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The fact that employees are willing to cash out now might mean that they are less confident about the potential of cashing out big in the future. I'm sure no ea

The fact that employees are willing to cash out now might mean that they are less confident about the potential of cashing out big in the future. I'm sure no early Google employee would even think of cashing out pre-IPO.

JabavuAdams 17y ago
The goal may not be to maximize return. For instance, if I could stop working tomorrow, and maintain my current lifestyle, I would take that over promises of more cash later. I might do this even if the payout were not enough for me to fully retire on. As long as I can take an ~5 yr sabbatical with no strings attached, I'm confident I can create enough things to keep the money coming in, on my own terms.
- peter123 17y ago
  But why would facebook encourage that? Unless they are really trying to cut down on payroll by incentivizing people to cash out early and leave.
  - vidarh 17y ago
    If employee Smith can get a payout of $1m now versus keeping a chance of getting $5m a couple of years from now, he might pick the $1m and leave. Facebook can probably hire someone else at the same salary and give them far fewer options because Facebook is seen as a far safer bet now than when Smith joined. The result is that the rest of Facebooks shareholders potentially win a lot of money.
cperciva 17y ago
The fact that employees are willing to cash out now might mean that they are less confident about the potential of cashing out big in the future. It might. Or it might just mean that some employees want to buy houses, new cars, etc. People are very good at "doing without" when they're starting a new company, but there's a point where life catches up and they want to start living in a bit of comfort. This goes double (or more) for those people who have families -- I'm not sure quite how one would explain to a 3 year old that they're not getting the toys they want because daddy wants to hold on to his stock options so that he can become a millionaire when facebook IPOs a few years from now.
- sanj 17y ago
  I don't believe that salaries at Facebook are hugely depressed based on burgeoning stock options. Glassdoor (self-) reports them in the >100k range.

JabavuAdams 17y ago

The goal may not be to maximize return. For instance, if I could stop working tomorrow, and maintain my current lifestyle, I would take that over promises of more cash later. I might do this even if the payout were not enough for me to fully retire on. As long as I can take an ~5 yr sabbatical with no strings attached, I'm confident I can create enough things to keep the money coming in, on my own terms.

peter123 17y ago
But why would facebook encourage that? Unless they are really trying to cut down on payroll by incentivizing people to cash out early and leave.
- vidarh 17y ago
  If employee Smith can get a payout of $1m now versus keeping a chance of getting $5m a couple of years from now, he might pick the $1m and leave. Facebook can probably hire someone else at the same salary and give them far fewer options because Facebook is seen as a far safer bet now than when Smith joined. The result is that the rest of Facebooks shareholders potentially win a lot of money.

cperciva 17y ago

The fact that employees are willing to cash out now might mean that they are less confident about the potential of cashing out big in the future. It might. Or it might just mean that some employees want to buy houses, new cars, etc. People are very good at "doing without" when they're starting a new company, but there's a point where life catches up and they want to start living in a bit of comfort. This goes double (or more) for those people who have families -- I'm not sure quite how one would explain to a 3 year old that they're not getting the toys they want because daddy wants to hold on to his stock options so that he can become a millionaire when facebook IPOs a few years from now.

sanj 17y ago
I don't believe that salaries at Facebook are hugely depressed based on burgeoning stock options. Glassdoor (self-) reports them in the >100k range.