[pumaontheprowl]

Something doesn't add up here.

Levels is showing that the average senior engineer at Netflix is only getting $11k stock though. If employees were allowed to choose what percentage stock they wanted, I'd expect most employees to choose a larger percentage than that.

Stock is likely to grow in value over the course of the year while cash is almost guaranteed to lose value due to inflation. You'd have to be pretty pessimistic about Netflix's future to choose the all-cash option. And even if you're only neutral about it, the stock is the better choice because it's inflation protected.

If I were a Netflix employee, I'd probably choose $200k cash, $300k stock. The fact that levels is reporting such wildly different numbers tells me employees don't actually have that level of freedom to control their comp.

[extesy]

You can always buy NFLX with cash in your brokerage account. It's not like you are going to get any discounts if you choose to receive part of your salary in stock.

[bern4444]

If you're granted stock on a vesting schedule (even if its 1 year), doesn't it qualify for long term cap gains if you don't sell? So you only pay potentially long term capital gains.

versus

If you get cash, pay income tax on it, and then invest it, and then pay cap gains, that's another round of taxes you pay no?

[LadyCailin]

No, pretty sure not. First of all, the “buy” date is the date it vests, not the date it was initially granted. Secondly, you pay normal income tax on stock grants. So if $100 of stock vests today, you pay normal income tax on $100, and the cost basis and “buy” date are set to $100 and today. If you hang one to the stock for a year, then sure, you get long term gains, but then it’s the same boat as if you just got cash then bought it for $100.

ESPP can be a bit different, because you get a discount on the stock, but that discount is also taxed at normal income rates, and anyways is capped at like 15% or something.

[bern4444]

Okay, thanks for the walk through. Getting my first stock grant later this year and I was a bit confused by this