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I’m a Googler who doesn’t do anything remotely close to setting capital return policy. Just remember Alphabet has been buying back 10s of billions for a while.
by formercoder 2y ago
I’m a Googler who doesn’t do anything remotely close to setting capital return policy. Just remember Alphabet has been buying back 10s of billions for a while. Dividends are just a different capital return mechanism.
- jnwatson 2y agoImportantly, dividends devalue issued unvested RSUs.
- kidintech 2y agoCould you please expand on this? If a person got issued RSUs but they have not vested yet, wouldn't they be happy that the RSUs are going to be worth more by the time they get vested?
- saagarjha 2y agoNo, because they would be worth the amount less the dividends during the vesting period.
- kidintech 2y agoIn a vacuum where precise numbers do not exist, maybe. In this real scenario, if someone's goog shares were vesting at an earlier value - let's take a rough average at a glance of goog YTD to be $145, they will have lost on a year's worth of dividends at $0.2 per share. However, the current share price is $175. So, through this maneuver, a person holding N goog shares will lose at most 3 quarters of dividends: N * 0.2$ * 3 = N * 0.6$ But they will have gained whatever the stock has appreciated, which at this moment in time works out to: N * (175-145)$ = N * 30$ What am I missing which would make the scenario above result in OP's claim of "dividends devalue issued unvested RSUs"? EDIT: This also fails to take into account "Dividend Equivalents (DEs)", which are not factored above, and would yield extra income to the person that owns unvested shares.
- formercoder 2y agoCorporate finance theory says that when a dividend is issued, the price of the stock goes down by an equivalent amount.
- afc 2y agoI though this was the case, but Googlers will receive Dividend Equivalent Units on unvested GSUs on each dividend payment date.