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Don’t Tax Options and RSUs Upon Vesting

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Re: Don’t Tax Options and RSUs Upon Vesting

#191

Post by ihsw2 »

kstrauser wrote: post #157
ihsw2 wrote: post #29

Earlier quoted context omitted.

While this is an unintended consequence, how do you otherwise tax the massive equity compensation packages offered to executives? It has to be across the board.

I don't think it's an unintended consequence. I think it was meant to punish Big Tech for their resistance to the Republican party in the 2016 election.

That is another hunch that I was considering posting but personally I'm skeptical of this. While immigration reform may have fell on its face due to opposition from tech firms, I find it hard to believe the Trump administration would conceive such an effective means of targeting them.

It stands to reason that they recognized NSOs/ISOs being used heavily (perhaps more than anyone else) by tech firms but this just seems like a recognition that wealth taxation woefully needs reform. The estate tax is being retired so this seems to balance it out.

Re: Don’t Tax Options and RSUs Upon Vesting

#192

Post by beavisthegenius »

austenallred wrote: post #18

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…

I guess they'll have to pivot or be disrupted.

Re: Don’t Tax Options and RSUs Upon Vesting

#193

Post by cyberpunk0 »

austenallred wrote: post #18

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…

Equity is imaginary fugazi. you might as well be accepting empty promises. I wouldn't want it even now

Re: Don’t Tax Options and RSUs Upon Vesting

#195

Post by s73ver_ »

pc86 wrote: post #166
logfromblammo wrote: post #144

Earlier quoted context omitted.

That's just it. Where I am, I don't see new companies building anything . YC isn't here . I'd love to work for a startup with a like-brand-X-but-for-Y or a word-salad elevator pitch, that also offered a compensation package as good as any found in Silicon Valley. But I don't get options or RSUs, or even cash bonuses. I get billed to a customer at $200-$400/hr and get maybe $50-$60 of that in total compensation. It's…

> I'd love to work for a startup with a like-brand-X-but-for-Y or a word-salad elevator pitch Why? I'd much rather actually deliver something to the client, even if... > I get billed to a customer at $200-$400/hr and get maybe $50-$60 of that in total compensation. Then it sounds like everything else around what you deliver is worth at least $140-350/hr. If it's really so easy I'm sure you could offer your services f…

"Then it sounds like everything else around what you deliver is worth at least $140-350/hr. If it's really so easy I'm sure you could offer your services for $100/hr, take a nice big raise and save your clients hundreds of thousands a year."

Not everyone wants to, or is able to strike it out on their own.

Re: Don’t Tax Options and RSUs Upon Vesting

#196

Post by s73ver_ »

dwaltrip wrote: post #177
logfromblammo wrote: post #144

Earlier quoted context omitted.

That's just it. Where I am, I don't see new companies building anything . YC isn't here . I'd love to work for a startup with a like-brand-X-but-for-Y or a word-salad elevator pitch, that also offered a compensation package as good as any found in Silicon Valley. But I don't get options or RSUs, or even cash bonuses. I get billed to a customer at $200-$400/hr and get maybe $50-$60 of that in total compensation. It's…

You don't like what some of the startups in the current age are focusing on, so you want disincentivize all startups in general, for perpetuity? That's an incredibly extreme response. Throwing the baby out with the bathwater, if I've ever seen it.

It sounds more like startups have not given them a reason to care about their fate.

Re: Don’t Tax Options and RSUs Upon Vesting

#197

Post by mywittyname »

pascalxus wrote: post #142
austenallred wrote: post #30

Earlier quoted context omitted.

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,…

> it's like taking that money an investing it right then and there.

I disagree. This is only the case if the options are $50k in cash, or $50k in equity. With startups, the options are $0k in cash or $50k in equity. Startups can wish equity into existence, but they can't magically produce cash.

Re: Don’t Tax Options and RSUs Upon Vesting

#198

Post by dopamean »

cyberpunk0 wrote: post #193
austenallred wrote: post #18

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…

Equity is imaginary fugazi. you might as well be accepting empty promises. I wouldn't want it even now

Yeah so imagine having to pay taxes on something you think is "imaginary fugazi."

Re: Don’t Tax Options and RSUs Upon Vesting

#199

Post by s73ver_ »

austenallred wrote: post #161
pascalxus wrote: post #142

Earlier quoted context omitted.

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,…

Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening. It's certainly rational in some cases to take the risk of owning a portion of a company instead of taking the same amount of cash and putting it in the S&P 500. You're always investing your time and money, it's just a matter of where. And for what it's worth, if you're getting paid…

"Maybe an employee believes in the company and wants to take part, deeming the risk is worth it for them? Clearly that's what's happening."

And that belief is abused, and the employees get fucked over when it comes time for an acquisition, as their shares get dilluted to hell and back.

Re: Don’t Tax Options and RSUs Upon Vesting

#200

Post by s73ver_ »

austenallred wrote: post #159
s73ver_ wrote: post #146

Earlier quoted context omitted.

So why are you going after these guys that need to take such big pay cuts? I can almost guarantee you that there are plenty of people with a high enough level of talent that are in other areas.

Find them for me, and I'll hire them and pay you a referral bonus.

Go outside the Valley.
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