Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

Post by jegutman » Fri, Jul 01, 2016, 6:58 PM UTC

argonaut wrote: post #22

jegutman wrote: post #20

Earlier quoted context omitted.

I actually disagree with the 10yr time frame (although will admit it has its merits), but also agree with some of your logic. I just think that the 10yr "fix" solves some problems and creates others. I think this issue is that you should: A) not rob former employees of accrued stock value B) probably try to somewhat reduce incentives to leave if the company is going to continue to do well There are a few problems I s…

There's a huge tax hit. Giving shares is taxed as ordinary income.

It's not giving shares, it's a share exchange. Again I'm not an expert, but I've seen these types of arrangements before and somehow they got reasonable tax treatment because they were spelled out as such in the original grant (so nothing had actually "changed" at the time).

Post by jonathankoren » Sat, Jul 02, 2016, 11:58 PM UTC

lmm wrote: post #60

jonathankoren wrote: post #34

Earlier quoted context omitted.

Yeah, the ISO spread with the AMT is bullshit that basically keeps the plebes in their place by not actually letting them get any windfall. However it seems like the real problem is exercising post-IPO. In the post-IPO world, you're dealing with say a 5x to 10x spread, possibly even more. In the pre-IPO world, your spread is probably 2x at most, which is much more manageable. One clarification with what you said, is…

The notion of "realizing" seems like nonsense to me. You get given a piece of paper worth $100, you should get taxed for $100. Whether that piece of paper is a federal reserve note or a stock certificate should be an irrelevance, no?

I have $1. I buy something for $1 that's worth $100 dollars. I now have zero dollars. I now owe $37 in taxes. I have $-37.

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System

Re: Palantir Buyback Plan Shows Need for New Silicon Valley Pay System