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Do you realize that Coinbase is now a public company? There’s no such a thing as strike price because their stock compensation is likely done through RSUs. Not
by whoisjuan 5y ago
Do you realize that Coinbase is now a public company? There’s no such a thing as strike price because their stock compensation is likely done through RSUs. Not stock options.
Public companies issue an RSU grant at the beginning of employment and at no cost for the employee. Also if the share price goes below the grant date price, you’re likely recalibrated through rolling refreshers.
- deleted 5y ago[deleted]
- sologoub 5y agoTerminology aside, the general principle is still the same issue and employees ARE better of with 4 year grants in high growth companies. Let’s say you target RSU comp is $100k per year. Stock is $100 in year 1, $125 in year 2, $150 in year 3 and $200 in year 4. Ignoring inflation and taxes to make this easier to illustrate. 1) initial 4 year grant - $100k x 4 = $400k at $100/share is 4k shares. Assuming you keep all of your RSUs, you have $800k worth at year 4. 2) $100k of shares paid each year: year 1 - 1000 shares, year 2 - 800 shares, year 3 - 666.67 shares, year 4 - 500 shares. 4 year total comp in year 4 shares values is $593,334 So the employee receives $206.7k less under the new scheme versus the 4 year one. In reality, it’s even worse because we are talking high growth business here. Layering in annual refreshers helps as well, but this is where things generally plateau a bit.
- deleted 5y ago[deleted]