6 ms·

RSUs are worth more due to tax implications? I'd rather have a dollar now versus the equivalence of a dollar in a stock which is unavailable for up to 4 years.

by ozten 7y ago

RSUs are worth more due to tax implications? I'd rather have a dollar now versus the equivalence of a dollar in a stock which is unavailable for up to 4 years... Even if your companies stock is out performing the market, I'd rather have a dollar now to buy company stock and keep my mobility. Employees need to be careful to diversify their portfolio. A dollar today can be put in any type of investment, whereas RSUs can lead to folks having too much of their egg nest in one basket.

awillen 7y ago
Sounds like the original comment was referring to RSUs in public companies. If you sell those immediately upon receiving them, they're basically equivalent to cash.
goobynight 7y ago
RSUs are as good or better than cash as long as you can keep a job for the length of the cliff. That's typically just a year... The 4th year of an RSU grant is just as unavailable as my base salary 4 years away.
- ozten 7y ago
  Good point, I wasn't thinking clearly about base salary 4 years away.
tmarman 7y ago
... except the choice is not a dollar now vs. a dollar of stock in 4 years. RSUs are calculated as part of your total annual compensation the same was as salary. A grant of $100k RSUs that vest over 4 yrs would be more the equivalent of $25k more in salary, not $100k bonus. Yes, there's the diversification problem but it's not like you have that same money upfront to invest in anything you want.
ThrustVectoring 7y ago
An RSU grant from a publicly-traded company is equivalent to a cash bonus that is tied to the current stock price of the company.
shitpostbot 7y ago
You've got it backwards. From a time-value-of-money perspective RSUs are a dollar now and a regular salary is a dollar in 4 years. If a company told me they would give me 4 years of salary on my first day of work, as long as I only invest it and dont spend it, that would be obscenely lucrative. That's pretty much what RSUs are.

by ozten 7y ago

awillen 7y ago

Sounds like the original comment was referring to RSUs in public companies. If you sell those immediately upon receiving them, they're basically equivalent to cash.

goobynight 7y ago

RSUs are as good or better than cash as long as you can keep a job for the length of the cliff. That's typically just a year... The 4th year of an RSU grant is just as unavailable as my base salary 4 years away.

ozten 7y ago
Good point, I wasn't thinking clearly about base salary 4 years away.

tmarman 7y ago

... except the choice is not a dollar now vs. a dollar of stock in 4 years. RSUs are calculated as part of your total annual compensation the same was as salary. A grant of $100k RSUs that vest over 4 yrs would be more the equivalent of $25k more in salary, not $100k bonus. Yes, there's the diversification problem but it's not like you have that same money upfront to invest in anything you want.

ThrustVectoring 7y ago

An RSU grant from a publicly-traded company is equivalent to a cash bonus that is tied to the current stock price of the company.

shitpostbot 7y ago

You've got it backwards. From a time-value-of-money perspective RSUs are a dollar now and a regular salary is a dollar in 4 years. If a company told me they would give me 4 years of salary on my first day of work, as long as I only invest it and dont spend it, that would be obscenely lucrative. That's pretty much what RSUs are.