4 ms·

Slight 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 tax

Slight 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 ago
It is the same in the US.
pnut 5y ago
pseudo. "sudo" means "super-user do", is pronounced "soodoo" https://en.wikipedia.org/wiki/Sudo https://en.wikipedia.org/wiki/Sudo
- cutthegrass2 5y ago
  Yep, 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 ago
  I 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 ago
Typically 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 ago
  No. 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.
  - cutthegrass2 5y ago
    I don't disagree with this. They are indeed a form of equity. My issue relates to how they're treated with respect to taxation by the various revenue authorities. In the UK, the tax paid on RSU's vesting is related to the personal income tax bracket the individual falls into. Which means for anyone in the UK's higher tax bracket, you end up losing ~50% of the amount vesting as tax. If these behaved like other forms of equity, ordinary shares, preference shares for instance, they'd be taxed as capital, the gains of which would be taxed 'when you sell them' and at a much lower rate of tax - ~50% lower for a UK higher rate tax payer. I'd rather a company just pay me a higher basic salary than award RSU's. At least then it's both pensionable and often used as a multiplier at bonus/salary raise calculation time.
    - mercutio2 5y ago
      Agreed! If you can guarantee that you're going to get the same total compensation, compensation-as-salary is always better than compensation-as-RSUs. Of course there's upside to exposing yourself to your company's stock performance, but there's also downside risk, which people looking at equity compensation tend to downplay. Turns out its worked out well for big tech employees, as big tech has gone up 10x over not very many years. But that's not a reliable state of affairs into the indefinite future for big tech, and it was never reliable for smaller companies. Nitpick: "If these behaved like other forms of equity" I don't know what "behaved like" means in this context. You start out without equity. Then your company pays you equity. That's always going to be taxed as income, because it's transparently just income, just paid in a different liquid market.
      - someguydave 5y ago

kevinventullo 5y ago

It is the same in the US.

pnut 5y ago

pseudo. "sudo" means "super-user do", is pronounced "soodoo" https://en.wikipedia.org/wiki/Sudo https://en.wikipedia.org/wiki/Sudo

cutthegrass2 5y ago
Yep, 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 ago
I 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 ago

Typically 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 ago
No. 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.
- cutthegrass2 5y ago
  I don't disagree with this. They are indeed a form of equity. My issue relates to how they're treated with respect to taxation by the various revenue authorities. In the UK, the tax paid on RSU's vesting is related to the personal income tax bracket the individual falls into. Which means for anyone in the UK's higher tax bracket, you end up losing ~50% of the amount vesting as tax. If these behaved like other forms of equity, ordinary shares, preference shares for instance, they'd be taxed as capital, the gains of which would be taxed 'when you sell them' and at a much lower rate of tax - ~50% lower for a UK higher rate tax payer. I'd rather a company just pay me a higher basic salary than award RSU's. At least then it's both pensionable and often used as a multiplier at bonus/salary raise calculation time.
  - mercutio2 5y ago
    Agreed! If you can guarantee that you're going to get the same total compensation, compensation-as-salary is always better than compensation-as-RSUs. Of course there's upside to exposing yourself to your company's stock performance, but there's also downside risk, which people looking at equity compensation tend to downplay. Turns out its worked out well for big tech employees, as big tech has gone up 10x over not very many years. But that's not a reliable state of affairs into the indefinite future for big tech, and it was never reliable for smaller companies. Nitpick: "If these behaved like other forms of equity" I don't know what "behaved like" means in this context. You start out without equity. Then your company pays you equity. That's always going to be taxed as income, because it's transparently just income, just paid in a different liquid market.
    - someguydave 5y ago