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Early Facebook Employees Struggle with the Shame of a Seven-figure Net Worth

on Nov 8, 12 • by + • with 9 Comments

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Patrick O’Leary, formerly of Facebook’s sales team.

The disappointing Facebook IPO has left the company struggling to justify its valuation and current employees questioning the long-term value of their pay packages.  But another constituency is feeling the pinch just as hard:  Facebook’s earliest employees, many of whom have recently “retired.”

With many early employees’ stock lock-ups expiring next week, these Facebook alumni have a choice to make: hang on for a possible return of more premium valuations, or sell, thus locking-in a share price and resulting post-tax net worth far below the high-water mark they once took for granted.

A report published recently finds that the average employee (excluding top executives) lost $2 million in equity since the IPO. If the average employee saw that much disappear, it stands to reason that early employees – those 500 or so starting before 2009 – lost some or many multiples of that.

Watching millions of dollars in theoretical wealth disappear is stressful.  Says Janet M. Pollard, MPH, in her work Depression in Tough Economic Times, “It can be devastating to your well-being…physically, emotionally, socially.”

Her conclusions ring true in the words of some former Facebook employees. Banner Ad Confidential talked at length to a former engineer who asked to remain anonymous, citing many friends still with the company.

“Do you have any idea how it feels to be a 26 years-old in Palo Alto with less than $10 million in liquid assets?” he asked. “It’s, like, depressing.”

He went on, “I mean, I’ve been out of college for almost four years and I still have to fly commercial. I feel like a complete asshole.”

Pollard indicated that the angst felt by this Facebook alumnus is to be expected, and that the stress of severe financial loss may be exacerbated further if one has lived above his means in anticipation of a windfall.

Said the former Facebook engineer, “I sold some stock on SecondMarket before the IPO, but I didn’t buy anything crazy – just the normal stuff.  I took a trip, bought a car and a condo in Palo Alto.”

When prodded, he admitted sheepishly that the trip was a safari, the car is a Fisker Karma, and the condo cost $3.2 million.  He also leased a “crash-pad” in San Francisco, a share in a Lake Tahoe ski house and invested $250,000 in a friend’s start-up company, that was “totally disrupting the NorCal wakeboarding scene.”

In true Facebook fashion, he adopted contrarian – some would say esoteric – behavior. For example, he swore off using coins. ”I did the analysis, and for anyone worth $9 million or more, handling coins actually costs you money. So I was like, ‘just keep it, bro.’”

The benefits of Facebook enrichment took different forms, depending on the age of the employee.  Patrick O’Leary, a 43-year old former Facebook sales leader, left the company last year and moved back to his hometown of St. Louis, MO where he bought a big house that he planned to own forever.

Former Facebook sales leader Patrick O’Leary enjoys some of the benefits of being back home in St. Louis.

“It’s not that I said ‘I’m done,’ officially,” said O’Leary. “But leaving California for the fourth biggest city in the Midwest is basically sending the message that you no longer need – or wish – to compete in the digital industry.”

Now that the stock is down to what many analysts (like those dicks at Barrons) say is a still richly-valued $21/share, it’s time for cutbacks. Says the former engineer, ”With the stock at about half of what it’s really worth, it’s, like, austerity-time – I might even have to sell my Fisker. I can totally relate to those people in Greece.”

Even the presumably more mature O’Leary struggles to keep the stock’s performance in perspective, saying ”I could have sold it all on Second Market before the IPO anywhere from $32-44/share. That’s hard not to think about. And just as soon as I do forget, my wife reminds me. She’ll be like, ‘tell me again – how much would we be worth if you would have sold it all like I told you to?”

O’Leary, who was raised Catholic, feels guilty for missing out on the big sale, saying,  ”In the weeks after the IPO, I would just stare at my stock screen all day and blame Zuck. Now I just stare at the ceiling all night and blame myself.”

“Seriously, I’m not sleeping well. I wake up in the middle of the night and can’t go back to sleep. Nothing can turn my brain off – not even ‘The Jerk-Quil.’” he said, referring to a sleep-inducing technique that includes masturbation and two shots of Nyquil.

We asked Pollard if her work shed light on what these early Facebook employees were feeling.
“Well, I haven’t studied really-rich people becoming only mostly-really-rich. My work has been focused on families experiencing existential economic threats, i.e. people with little or no net worth who lose their jobs and struggle to pay their rent and utilities.”
Pollard continued, “These…young people…who still have millions of dollars…it’s not really something I’m worried about.” said Pollard.  ”That doesn’t mean their stress isn’t real. It’s just, well, cuter.”

Still, the stock’s performance has these former-employees scratching their heads, wondering what to do next, and considering the unthinkable: going back to work.

“Would I have done anything different had I known I might be back in the job market?” pondered O’Leary. ”Well, I probably wouldn’t have signed my company-wide departure e-mail ‘Later, Bitches!’.”

“I thought that was sort of a cute, Zuckerberg-ian thing to do. But I was twice his age when I did it, so it was a little less cool.” he said.

“And I probably wouldn’t have moved back to St. Louis – there’s really not much internet or media stuff going on here. The chamber of commerce is trying to brand it as a digital city, like ‘Silicon Arch’ or some horseshit like that.” said O’Leary.

He continued, “But the totality of the interactive industry here is one digital agency, a mobile app developer, and an East St. Louis porn site specializing in BBW’s.”

Back in Silicon Valley, the former engineer is considering a change of location as well. “Now my total haul is only going to be like $4.1 million after taxes. With interest rates and market returns so low, it’s hardly enough to live in Palo Alto.”

“I might have to move to Burlingame,” he said with heavy resignation. “I’m never going to get laid.”

So, have the engineer’s new financial circumstances altered his approach to metallic currency?

“Naw, man. Coins are are just so dirty.”

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