[commandlinefan]

> stock options did become nearly universal in tech compensation

Although I've noticed that options have been replaced more and more these days with RSU's (plain old grants) because options have a tendency to go "underwater", suggesting that they weren't all that great to begin with.

[zozbot234]

Right, options go underwater precisely when the company is not doing well and you are at greatest risk of losing the job. That's not a great risk profile.

[JumpCrisscross]

> options have been replaced more and more these days with RSU's (plain old grants)

RSUs are also much-less liquid and tightly controllable by companies than actual stock. That has made them attractive to management and insiders.

[bluGill]

I learned long ago (when my company decided they couldn't give me options because we were too big so they did these "I can't believe it isn't an option", which expired worthless): until cash is in my bank account it is just a promise waiting to be broken. If I want to invest I want it my choice.

In any case, it is a bad idea to invest in the company you work for - unless you are high enough up in the company that you see the real books, or you have so much invested they have to show you as a large shareholder. (nobody is the later - large shareholders have a full time job managing their money not working for someone else). There have been a number of cases where a company has unexpectedly filed bankruptcy and someone lost their job and their savings on the same day.

[nostrademons]

> In any case, it is a bad idea to invest in the company you work for

I'd question this conventional wisdom, simply because you have a lot more information about the company as an employee than a random investor does, even if you are not in possession of things like financials that the SEC considers "material non-public information". Things like culture, intelligence of your coworkers, whether or not you're actually delivering on your commitments, how many feature requests and bug reports you get from your customers, mood of management, perks offered, etc. are all intangibles, but they are usually better predictors of long-term company performance than the financials that the company gives investors.

If your company is not doing well enough or is not something that you would consider investing in, you should find a different company to work for. Bad things are going to happen in your future, regardless of whether you own shares or not.

[p_l]

I used to be on a project that, IMHO, had possibly considerable impact on capabilities and even some specific financials in a publicly traded corporation.

After about third earnings call (which happened a tiny bit before the trading window for our stock grants opened), I (re)learned the hard lesson that even if we delivered and I had actual, material, move the needle impact on corporate financials, that would not translate in any way to stock price. Except maybe if I pushed it really, really, down by causing an avalanche of problems that resulted in some big name deal going down.

The stock prices are vibe based, once its publicly traded your share value will be based on whatever vibes pushed numbers in excel around earnings call, and it's perfectly normal occurrence to beat expected earnings per share for 3 quarters straight and every quarter get a different vibed-off reason as to why the price should go down.

[raw_anon_1111]

No you don’t. If you did, you would be subject to lock outs. The average rank and file employee at any BigTech company knows only a minuscule more than the general public.

Amazon for instance has over 1 million employees. You know nothing about most of your coworkers or whether other teams are delivering featured

[YetAnotherNick]

> The average rank and file employee at any BigTech company knows only a minuscule more than the general public.

They know the clients, the contracts, hiring, cost cutting way before the general public does. The problem is that many BigTech is sum of many units which might not be correlated, but for say Nvidia or Apple I would assume the employees would be a good people to take the stock advice from.

[raw_anon_1111]

And this is again an obviously naive assumption. Your average developer at Apple has no idea how many iPhones Apple sold in China. Nor do Nvidia employees they know how many GPUs NVidia sold. Your random Amazon developer didn’t know Jassy was going to announce at the earnings call that Amazon was going to announce that they were going to spend more this year on Capex for AI related hardware than they’d free cash flow tanking their stock.

Again, I worked at AWS and we had no insider knowledge

[saghm]

> but for say Nvidia or Apple I would assume the employees would be a good people to take the stock advice from

Isn't Apple pretty famously secretive even internally around stuff like product launches? I would expect a company that runs a tight ship to have rank-and-file employees who would have less potentially actionable info than ones at companies that don't control information as well.

[bluGill]

In a tiny company this is true. In any medium (much less large) company you don't know much more than anyone else on the street - and the independent analysts who just watch public information closely usually know more than you do about all that. (it is their job to read the data from China and figure out what that means for the companies involved).

[youarentrightjr]

> The average rank and file employee at any BigTech company knows only a minuscule more than the general public.

Huh? We're not talking about the custodial staff.

> Amazon for instance has over 1 million customers. You know nothing about most of your coworkers or whether other teams are delivering featured

This is a hilarious example; especially at Amazon, "rank and file" employees are privy to $100M+ AWS deals, they have to implement them after all.

[raw_anon_1111]

I worked for AWS in Professional Services (full time blue badge employee). Part of “sales”. Even when we talked internally asking for advice from the service teams (the people who worked on the various AWS services) or even internally within ProServe outside the project team, when we spoke on Slack, we didn’t mention the customers in Slack channels outside of a need to know basis and used the acronym “IHAC” (I have a customer) when referring to the customer.

I assure you the random developer on the EC2 service team for instance knew nothing about the sales deals.

Also a “$100 million dollar sales deal” is nothingburger for AWS not enough to move the market.

Do you think someone on the Alexa team in the retail division (“CDO”) knew anything about what was going on within AWS?

[bluGill]

You have more information, but only in a small area. if there is fraud by the executives they will hide it from you. If a different division doing poorly bringing everyone down you won't know before anyone on the street. even in your own division you won't know all the important numbers, a great feature coming doesn't mean customes really want it, you might be sucked into thinking a useless vanity project is something customers care about.

[thegrim33]

>> RSUs are also much-less liquid

Every time I got an RSU I could just sign into my RSU account and press a single button which sold them all, put a portion of the proceeds aside for taxes, and deposited the rest as cash directly into my bank account within 1-2 business days.

How are options more liquid than that?

[jayd16]

What makes them more or less controllable? I know they can have specific triggers applied to them so as to delay vesting. Are options somehow immune to that or is it something else entirely?

[JumpCrisscross]

Note that I’m speaking more about private companies than public ones. But an RSU is basically only liquid if the company says it is. Shares, out of exercised options, have a lot more flexibility.

[jayd16]

Right, but that seems to be comparing unvested RSUs to vested and exercised options. Are options more strict about what games can be played with vesting triggers?

[lotsofpulp]

It’s been standard advice on this forum for at least 10 years to value options at $0, and only consider cash comp + RSUs.

[0x3f]

Options have some minor value in signalling that you're a true believer. You should in fact care only about base salary, but not telling the people doing the hiring that can be quite useful. Doing a fake come-down on base in exchange for options shows you are invested and surely worth hiring.