Ask HN: Are RSUs worth your loyalty? • Hacker News Board

Re: Ask HN: Are RSUs worth your loyalty?

#21

Post by klipt » Wed, Jan 08, 2020, 6:11 PM UTC

tracer4201 wrote: post #7

mutaaf wrote: post #4

Earlier quoted context omitted.

There are a finite # of RSUs which management can distribute to high performers or valuable team members vested over a period of employment time. Here’s why I feel like job security is oddly related, why would the organization want you tied to them for that vesting period if they did not value you or your efforts or want you there for that period?

I believe RSUs give your employer some friendly tax consequences. Aren’t they allowed to be written off? IMO people allocating RSUs are no safer than an engineer. They can easily get replaced. As a matter of fact, leadership can change directions at any time and now put you in a position where you’re miserable every day. I see the two have perhaps some correlation but because you’ve been given a decent grant doesn’t…

> RSUs give your employer some friendly tax consequences. Aren’t they allowed to be written off?

Is this in any way different from deducting normal salary from profits?

Re: Ask HN: Are RSUs worth your loyalty?

#22

Post by qeternity » Wed, Jan 08, 2020, 6:12 PM UTC

lnanek2 wrote: post #10

Aren't RSUs the opposite of job security? If you get fired or leave before they vest, you lose them. In the bay area they are often called golden handcuffs because developers halfway through their 4 year term often have another million in RSUs vesting, so can't go leave and work on their friend's awesome startups and the like, since the startups can't afford to match the compensation.

If you get fired, unless it qualifies under some due cause, the options should immediately vest.

Re: Ask HN: Are RSUs worth your loyalty?

#23

Post by gigatexal » Wed, Jan 08, 2020, 6:13 PM UTC

dominotw wrote: post #14

lnanek2 wrote: post #10

Aren't RSUs the opposite of job security? If you get fired or leave before they vest, you lose them. In the bay area they are often called golden handcuffs because developers halfway through their 4 year term often have another million in RSUs vesting, so can't go leave and work on their friend's awesome startups and the like, since the startups can't afford to match the compensation.

> have another million in RSUs vesting I would gladly wear these handcuffs :D

Depends on the actual numbers. They could be worthless or worth millions. Every funding round changes that.

Re: Ask HN: Are RSUs worth your loyalty?

#24

Post by awillen » Wed, Jan 08, 2020, 6:14 PM UTC

qeternity wrote: post #22

lnanek2 wrote: post #10

Aren't RSUs the opposite of job security? If you get fired or leave before they vest, you lose them. In the bay area they are often called golden handcuffs because developers halfway through their 4 year term often have another million in RSUs vesting, so can't go leave and work on their friend's awesome startups and the like, since the startups can't afford to match the compensation.

If you get fired, unless it qualifies under some due cause, the options should immediately vest.

This is not true in most contracts - you can negotiate for it if you're high enough level or early enough, but otherwise it's rarely the case.

Besides, if you get fired from a startup and it's not for cause, then it's probably because there are layoffs, so it might be a bad choice to exercise your options anyway.

Re: Ask HN: Are RSUs worth your loyalty?

#25

Post by paxys » Wed, Jan 08, 2020, 6:14 PM UTC

frank2 wrote: post #17

zaptheimpaler wrote: post #13

RSUs are worth more than cash if you're optimistic about the stock and worth less if you're pessimistic. Over the last 10 years they've probably been worth a lot more than cash if you held on instead of selling, but no one knows about the next 10.

I disagree that RSUs can be worth significantly more than cash because the recipient of the cash can use the cash to buy (unrestricted) stock units if he or she is optimistic about the stock.

They can definitely be worth significantly more since RSU numbers are locked well in advance (1-4 years).

Re: Ask HN: Are RSUs worth your loyalty?

#26

Post by nik_0_0 » Wed, Jan 08, 2020, 6:16 PM UTC

frank2 wrote: post #17

zaptheimpaler wrote: post #13

RSUs are worth more than cash if you're optimistic about the stock and worth less if you're pessimistic. Over the last 10 years they've probably been worth a lot more than cash if you held on instead of selling, but no one knows about the next 10.

I disagree that RSUs can be worth significantly more than cash because the recipient of the cash can use the cash to buy (unrestricted) stock units if he or she is optimistic about the stock.

OP didn’t say significantly.

The only reason I would agree with putting RSUs at a higher valuation is due to the vesting schedule - it often isn’t value now, but value in 2 years.

So obviously “cash now” vs “stock now” is equal as you point out, but “this much cash in two years” vs “the value of this much stock now, in two years” would make most people lean towards RSUs in that scenario. (Of course no one would really offer the former straight up, but I suppose thats what bonuses are)

Re: Ask HN: Are RSUs worth your loyalty?

#27

Post by awillen » Wed, Jan 08, 2020, 6:17 PM UTC

ozten wrote: post #12

ThrustVectoring wrote: post #6

RSUs are worth very slightly more than straight cash compensation due to the optionality. Your compensation will go up and down as the underlying stock moves, and you are allowed to switch jobs when the stock price moves downwards.

RSUs are worth more due to tax implications? I'd rather have a dollar now versus the equivalence of a dollar in a stock which is unavailable for up to 4 years... Even if your companies stock is out performing the market, I'd rather have a dollar now to buy company stock and keep my mobility. Employees need to be careful to diversify their portfolio. A dollar today can be put in any type of investment, whereas RSUs ca…

Sounds like the original comment was referring to RSUs in public companies. If you sell those immediately upon receiving them, they're basically equivalent to cash.

Re: Ask HN: Are RSUs worth your loyalty?

#28

Post by al_chemist » Wed, Jan 08, 2020, 6:17 PM UTC

"A restricted stock unit (RSU) is compensation issued by an employer to an employee in the form of company stock."

Re: Ask HN: Are RSUs worth your loyalty?

#29

Post by pcmaffey » Wed, Jan 08, 2020, 6:18 PM UTC

zaptheimpaler wrote: post #13

RSUs are worth more than cash if you're optimistic about the stock and worth less if you're pessimistic. Over the last 10 years they've probably been worth a lot more than cash if you held on instead of selling, but no one knows about the next 10.

I wonder. If you took the average value of all RSU/options granted over the past 10 years in tech, I'd venture to guess the number would be closer to 0 than not.

Re: Ask HN: Are RSUs worth your loyalty?

#30

Post by didibus » Wed, Jan 08, 2020, 6:19 PM UTC

RSU's aren't as good a deal as the equivalent worth in salary, but are a better deal than a lower salary, unless the company stock tanks.

They allow the business to transfer some of the risk from them to you. Basically a kind of I'll pay you more if I can.

Think of it as, I'll pay you X dollars now, and in 4 years, I'll pay you an additional Y dollars * how much I can afford, unless you no longer work here. Where "how much I can afford" is basically the stock price.

It's better than the same salary without RSU. It's worse than a higher salary of equal worth. For anything in between, it depends on your risk tolerance and when you'll need the money.