4 ms·
83(b) election is one way to make ISOs more on par with RSUs. 83(b) isn’t cheap... But! These days a lot of companies (especially FAANG, but start-ups too) are
by choppaface 7y ago
83(b) election is one way to make ISOs more on par with RSUs. 83(b) isn’t cheap... But! These days a lot of companies (especially FAANG, but start-ups too) are offering $20k-$100k signing bonuses; those bonuses essentially give the appearance of competitive total comp while in actuality depress base salary growth. It might be productive for employees to push towards having signing bonuses turned into an 83(b) election bonus that covers strike and (some amount of) taxes. Then fewer employees get roped into dumb tax games that only entertain investors, and we’d be moving the notion of competitive compensation towards reducing stock risk for those who can least afford it. (If salaries grow more rapidly as a side-effect, that’d be nice too).
- usaar333 7y agoCorrect - this allows you to get QSBS treatment on your stock - a huge tax win. The better startups will even loan employees "money" to exercise.