4 ms·

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.

You get fired or have a mental breakdown and quit before your shares vest. The shares are worth less in 4 years , etc.

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.