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> Sure, but the stock price would tank (note that the current multiple assumes growth), employees would leave due to poor compensation, and starts a downward sp
by nuerow 5y ago
> Sure, but the stock price would tank (note that the current multiple assumes growth), employees would leave due to poor compensation, and starts a downward spiral.
This assertion presumes that it is impossible to propose any form of compensation that's enticing without involving stock. This is not only baseless but also flies in the face of reality, as other tech companies, including other FAANGs, barely offer any stock and still manage to attract top talent.
- gregorygoc 5y ago> This is not only baseless but also flies in the face of reality, as other tech companies, including other FAANGs, barely offer any stock and still manage to attract top talent. Which one?
- jw_mc 5y agoNetflix is known for having all-cash offers.
- saagarjha 5y agoNetflix is pretty much the only FAANG that does that. Every other large tech company has generous stock grants, and as you pass a couple years of experience your stock will generally be larger than your cash compensation.
- Sebb767 5y ago> Netflix is pretty much the only FAANG that does that. Netflix is also 20% of FAANG companies, so that's not as lonely as it sounds.
- saagarjha 5y agoRight, but they're a strange company that just happens to be in FAANG. Pretty much every other large company, in the FAANG acronym or not, will give you equity.
- lotsofpulp 5y agoIn the context of this discussion, it is more useful for FAANG to mean any tech company or tech adjacent company employing a lot of software engineers with comparatively high pay, in the form of cash or cash + stock.
- MrPatan 5y agoNetflix is in FAANG only to make the acronym nicer
- mehrdada 5y agoYou could pay them in other means, but there were constraints there are obvious constraints that I did not spell out. We are assuming a non-growing company that now needs to pay extra cash to you top up employee comp with cash. Your margin will start to shrink, and so does your earnings (the premise was no growth, remember), continuing the downward trend of your stock. Plus, your competitors are not sitting still. People will go work for the more exciting companies even if you pay them equal amounts anyway (to vary their type of work and grow their careers) rather than staying and watching the thing die and doing the same thing for 30 years.