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by honorious 1537 days ago
Isn't RSU the middle ground already? You can part of your compensation in salary, part in ownership of the company. If you work and the company does well, you do better.

The % of comp in RSU raises as you get promoted to higher levels, where you (theoretically at least) actually have more impact on the success of the company.

1 comments

If my contributions increase the value of a $100M company by 10%, there's no way my RSUs' value is going to increase by $10M (unless I own 100% of the company). In a realistic scenario of $100k/yr of RSUs, even this near-impossible mythical single-person contribution of 10% would only net me $10k/yr.

RSUs go a long way, but don't totally align the incentives.

The value proposition is that RSUs goes up more than your 10% contribution, so using MSFT's stock price, $100k at the start of 2021 is worth some $150k by the end of it. Still not $10mm but better than $10k. The change in value is +$70k if you were at TSLA. This only works while the stock is going up though. If you were at FB, you'd be underwater so that $100k of RSUs is now only worth $80k, but at least RSUs mean you can still get $80k out of them if you had to liquidate (unlike options which have a strike price and can even be worth negative dollars, depending on your tax situation).

At a company of, say, 100,000 employees, how much my individual contribution will makes the stock price go up is debatable, but getting more of those RSUs will materially boost my TC, where at upper levels the majority of TC is stock-based.