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As soon as your RSU vests, you can sell it for cash. Most companies offer an auto-sell option that works even during restricted windows. With a good vesting sch

As soon as your RSU vests, you can sell it for cash. Most companies offer an auto-sell option that works even during restricted windows. With a good vesting schedule, it's almost identical.

baobabKoodaa 5y ago
Sure, almost identical, but in the direction where cash is always AT LEAST AS GOOD as stock. Not in the other direction.
- pb7 5y ago
  It’s not at least as good as stock, it’s worse in most markets. Because your stock is appreciating before you’re allowed to sell it but the cash is depreciating to inflation.
  - baobabKoodaa 5y ago
    If you receive $100k worth of stock, you receive $100k worth of stock. If you receive X amount of stock that vests in 1 year, and at that time point it happens to be worth $150k, then you didn't receive $100k worth of stock, you received $150k worth of stock. The question wasn't about comparing $150k worth of stock to $100k cash, the question was about comparing $100k worth of stock to $100k cash.
    - overrun11 5y ago
      Every company I know of with the exception of Stripe and Coinbase have 4 year equity grants. In the real world you'd receive a 400k a grant that vests over 4 years. For most white collar workers who don't need the money to pay bills the 400k grant is worth more than an extra 100k a year in salary. It's a free call option on the stock. If it goes up you keep vesting at the new stock price which might be way above market rate for you position and if it goes down you get refreshers at the end of the year to bring you back to a market rate salary.
- seattle_spring 5y ago
  You're completely wrong because of your neglect to consider pre-vesting appreciation. Please see my previous comment for an example. Why do you think some people get rich joining pre-IPO companies? Because they're granted a lot of shares at a low price point, and by the time they are vested and liquid the shares have a possibility of being worth magnitudes more than when they were granted.

As soon as your RSU vests, you can sell it for cash. Most companies offer an auto-sell option that works even during restricted windows. With a good vesting schedule, it's almost identical.

baobabKoodaa 5y ago

Sure, almost identical, but in the direction where cash is always AT LEAST AS GOOD as stock. Not in the other direction.

pb7 5y ago
It’s not at least as good as stock, it’s worse in most markets. Because your stock is appreciating before you’re allowed to sell it but the cash is depreciating to inflation.
- baobabKoodaa 5y ago
  If you receive $100k worth of stock, you receive $100k worth of stock. If you receive X amount of stock that vests in 1 year, and at that time point it happens to be worth $150k, then you didn't receive $100k worth of stock, you received $150k worth of stock. The question wasn't about comparing $150k worth of stock to $100k cash, the question was about comparing $100k worth of stock to $100k cash.
  - overrun11 5y ago
    Every company I know of with the exception of Stripe and Coinbase have 4 year equity grants. In the real world you'd receive a 400k a grant that vests over 4 years. For most white collar workers who don't need the money to pay bills the 400k grant is worth more than an extra 100k a year in salary. It's a free call option on the stock. If it goes up you keep vesting at the new stock price which might be way above market rate for you position and if it goes down you get refreshers at the end of the year to bring you back to a market rate salary.
seattle_spring 5y ago
You're completely wrong because of your neglect to consider pre-vesting appreciation. Please see my previous comment for an example. Why do you think some people get rich joining pre-IPO companies? Because they're granted a lot of shares at a low price point, and by the time they are vested and liquid the shares have a possibility of being worth magnitudes more than when they were granted.