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Subject: "What is a restricted stock unit in an offer and how do you evaluate them..." Previous topic | Next topic
MEAT
Member since Feb 08th 2008
20979 posts
Tue Jun-08-21 02:14 PM

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"What is a restricted stock unit in an offer and how do you evaluate them..."


  

          

There's a ton of videos out there, but OKP is home

------
“There is no fate that cannot be surmounted by scorn.” -Albert Camus

  

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Topic Outline
Subject Author Message Date ID
You are given stock in the company, but you can't immediately sell
Jun 08th 2021
1
From an internal logic standpoint, would you consider it income?
Jun 08th 2021
2
Personally I wouldn't. I consider income to be relatively fixed...
Jun 08th 2021
4
Are there any companies out there that you would add a caveat for?
Jun 08th 2021
9
I know people who had restricted stock in GM when it went bankrupt
Jun 08th 2021
5
No I wouldn't. They company wants you to though
Jun 08th 2021
6
I mean, the IRS treats it as income.
Jun 08th 2021
10
      he didn't ask what the IRS considers
Jun 08th 2021
13
           Right now the verbal is more than I make
Jun 09th 2021
15
                My point simply is that I think its silly to as a general rule not take ...
Jun 09th 2021
17
I do.
Jun 08th 2021
12
"and you are free to do whatever you want with it."
Jun 08th 2021
3
this is a perfect question for Blind App
Jun 08th 2021
7
What do you mean?
Jun 08th 2021
8
It's the unofficial "backroom chat" by and for employees
Jun 09th 2021
16
TC: $485k
Jun 09th 2021
18
Restricted stock is basically free money.
Jun 08th 2021
11
we got them a few times over the last few years
Jun 09th 2021
14

PimpTrickGangstaClik
Member since Oct 06th 2005
15364 posts
Tue Jun-08-21 02:24 PM

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1. "You are given stock in the company, but you can't immediately sell"
In response to Reply # 0


  

          

You have to hold it for a period of time (vesting period) before it becomes unrestricted and you are free to do whatever you want with it.

If you leave the company before the vesting period is over, you lose the stock.

How to evaluate them? That's tricky. I guess the value you place on them will depend on a few things. How much potential you think the company has. How likely you are to stay at the company before the vesting period. Probably some other things I'm not thinking of.

  

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MEAT
Member since Feb 08th 2008
20979 posts
Tue Jun-08-21 02:26 PM

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2. "From an internal logic standpoint, would you consider it income?"
In response to Reply # 1


  

          

As in, I have an offer for a 4 year vesting with a cliff.
Should I multiply the base salary over that period of time, add the RSU offer, then divide by four and say that's what my "real" salary would be?

------
“There is no fate that cannot be surmounted by scorn.” -Albert Camus

  

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PimpTrickGangstaClik
Member since Oct 06th 2005
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Tue Jun-08-21 02:35 PM

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4. "Personally I wouldn't. I consider income to be relatively fixed..."
In response to Reply # 2


  

          

...and stock is risky.

There is a chance that the stock could be worth a whole bunch when it finally vests. But there is a chance that stock could end up being worth absolutely nothing.
For startups (where RSUs are pretty common), the latter case is a common scenario.

Income to me is something I can depend on.


If you are trying to compare compensation at different places, then you'll have to consider it as income to do an apples to apples comparison.
But you have to be sure to factor in the risk, and think about your risk tolerance in trading off guaranteed income for the possibility of the stock blowing up

  

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MEAT
Member since Feb 08th 2008
20979 posts
Tue Jun-08-21 04:56 PM

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9. "Are there any companies out there that you would add a caveat for?"
In response to Reply # 4


  

          

------
“There is no fate that cannot be surmounted by scorn.” -Albert Camus

  

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shockvalue
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150 posts
Tue Jun-08-21 02:52 PM

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5. "I know people who had restricted stock in GM when it went bankrupt"
In response to Reply # 2


          

If you started at General Motors in in 2005, you'd be in no position to expect that in 2009 (when your vesting ended) the shares would be worth nothing.

So yeah, it's a crapshoot, even with some blue chip companies.

  

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Stadiq
Member since Dec 21st 2005
4205 posts
Tue Jun-08-21 03:05 PM

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6. "No I wouldn't. They company wants you to though"
In response to Reply # 2


          


I would look at it as a perk/benefit, and the value would depend on how long I planned to stay and/or my feel for how the stock will perform.

But not income, no matter how hard the company sells it as such.

my 2 cents

  

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Buddy_Gilapagos
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Tue Jun-08-21 05:28 PM

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10. "I mean, the IRS treats it as income. "
In response to Reply # 6


  

          

If you working for a blue chip company that's real money to be treated like income.

what you calling a perk has paid my kids tuition and second home.


**********
"Everyone has a plan until you punch them in the face. Then they don't have a plan anymore." (c) Mike Tyson

"what's a leader if he isn't reluctant"

  

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Stadiq
Member since Dec 21st 2005
4205 posts
Tue Jun-08-21 09:40 PM

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13. "he didn't ask what the IRS considers"
In response to Reply # 10
Tue Jun-08-21 09:41 PM by Stadiq

          

I said I wouldn't because you can't necessarily count on it.

>If you working for a blue chip company that's real money to
>be treated like income.
>
>what you calling a perk has paid my kids tuition and second
>home.

Wait...so your 2nd home isn't a perk???

I mean good for you man, but it doesn't work out like that for everyone.

I never said it couldn't be a good- or even great- perk.


I wouldn't count on it as my income.

And the company DEFINITELY wants you to think that way, so they can offer you a lower salary.

*shrugs*

>
>
>**********
>"Everyone has a plan until you punch them in the face. Then
>they don't have a plan anymore." (c) Mike Tyson
>
>"what's a leader if he isn't reluctant"

  

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MEAT
Member since Feb 08th 2008
20979 posts
Wed Jun-09-21 06:11 AM

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15. "Right now the verbal is more than I make"
In response to Reply # 13


  

          

About 20% more. But I get quasi guaranteed quarterly bonuses
But it would still be 10% more than if I counted my bonuses as salary
Take the 3% raise I get a year if still be making more at the new gig but the numbers gap starts to close
But with the equity package it’s the equivalent of 1.5 years of salary spread over 4 years
And if I’m reading it right it’s basically free money.
That even if the stock craters from where it is. Selling it would be free money.
So if the stock were to sell at today’s rate or the last two years I could get us out of student loan debt
If it sells at where it was a few years back. It would be a nice Christmas gift. It’s a very large range right now.

------
“There is no fate that cannot be surmounted by scorn.” -Albert Camus

  

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Buddy_Gilapagos
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Wed Jun-09-21 11:30 AM

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17. "My point simply is that I think its silly to as a general rule not take ..."
In response to Reply # 15


  

          

into consideration as comp because if you are at certain companies, its real tangible easy to make liquid cash.

A lot of blue chip companies rely largely on stock to pay their employees premiums. RSUs are why their are tons of google, facebook, amazon millionaire employees walking around and retiring early.

I've seen people burned gambling taking stock over cash but to have a general rule to treat all stock as a perk regardless of the company is a silly rule and could cause you or anyone to pass up a great opportunity.


**********
"Everyone has a plan until you punch them in the face. Then they don't have a plan anymore." (c) Mike Tyson

"what's a leader if he isn't reluctant"

  

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Nopayne
Member since Jan 03rd 2003
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Tue Jun-08-21 08:21 PM

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12. "I do."
In response to Reply # 2


  

          

Mine vest monthly and with the way that my plan works I can sell them immediately without paying additional taxes. Good times.

---
Love,
Nopayne

  

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Buddy_Gilapagos
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Tue Jun-08-21 02:35 PM

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3. ""and you are free to do whatever you want with it.""
In response to Reply # 1


  

          

might be true for a public company, but not necessarily for a private company.

I am guessing he is talking a private company because if it were a public company I think it would be easier to know how to evaluate them. If its a private company evaluating then becomes dang near impossible.

**********
"Everyone has a plan until you punch them in the face. Then they don't have a plan anymore." (c) Mike Tyson

"what's a leader if he isn't reluctant"

  

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double negative
Member since Dec 14th 2007
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Tue Jun-08-21 04:09 PM

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7. "this is a perfect question for Blind App"
In response to Reply # 0


  

          

i used to get my kicks from reading that, then suddenly my email stopped working which makes me think IT realized it was a pretty fucking major deal.

***********************************************************
https://soundcloud.com/swageyph/yph-die-with-me

  

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MEAT
Member since Feb 08th 2008
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Tue Jun-08-21 04:32 PM

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8. "What do you mean?"
In response to Reply # 7


  

          

------
“There is no fate that cannot be surmounted by scorn.” -Albert Camus

  

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double negative
Member since Dec 14th 2007
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Wed Jun-09-21 08:14 AM

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16. "It's the unofficial "backroom chat" by and for employees"
In response to Reply # 8


  

          

only verified employees are able to speak on things.

if you have a question like "about to interview at microsoft...how do i ace it?" there will be scores of MS employees there running you through the playbook. hard to describe.

the salary discussions always blows my mind. some of the people there have been making money for so long, the thought of making 120k base would make them jump off a bridge.

https://www.teamblind.com/

***********************************************************
https://soundcloud.com/swageyph/yph-die-with-me

  

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sectachrome86
Member since Dec 22nd 2007
2699 posts
Wed Jun-09-21 04:42 PM

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18. "TC: $485k"
In response to Reply # 7


          

YOE: 2

-------------------------------------------------
http://www.soundcloud.com/sectachrome

  

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allStah
Member since Jun 21st 2014
5249 posts
Tue Jun-08-21 06:12 PM

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11. "Restricted stock is basically free money. "
In response to Reply # 0
Tue Jun-08-21 06:16 PM by allStah

          

Once you have satisfied the hold period, you can instantly sell to make
a profit. The amount of the profit all depends on the price of the stock.

They are way more attractive as an incentive than company stock options,
which just gives you the right to buy the company’s stock at a set price
once your options have fully vested. But they can become worthless
if the stock price falls below the set price.

Restricted stock is free money, unless the company goes bankrupt before
you can sell the stock.


Stock is still an extremely valuable instrument, but patience is required which
most people don’t have. However, with restricted stock you can afford to play
the long game.

Stock is a long game asset.

* 5-6 years experience as a FIX Technology Analyst at the NYSE*




HIS NAME IS MASON MOUNT
Bulls | Bears | White Sox | Yankees | Notre Dame | Illinois | Chelsea | Real Madrid

  

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Rjcc
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Wed Jun-09-21 04:57 AM

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14. "we got them a few times over the last few years"
In response to Reply # 0


          

remember the trump corporate tax breaks?

essentially chunks of stock options that automatically disbursed at certain dates, in our case it just sold on x date at whatever the price was, and you get the money with taxes already taken out.

it wasn't like an offer or something since I already worked for verizon, but it wasn't anything to sneeze at either. as far as considering them, I'd probably treat it as bonus, just because you never know if you'll actually be there to get them, or the stock price could tank for whatever reason

www.engadgethd.com - the other stuff i'm looking at

  

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