The CEO of a $3.7 billion startup is allegedly firing employees right before their stock options vest, report says

Orion Tanium

Employees at a highly valued Silicon Valley startup are saying that the company has a brutish CEO who humiliated them and allegedly fired people right before their stock options vested, according to an explosive exposé on Tanium by Bloomberg’s Lizette Chapman and Sarah McBride

Orion Hindawi is the CEO cofounder of Tanium, a startup he created with his father a decade ago. Today it is one of the mostly highly valued security startups in the tech industry. It raised $287 million of venture investment at a valuation of $3.7 billion, much of that coming from VC powerhouse Andreessen Horowitz.

Andreessen Horowitz put $90 million into the company in 2014, then invested another $52 million in 2015, on the urging of former Microsoft executive Steven Sinofsky, who works as an advisor for Andreessen Horowitz and once called Tanium’s technology “magic.”  

With that, other investors such as TPG Capital, T. Rowe Price, Geodesic Capital and Institutional Venture Partners, poured about another $130 million in, according to PitchBook.

The most remarkable claim in Bloomberg’s story is an allegation that Hindawi kept tabs on the employees who had chunks of stock options and fired some of them right before their stock vested, a process some employees internally dubbed “Orion’s List.”

The allegation is that the CEO didn’t want his majority stake in the company to become diminished, and thereby reduce the voting control he and his father have over the company and the board.

Conduct in question

Employees at startups frequently agree to lower salaries and receive part of their compensation in stock that vests after a number of years. As more stock is issued, existing stock holders find their stakes diluted.

A spokesperson told Bloomberg that employees who were fired were done so for inappropriate conduct. 

Hindawi also allegedly publicly insulted people’s intelligence, mocked a senior executive for being overweight, and spread rumors about things like sexual promiscuity and drug abuse among certain current and former staffers, according to the Bloomberg report.

For what it’s worth, the tales sources told Bloomberg do not also appear on job hunting site Glassdoor. Employees who have submitted reviews for Tanium on Glassdoor rate it a 4.6 out of 5 stars and 88% of them approve of the CEO.

But Bloomberg points out that, in less than a year, nine senior executives have left including the company’s president, chief marketing officer, chief accounting officer and the chief of operations and finance.

Tanium is being watched as a startup that could IPO soon. Tuesday it announced that it hired Fazal Merchant from Comcast DreamWorks Animation to be the new operations and finance chief, presumably charged with the IPO. He replaces former COO and CFO Eric Brown.

Andreessen Horowitz, which holds two board seats, declined comment to Business Insider.

A spokesperson for Tanium also told Business Insider:

“This is not a company in crisis. We’re proud of what we’ve built and our successes so far. It’s no small thing that Tanium is trusted to protect and maintain the critical data and assets of a significant number of the Fortune 100 and many agencies of the US federal government. Our nearly 100% customer renewal rate and strong revenue growth wouldn’t be possible without the work of exceptional people who believe in our mission and love working here. The real story of Tanium is that we work incredibly hard and hold ourselves to high ethical and performance standards. That’s the kind of company we’re building, and we understand that doesn’t work for everyone.”

The full Bloomberg story, with all the details, is worth a read. 

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Source: http://www.thisisinsider.com/security-startup-tanium-has-been-accused-of-a-horrible-culture-2017-4

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