4 ms·

That's kind of the point of stock being part of TC isn't it?

• draw_down 4y ago
• eru 4y ago
  Depends a bit. It's perhaps easier to see when you compare this with a discretionary bonus paid in cash. The company can decide on the bonus depending on how well you did and how much money the company has to spare. The implied deal with employees is that they'll leave if the bonus is too low for their liking for too long. Overall a pretty decent deal for people with enough base to make ends meet and a deal with lots of flexibility for the employer. An established company like Google might have seen its share price fall recently, but still have plenty of money to spare and, importantly!, its competitors might also still have lots of money to spare. For historical and institutional reasons Google like to give out a lot of stock as part of its compensation, cash bonuses play a smaller role. So if the value of stock goes down and they want to / have to keep the value of total compensation high, they would want to make up for the recent drop in stock prices by giving employees more shares. Does that make sense? > That's kind of the point of stock being part of TC isn't it? In comparison, for a cash-strapped startup, you are exactly right, and for them the drop in total comp that comes with a drop in share price is exactly the point.
  • muzani 4y ago
    In this case, most of the competitors have lost stock value too, so it's a "fair" pay cut when things are going poorly for the economy as a whole. There's usually the offer of cash vs stock, and the employee gambles accordingly. If they're going to get compensated for the drop in stock too, why even ask for more cash?
    • eru 4y ago
      At eg Google (at least when I was there for a few years from 2014 onwards), basically everyone on the same level and in the same location got the same amount of cash. The amount of stock was variable, based on how badly they wanted you to join (or keep you) and how well you negotiated. There was never any option to ask for proportionally more cash or more stock. The stock vested over time and the grant was typically renewed every year. So that you basically could plan to receive a relatively fixed proportion of your total comp in newly vested stock every year. From a financial point of view the newly vested stock was basically as good as cash: you could sell it straight away. > In this case, most of the competitors have lost stock value too, so it's a "fair" pay cut when things are going poorly for the economy as a whole. Look at the qualifiers in my previous comment. It doesn't matter what's 'fair', what matters is what the competition is up. If Facebook is still sitting on piles of cash and eager to spend it on employees, Google can't let their total comp drop too much, even if both companies have lost total market value. If Facebook (and other competitors) spend less, Google will also have to spend less. That's not the same as the state of the economy as a whole, but it's related to it. > If they're going to get compensated for the drop in stock too, why even ask for more cash? As said earlier, at Google (at least back then) asking for more cash wasn't an option.
      • mrep 4y ago
        When I got an offer in 2018, they asked about cash vs equity and I said I didn't care so they seemed to go more heavy on the equity for my total comp. I then got an L+1 offer from dropbox that had a higher total comp and they matched it by increasing the salary and left the equity grant the same.
        • eru 4y ago
          Btw, I was at Google in Australia, for what it's worth. So not sure how that compares to other places.