OpenAI Allows Employees to Donate Equity to Charity
▼ Summary
– OpenAI will now allow current and former employees to donate their equity to charity after years of restrictions and delays.
– Employees with six-figure equity deals from 2019 could potentially donate millions to charity through this program.
– The donation process has a quick-turnaround deadline that is shorter than SEC-mandated periods, making participation difficult for some.
– This change follows employee frustration over equity control and past delays, with charitable donation being a previous recruitment tool.
– OpenAI recently completed a restructuring and its share price has increased significantly, now valued at about $483 per share.
OpenAI has introduced a new policy allowing current and former employees to donate their company equity to charitable organizations, a move that follows years of internal pressure and addresses a key concern among its workforce. This development comes via a company-wide email from the equity team, detailing the opportunity for eligible shareholders to participate.
A substantial amount of money could be directed toward philanthropic causes. Employees who received significant equity packages back in 2019 now have the potential to donate millions of dollars to charity through this program. However, the rollout is reportedly about eighteen months behind schedule. This delay is notable because the promise of charitable equity donation was previously used as a recruitment tool, especially as competition for top artificial intelligence talent intensifies. Rival firm Anthropic, for instance, offers an optional 1:1 matching program for equity donations on its careers page.
A significant challenge for participants is the unexpectedly short deadline for making donation decisions. The window provided is considerably narrower than the standard Securities and Exchange Commission-mandated period for other financial actions, such as tender offers which typically require at least twenty business days. This compressed timeline is creating difficulties for some individuals who wish to take part. The company’s own communication strongly advises consulting a tax or financial advisor, yet the lack of advance notice means some employees find themselves with fewer shares available to donate than they had anticipated.
This policy shift occurs against a backdrop of growing employee unease regarding OpenAI’s management of their equity. As the company’s valuation climbs and its corporate framework evolves, staff have expressed worries about restrictive practices. Past concerns included the potential for the company to reclaim vested equity from employees who breached non-disparagement clauses. Throughout this year, these frustrations have been voiced openly in internal Slack channels and company-wide meetings, focusing on the prolonged inability to make charitable contributions.
While donation programs were operational in 2021 and 2022, the extended hiatus since the last round had become a source of irritation. Last year, following a major tender offer that let employees sell approximately $1.5 billion in shares, staff were led to believe a charitable option would follow shortly. That initiative was postponed indefinitely. Now, with OpenAI’s latest mega-funding round finalized and its transition to a for-profit structure complete, the company appears to be easing these restrictions.
The restructuring itself was finalized late last month after more than a year of negotiations with the attorneys general of California and Delaware. Originally established as a nonprofit research laboratory in 2015, a critical unresolved issue is whether the original nonprofit entity will maintain authority over future technological developments, particularly the pursuit of artificial general intelligence (AGI), systems with cognitive abilities matching or exceeding those of humans.
Coinciding with these changes, the value of OpenAI shares has seen a notable increase. Last month, the price per share in a tender offer was around $430. Currently, the fair market value has risen to approximately $483 per share. This surge is partly attributed to the company’s revised financial obligations, as it no longer owes the same level of future profits to its nonprofit arm as it did previously.
(Source: The Verge)
