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I recently got an offer from Uber (didn't accept for various reasons), so I have a couple of data points. In the last two years, they started offering RSUs, no
by pfarnsworth 11y ago
I recently got an offer from Uber (didn't accept for various reasons), so I have a couple of data points. In the last two years, they started offering RSUs, not options, that addressed this issue. And two years ago, they had roughly 200 engineers vs 2000+ engineers now. The issues they had 2 years ago are different, as was the business, it wasn't nearly as ubiquitous and now since they offer RSUs, there isn't the same level of problems.
So it's another hit piece on Uber that is completely unfounded.
- matchagaucho 11y agoThe latest Uber investment rounds require that employees hold onto their shares for one year after going public. This will prevent employees from flooding the market post-IPO and devaluing the stock.
- toomuchtodo 11y agoIt also prevents employees from realizing any value if the stock price drops in the first year. EDIT: Nothing quite like watching the public stock price decline while you're in your lockup period.
- steven2012 11y agoDo other companies have this clause in place?
- matchagaucho 11y agoThe latest unicorn rounds are redefining liquidity preferences. Wouldn't be surprised if there are others. VCs want protection when valuing a company at $60B+. Employees are, unfortunately, last in line under the current RSU models.
- superuser2 11y agoBut the stock will be considered income in the IPO year and subject to withholding, right? So some employees will work for a negative potentially six figure salary (100% withholding + 5-6 figures owed to the IRS) with no way to pay the IRS until they can sell the stock in the next year? That can't be right. How does this work?
- matchagaucho 11y agoRSUs are "restricted" in the sense that employees do not own them until exercised, which defers the tax burden. Typically, a portion of the RSUs are withheld to cover taxes when exercised.
- zwily 11y agoYou don't exercise RSUs. RSUs are taxable as they vest. At my company, a portion of your vesting RSUs are sold every time to pay the tax on them, unless you provide some cash to pay the tax.
- superuser2 11y agoRight, I am interested in whether they would do this during the lockup period. It would seem that if employees were contractually obligated to hold their positions, selling to cover taxes wouldn't be allowed.
- DannyBee 11y agoYou know, i've never really delved into the details of this, but i wonder if it's only required to be withheld, not sold. That is, uber could withhold the right number of shares, and is selling them itself or repurchasing them and paying out the FMV. In any case, Uber has to pay the withholding, and i suspect they have no magic way around this.
- home_boi 11y agoWhat happens when private RSUs vest? Do companies withhold some RSUs and the government considers the tax bill paid by the withheld amount?
- YuriNiyazov 11y agoIt's completely founded. This article is about the issues of people that started out when Uber was giving out options.