5 ms·

Worth noting that this looks like total comp. Which is fine, but the implication of course is that a good percentage of the comp comes from stock, which is a bi

Worth noting that this looks like total comp. Which is fine, but the implication of course is that a good percentage of the comp comes from stock, which is a bit easier to manage as a form of payment than actual dollars.

ghaff 6y ago
And stock in many of these companies has had a very nice run. Obviously RSUs are relevant as a component of total comp but, if stock appreciation went away tomorrow, a lot of these comp lists would go from astronomical to merely high.
- shuckles 6y ago
  The website asks you to report granted compensation, not including equity appreciation. Sure, it’s unlikely that is what people are always reporting, but the Facebook numbers track with some new hire offers.
- jedimastert 6y ago
  I think the amounts are set at the time of award, rather than time of vesting, so Facebook says "I want to pay you $10 but in RSU" than you get than many RSU at the current price. What I mean to say is that I don't think the actual stock performance affects these numbers
  - slumdev 6y ago
    This is true. If you can hire into a FAAMNG during a stock market crash, you're set for life.
  - ghaff 6y ago
    It depends how people are reporting it. If I'm thinking in terms of my W2 number (which is what I would use if you asked me how much I made last year), that's affected by the price at vest, not at grant.
    - ryandrake 6y ago
      Also, if they are reporting the full equity amount on their offer letter, they may be forgetting to divide by the vesting period. I've met a number of otherwise smart folks think that since their salary is $120K and their full equity offer is $200K then their TC is $320K. There was an HN thread about this a couple of weeks ago. Levels.fyi guy said they try to account for this though in their surveys.
orange_tee 6y ago
What difference does this make in practice? Are there limitation on what you can do with the shares you are given?
- offtop5 6y ago
  You get fired or have a mental breakdown and quit before your shares vest. The shares are worth less in 4 years , etc.
- sombremesa 6y ago
  Yep, vesting. If I tell you I'll give you employment where you get 20% of your annual salary this year, 120% next year, and 70% for the next few years (but ofc subject to market forces), that doesn't compare well at all to someone else's base salary, especially if you quit that first year, which many do.
  - zdrummond 6y ago
    Except Google’s RSUs vest every month. So, other than the whims of the market, it’s the same as salary.
    - ryandrake 6y ago
      I think it's more complicated for Google. If you get above a certain number of shares, they vest every month. If you get a medium number of shares, they vest quarterly. If you get a few, they vest yearly.
    - sombremesa 6y ago
      This would be a very good counterpoint if Google was the only company in the world. Since it isn't, I don't really understand the relevance.
- MereInterest 6y ago
  Suppose you get a stock grant worth X dollars, vesting over Y years. At the time of the grant, you get nothing. A year later, you get X/Y dollars worth of stock. Another year passes, and you get another X/Y dollars worth of stock, and so on for Y years in total. If at any time you leave the company, any stock that hasn't vested disappears into the aether. Sometimes, you'll hear this described as "golden handcuffs". You get more money, but it is money that disappears if you ever leave the company, providing an incentive to stay. This is, fundamentally, a wrong way to view the stock grants. Instead, they should be seen as a temporary raise of X/Y dollars per year, that expires after Y years. The money isn't yours until the stocks vest, and until that point is nothing more than a commitment to give you stock at a later point.

ghaff 6y ago

And stock in many of these companies has had a very nice run. Obviously RSUs are relevant as a component of total comp but, if stock appreciation went away tomorrow, a lot of these comp lists would go from astronomical to merely high.

shuckles 6y ago
The website asks you to report granted compensation, not including equity appreciation. Sure, it’s unlikely that is what people are always reporting, but the Facebook numbers track with some new hire offers.
jedimastert 6y ago
I think the amounts are set at the time of award, rather than time of vesting, so Facebook says "I want to pay you $10 but in RSU" than you get than many RSU at the current price. What I mean to say is that I don't think the actual stock performance affects these numbers
- slumdev 6y ago
  This is true. If you can hire into a FAAMNG during a stock market crash, you're set for life.
- ghaff 6y ago
  It depends how people are reporting it. If I'm thinking in terms of my W2 number (which is what I would use if you asked me how much I made last year), that's affected by the price at vest, not at grant.
  - ryandrake 6y ago
    Also, if they are reporting the full equity amount on their offer letter, they may be forgetting to divide by the vesting period. I've met a number of otherwise smart folks think that since their salary is $120K and their full equity offer is $200K then their TC is $320K. There was an HN thread about this a couple of weeks ago. Levels.fyi guy said they try to account for this though in their surveys.

orange_tee 6y ago

What difference does this make in practice? Are there limitation on what you can do with the shares you are given?

offtop5 6y ago
You get fired or have a mental breakdown and quit before your shares vest. The shares are worth less in 4 years , etc.
sombremesa 6y ago
Yep, vesting. If I tell you I'll give you employment where you get 20% of your annual salary this year, 120% next year, and 70% for the next few years (but ofc subject to market forces), that doesn't compare well at all to someone else's base salary, especially if you quit that first year, which many do.
- zdrummond 6y ago
  Except Google’s RSUs vest every month. So, other than the whims of the market, it’s the same as salary.
  - ryandrake 6y ago
    I think it's more complicated for Google. If you get above a certain number of shares, they vest every month. If you get a medium number of shares, they vest quarterly. If you get a few, they vest yearly.
  - sombremesa 6y ago
    This would be a very good counterpoint if Google was the only company in the world. Since it isn't, I don't really understand the relevance.
MereInterest 6y ago
Suppose you get a stock grant worth X dollars, vesting over Y years. At the time of the grant, you get nothing. A year later, you get X/Y dollars worth of stock. Another year passes, and you get another X/Y dollars worth of stock, and so on for Y years in total. If at any time you leave the company, any stock that hasn't vested disappears into the aether. Sometimes, you'll hear this described as "golden handcuffs". You get more money, but it is money that disappears if you ever leave the company, providing an incentive to stay. This is, fundamentally, a wrong way to view the stock grants. Instead, they should be seen as a temporary raise of X/Y dollars per year, that expires after Y years. The money isn't yours until the stocks vest, and until that point is nothing more than a commitment to give you stock at a later point.