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Aren't RSUs the opposite of job security? If you get fired or leave before they vest, you lose them. In the bay area they are often called golden handcuffs beca

Aren't RSUs the opposite of job security? If you get fired or leave before they vest, you lose them. In the bay area they are often called golden handcuffs because developers halfway through their 4 year term often have another million in RSUs vesting, so can't go leave and work on their friend's awesome startups and the like, since the startups can't afford to match the compensation.

dominotw 7y ago
> have another million in RSUs vesting I would gladly wear these handcuffs :D
- LaserToy 7y ago
  Believe me, perspective changes once you are in them.
- gigatexal 7y ago
  Depends on the actual numbers. They could be worthless or worth millions. Every funding round changes that.
  - alex_young 7y ago
    RSUs are for public companies.
    - seanhunter 7y ago
      They are more common at public companies, but a company doesn't need to be publicly traded to give people RSUs. Conversely, a public company can pay in options rather than RSUs (or both) if they want. Source: Work for a non publicly traded company and have RSUs not options, previously worked for a publicly-traded company that issued RSUs and options as part of comp
  - awinder 7y ago
    RSUs should be a lot more reality based, these are not options to purchase on a hypothetical future liquidity event, they're restricted stock that turns into real shares on public markets upon vesting.
    - gigatexal 7y ago
      Ahh I was thinking they were options. Never mind. Does one still pay taxes every year on the RSUs should they rise in paper valuation before vesting?
      - awinder 7y ago
        Yeah kinda, you pay taxes on the market value of shares when they vest (become unrestricted). But only on the shares that have become unrestricted, not your still-restricted shares.
- nugget 7y ago
  What are you willing to sacrifice to vest those RSUs, besides just time? Your mental health? Your physical health? Watching your kids grow up? Your marriage? Etc. As other folks have alluded to it can sound relatively trivial (and sometimes it is, but often not) until you're actually staring into the abyss. The flip side is that quarterly RSU vesting is highly effective as a retention tool. I've known brilliant people pushed to their absolute breaking point before they finally leave (Amazon, I'm looking at you).
  - Ididntdothis 7y ago
    From observation there is no connection between unhealthy workplaces and compensation. If anything, it seems the more you get paid, the better you get treated. There may be exceptions obviously.
  - dominotw 7y ago
    I already sacrifice those :D
  - crmrc114 7y ago
    Yep, sounds like Amazon. I used to joke that the only Engineers who were there longer than four years were either getting divorced or were already divorced. You did not find very many who were married with kids AND happy working there.
- MetalGuru 7y ago
  The grass is always greener. It can be pretty frustrating to be at a job you’re not very satisfied at because the expected value of leaving just doesn’t make sense. Sounds silly to complain about having golden handcuffs, but it does change the decisions you make (potentially in a way that makes you less happy).
qeternity 7y ago
If you get fired, unless it qualifies under some due cause, the options should immediately vest.
- awillen 7y ago
  This is not true in most contracts - you can negotiate for it if you're high enough level or early enough, but otherwise it's rarely the case. Besides, if you get fired from a startup and it's not for cause, then it's probably because there are layoffs, so it might be a bad choice to exercise your options anyway.
- shemnon42 7y ago
  Only if you are an executive. Rank and file tend to get the short end, which means you lose RSUs whether you leave voluntarily (took another job) or involuntarily (fired for cause, fired for no cause, or laid off).
- paxys 7y ago
  Did you just make that up?
  - qeternity 7y ago
    Literally how my options are written.
- lnanek2 7y ago
  > If you get fired, unless it qualifies under some due cause, the options should immediately vest. That definitely didn't happen at my company. We had a round of layoffs and the package offered to people who signed an agreement not to sue only included a couple weeks of accelerated vesting. There was no performance management system in place either, so the people fired were basically just the bottom of the stack rank their managers were asked to turn in, which was often based more on personal like or dislike than performance. There was one engineer entering his fourth year, who had saved the company 30 million dollars during his term with infrastructure efficiency improvements, who was laid off and lost millions in the RSUs that would have vested that last year (he was on a 10/20/30/40% schedule). All the ICs speculated he was fired so the company wouldn't have to pay.
calypso 7y ago
Would this only be a problem if they vest in non-uniform quantities? At the company (Shopify) I work for they vest in even amounts over 4 years but you have to wait 1 year to get 1/4 of them then every quarter after that.
mrbonner 7y ago
The first few years (2 or 3 in my case), is tough. You don’t get any more RSU hence you need to stick with it. After that period, I got awarded more every performance review. So, the vested schedule is bearable but I still feel it is a golden handcuff. If I quit I would lose any unvested shares (1-2 years from now).
ryandrake 7y ago
Look at it this way: say you make $100k per year. This means you’ve got $1M coming over 10 years! If you leave after 2 years, do you feel like you are giving up $800k?probably not. So why not think of RSUs the same way? That’s how I think of RSUs: they aren’t yours until they vest: they’re just like future pay, so you’re not really giving anything up if you leave “early”.
- shitpostbot 7y ago
  The only people dealing with RSU handcuffs are people whose companies have gone up significantly in value since they got their grants. If you leave youre essentially throwing away the time you invested letting those RSUs appreciate, and your next company has no guarantee of doing as well as your current one has. If you were granted 200k/y in stock for 4 years, after 4 years you could be making 200k+ above your market rate. If the salary bump from changing gigs doesn't cover the appreciation you've got a case of RSU handcuffs.

dominotw 7y ago

> have another million in RSUs vesting I would gladly wear these handcuffs :D

LaserToy 7y ago
Believe me, perspective changes once you are in them.
gigatexal 7y ago
Depends on the actual numbers. They could be worthless or worth millions. Every funding round changes that.
- alex_young 7y ago
  RSUs are for public companies.
  - seanhunter 7y ago
    They are more common at public companies, but a company doesn't need to be publicly traded to give people RSUs. Conversely, a public company can pay in options rather than RSUs (or both) if they want. Source: Work for a non publicly traded company and have RSUs not options, previously worked for a publicly-traded company that issued RSUs and options as part of comp
- awinder 7y ago
  RSUs should be a lot more reality based, these are not options to purchase on a hypothetical future liquidity event, they're restricted stock that turns into real shares on public markets upon vesting.
  - gigatexal 7y ago
    Ahh I was thinking they were options. Never mind. Does one still pay taxes every year on the RSUs should they rise in paper valuation before vesting?
    - awinder 7y ago
      Yeah kinda, you pay taxes on the market value of shares when they vest (become unrestricted). But only on the shares that have become unrestricted, not your still-restricted shares.
nugget 7y ago
What are you willing to sacrifice to vest those RSUs, besides just time? Your mental health? Your physical health? Watching your kids grow up? Your marriage? Etc. As other folks have alluded to it can sound relatively trivial (and sometimes it is, but often not) until you're actually staring into the abyss. The flip side is that quarterly RSU vesting is highly effective as a retention tool. I've known brilliant people pushed to their absolute breaking point before they finally leave (Amazon, I'm looking at you).
- Ididntdothis 7y ago
  From observation there is no connection between unhealthy workplaces and compensation. If anything, it seems the more you get paid, the better you get treated. There may be exceptions obviously.
- dominotw 7y ago
  I already sacrifice those :D
- crmrc114 7y ago
  Yep, sounds like Amazon. I used to joke that the only Engineers who were there longer than four years were either getting divorced or were already divorced. You did not find very many who were married with kids AND happy working there.
MetalGuru 7y ago
The grass is always greener. It can be pretty frustrating to be at a job you’re not very satisfied at because the expected value of leaving just doesn’t make sense. Sounds silly to complain about having golden handcuffs, but it does change the decisions you make (potentially in a way that makes you less happy).

qeternity 7y ago

If you get fired, unless it qualifies under some due cause, the options should immediately vest.

awillen 7y ago
This is not true in most contracts - you can negotiate for it if you're high enough level or early enough, but otherwise it's rarely the case. Besides, if you get fired from a startup and it's not for cause, then it's probably because there are layoffs, so it might be a bad choice to exercise your options anyway.
shemnon42 7y ago
Only if you are an executive. Rank and file tend to get the short end, which means you lose RSUs whether you leave voluntarily (took another job) or involuntarily (fired for cause, fired for no cause, or laid off).
paxys 7y ago
Did you just make that up?
- qeternity 7y ago
  Literally how my options are written.
lnanek2 7y ago
> If you get fired, unless it qualifies under some due cause, the options should immediately vest. That definitely didn't happen at my company. We had a round of layoffs and the package offered to people who signed an agreement not to sue only included a couple weeks of accelerated vesting. There was no performance management system in place either, so the people fired were basically just the bottom of the stack rank their managers were asked to turn in, which was often based more on personal like or dislike than performance. There was one engineer entering his fourth year, who had saved the company 30 million dollars during his term with infrastructure efficiency improvements, who was laid off and lost millions in the RSUs that would have vested that last year (he was on a 10/20/30/40% schedule). All the ICs speculated he was fired so the company wouldn't have to pay.

calypso 7y ago

Would this only be a problem if they vest in non-uniform quantities? At the company (Shopify) I work for they vest in even amounts over 4 years but you have to wait 1 year to get 1/4 of them then every quarter after that.

mrbonner 7y ago

The first few years (2 or 3 in my case), is tough. You don’t get any more RSU hence you need to stick with it. After that period, I got awarded more every performance review. So, the vested schedule is bearable but I still feel it is a golden handcuff. If I quit I would lose any unvested shares (1-2 years from now).

ryandrake 7y ago

Look at it this way: say you make $100k per year. This means you’ve got $1M coming over 10 years! If you leave after 2 years, do you feel like you are giving up $800k?probably not. So why not think of RSUs the same way? That’s how I think of RSUs: they aren’t yours until they vest: they’re just like future pay, so you’re not really giving anything up if you leave “early”.

shitpostbot 7y ago
The only people dealing with RSU handcuffs are people whose companies have gone up significantly in value since they got their grants. If you leave youre essentially throwing away the time you invested letting those RSUs appreciate, and your next company has no guarantee of doing as well as your current one has. If you were granted 200k/y in stock for 4 years, after 4 years you could be making 200k+ above your market rate. If the salary bump from changing gigs doesn't cover the appreciation you've got a case of RSU handcuffs.