[manfredo]

It's still not the same thing. I worked at a company whose stock price dropped by 40% in the span of a year. If someone is making $100k/$100k stock and equity, then that can easily become $100k/50k. It's even worse than that because you paid taxes on the stock at the vesting price and not the sell price (you can deduct this as a capital gains loss, but it's still money you're not getting).

That poster is definitely has good compensation, but TC needs to be broken into salary and equity.

[drewg123]

This is one of the reasons why I like working for Netflix. My compensation is (almost) entirely base salary.

When I left Google, a substantial part of my salary was via stacked yearly vesting GSU (like RSU) stock grants with some bonus mixed in. That meant that my salary was heavily dependent on the whims of the market. It also meant that my cash flow was somewhat impacted by either doing a lot of extra withholding or doing quarterly estimated taxes, since the GSUs were taxed at 25% instead of my actual tax rate.

Just getting paid every two weeks is so much nicer, and so much simpler. And we don't have a Monday in January after annual bonuses are awarded when we spend all day talking about who quit after their bonus was paid.

[peripitea]

>It's even worse than that because you paid taxes on the stock at the vesting price and not the sell price

How is this worse? You can always sell the stock as soon as it vests, with zero tax implication.

[manfredo]

Not if you work in a private company. And even if you do sell stock immediately, if the stock price goes down so does your actual compensation. Equity compensation is less certain than salary compensation.

[peripitea]

I suppose, but how many late-stage private companies (i.e. late enough that you're getting stocks instead of some kind of option or other you-aren't-technically-gaining-anything vehicle) are having wild downswings in stock price? I'm not aware of any, and while I could imagine there are some I would assume it's a relatively small number, but I could just not be in the loop.

[manfredo]

Dropbox and Twitter both experienced drops in stock value of ~40%. Uber and Lyft both lost a third of their stock value since July. Washington is consistently taking about tougher regulations for tech companies. I would not assume that tech stocks are going to be stable in the near future.

[tidepod12]

The companies that I am aware of award stock units based on their monetary value. If the stock is worth $100/unit, and your TC is to get $100k in stocks, you get $100k in stocks. If the stock falls to be worth $50/unit, you still get $100k in stocks.

Your compensation has nothing to do with stock price. Your decision to sell or hold onto the stock is an investment decision made by you, but isn't really relevant to the discussion of "this is how much money was given to me by my company".

[manfredo]

That's not how it worked at the companies I've been at. Your stock grants were determined at the time you join, and your refreshers are determined in January or February. You are granted $X worth of stock, so in that sense the stock units are based on monetary value.

But if you are granted $100k worth of stock in February, and the stock price drops by half in March you're only getting $50k worth of stock. Come next February, your stock grant will probably have a higher number of units to account for the drop in price, but you still earned less than $100k in stock the previous year.

[neilparikh]

They award stock units based on monetary value, but that calculation is done once sometime around when you join. So a drop pre-joining would be accounted for (maybe beneficial if you expect the stock to rise, but if it drops afterwards, you would have a loss.

[refurb]

Normally there is a vesting period before you can sell any equity.

Get $50k in equity ($100 per share), but you can only sell 1/3 each of the next 3 years. Stock price drops to $50 means you now have $25k of equity.

If it’s options it may mean you get $0.

[encoderer]

This isn’t normal. They do often have a minimum compensation target but it’s going to be a lot less than your advertised comp. once your stock is granted the number of shares is locked in.

[balfirevic]

Is there a time period between being awarded stock and being able to sell it?

[balfirevic]

It can also become $100k/$150k. Such huge drops that you mention will be exceedingly rare (as will huge jumps that I mentioned), and are in any case capped by the vesting interval.

Really, anything but taking the value of stock as it is when discussing total compensation of well-established publicly traded companies is just noise.