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by dfadsadsf 1843 days ago
Equity is public company is as good as cash. You should absolutely count it as part of base compensation. Vesting is every 4 months and risk is minimal. If you want you can even fully deriskify by buying put options (or come up with something synthetic that mirror put options while not breaking your employment agreement).

On the other hand Equity is startup is completely different thing and should be heavily discounted.

4 comments

> Vesting is every 4 months and risk is minimal.

That's not the way Amazon vests your stock, unless things have drastically changed recently. They vest in single lump sums for the year, and they have a slowly ramping up vesting schedule.

First year, nothing (but they give you straight money bonus) Second year, barely anything, but they give you some cash to "offset". Third year, good bunch of the stock, but still less than half. Fourth year, all the rest of the stock vests.

Within each year you should get some stock offering, on the same ramping up basis so the idea is after the fourth year, you have consistent RSUs vesting, and they'll probably be split over the year based on whenever Amazon gave you the stock offering.

The sign up bonus over the first two years is pro-rated and paid every month and it makes up for the lack of stock vesting during that time.
> Vesting is every 4 months and risk is minimal.

For very few companies. Most companies - even tech companies have annual vesting (so 25% every year). And Amazon has 5% vesting after the first year.

It's not as good as cash because the value can vary, especially the further out you look. It might go up, but it might go down. Cash is far more stable than that.

But it still should be modeled far above zero, and far closer to cash than pre-ipo options.

Until the public stock shits the bed, like GE for example