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Stripe faces $3.5B tax bill as employees' shares expire

bloomberg.com

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Re: Stripe faces $3.5B tax bill as employees' shares expire

#251

Post by blodkorv »

wreath wrote: post #240
admissionsguy wrote: post #232

Earlier quoted context omitted.

But we get frEe hEaLtHcaRe! And when you factor in the municipal bus network, a $40k salary at Klarna in Stockholm is basically the same as a $350k salary at Stripe in the US. Not to mention in the USA, god knows what cookies might be put into your browser by any random cooking blog, without warning.

You dont have free healthcare. You pay for it like tech employees in the US do and you probably get worse service. At least there is a chance in the US to make generational wealth for a middle class, but no way in hell in Europe.

There are plenty of chanses to make generational whealth for the middle class in europe. Especially in the nordic countires.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#252

Post by lifty »

oblio wrote: post #245
admissionsguy wrote: post #232

Earlier quoted context omitted.

But we get frEe hEaLtHcaRe! And when you factor in the municipal bus network, a $40k salary at Klarna in Stockholm is basically the same as a $350k salary at Stripe in the US. Not to mention in the USA, god knows what cookies might be put into your browser by any random cooking blog, without warning.

> And when you factor in the municipal bus network, a $40k salary at Klarna in Stockholm is basically the same as a $350k salary at Stripe in the US. Sorry, I'm European but this is just silly. There's no way $40k in Sweden buys you equivalent quality of life as $350k in the US, even when taking all the welfare state factors into account.

I think it was a joke.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#253

Post by kgwgk »

sillysaurusx wrote: post #179
nugget wrote: post #173

Earlier quoted context omitted.

Based on internal data I have from similar companies my guess would be the first 50 employees average about $15-20m each and the next 100 average about $5-10m each just from their initial 4 year grants, with a lot of variation based on team and seniority. Stripe options have probably grown about 100x in value since the Series B so if you were an engineer who joined around that time, received $100k in RSUs, and left u…

Stripe employee #130 made $5m (after taxes) from 4 years of options? Is there any data to support that? It sounds mistaken, but exponential curves are hard to reason about. 50 x $15m + 100 x $5m = 1.25B post-tax, so probably north of $1.7B pre tax. Stripe had a post-money valuation of $10B+ in March 2021, so that’s around 15% of the company. I guess that’s in the right ballpark. Hmm. Thank you for the concrete number…

> Happy to hear the startup reward structure still makes sense in 2023.

At least for people who joined a successful one ten years ago.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#254

Post by [deleted] »

Apofis wrote: post #147
valzam wrote: post #74

Earlier quoted context omitted.

The gains are realised, you just aren't getting cash but company stock. The 'gain' is the difference between option strike price and market value of the shares. Since stripe is privat the market value is a bit murky but that doesn't deter the IRS. EDIT: spelling

What's realized about these gains if the company is blocking the sale of the stock on the secondary market? This is toilet paper these people were duped into thinking was worth something. Sounds more like a lawsuit.

[deleted]

Re: Stripe faces $3.5B tax bill as employees' shares expire

#255

Post by oblio »

lifty wrote: post #252
oblio wrote: post #245

Earlier quoted context omitted.

> And when you factor in the municipal bus network, a $40k salary at Klarna in Stockholm is basically the same as a $350k salary at Stripe in the US. Sorry, I'm European but this is just silly. There's no way $40k in Sweden buys you equivalent quality of life as $350k in the US, even when taking all the welfare state factors into account.

I think it was a joke.

I guess too much time spent on the internet does that to a person (me).

¯\_(ツ)_/¯

Re: Stripe faces $3.5B tax bill as employees' shares expire

#256

Post by mousetree »

noja wrote: post #224

Who is this news for? It can't be Stripe, they already know this. It can't be investors, this information is already priced in.

There are a lot of other people in the world that read Bloomberg news who are not Stripe and who are not Stripe investors.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#257

Post by Ferret7446 »

akhosravian wrote: post #198
polishdude20 wrote: post #190

Earlier quoted context omitted.

Why is that even treated as income then? That's like the government asking for more taxes from me because I have the potential to make money in the future if I'm lucky.

Because shares in a company represents something of value. Just because a company’s shares are privately held doesn’t make them worthless. The IRS has ways to estimate valuations of privately held companies. The problem unique to folks likely to be reading here is the exponential growth that can happen in early stage start ups. The options might’ve represented 100k in value when they were granted, but grown to 1m in…

I understand how the law works, but it's quite silly to consider the shares as having value when it's literally impossible to convert them to that "value" to pay the tax. By definition the shares do not have value.

It's like if I handed you a coin that I promise is worth one million because I will buy it from you for one million right now, except I won't buy it from you now and I don't plan on buying it from you ever in the foreseeable future, and if I do buy it from you later it won't be for one million.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#258

Post by superzamp »

ojbyrne wrote: post #133
mertd wrote: post #78

Earlier quoted context omitted.

Good luck hiring or retaining anyone after that while Stripe is still private.

I think the point the previous commentator was trying to make was, why can't they let them expire and issue new options/RSUs of equivalent value to the same people.

My understanding is that the delta between their strike price and the current valuation would be seen as capital gain and taxed accordingly.

Re: Stripe faces $3.5B tax bill as employees' shares expire

#260

Post by pc_edwin »

bboygravity wrote: post #228
sillysaurusx wrote: post #177

Earlier quoted context omitted.

I think I misread your comment, so I deleted my earlier one. Sorry. You’re right: if you’re going to work hard, you may as well choose the path with the highest rewards. If Stripe can’t make it worthwhile, is there a good reason to trade away what you’d get at FAANG? So the hard workers have a lucrative path (FAANG), and the ones who want to spend more time away from work have a more lucrative path (BigCo). That does…

As a European I feel like both those concepts (big money jobs or big money startups) are a USA only concept. Anywhere else in the world that has those kinds of options? China maybe?

I understand that my opinion may be controversial, but I believe that the presence of unions is a contributing factor.

The impact of unions is far-reaching and can be seen in everything from the salaries of grocery chain CEOs to startup stock option allocation for early employees.

Here in the UK, it's not uncommon to come across articles in major publications about a CEO's pay being multiple times higher than the average employee and you look at the number its peanuts compared to the US.

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