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That's equity compensation, in my view. It's not like it's different at the FAANGs. If you go to work at Apple, and you work super hard, and the company decli
by aetherson 7y ago
That's equity compensation, in my view. It's not like it's different at the FAANGs. If you go to work at Apple, and you work super hard, and the company declines in stock value from $5jillion to $3jillion, nobody is like, "Whaaaat? Why didn't my equity go up in price? I worked really hard, and also $3jillion is still a ton of money!"
Equity compensation is about owning part of the COMPANY. If the company has destroyed value -- if it is now worth less than its bank account, with no company attached, was worth before any revenue -- then your equity is valueless.
Asking for the reward of equity with no risk is weird.
- alteria 7y agoDefinitely agree that equity compensation carries risk. However, I've seen equity pitched as a way to "make up" for the lower cash comp a startup might offer. This is probably the wrong way to look at equity. The expected value of the equity might make up for lower cash comp, but that's with a large sample size. Employees don't get that benefit at all. It's definitely up to the employee to understand the risks, but frequently they don't, and employers don't actively educate their employees.