OpenAI Removes Six-Month Equity Vesting Cliff for New Hires

OpenAI has eliminated a compensation rule that previously required new employees to remain at the company for at least six months before receiving their first portion of equity, according to people familiar with the matter. The decision was communicated to staff during the past week by Fidji Simo, the organization’s chief of applications, marking a significant modification to how the artificial-intelligence firm structures incentives for incoming talent.

The policy—commonly known as a “vesting cliff”—had set an initial half-year period in which no stock would vest. At the conclusion of that window, employees would receive the first scheduled tranche of equity, followed by standard vesting intervals. By removing the six-month requirement, OpenAI intends to provide immediate access to a pro-rated share of equity from the first day of employment. Individuals briefed on the change said the move seeks to reduce anxiety among new hires who might worry about losing equity if their employment ends before the previous cliff period lapses.

Leadership framed the revision as a step to foster greater willingness among prospective employees to accept roles that involve uncertainty or experimentation. People close to the company said executives believe that front-loaded ownership can encourage calculated risk-taking, an objective they view as critical for advancing cutting-edge research and product development. Under the prior system, an employee separated from the company during the first six months would have forfeited all unvested shares; the new structure eliminates that possibility.

The change arrives at a moment when OpenAI continues to expand its workforce to meet rising demand for its generative-AI tools. In July, chief executive officer Sam Altman appeared at a conference in Washington, underscoring the company’s public profile amid broader discussions on AI policy and regulation. While those external conversations focus largely on societal implications, the revised compensation structure underscores an internal emphasis on talent acquisition and retention.

OpenAI did not publicly disclose additional details about how the updated vesting schedule will be distributed over time, such as whether the overall duration of vesting remains unchanged or whether subsequent intervals will be adjusted. People familiar with the deliberations said the immediate goal was to remove the initial cliff without altering other equity parameters, but they added that specific mechanics may vary by role, seniority, and start date.

Industry-wide, vesting cliffs are a common feature of startup equity plans, designed to guard against short-term employment that could burden cap tables with small share allocations. However, critics argue that extended cliffs can deter candidates who value liquidity or fear unforeseen circumstances that might terminate employment early. The U.S. Securities and Exchange Commission provides general guidance on equity compensation, including vesting provisions, for private companies and employees seeking additional clarity (SEC).

By scrapping its own six-month threshold, OpenAI joins a smaller cohort of technology firms experimenting with alternative approaches to equity vesting. People familiar with the company’s decision said the revised framework was presented internally as an experiment that could be refined over time. No timeline was provided for a potential assessment of the policy’s effectiveness, though management indicated it would monitor hiring trends and employee feedback in the months ahead.

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The announcement was delivered through internal channels by Simo, who oversees OpenAI’s applications initiatives. She framed the shift as part of broader efforts to align incentives across teams focused on research, product, and commercial deployments. Employees were informed that the policy applies to individuals who join the company after the effective date as well as those who remain within their first six months of tenure.

OpenAI’s compensation strategy combines salary, equity, and benefits, a model common among private technology companies. While salary ranges are typically adjusted for geographic location and role seniority, equity grants can vary widely based on anticipated impact and competitive benchmarks. The latest change effectively raises the immediate value of new-hire packages by accelerating ownership exposure at the outset of employment.

People familiar with the matter said the company does not expect the policy shift to materially affect its capitalization table in the near term, as the total number of shares allocated to new employees remains unchanged. Instead, the adjustment redistributes the timing of vesting events. Executives told staff they believe the new approach better reflects the collaborative culture they aim to cultivate, emphasizing shared ownership from the first day of work.

OpenAI continues to operate as a capped-profit entity overseen by a nonprofit parent organization. The structure allows the company to offer equity to employees while maintaining constraints on investor returns. Observers inside the organization said the ending of the vesting cliff is consistent with an overarching goal to attract mission-aligned talent in a competitive AI labor market. Whether the policy will become standard practice across the broader technology sector remains to be seen, but for OpenAI, the immediate objective is clear: reduce barriers to ownership and empower new hires to engage fully in the company’s high-stakes projects from day one.

Crédito da imagem: Bloomberg News