4 ms·

> I'm getting a bit more per paycheck, but on the whole I suspect my tax returns over the next few years will add up to less than I was making before, even if t

> I'm getting a bit more per paycheck, but on the whole I suspect my tax returns over the next few years will add up to less than I was making before, even if the startup succeeds. That sounds counter-intuitive -- why would that be? Did you have some expense you could claim at [large corporation] that you can no longer claim?

mabbo 9y ago
Most of the big post-IPO companies hand out stock on a regular basis as a bonus or a top-up to the actual pay. The corp in question for me was Amazon. Around 1/3 of my pay (more some years) was in the form of AMZN stock that vested every six months. Stock, not Stock Options. No paying for it, no decisions, just boom, you now own X more stocks and how would you like to pay the income tax on that?
- iaw 9y ago
  What's worth more? A $200K lump sum in 20 years or $10K every year for the next 10? The answer depends on how much interest you can earn on the $10K/year. At around ~7% the $10K/year is worth more than the $200K in 20 years. Your stock grants from Amazon are equivalent to the $10K/year, the options, if you get them, are equivalent to the $200K. The actual weighting is impossible to get precisely but the way you approach it can give you better accuracy than just comparing apples to oranges. Good news, even if it's horrible, ~2 years is the typical employee tenure so you probably wont be there long. If you are and it's going to be successful you'll be able to renegotiate based on foregone comp at Amazon.
  - loeg 9y ago
    Even assuming a $200k payout after 20 years is a very optimistic startup outcome.
toomuchtodo 9y ago
Possibly total comp. Statups are stingy with health insurance, while larger corps are more likely to pick up more of the tab (and occasionally, they'll pay your monthly premiums in full). This can easily add an additional $12k-24k to your total annual comp if you have a family. Edit: US centric advice
- mabbo 9y ago
  I'm in Canada, so health insurance isn't very expensive (government covers most of it). The biggest thing for me was stock bonuses vs stock option bonuses.
  - deleted 9y ago
    [deleted]
URSpider94 9y ago
The way I read it, his take-home pay is higher, but either he mis-valued his options as being worth more than his BigCo stock package, or (as is usually the case) the value of the options is virtual until there's a liquidity event ... His old comp was paycheck + stock vesting (which doesn't appear in paychecks), his new comp is paycheck + (non-exerciseable options) = paycheck

mabbo 9y ago

Most of the big post-IPO companies hand out stock on a regular basis as a bonus or a top-up to the actual pay. The corp in question for me was Amazon. Around 1/3 of my pay (more some years) was in the form of AMZN stock that vested every six months. Stock, not Stock Options. No paying for it, no decisions, just boom, you now own X more stocks and how would you like to pay the income tax on that?

iaw 9y ago
What's worth more? A $200K lump sum in 20 years or $10K every year for the next 10? The answer depends on how much interest you can earn on the $10K/year. At around ~7% the $10K/year is worth more than the $200K in 20 years. Your stock grants from Amazon are equivalent to the $10K/year, the options, if you get them, are equivalent to the $200K. The actual weighting is impossible to get precisely but the way you approach it can give you better accuracy than just comparing apples to oranges. Good news, even if it's horrible, ~2 years is the typical employee tenure so you probably wont be there long. If you are and it's going to be successful you'll be able to renegotiate based on foregone comp at Amazon.
- loeg 9y ago
  Even assuming a $200k payout after 20 years is a very optimistic startup outcome.

toomuchtodo 9y ago

Possibly total comp. Statups are stingy with health insurance, while larger corps are more likely to pick up more of the tab (and occasionally, they'll pay your monthly premiums in full). This can easily add an additional $12k-24k to your total annual comp if you have a family. Edit: US centric advice

mabbo 9y ago
I'm in Canada, so health insurance isn't very expensive (government covers most of it). The biggest thing for me was stock bonuses vs stock option bonuses.
- deleted 9y ago
  [deleted]

URSpider94 9y ago

The way I read it, his take-home pay is higher, but either he mis-valued his options as being worth more than his BigCo stock package, or (as is usually the case) the value of the options is virtual until there's a liquidity event ... His old comp was paycheck + stock vesting (which doesn't appear in paychecks), his new comp is paycheck + (non-exerciseable options) = paycheck