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The Coca-Cola Company actually does offer RSUs to employees.
by caslon 5y ago
The Coca-Cola Company actually does offer RSUs to employees.
- akhosravian 5y agoI would be surprised if any large publicly traded corporation doesn’t offer some form of equity compensation to basically all employees with a six figure or higher salary. The only lesson here is it is another data point in being very skeptical of someone claiming “we’ll never sell” in a compensation negotiation — if the founder(s) never plan to raise outside money or sell the company there’s very little downside to establishing an employee stock pool and awarding options to folks that may never be exercised.
- patio11 5y agoIt is in fact not the practice of most publicly traded companies to award equity outside the tech company, even to highly-compensated employees.
- midasuni 5y agoI don’t get a desire for stock - why would I want all my eggs in one basket. If my savings and my income are from the same company, and it does well, that’s great and I make a fortune But if it doesn’t do well, I lose my job and have nothing to fall back on. Surely it’s better to have a diverse portfolio?
- kevinventullo 5y agoOne benefit is that stock is typically awarded in the form of a multi-year grant, where the number of shares is priced at the time the grant starts. So if the original grant says you get $X worth of stock per year for the next 4 years, and then the stock price goes up 40% in Year 1, you’re now effectively getting $1.4X worth of stock per year for the remaining 3 years.
- notJim 5y agoTo illustrate this, imagine at offer time, you're given $150k + $80k worth of stock over 4 years. That works out to $170k per year. Nice, but not even doctor money. The stock is currently $100/share, so that's 800 shares. Now imagine the stock 4xes (not unusual in tech). By year 4, you're making $230k, without having had to beg for a raise or anything. This is how people end up with ludicrous total comp in tech.
- midasuni 5y agoBut if the company goes down in value you’re screwed. Wouldn’t it be more sensible to buy options in your competitor and hedge your bets?
- jdavis703 5y agoThe taxes on equity are substantially lower than on salary. Also equity compensation can be an order of magnitude higher than any market-based salary would ever be.
- mercutio2 5y agoThe taxes on RSUs at vesting are identical to taxes on other income. RSUs are equity. If you get stock options, there are (very limited) circumstances where those options have favorable taxation relative to income, but it’s a gamble, if you follow the strategies that might yield tax advantages.
- e1g 5y agoIt's fairly common for execs (both in the US and EU), it's just framed as LTIs via phantom shares. Comparable to RSUs in philosophy, outcomes, and vesting schedules. Source: we sell software to run these programs.
- ledbettj 5y agoWhen I worked at Cisco years ago fresh out of college, they offered an Employee Stock Purchase Program -- you could put up to X$ towards purchasing Cisco stock over the quarter, and the stock was issued at the end of the quarter at min(start_price, end_price) * 0.85. I haven't worked at another large corporation since then but I thought that was fairly generous and I still have quite a bit of CSCO from that program.
- kasey_junk 5y agoAlmost 50% of the s&p 500 offer ESPP and ~40% of the Russel 3000 do[0]. Given that, 401k stock contributions, ESOP & RSU I think we are right at the line of “expecting” equity as part of your comp for most public companies. It’s close enough that we can presume it’s a standard benefit anyway. [0] https://rewards.aon.com/en-us/insights/articles/2020/how-common-are-employee-stock-purchase-plans-it-varies-widely-by-demographics https://rewards.aon.com/en-us/insights/articles/2020/how-com...
- RC_ITR 5y agoI mean, they give out <$300mn a year vs. Market Cap of $240bn[0]. Assume most of that flows to the top and it's basically 0. [0]https://www.macrotrends.net/stocks/charts/KO/cocacola/stock-based-compensation https://www.macrotrends.net/stocks/charts/KO/cocacola/stock-...
- cutthegrass2 5y agoSlight tangent, but RSU's are "sudo equity" IMO. I'm not sure how the tax liability of RSU's works in the US, but in the UK they are treated as "income" and taxed as income, not taxed as "capital" as most other types of equity are. As a result, I loose just over 50% of my RSU value to income tax when they vest.
- kevinventullo 5y agoIt is the same in the US.
- pnut 5y agopseudo. "sudo" means "super-user do", is pronounced "soodoo" https://en.wikipedia.org/wiki/Sudo https://en.wikipedia.org/wiki/Sudo
- cutthegrass2 5y agoYep, gotcha. I actually meant "pseudo", but I spend a lot of my day typing sudo so... and whilst we're nitpicking, I also meant "lose" and not "loose" in the sentence below.
- mywittyname 5y agoI thought it was pronounced pseudo, thinking it's a joke. You're not actually the super user, you're a "pseudo" super user.
- deleted 5y ago[deleted]
- someguydave 5y agoTypically in the US public companies sell RSUs to employees with a discount to the market price, so there is compensation for income tax.
- mercutio2 5y agoNo. That is ESPP. RSUs are, indeed, just taxable income linked to share price. The fact that RSUs are taxed as income in no way means “they aren’t equity”, though, so this whole thread is just filled with bizarre inaccuracies.