In an extraordinary move, Juul is trying to make peace with its investors and employees by paying them more than $4 billion

The e-cigarette company Juul is effectively giving out free money to its investors and employees as part of its agreement to sell 35 percent of the company to Altria, the tobacco giant.

To say this is unusual is an understatement.

Juul is paying a dividend of $150 per share to its investors as part of the arrangement, according to people close to the deal. That means that large Juul shareholders like Tiger Global Management will be paid $1.6 billion in cash, one person said — money that comes off the top of the $12.8 billion that Juul accepted in exchange for forfeiting 35 percent of the company.

Investors like Tiger aren’t giving up any shares for this payment, Recode is told. So not only are they receiving billions of dollars up front, but they’ll still hold hold onto their stock in a company now valued at $38 billion instead of the $16 billion Juul was valued at this summer.

Juul’s total payout to investors is expected to exceed the $2 billion that it is awarding to its employees, according to a person close to the deal. So although Altria is funneling $12.8 billion into the company, less than $8.8 billion is actually finding its way to Juul’s balance sheet after the investors and employees are paid off.

Juul and Tiger Global declined to comment. The payments to employees and to investors were first reported by CNBC and Bloomberg respectively.

Dividends to shareholders aren’t uncommon in the public stock markets, especially from conservative, old-line industry titans like General Electric. They’re awarded typically to increase the value of a stock, since more investors will want to own it if they are guaranteed regular payouts. You’ll sometimes see companies backed by private-equity hand out dividends, too.

But dividend-esque payouts of this size to a venture-backed company when it’s still privately held? Venture capitalists tell Recode that they haven’t seen that before.

The payments to employees make some sense, at least: Some of Juul’s 1,500 employees were reportedly upset with the deal to sell out to the maker of Marlboro, given that Juul’s mission has been to lead people away from smoking traditional cigarettes, not to partner with their makers.

With that in mind, Juul decided to pay each employee something of an absurd holiday bonus — averaging out to more than $1 million each — to boost morale internally, according to a person close to the deal. It seems fair to assume that it will likely be attached to some retention clauses that keep Juul’s talent from looking for other jobs.

What makes less sense to us is the dividend that is being paid out to (already rich) venture capitalists. A person close to the deal said the billions of dollars to investors is meant to reward Juul’s longtime financial supporters, who have had to stomach a crackdown by the Food and Drug Administration and other not-so-fun scrutiny. They took a risk, for sure.

But again: These shareholders already have the payoff from the risk — the appreciated value of their stock. That all makes me think that this deal wasn’t super-popular with investors to begin with.

But if we know one thing about Silicon Valley, it’s that billions of dollars can make a bad taste fade easily.

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