- Back in April, the WhatsApp cofounder Jan Koum announced plans to leave Facebook.
- But he’s still showing up to the office once a month so he can continue to collect $450 million in Facebook stock he’s contractually due from when Facebook bought his company.
- It’s a high-dollar example of “rest and vest,” in which big tech companies pay senior employees who don’t do much work.
- Koum has already sold over $7 billion in Facebook stock.
The WhatsApp cofounder Jan Koum said in April that he planned to leave Facebook, which bought his company for $19 billion in 2014. He’s already sold $7.1 billion worth of Facebook shares.
But he’s still showing up to the office, The Wall Street Journal reports, to collect one last payday: $450 million in stock.
Koum is resting and vesting, in Silicon Valley lingo, a state that often refers to wealthy entrepreneurs and engineers with one foot out the door at big tech companies who are allowed to continue to be officially employed until they’re able to collect stock and options in quarterly or annual increments.
Usually, stock awards after a merger are distributed on a four-year vesting cliff – if you last all four years, you get your entire stock grant. Koum’s last vesting date is November. He showed up at Facebook’s offices in mid-July, fulfilling a requirement of his employment contract, according to The Wall Street Journal.
“Resting and vesting” is an open secret in Silicon Valley, Business Insider has reported. At some companies, the employees are called “coasters.” The HBO show “Silicon Valley” even spoofed it in an episode in which engineers hang out on a roof and don’t do any work.
“I’ve actually had a number of people, including today at Google X … send me pictures of themselves on a roof, kicking back doing nothing, with the hashtag ‘unassigned’ or ‘rest and vest.’ It’s something that really happens, and apparently, somewhat often,” Josh Brener, the actor who plays the lucky character who got to rest and vest in HBO’s “Silicon Valley,” told Business Insider last year.
From Business Insider’s report on the phenomenon:
“Facebook, for instance, has a fairly hush bonus program called ‘discretionary equity,’ a former Facebook engineer who received it said.
“DE is when the company hands an engineer a massive, extra chunk of restricted stock units, worth tens to hundreds of thousands of dollars. It’s a thank-you for a job well done. It also helps keep the person from jumping ship because DE vests over time. These are bonus grants that are signed by top executives, sometimes even CEO Mark Zuckerberg.”
Koum’s payday isn’t related to discretionary equity; it’s instead a result of the over 20 million restricted shares of Facebook he received when he sold WhatsApp. He has one more vesting day in August and one in November, according to filings with the Securities and Exchange Commission.
Koum reportedly decided to leave Facebook in the middle of a spat over how to integrate advertising into WhatsApp. A WhatsApp representative declined to comment, but The Journal reports that Koum is still employed at the social-networking giant.
When Koum left, he wrote that he was taking time off to collect “rare air-cooled Porsches” and play ultimate Frisbee.
How many Porsches can one buy with $450 million?