4 ms·

Right, but the stocks start earning value immediately and cash bonuses do not. Assuming gains are even at 5% per year, and the bonus is $100k (because the math

Right, but the stocks start earning value immediately and cash bonuses do not. Assuming gains are even at 5% per year, and the bonus is $100k (because the math is easier): With RSU's, you get $400k1.05^4 (4 years of compounded growth) With cash, assuming you immediately invest the money, you get $100k1.05^4 + $100k1.05^3 + $100k1.05^2 + $100k *1.05 Running those numbers, the RSU's are worth $486,202 at the end and the cash is worth $452563. RSU's appreciated by $86k over the duration, cash appreciated $52k over the duration. It's the time value of money. Getting it earlier makes it worth more.

gpderetta 4y ago
Yes, that's why I suggest you should buy calls on the day your grant would have been assigned if you think the stock will go up. Of course most people won't do it because is very risky. Yet getting RSUs has similar risk (or larger as you can lose more than the option premium). There might be US tax implications that I'm not familiar with of course.
- darkwizard42 4y ago
  You aren't allowed to do this in the US. Lot of regulations on your RSUs and when you can sell etc. including derivatives on your vested and unvested stock.
  - gpderetta 4y ago
    We are talking about a scenario in which you get cash not RSU. Also I'm not familiar with the US case, but I understand those limitations are contractual not regulatory and thus have no bearing in what's would be optimal for the employee.
sokoloff 4y ago
You have to use two ** to "escape" the italicizing that happens with multiple single * in your post.
vineyardmike 4y ago
30K of missed growth on 400K doesn’t seem so bad to not have 400K tied up in a single company. If, along those 4 years, your company tanks 25% (Shopify tanked over 50%), you’ll be able to abandon the investment (and get 100k a year of something else), or double down and get more shares (aka dollar cost averaging).
JAlexoid 4y ago
Cash sign on bonuses typically get paid out early, and have an "unearned" timeframe. Therefore you get cash earlier, than any stock.

gpderetta 4y ago

Yes, that's why I suggest you should buy calls on the day your grant would have been assigned if you think the stock will go up. Of course most people won't do it because is very risky. Yet getting RSUs has similar risk (or larger as you can lose more than the option premium). There might be US tax implications that I'm not familiar with of course.

darkwizard42 4y ago
You aren't allowed to do this in the US. Lot of regulations on your RSUs and when you can sell etc. including derivatives on your vested and unvested stock.
- gpderetta 4y ago
  We are talking about a scenario in which you get cash not RSU. Also I'm not familiar with the US case, but I understand those limitations are contractual not regulatory and thus have no bearing in what's would be optimal for the employee.

sokoloff 4y ago

You have to use two ** to "escape" the italicizing that happens with multiple single * in your post.

vineyardmike 4y ago

30K of missed growth on 400K doesn’t seem so bad to not have 400K tied up in a single company. If, along those 4 years, your company tanks 25% (Shopify tanked over 50%), you’ll be able to abandon the investment (and get 100k a year of something else), or double down and get more shares (aka dollar cost averaging).

JAlexoid 4y ago

Cash sign on bonuses typically get paid out early, and have an "unearned" timeframe. Therefore you get cash earlier, than any stock.