[hansvm]

If Google is offering an initial total cash equivalents of $300k (say $140k salary, $480k/4 stock, 15% annual bonus on each), that's roughly the same deal as somebody else getting a base salary of $300k. The fact that a particular investment decision (GOOG) can accidentally push the individual's yearly increase in net worth past $1M isn't a good way to judge what Google is actually offering:

Anyone with a base salary of $300k can obtain a similar payoff structure by taking out a $550k loan to invest in GOOG, and taking out additional smaller loans at each stock refresh. The tax benefits from capital gains/losses and time-value-of-money benefits from getting your bonus sooner should handily outweigh the cost of servicing the loan, but even in a worst-case scenario where you pay interest for no benefit, that example Google offer would be a lot more comparable to a $315k-$330k salary, not a $1M+ salary.

[dasil003]

Well first of all, my point was that over the last decade Google has likely paid more individuals 7 figures than JS or Citadel has. Obviously this is subject to the risk of stock performance, and if your point is that cash is better than stock, I agree with you 100% (especially today when tech stocks are still arguably over-valued).

On the other hand, this, my friend, is absolute nonsense:

> Anyone with a base salary of $300k can obtain a similar payoff structure by taking out a $550k loan to invest in GOOG, and taking out additional smaller loans at each stock refresh.

This is only equivalent if you ignore downside risk, which in the case of an average young professional with no significant assets could ruin you. The RSUs give you significant upside over 4 years with absolutely zero risk.

Also you said this:

> The fact that a particular investment decision (GOOG) can accidentally push the individual's yearly increase in net worth past $1M

This makes me think you might not understand how RSUs work. They are W-2 income at the valuation at the time of vest. What we're talking about is 7 figure annual income. Not investment gains over time.

[kortilla]

> Well first of all, my point was that over the last decade Google has likely paid more individuals 7 figures than JS or Citadel has

No, they granted stock initially and set aside those shares for the employee. The market paid the employees the gain between the initial grant price and the sell.

> This is only equivalent if you ignore downside risk, which in the case of an average young professional with no significant assets could ruin you. The RSUs give you significant upside over 4 years with absolutely zero risk.

You didn’t understand the example. The person taking the loan gets $300k/year cash and the Googler gets $180k/year. Setting aside $120k/year for the loan makes the risk the same so you won’t be “ruined”. Google failing in either scenario means they each have $180k in annual cash leftover.

[dasil003]

No, I understood the example perfectly, it's you who doesn't seem to understand the downside risk. You would need a $480k loan to buy the four years of stock because you are buying it before you've done the work to earn the $480k. A loan is something you have to pay back, so if the stock tanks you have to make up the difference. In order to be equivalent, the terms of the loan would have to be pegged to the stock price on the downside (so if stock price was cut in half you would only owe $240k), but not on the upside (so you get all the gains). No one in the world will give you a loan with these kinds of terms.

[hansvm]

That's only relevant if you're leaving Google before the 4yr period is over and also if you don't know roughly what subset you'll stay for (where you'd just take a smaller loan to represent the first N years of vesting).

Also, the cost of options to completely mitigate the incremental risk beyond that of an ordinary Googler is small (cumulatively a little less than the cumulative cost of interest for the loan). It's a small point that matters if you go out to actually implement the idea, but in the context of comparing Google (X total cash equivalents in their normal structure) to some other company (X salary), the investment opportunities in GOOG are sufficiently comparable that it might be reasonable to upweight Google's TC to 1.1X or so (or downweight it because you're restricted to GOOG itself and don't have more options), but I still think it's unreasonable to call it anything like 3.5X. Those aren't million dollar contracts; they're $X contracts paired with a forced investment that anyone else could choose to make without a huge downside (ignoring the much rarer actual $X contracts).

[geph2021]

   Anyone with a base salary of $300k can obtain a similar payoff structure by taking out a $550k loan to invest in GOOG

I'm curious how someone could obtain such a large, unsecured loan of $550k? Even secured against a home with a mortgage cash-out Refi, that's a large sum. You'd have to have built up a lot of equity in your home value.

[hansvm]

GoKapital advertises up to $500k personal loans on an unsecured basis, with a higher chance of success if you're partially secured (admittedly, putting $50k down instead of investing it elsewhere is an additional cost to servicing the loan, but even 6-12 months into a tech career you should've had $50k saved up, so that shouldn't be a barrier to entry at least).

Also, ordinary banks might not advertise outrageous personal loans, but when your base salary starts at $300k and has a history of increasing (i.e., you don't _need_ the money and just want it to power a particular total comp over time profile, especially when you keep at least 50% of your total comp in cash rather than leveraged investments), most mainstream banks are more than happy to furnish somebody to personally service your account and make a loan like that happen.

Separately, if you live in parts of the country (US-specific) where salaries like that are common, you probably have a down payment of $200k+ if you have a mortgage and would have little problem grabbing a partially secured loan against your current equity.

[KRAKRISMOTT]

Base salary can be re-invested (granted, their hands are somewhat tied when it comes to personal fund management due to the nature of their job)

[hansvm]

Whatever point you're making flew over my head. Would you mind elaborating?