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by tidepod12 2467 days ago
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".

5 comments

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.

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.
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.

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