Current and former employees of OpenAI have expressed frustration over the company’s longstanding restriction on charitable donations of their equity. Recently, OpenAI has communicated via an email from its equity team that eligible employees will now have the opportunity to donate their shares to charity. This decision comes after a significant delay, as it is believed that the company is approximately 18 months behind its initial timeline for this initiative.
The potential financial implications are substantial, as some employees, particularly those who received six-figure equity deals in 2019, could donate millions to charitable causes. However, a source indicated that the quick turnaround for deciding donation amounts—and the requirement to consult a tax or financial advisor—may limit participation. The time frame for this decision is shorter than the U.S. Securities and Exchange Commission’s mandated periods for other liquidation events, which raises concerns among employees, many of whom have fewer shares available for donation due to previous restrictions.
OpenAI’s current policy on equity has become a point of contention, particularly as the company’s valuation has increased and its corporate structure has evolved. In the past, OpenAI has employed a restrictive approach to equity control, which has prompted worries among former employees about potential recapture of vested equity, particularly related to non-disparagement agreements. Employees have increasingly voiced these concerns in various internal communication channels.
The last round of employee donations occurred in 2021 and 2022, leading to dissatisfaction with the absence of new donation opportunities since then. Following the successful completion of a tender offer generating significant funds for the company, it appears that OpenAI is now easing these restrictions. The company also finalized a new restructuring arrangement with the attorney generals of California and Delaware, which may affect its operations moving forward. Notably, the share value has risen recently, reflecting the shifting dynamics surrounding the company’s financial obligations and valuation.
Source: https://www.theverge.com/ai-artificial-intelligence/822496/openai-employee-equity-donation-charity-rounds-share-valuation