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Don't many of the big tech companies have this with their stock options? And I've heard that, with the Wall Street approach, your bonus is the lion's share of
by s73ver 9y ago
Don't many of the big tech companies have this with their stock options?
And I've heard that, with the Wall Street approach, your bonus is the lion's share of your income for the year. If true, I don't know if I'd like to go to that, given the propensity for letting people go in this field.
- spinlock 9y agoA bird in the hand is worth two in the bush. Wall Street bonuses are cash. Your options are restricted and the value is very unknowable.
- dv_dt 9y agoA stock option is a lottery ticket (some are better odds than others). Notice how the wall street guys that deal with probabilities in financial instruments all day long in a professional capacity expect bonuses in cash.
- bradlys 9y agoI think at the big tech companies, it's comparable to cash but favored even more so because (if you hold them for a year) you can take capital gains (15-20%) on them instead of paying 40%+ tax. I don't think s73ver wasn't talking about startups that are pre-IPO. I think this only applies at companies not using RSUs. Since I think you get taxed immediately (no capital gains) with RSUs.
- mahyarm 9y agoNo when you receive the RSU unit or exercise your option, it's taxed as income. Whatever gains you make after that event is taxed as capital gains, like any other stock.
- lordnacho 9y agoA lot of that may be deferred, depends on the firm. I knew a guy at a fund who told me he hated the place, but he was locked in for the next 5 years due to several million being deferred. No motivation at all, the guy sounded very jaded.
- ben_w 9y agoAfter three zero-value share options schemes in a row (two ran out of money, the third is still going but doesn't look like it'll ever be publicly traded), I now regard share options as worth less than the time it takes to sign the paperwork.
- soulnothing 9y agoI view it more akin to a military contract. You will serve X years then get stock.
- s73ver 9y agoWhat's to stop them from terminating the contract a month shy, because of "performance reasons"? Unfortunately this setup would require quite a lot of trust in the industry, which, quite frankly, it has not earned.
- soulnothing 9y agoNo I'm completely in agreement with this. There are two types the Restricted units. Which vest slowly over several years. So if you're terminated early. You may get a percentage of the promised stock. Then there is the startup model. Where you're given stock of varying grades. Stock always felt like a gamble. Give me enough for bills + saving, then treat the stock as a bonus. Not core compensation.
- ido 9y agoAt least in Germany this would open the company to a lawsuit for wrongful termination (unless you worked there less than 6 months I think). At-will employment throws this out the windows, of course.
- gozur88 9y agohttps://www.cnet.com/news/zynga-to-employees-give-back-our-stock-or-youll-be-fired/ https://www.cnet.com/news/zynga-to-employees-give-back-our-s... If I stayed at a place a few extra years in anticipation of an IPO, this would have me seeing red.
- qub1t 9y agoThe problem with stock options is that the majority of their value is not directly tied with your individual performance. You can be a stellar employee but your options could turn out to be worthless. Likewise, you could be extremely mediocre but end up winning the lottery and your options become very valuable. With wall street bonuses, as long as you perform well, you get rewarded for it. Its a much more "meritocratic" system, there are cases when a hedge fund will lose money overall but individuals within the fund still get large bonuses because the areas they were responsible for did well.