Pinterest allowing employees to sell off their vested shares

Pinterest is allowing employees who have vested shares in the social media company to cash out, a move that gives its hires more freedom than many technology startups award.

A couple of moves announced in recent months, including one last week, could make Pinterest stand out in a competitive hiring environment.

Rather than pay employees the salaries they might get working elsewhere, startups sometimes offer “sweat equity.” That means employees get compensated in part with generous stock options that could someday be worth millions of dollars if the startup heads up the right path.

Even when it does, though, employees might want out before the company goes public. Family circumstances might dictate a move or, as the company grows, their expertise may no longer be needed. Complicating matters more is the trend of startups staying private longer because of the wide-open cash spigots on the private market.

But Pinterest announced recently that it’s allowing employees who had stock vested by April 30 to be able to sell their shares to investors as part of Pinterest’s current fundraising cycle. Pinterest allowed a similar sell-off in 2012.

Some companies forbid secondary sales, but a well-known startup going this route again could spur smaller rivals to follow suit to recruit workers.

The previous change was to allow employees to hold onto shares as long as seven years after leaving the company, rather than the typical 90 days. It gives employees more flexibility in coming up with the cash to exercise those options and delays the subsequent tax hit.

Pinterest’s new round of funding has valued it at $11 billion and it has already brought in $553 million from investors including Goldman Sachs and Wellington Management Co.