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

Re: Ask HN: Are RSUs worth your loyalty?

#41

Post by paxys » Wed, Jan 08, 2020, 6:30 PM UTC

pcmaffey wrote: post #29

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.

How do you even calculate that number? I can start a company tomorrow and give myself a billion dollar stock grant. That those are worthless doesn't take away from the fact that the total market cap of tech has grown by trillions of dollars over the last decade, and a good chunk of that gain has gone to rank-and-file employees via RSUs.

Re: Ask HN: Are RSUs worth your loyalty?

#42

Post by SamWhited » Wed, Jan 08, 2020, 6:32 PM UTC

Money (or options, RSUs, or other potential gamble that you'll get money) are handcuffs, you can't be loyal to someone who has you in handcuffs, even very nice ones (unless they're the fun fuzzy kind maybe, but that's a different situation).

Save your loyalty for a nice non-profit or co-op doing some good thing that you feel passionate about in your community, just give your employer your time until such a time as things change and you feel it's no longer worth it.

Re: Ask HN: Are RSUs worth your loyalty?

#43

Post by apexkid » Wed, Jan 08, 2020, 6:32 PM UTC

I disagree with anyone saying that RSU's are ideal way to get employees invested in a company's success. In practice, total compensation for an employee is decided by market value of that employee. If RSUs shoot up, you will get lesser base pay, if they go down you will end up getting higher base pay in next appraisal cycle. Your salary might be inflated or underflated (for lack of a better word) for a while but in long term the company will balance it out with market standards.

If you think of RSUs as an investment, then its a different game. However, it is no different than owning stock on NASDAQ. You can get rich if you buy the right stock.

Hence, my perspective. All cash better than RSU. If you wanna buy stocks then just buy from stock exchange of whichever company you want.

Caveat: For startups where you get equity this argument doesn't hold true. There the startup might end up a unicorn and you make ton of money.

Re: Ask HN: Are RSUs worth your loyalty?

#44

Post by frank2 » Wed, Jan 08, 2020, 6:32 PM UTC

paxys wrote: post #25

frank2 wrote: post #17

Earlier quoted context omitted.

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).

Oh, OK. Thanks.

Re: Ask HN: Are RSUs worth your loyalty?

#45

Post by MetalGuru » Wed, Jan 08, 2020, 6:32 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

The grass is always greener. It can be pretty frustrating to be at a job you’re not very satisfied at because the expected value of leaving just doesn’t make sense. Sounds silly to complain about having golden handcuffs, but it does change the decisions you make (potentially in a way that makes you less happy).

Re: Ask HN: Are RSUs worth your loyalty?

#46

Post by Ididntdothis » Wed, Jan 08, 2020, 6:33 PM UTC

nugget wrote: post #39

dominotw wrote: post #14

Earlier quoted context omitted.

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

What are you willing to sacrifice to vest those RSUs, besides just time? Your mental health? Your physical health? Watching your kids grow up? Your marriage? Etc. As other folks have alluded to it can sound relatively trivial (and sometimes it is, but often not) until you're actually staring into the abyss. The flip side is that quarterly RSU vesting is highly effective as a retention tool. I've known brilliant peopl…

From observation there is no connection between unhealthy workplaces and compensation. If anything, it seems the more you get paid, the better you get treated. There may be exceptions obviously.

Re: Ask HN: Are RSUs worth your loyalty?

#47

Post by stygiansonic » Wed, Jan 08, 2020, 6:33 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.

This isn’t true when you consider how RSUs are typically granted and vested.

When you are hired you are given a certain number of units based on your RSU package and the current stock price. Example: 400k package over 4 years, current stock price $1000. This means you get 400 units total or 100 vesting per year.

If the stock prices goes (up/down) the number of units do not change but the total value does. This could result in significantly (more/less) for your total compensation in a way that cannot be achieved by what you have described due to the timing differences in when cash from base pay becomes available.

Re: Ask HN: Are RSUs worth your loyalty?

#48

Post by zaptheimpaler » Wed, Jan 08, 2020, 6:34 PM UTC

pcmaffey wrote: post #29

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.

Well if we're counting options as well, the median is probably around 0, but the mean will skew a lot higher :)

If we count RSUs only, then the stock already has to be public, and it probably heavily weights towards FAANG and a pretty high average.

Re: Ask HN: Are RSUs worth your loyalty?

#49

Post by frank2 » Wed, Jan 08, 2020, 6:35 PM UTC

nik_0_0 wrote: post #26

frank2 wrote: post #17

Earlier quoted context omitted.

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 reall…

>OP didn’t say significantly.

True, but he or she implied it: if it weren't significant, it would be a disservice to the advice asker to distract him or her with the information.

Re: Ask HN: Are RSUs worth your loyalty?

#50

Post by maxwellg » Wed, Jan 08, 2020, 6:37 PM UTC

bduerst wrote: post #38

RSUs are golden handcuffs. You'll continually get a raise each year and a portion of that will be new RSUs that vest over the next four years. If you ever want to leave, that continually means leaving a substantial amount of money on the table. Thankfully some companies will give you a hiring bonus equal to your unvested RSUs though (edit: the big tech companies poaching from each other will sometimes do it, for thos…

> Thankfully some companies will give you a hiring bonus equal to your unvested RSUs though

I've never head of this before. Seems like 2-3 years of RSUs could easily be over $1 million for someone later in their career. A $1 million signing bonus would be insane.