Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

bloomberg.com

Post reply on HN
Print view View original

311–320 of 396 posts

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

#311

Post by jen20 »

pc_edwin wrote: post #260
bboygravity wrote: post #228

Earlier quoted context omitted.

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 ave…

It would be a lot less controversial perhaps if you stated why you believe that.

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

#312

Post by cornholio »

SamvitJ wrote: post #160

> Winning Competitions > In the presentation, Stripe said it generated $14.3 billion in revenue as it processed $816 billion in payments volume last year. The company’s so-called transaction margin before losses — a measure of net revenue — rose to $3.17 billion, or 0.38% of total volume. That compares with 17 basis points for rival Adyen NV, according to the presentation. Does anyone else feel these numbers aren't a…

The main problem with investing in Stripe is they are one meeting away from being disrupted into oblivion.

This would be the meeting where the likes of Revolut, Transferwise, PayPal, Monzo etc. meet with the high-street bankers and with the eCommerce industry and agree to cutout the middle man and rollout a modern online payment system for the 21st century, cheap and architected to resist fraud. Many European countries already have local systems.

Luckily for Stripe, MC, Visa etc. those three groups hate each other, but the probably of this meeting happening in the long run tends towards certainty.

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

#313

Post by bradleyjg »

nl wrote: post #265
sillysaurusx wrote: post #179

Earlier quoted context omitted.

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…

Also worth noting that in today's market a company like Stripe isn't paying significantly below market rates, so there's not huge downside in that regard.

Companies like stripe today or companies like stripe just after its series B?

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

#314

Post by ghaff »

brandall10 wrote: post #288
sverhagen wrote: post #279

Earlier quoted context omitted.

Or you'd never qualify for a FAANG, and startups are your only chance to riches...

It does seems that unicorny startups are full of ex-FAANG though.

Is that surprising? They've probably already made lots of money at a large company and want to do something they consider more exciting albeit financially risky.

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

#315

Post by ghaff »

WJW wrote: post #285
sverhagen wrote: post #279

Earlier quoted context omitted.

Or you'd never qualify for a FAANG, and startups are your only chance to riches...

I think you focused too much on the "FAANG" part of my previous post and not enough on the "odds" part. Let me rephrase my previous point: Startups are not a reliable path to riches, anymore than the casino is. A "normal" career, whether in FAANG or in the less flashy parts of the industry, has a vastly lower variablility than the startup route with the same or higher expected value when measured over a few decades.…

There's this certain FAANG vs. startup dichotomy in this thread. There are a ton of IT-related jobs that pay very decent professional salaries (in not necessarily the very most expensive locations to live) and have interesting --if not necessarily cutting-edge--work. A ton of people are just fine with that. It's not like you need to work at Google or a startup to not be a failure.

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

#316

Post by jossclimb »

kasey_junk wrote: post #34
raylad wrote: post #3

I'm not following why there is a tax bill. If the stocks are founder stock or RSU, then the employee should have done an 83b election to avoid paying tax as they vest. If they are options, then the employee is under no obligation to exercise them, and owes no tax until they are exercised. What am I missing?

RSUs aren’t eligible for an 83b election.

correct

The 83b election is a provision in the Internal Revenue Code that allows employees who receive equity-based compensation (such as restricted stock) to elect to be taxed on the value of the stock at the time it is granted rather than at the time it vests. This can be beneficial for employees who believe that the value of the stock will increase over time, as they will pay taxes on the lower grant price rather than the higher vesting price.

However, RSUs are different from restricted stock in that they do not represent actual ownership in the company until they are vested and settled in shares. Therefore, they cannot be subject to an 83(b) election. Instead, RSUs are generally taxed as ordinary income at the time of vesting, based on the fair market value of the underlying shares on that date.

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

#317

Post by jossclimb »

BlackjackCF wrote: post #4
raylad wrote: post #3

I'm not following why there is a tax bill. If the stocks are founder stock or RSU, then the employee should have done an 83b election to avoid paying tax as they vest. If they are options, then the employee is under no obligation to exercise them, and owes no tax until they are exercised. What am I missing?

Like you said, if the employees filed an 83b, they would be in the clear. However, the article’s talking about some of Stripe’s earliest employees, who might not have elected to file an 83b because the company was still unestablished and risky, and filing the 83b meant potentially paying taxes on shares that might ultimately be worthless. And since these are the company’s early employees, I imagine that Stripe is doi…

You cannot elect 83b on RSU's.

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

#318

Post by ghaff »

thomascarney wrote: post #275
messe wrote: post #246

Earlier quoted context omitted.

> You dont have free healthcare If you’re going to use that sort of reasoning, then you don’t get free anything other than air. Yes, it’s paid for by taxes (or through insurance depending on country; yes we have cheap private insurance here). Thank you for bringing that to our attention, our feeble European brains were unable to deduce that on our own.

In Germany, my wife and I pay together about ~2,000 USD per month for public health insurance. It's not cheap!

Which is about what a good family plan on the exchanges would be in the US.

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

#319

Post by refurb »

hagbarth wrote: post #294
refurb wrote: post #283

Earlier quoted context omitted.

The problem with those social mobility scores is they rank it by “chance of going from lowest quintile to highest quintile”. But the quintiles aren't the same. A good example is Canada vs the US vs the UK. The top US income quintile is 153,000 USD. Canada is 131,000 CAD (98,000 USD). The UK is 87,000 GBP (105,000 USD). So you could have less social mobility in the US (going from 1st to 4th quintile) than Canada (1st…

I think the reasoning is that you likely won't get out of 1st at all.

But that's not how economic mobility is generally measured. It's usually movement from bottom to top quintile. The measure is relative mobility within a society, not absolute mobility.

But the WEF reference for the grandparent uses a "social mobility index" which includes such factors as: "Adolescent birth rate per 1,000 women", "Pupils per teacher in pre-primary education (%)", "Extent of staff training (1–7 best)", "Internet users (%)", "Meritocracy at work (1–7 best)", so it's clearly quite subjective when it comes to "social mobility".

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

#320

Post by destitude »

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.

I thought it was interesting because it shows what other companies are doing for their employees that have been there for 10 years. This was a big topic at a previous company I worked at who had employees getting close to their 10 year mark and it looks like that previous company is just going to let those employees options expire and screw them over.
Post reply on HN