeing that no one had any objections, he added, "As for the remaining bonus after the distribution, we've decided to divide it into several parts. When each group organizes team-building activities in the future, we'll use this money as additional funding until the remaining bonus is used up."
This arrangement is very popular, as it avoids uneven distribution and provides more options for future group activities.
Americans really enjoy group activities like dinners and team building events, so the employees were overjoyed and applauded enthusiastically.
Some people excitedly high-fived their colleagues, and some even jumped up, filling the hall with a joyful atmosphere.
Seeing everyone's happy expressions, Josh Green smiled again on his usually calm face. "It seems everyone agrees with this distribution plan. Now, you can all return to your posts, log into your company email, and check the specific amounts of equity and bonuses you will receive."
At this point, he couldn't resist adding a joke, "Of course, if anyone wants to go home immediately to share this joy with their family or girlfriend and witness it together, I have no objection."
Everyone burst into laughter, and then the hall erupted in chaos as everyone dispersed.
The scene resembled a herd of wildebeest migrating across the African savanna—chaotic yet full of vitality.
Many people returned to their workstations and couldn't wait to log in to their emails to check their reward amounts. Some employees, wanting to share their joy with their families, went straight back to their seats to pack their things, grabbed their bags, and rushed out, walking several times faster than usual.
Josh Green and Ryan Ruiz stood there, watching their employees' excited backs as they walked away. They exchanged a smile, and both saw satisfaction in each other's eyes.
As a key member of the company's management, Ryan Ruiz received the most shares in this equity award, a total of 50 shares, which are now worth tens of millions of dollars.
Moreover, this is only the first phase of the reward. If he can successfully complete the goals during his term, he can receive up to 100 million stock options, which is equivalent to 0.8% of the company's current total share capital.
Such treatment is considered quite generous among the management of tech companies in Silicon Valley.
However, unlike ordinary employees who have a four-year, three-term vesting period, Ryan Ruiz's three-term vesting period is set at 6 months.
This was his contract term with the company, which was also the year he signed.
If the company chooses to renew his contract in 6 years, he can still receive stock awards, but the amount will not be as much as it is now. However, the stock price may not be comparable to the current price at that time.
However, the company treated everyone equally in terms of cash bonuses. Whether it was a senior manager like Ryan Ruiz or other middle managers, everyone received a maximum cash bonus of $100,000.
After most of the employees had left, Ryan Ruiz patted Josh Green on the shoulder and asked, "Want to go to the bar for a drink?"
Josh Green glanced at his watch, shook his head, and said with a hint of helplessness mixed with gentleness, "Let's not. Jenny's waiting for me at home to share the good news. Besides, we have to get up early tomorrow, so we need to go back and pack our bags, right?"
This time, in addition to giving employees stock and cash bonuses, tomorrow all employees of YueDong Games will take a company-chartered plane to Denver for a week-long team building activity.
This is the last perk the company is giving everyone before the Christmas holidays.
The reason for choosing Denver is that its ski resorts are especially popular in winter. Our employees usually have a lot of work pressure, so it's a good opportunity to relax there and enjoy skiing.
On the other hand, it was also to avoid those annoying reporters outside.
The recent news about YueDong's upcoming IPO has been making headlines, with many reporters following the company around the building like shadows, trying to dig up some exclusive stories. This trip to Denver was a way for everyone to temporarily escape the reporters' harassment and enjoy some peaceful team-building time.
The two walked upstairs side by side. When they were almost at the door of Josh Green's office, he suddenly stopped, turned around and extended a somewhat informal invitation to Ryan Ruiz: "I'm planning to have a housewarming party during the Christmas holidays. You absolutely have to come."
Ryan Ruiz paused for a moment, then realized what he meant, and a delighted smile spread across his face. "You're finally going to buy that house you've been eyeing for so long?"
Although Josh Green is a top graduate from a prestigious university with exceptional professional skills and is a capable chief financial officer in his company, he has only been in the workforce for a few years. While he has a considerable amount of savings, buying a satisfactory house in San Jose, where housing prices are not low, is still a bit of a struggle.
He didn't like those small houses in remote locations, but the houses in good locations and with nice layouts in downtown San Jose were expensive, so he kept putting off buying a house until now.
Josh Green smiled sheepishly, his tone full of anticipation for the future. "Yes, we can't keep renting forever. I need to give Jenny and the kids a real home. I promised Jenny this a long time ago. I couldn't do it before because of money, but now that I have stock options and bonuses, I finally have the ability to make it happen."
Josh Green and his wife Jenny were college classmates. They had their first child before graduating and got married, which is quite common in the United States.
"So you're planning to cash out your shares after the company goes public, and then use the money to buy a house?" Ryan Ruiz asked curiously.
Josh Green received fewer stock options than him, but he still received the second most in the company, totaling 30 shares, which can be exercised in three tranches of 10 shares each. This amount is quite considerable.
Josh Green shook his head. "I don't plan to cash out. After all, the company has such great potential, and nobody can predict how high the stock price will rise in the future. If I sell the stock now, I'll definitely regret it later. I plan to use some of the stock as collateral at the bank and borrow $150 million."
"Of that, $40 was used to buy a house, and the rest, along with my previous savings, was used to pay for the exercise fees of the first tranche of 10 stock options."
The total cost for 10 stock options, at an exercise price of $145 per share, would be $14.5 million.
Ryan Ruiz nodded, agreeing with Josh Green's idea.
Although housing prices in the United States are not low now, $40 in San Jose can buy a decent-sized detached house with a small yard, enough for Josh Green and his family to live comfortably.
Stock-backed lending, like the one used by Josh Green, is a well-established practice in the American financial system.
The employee and the bank first sign a detailed contract, and the bank then transfers the money to the employee to help them exercise their stock options.
The employees then pledge the shares they received from exercising their options to the bank to repay the loan according to the interest rate and term stipulated in the contract.
This approach solves the funding problem for employees when exercising their stock options, allows employees to retain their shares and wait for future stock price increases to generate more returns, and also provides banks with substantial earnings—a win-win situation.
In fact, it wasn't just Josh Green; almost all other managers in the company chose this method to handle their stock options.
Seeing that Josh Green had such a clear understanding of his financial arrangements and future plans, Ryan Ruiz felt relieved.
He patted Josh Green on the shoulder and said with a smile, "Okay, then it's settled. I'll definitely be there for the housewarming party during the Christmas holidays, and we'll have to have a few drinks together."
"But don't schedule the party too late. I promised Moltz I'd take him to Australia to see koalas for Christmas. If it delays our trip, he'll definitely throw a tantrum."
77