4 ms·
While I would avoid trying to time the market, anyone starting now has a much lower "cost basis" (they're not spending money, it's not a cost) and better chance
by sulam 4y ago
While I would avoid trying to time the market, anyone starting now has a much lower "cost basis" (they're not spending money, it's not a cost) and better chance at their RSUs appreciating while they vest. Using the last 12 months as a guide for the next 4 years isn't a reasonable way to analyze this.
- RHSeeger 4y ago> they're not spending money, it's not a cost I'm not sure I follow that. If you're getting those shares instead of a higher salary, there's no effective difference between that and a cost you paid out of pocket (except for certain tax implications).
- junofan 4y agoYou get 4 years of exposure. You can’t pre-allocate 4 years of salary. That is the difference.
- sulam 4y agoShopify's plan is an oddity in the industry, normally one doesn't directly trade RSUs and base comp. Netflix has allowed for this (probably still does, but I haven't negotiated against a Netflix offer recently), but I don't know of any other significant examples. That said, legally, even in the specific case of the Shopify plan, you aren't taking cash and spending it on Shopify stock. If you were, your tax situation would be more complicated.
- doktorhladnjak 4y agoNetflix lets you take a fraction of your pay in long term options, not RSUs
- RHSeeger 4y ago> normally one doesn't directly trade RSUs and base comp You do, it just isn't spelled out. If you're getting comp in one way (RSUs), then you're not getting it in other ways (salary). The same is true of other benefits, like free food, 401k contributions, etc. It generally isn't a 1-to-1 thing, but it _is_ a tradeoff.
- sulam 4y agoI look forward to your perspective when the IRS starts arguing your free food and other benefits should be taxed like regular income.