[pewpewpew777]

The author misses a point here: taxes.

If someone holds their stock past a year, when they sell it they are taxed at the long term capital gains rate of 15-20%

So cash only take home @ $250k would = $165k Cash + RSU @ $250k ($160K base) would = $182.1K ($105.6 + $76.5)

From the company perspective it is a positive as it locks in employees as their RSU's don't typically vest until after year 2 and there is always the carrot in front of employees to wait for their next vesting which happens every 6 months thereafter.

[fatnoah]

Are you saying that the RSU portion of the compensation is only taxed at the rate of long term capital gains? If so, that's not the case. RSUs are taxed as ordinary income at the time they vest.

You won't realize a gain or loss until you sell them. Whether that's long term or short term depends on how long you hold after vesting.

You are very correct about the RSU carrot, though.

[joshuamorton]

No. No no no no no!

When an rsu vests you are taxed on the current value as income. Capital gains are completely uninvolved. This is usually done by selling some fraction of the vested shares to cover the tax (3 shares vest, you sell 1, and end up with 2 shares and some change).

Then, the vested value is your cost basis for any cap gains, which are taxes as cap gains.

But if you're paid solely in stock, your income is still $250k, and you pay income tax on $250k.