Re-reading the grant in 2024, he says, showed that it was meant to vest in four quarters, or a year, instead of over four years. An April 1996 CFO letter counted 15,625 vested, so 9,375 more shares should have vested too, he added. After a combined 480x in splits, this would be 4.5 million shares, or about $1.01 billion at Nvidia’s Sept. 25 close of $225.07, in line with his “about a billion dollars.” He says that he and his counsel agreed that the statute of limitations was against him, and “it seemed unlikely we’d make it past a motion to dismiss.”
The option grant document provided by Gullichsen on the blog post is dated Sept. 9, 1993, with a No. 7 grant of 25,000 shares, signed for Nvidia by Huang. “All shares shall vest upon the expiration of one year from Grant Date,” which means fully vested by Sept. 9, 1994. It states 25% at three months, then quarterly, which would be four times in the year.
Gullichsen also provided the exercise letter from CFO Marcel Gani dated April 16, 1996, which ends his “contractual relationship with NVIDIA and Its Technical Board of Advisors” and states that he had “15,625 shares of NVIDIA stock options vested.” This was at $0.05 a share with 90 days to exercise, or $781.25 for a full exercise.
Gullichsen also included an undated invitation letter signed by Huang asserting “a stock option of 25,000 which vests over 4 years.” Doing the math, 15,625 is 62.5% of 25,000 shares, or 10 of 16 quarters, which matches the Sept. 9, 1993 to April 16, 1996 timeline. The CFO’s count fits the four-year quarterly schedule. So the CEO’s letter says four years, while the signed cover sheet says one. The cover sheet also says any discrepancy with its attached legal provisions “shall be governed by the attached legal provisions,” and those attachments are not in Gullichsen’s post. It also says it supersedes prior written agreements, which would override the invitation letter.
Nvidia turns $5B Intel stock bet into $30B windfall
Key considerations
- Investor positioning can change fast
- Volatility remains possible near catalysts
- Macro rates and liquidity can dominate flows
Reference reading
- https://www.tomshardware.com/tech-industry/big-tech/SPONSORED_LINK_URL
- https://www.tomshardware.com/tech-industry/big-tech/early-nvidia-advisor-says-hes-owed-usd1-billion-in-stock-due-to-vesting-error-1993-stock-options-amount-to-around-4-5-million-shares-after-splits#main
- https://www.tomshardware.com/membership
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Informational only. No financial advice. Do your own research.