7 ms·

Stupid question, aren't employees paid partly in stock?

• reissbaker 7y ago
  Most are, but I assume the GP sold their stock, either while they were at FB or after they left.
  • dweekly 7y ago
    At both Google and Facebook I elected the Autosale programs to immediately sell my company equity for cash and then immediately automatically reinvest the cash in an ETF portfolio (using Schwab Intelligent Portfolios). When autosale wasn't available I would habitually sell on the first open trading window day.
    • azinman2 7y ago
      Why? Both of those stock have performed very well.
      • granzymes 7y ago
        Risk. If you are an employee you are already have significant exposure to the risk of the business doing poorly, so it makes sense to diversify. Maybe frame it this way: if I handed you $20,000 to put in the stock market would you put it all in your employer's stock?
      • likpok 7y ago
        Because they perform well up until the point that they don't. By working at $Company, you're already invested heavily in their success. If a substantial portion of your net worth is also tied up in their stock, the company having problems may ruin you. Imagine: the stock price tanks due to some real issues, and then you get laid off. In one swoop you've lost both your salary and your savings. If you'd instead sold some or all of your stock, you'd have a solid nest egg to fall back on. And companies doing very well up until the point that they suddenly explode is not exactly unheard of: consider Enron, or even Groupon or Zynga. It's true that it's unlikely for FB to implode over the next year, but last year was real rough for the company: the July earnings went from 220 to ~160. If your whole savings is wrapped up in that, that's a scary drop. (You can say that it's recovered, but only partially and slowly). Long story short: it's easy to pick the winners if you're looking backwards.