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> she had been killing herself to make it more successful and protect her people from losing their jobs over it. > As tired as she was, she couldn't just quit

by Swizec 9y ago

> she had been killing herself to make it more successful and protect her people from losing their jobs over it. > As tired as she was, she couldn't just quit this job. She owed a big chunk of money in taxes thanks to that stock and needed her salary to pay those taxes. > after getting violently ill at the thought of going to work Burned out and trapped by debt. Not a great place to be even with the $1mm/year compensation. Most of which is illiquid I assume.

hendzen 9y ago
Google/FB stock is in no way illiquid.
- Swizec 9y ago
  It says the stock was from a recent acquisition and the article context is about vesting. One can surmise her stock is tied up in a vesting schedule and thus illiquid for now.
- lisper 9y ago
  It can be if it's part of the compensation in an acquisition deal.
  - Kiro 9y ago
    How?
    - lisper 9y ago
      Because it can be subject to a vesting schedule.
tryingagainbro 9y ago
Burned out and trapped by debt. Not a great place to be even with the $1mm/year compensation. Most of which is illiquid I assume. It can be worse, like being trapped making $8 an hour at some supermarket.
muzz 9y ago
Not sure how "She owed a big chunk of money in taxes thanks to that stock". One has to do really risky/dumb things with stock options to get into that scenario
- encoderer 9y ago
  All you have to do is execute them and hold. You owe taxes. Look up dual basis.
  - muzz 9y ago
    Like I said, risky/dumb things
    - encoderer 9y ago
      To realize the benefit of ISOs you need long term gains treatment. That requires you "prepay" tax when you execute. It's the difference between 20% and 33%+ effective tax rate.
      - muzz 9y ago
        Just to be clear, sounds like you are referring to the company that was acquired (not Google, whose stock is liquid). Few startups have Early Exercise of stock options. For those that do, if one has the cash to do the exercise and the willingness to put the cash into that illiquid startup stock, it behooves them to do it as soon as they can, so that there is no difference between their Strike Price and the Fair Market Value, so the tax owed is $0 when they file their 83(b) election. If Early Exercise is not available, one could exercise the options as they vest, but that is entails both the risk of both owing taxes (since FMV would be higher than strike price by that time) in addition to putting cash into illiquid startup stock-- all for a potential benefit of slightly lower tax rate (33%+ vs 20%) when the hope of both appreciation and liquidity is realized. That's the risky/dumb thing I was referring to. Alternatively, they could simply hold the option, which costs them nothing, and just pay the normal taxes (33%+) when exercising and selling.

by Swizec 9y ago

hendzen 9y ago

Google/FB stock is in no way illiquid.

Swizec 9y ago
It says the stock was from a recent acquisition and the article context is about vesting. One can surmise her stock is tied up in a vesting schedule and thus illiquid for now.
lisper 9y ago
It can be if it's part of the compensation in an acquisition deal.
- Kiro 9y ago
  How?
  - lisper 9y ago
    Because it can be subject to a vesting schedule.

tryingagainbro 9y ago

Burned out and trapped by debt. Not a great place to be even with the $1mm/year compensation. Most of which is illiquid I assume. It can be worse, like being trapped making $8 an hour at some supermarket.

muzz 9y ago

Not sure how "She owed a big chunk of money in taxes thanks to that stock". One has to do really risky/dumb things with stock options to get into that scenario

encoderer 9y ago
All you have to do is execute them and hold. You owe taxes. Look up dual basis.
- muzz 9y ago
  Like I said, risky/dumb things
  - encoderer 9y ago
    To realize the benefit of ISOs you need long term gains treatment. That requires you "prepay" tax when you execute. It's the difference between 20% and 33%+ effective tax rate.
    - muzz 9y ago
      Just to be clear, sounds like you are referring to the company that was acquired (not Google, whose stock is liquid). Few startups have Early Exercise of stock options. For those that do, if one has the cash to do the exercise and the willingness to put the cash into that illiquid startup stock, it behooves them to do it as soon as they can, so that there is no difference between their Strike Price and the Fair Market Value, so the tax owed is $0 when they file their 83(b) election. If Early Exercise is not available, one could exercise the options as they vest, but that is entails both the risk of both owing taxes (since FMV would be higher than strike price by that time) in addition to putting cash into illiquid startup stock-- all for a potential benefit of slightly lower tax rate (33%+ vs 20%) when the hope of both appreciation and liquidity is realized. That's the risky/dumb thing I was referring to. Alternatively, they could simply hold the option, which costs them nothing, and just pay the normal taxes (33%+) when exercising and selling.