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Big IPO, Tiny Payout for Many Startup Workers

Side deals and volatile shares make stock options a bigger gamble for startup employees.
Wall Street Unoccupied With 200,000 Job Cuts
Photographer: Scott Eells/Bloomberg

Jeff Sutton led the corporate IT team at Box for four years, as the online file-sharing company grew from 50 employees to more than 1,000. He joined Box from IBM, making about $95,000 a year—forgoing the higher salary somebody with his decade of experience in systems administration could have made so he could collect stock options, roughly 21,000 in all.

When Box went public at the beginning of 2015, Sutton’s bet seemed to be paying off. On their first day on the New York Stock Exchange, the company’s $14 shares jumped 66 percent, to $23.23. But Sutton, subject to an employee lockup agreement, had to wait 180 days before he could cash out. By then, the stock had fallen more than 20 percent from that high; it’s now trading at about $13, below its initial public offering price. “I thought the stock was going to keep skyrocketing,” Sutton says. “Obviously it didn’t work out that great.”