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by fc417fc802 37 days ago
If you see it as dangling future compensation in front of you then you wouldn't, obviously. But then why is it structured in that manner? What's the purpose?

If you view it as a signing bonus it makes perfect sense. They want to get you in the door but also don't want you to take advantage of them by quitting immediately. In that case you wouldn't be entitled to it if you left voluntarily or were fired for cause but being laid off is entirely their choice.
2 comments
solatic 35 days ago
> But then why is it structured in that manner? What's the purpose?

This is bizarre. When you agree to take a $100k base salary, you don't get all $100k on the first day; your salary is split into pay periods, and if you leave earlier (voluntary or not) then you don't get the rest of the year's salary by default (severance aside).

I'll agree with you that RSUs for public companies should not have cliffs. But the idea that you agree to a large amount of compensation up-front (so that re-negotiation is infrequent) which is then paid out in portions on a regular basis is very standard, for both cash and equity.

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senordevnyc 37 days ago
It’s structured that way to disincentivize leaving voluntarily, which I think is fine. What’s the problem with that? And why would that imply that if I’m laid off, I’m still entitled to that future compensation?
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eudamoniac 37 days ago
In the worst case, it's highly misleading. Imagine you get paid a pittance but with a huge RSU grant vesting on a 2 year cliff. Salary 50k, total comp 500k. Then they fire you after 23 months. You took the job because of the stock grants, you had no intention of quitting, but they got 2 years of good talent for 50k.
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senordevnyc 37 days ago
Well sure, we could throw out all kinds of theoretically abusive situations, but how often does that happen in the real world? I haven't seen any companies granting RSUs that pay a pittance in salary. And it seems many tech companies have dropped their one year cliff as well. Who has a two year cliff?

Now to be clear, stock options are completely different, and in the vast majority of cases, I'd value those at zero or near-zero.

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fc417fc802 37 days ago
> I haven't seen any companies granting RSUs that pay a pittance in salary.

If you recognize something as wrong in principle when taken to the extreme shouldn't you also regard milder instances to be wrong as well? "Well sure, if you steal $1M that's obviously immoral but that guy only stole $100."

Of course in this case I recognize that there's quite a bit of uncertainty over how exactly the intent and representation of RSUs ought to be interpreted. I had always seen them as akin to a signing bonus but it's clear now that many people don't share that perspective.

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senordevnyc 37 days ago
I’ve read probably thousands of negative comments about layoffs over the years, and I don’t think any of them centered on unvested RSUs.
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