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How is equity granted in a way that favors employers? I'm curious what you mean. The caveat I'd add to your first point is... bonuses for me have been an impor

How is equity granted in a way that favors employers? I'm curious what you mean. The caveat I'd add to your first point is... bonuses for me have been an important part of accelerating savings and retirement. I personally do not define my financial success by my month-to-month standard of living but rather by my net worth. And in those terms, a bonus dollars spends the same. Of course, though, that in the hypothetical case you were offered $10,000 raise or $10,000 bonus, certainly the raise is better. But that's a strawman. A more interesting analysis would be where is the line drawn? Is a 5k raise better than a 10k bonus? I'd probably take the bonus in that case, honestly, because time value of money and all. So where is the line drawn?

djur 12y ago
Long vesting periods, and the fact that, well, what you get at the end is an investment in your employer. So it's like getting money, except you don't get it for a few years, and someone else invests it for you. As far as 10k bonus vs. 5k raise, sure: if you're being offered 10k now versus 5k over the next year, and you expect to receive another 10k next year in lieu of the same 5k, then you're coming out ahead. But the case I'm talking about is when you're getting a compensation offer including a bonus, in which case you're choosing between 5k over the next year versus 10k in a year (maybe). A signing bonus of some sort, where you're receiving an immediate guaranteed payoff (or even a guaranteed payoff at some point in the future), is a completely different beast than a performance bonus as part of a compensation package.
- encoderer 12y ago
  An RSU is no different than cash bonus. It's taxed essentially as cash when it vests so at that moment you can sell all the stock and treat it as cash. In fact, that's what I would advise with RSUs. Options, i think it can be better to hold for a year and see long term cap gains rates.

djur 12y ago

Long vesting periods, and the fact that, well, what you get at the end is an investment in your employer. So it's like getting money, except you don't get it for a few years, and someone else invests it for you. As far as 10k bonus vs. 5k raise, sure: if you're being offered 10k now versus 5k over the next year, and you expect to receive another 10k next year in lieu of the same 5k, then you're coming out ahead. But the case I'm talking about is when you're getting a compensation offer including a bonus, in which case you're choosing between 5k over the next year versus 10k in a year (maybe). A signing bonus of some sort, where you're receiving an immediate guaranteed payoff (or even a guaranteed payoff at some point in the future), is a completely different beast than a performance bonus as part of a compensation package.

encoderer 12y ago
An RSU is no different than cash bonus. It's taxed essentially as cash when it vests so at that moment you can sell all the stock and treat it as cash. In fact, that's what I would advise with RSUs. Options, i think it can be better to hold for a year and see long term cap gains rates.