251–260 of 388 posts
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> and the free food some companies supply their employees. This is a long standing question. Are costs of benefits like these one not taxed in the US? The implications of not taxing that is huge.
Free food is taxed unless it meets certain qualifications, the biggest one being that it is for the convenience of the employer.
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> and the free food some companies supply their employees. This is a long standing question. Are costs of benefits like these one not taxed in the US? The implications of not taxing that is huge.
comparing free food, which you directly benefit, and RSUs seems really unfair.
This is pretty awful. It would kill the ability for startups to compete with large companies for top talent. There is no way startups can afford the salaries that Google, Facebook, etc. can offer. It would also break the machine that mints new angel investors. A huge percentage of angel investors are people who got rich off options/stocks in growth companies. This really seems explicitly anti-entrepreneurship and pro…
Not to go on too much of a tangent, but: the fact that companies think they're competing with Facebook and Google for the same tiny pool of people, and that that tiny pool of people is the "top talent", is one of the big problems in our industry.
See things like this article:
https://danluu.com/programmer-moneyball/
Or this comment:
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That’s simply incorrect. I founded a company that raised a mammoth seed round in Silicon Valley (not $8m but more than $3m), and we do pay some high salaries, but Apple and Facebook still pay salaries that are much, much higher. Critical employees have joined us while taking $100,000/yr pay cuts, despite. Having a salary in the six figures. To think that startups can play that game of “equity doesn’t matter” is just…
I don't think so. Why should employees make up such a large percentage of the money invested in the company? When you take a salary cut of 50K, it's like taking that money an investing it right then and there. Why should an employee be investing 50K of their own money into the company every single year? It's bad enough that someone would invest 50K in a single company: one that picked them, not the other way around,…
Recruiting and hiring, after new grad level, is a two way street. You have the choice to accept, deny or negotiate an offer.
I'm going to say something that may be unpopular. Hopefully my karma can handle it. The latest analysis I saw of this from Fenwick says that this is only applying to non-qualified stock options. Employees get NSOs when you vest too much to get ISOs in a calendar year, based on the vesting schedule and value at the time of grant, not fair market value at time of vesting of the option. That limit is $100K, for people w…
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His point is, that you have to assume that will happen quite often. We're simply not equipped to forsee all the legal and financial risks of having stock options. We've seen too many ways that employees have been taken advantage of. You can't simply "trust" that if the company does well, you'll do well.
Sure, but who said we should simply "trust" that?
The importance of this change can’t be understated; this effectively kills compensation at startups in the form of equity, and would make startups completely unable to compete with incumbents. Anyone that has options at a company that grows quickly would be paying tens or hundreds of thousands in taxes to keep their equity, which is still effectively a very risky bet that a company will end up huge. No one would want…
They already are mostly unable to compete with larger companies on total compensation. Startup equity is worthless unless you win the lottery.
I'm going to say something that may be unpopular. Hopefully my karma can handle it. The latest analysis I saw of this from Fenwick says that this is only applying to non-qualified stock options. Employees get NSOs when you vest too much to get ISOs in a calendar year, based on the vesting schedule and value at the time of grant, not fair market value at time of vesting of the option. That limit is $100K, for people w…
It is not the strike price or the exercise price. It is more-or-less the fair market value of the options when they vest, but if you need to compute your taxes, consult an accountant. (Yes, this rule is terrible for planning, because you don’t know what fraction of your shares are ISOs until they vest). Today, ISO’s are commonly given to engineers at pre-IPO startups. Nothing says they have to go to execs. Those engi…
This is not correct. The $100k threshold is calculated based on the fair market value of the option at the time of grant, which by definition is the exercise price. So you calculate how many shares you will vest in each year, multiplied by your exercise price, and as long as that is under $100k you are not over the limit and your option remains an ISO. If you're over, then the portion that exceeds $100k is treated as an NSO, but you can still get ISO treatment on the other part.
I'm a startup lawyer and having worked with 100+ companies on their options, it's really not that common to get tripped up on this.
I'm going to say something that may be unpopular. Hopefully my karma can handle it. The latest analysis I saw of this from Fenwick says that this is only applying to non-qualified stock options. Employees get NSOs when you vest too much to get ISOs in a calendar year, based on the vesting schedule and value at the time of grant, not fair market value at time of vesting of the option. That limit is $100K, for people w…
It is not the strike price or the exercise price. It is more-or-less the fair market value of the options when they vest, but if you need to compute your taxes, consult an accountant. (Yes, this rule is terrible for planning, because you don’t know what fraction of your shares are ISOs until they vest). Today, ISO’s are commonly given to engineers at pre-IPO startups. Nothing says they have to go to execs. Those engi…
> The $100,000 limit is calculated using the fair market value of the stock for which the options are exercisable, as of the grant date...
IOW — value at time of grant, not time of vest.
Earlier quoted context omitted.
It is not the strike price or the exercise price. It is more-or-less the fair market value of the options when they vest, but if you need to compute your taxes, consult an accountant. (Yes, this rule is terrible for planning, because you don’t know what fraction of your shares are ISOs until they vest). Today, ISO’s are commonly given to engineers at pre-IPO startups. Nothing says they have to go to execs. Those engi…
"It is not the strike price or the exercise price. It is more-or-less the fair market value of the options when they vest, but if you need to compute your taxes, consult an accountant" This is not correct. The $100k threshold is calculated based on the fair market value of the option at the time of grant , which by definition is the exercise price. So you calculate how many shares you will vest in each year, multipli…