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We need to rethink employee compensation

aaronkharris.com

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Re: We need to rethink employee compensation

#251

Post by walshemj »

dogma1138 wrote: post #185
walshemj wrote: post #68

Earlier quoted context omitted.

To put this in perspective that's a lot less than last years share options (5 year plan) at BT. The last sharesave to vest returned >£100,000 Tax free if you had the max amount.

BT is a multi billion dollar company, not to mention that sharesave isn't the same as an equity compensation. Share As You Earn SAYE is a savings plan in the UK which allows employees to save money from their salary in company shares. The UK has really weird schemes because people have historically had no pension or savings plans from their employees (most PAYE workers still do not have pension as the date mandated b…

Err no the UK used to have very good pensions schemes.

BT has a FS scheme unfortunetly now closed to new entrants and its DC pension matches up to 8 or 10%

The shares you get from share saves are real shares none of this multiple share lasses with different voting powers.

And I certainly get the divi from mine. And yes this years BT is a v good one. And I did 400% roi from my REL shares a couple of years back and you can normaly mitigate any tax by sensible use of ISAs and using your CGT Alowance.

And there are share schemes for high performers on top of that I know people that got some the share save is what everyone gets.

Re: We need to rethink employee compensation

#252

Post by walshemj »

jackgavigan wrote: post #128
walshemj wrote: post #68

Earlier quoted context omitted.

To put this in perspective that's a lot less than last years share options (5 year plan) at BT. The last sharesave to vest returned >£100,000 Tax free if you had the max amount.

BT as in British Telecom?

Yes though the changed to just BT for branding purposes a while back.

Re: We need to rethink employee compensation

#253

Post by sombremesa »

eastbayjake wrote: post #244
Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

> I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend time with my friends tonight" Just curious: are you under 25? Not meant as ad hominem -- I know tons of engineers who have this attitude from 22-25, but the closer I get to 30 the more I realize on a deep level that I'm going to die someday and I hav…

To work hard doesn't necessarily mean long hours.

Re: We need to rethink employee compensation

#254

Post by harryh »

ryandrake wrote: post #247
MCRed wrote: post #226

Earlier quoted context omitted.

Here's what 20 years of experience working for startups has taught me: -- Either be a founder if you want to be there in the early days. -- Or join a "sure thing". EG: Google, Twitter, Facebook about a couple years before they went public were already household names and really well known. I don't know how much upside you get joining a sure thing like that, but that's how you make sure your options will come into mon…

This seems like good advice. There's definitely a "valley" where low (but not "Founder-low") employee numbers get all the risk and disproportional reward. But, I wonder, really how much someone hired at Google, Twitter or Facebook a couple of years before IPO _really_ got. We're still probably talking "nice bonus" money rather than "life changing windfall" money. And, for "nice bonus" money, it makes more sense to go…

If you were at Google as a mid level engineer in 2002 (2 years before the IPO) you DEFINITELY made life changing windfall money. DEFINITELY. Take whatever guess you seem have in your head and multiply it by 10. Probably more than that.

(I started at Google in 2004 and did pretty well.)

Re: We need to rethink employee compensation

#255

Post by areyousure »

tptacek wrote: post #222
areyousure wrote: post #211

Earlier quoted context omitted.

Why can't I be told what the strike price will be for the options for the next four years?

Because it depends on the valuation of the company, and nobody can see the future.

Can't the strike price be set in the employment contract right now?

Re: We need to rethink employee compensation

#256

Post by ridgeguy »

drivingmenuts wrote: post #5
Jemaclus wrote: post #3

In this market, I tend to think of options as incentives, and not as replacements for salary. Salary gets me in the door and work hard, great people and culture make me want to be there and evangelize, and options incentivize me to work my ass off. (I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend ti…

I tend to think of options as worthless, until they vest. Which is too far in the future to count on. Pay me money. That's actually useful.

I agree.

The type of asset doesn't matter. Could be vested 10% options in an apparently great startup or Van Gogh's Starry Night.

If you can't sell it when you want (because of restrictions or because nobody wants it or for whatever reason), its market worth is exactly zero.

Re: We need to rethink employee compensation

#257

Post by eastbayjake »

sombremesa wrote: post #253
eastbayjake wrote: post #244

Earlier quoted context omitted.

> I'd work my ass off without options, but the options really make it easy to say "I will do everything in my power to make this succeed" instead of "I'd rather go spend time with my friends tonight" Just curious: are you under 25? Not meant as ad hominem -- I know tons of engineers who have this attitude from 22-25, but the closer I get to 30 the more I realize on a deep level that I'm going to die someday and I hav…

To work hard doesn't necessarily mean long hours.

Which is an excellent point that I deleted because it felt off-topic. I'm to the point where I want to work hard from 10-6 then go be a human, instead of working from 10-9 with lots of Nerf gun fights and Reddit breaks.

Re: We need to rethink employee compensation

#258

Post by ryandrake »

varelse wrote: post #192
totalrobe wrote: post #146

Earlier quoted context omitted.

$250 - $500k? Got anything to back up this claim?

I wouldn't even call this inflated in the valley anymore. There are outliers making serious money right here, right now. Such a salary pairs nicely with our lovely $1M+ median house price to insure we can never afford to buy one without living like a monk or going up to our eyeballs in debt. If you don't believe me, then just who's buying those $2M+ houses that stay on the market a week or two? SPOILER ALERT: Double…

Congratulate yourself, because you are, for sure, a fortunate outlier! I don't doubt that there exist engineers out there making $250K+, but they are definitely not the norm, big company or small. Check out a bigger sample of Bay Area companies on Glassdoor. My bet is you'll find the middle 90% to be between, say, $90K and $150K.

Re: We need to rethink employee compensation

#259

Post by vlasev »

eastbayjake wrote: post #257
sombremesa wrote: post #253

Earlier quoted context omitted.

To work hard doesn't necessarily mean long hours.

Which is an excellent point that I deleted because it felt off-topic. I'm to the point where I want to work hard from 10-6 then go be a human, instead of working from 10-9 with lots of Nerf gun fights and Reddit breaks.

Well, OP does talk about missing out on seeing his friends, so that would imply working long hours.

Re: We need to rethink employee compensation

#260

Post by [deleted] »

zmillman wrote: post #94
birken wrote: post #4

Another really important, highly negative, combination of these factors is if you want to leave the company. If the company is public, then you can essentially leave whenever you want, exercise the options and sell the stock to pay the costs (exercise price + taxes). But if the company is private, you have to pay the exercise price + applicable taxes (which can exist even if you only have theoretical gains) yourself,…

I've been hit with this too and it's not pretty at all. If anyone else is concerned about this, you should talk with your CEO/legal team about early exercise options which can remove a lot of the risk of massive tax liabilities. From my understanding, some companies offer an early exercise option where you pre-purchase the shares and then instead of being able to buy the shares after they've vested, the company inste…

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