You're missing the most important benefit: pre-vesting appreciation.

Say you are granted $600k that vests over 4 years. Well lucky you, the stock has 1.5x after year 1, doubled at year 2 and tripled by year 3! That means you've cumulatively vested $225k at year 1, $525k at year 2, and $975k at year 3. If you had cash only compensation, you would have received a total of $450k for that same time period.

I feel like this is the most illuminating comment in this thread, so, thank you.

That said, if I can choose between receiving $600k in cash today, and receiving $600k worth of public company stock today with restrictions on when I can sell it, then I will choose the cash, because it is worth AT LEAST AS MUCH as the public company stock (because, again, cash is freely exchangeable to public company stock without restrictions, and the opposite does not hold true in this hypothetical).

If you feel that there's a good chance that the stock of the company you're working for is going to tank, take that as a sign that you should work somewhere else ;)

> If you feel that there's a good chance that the stock of the company you're working for is going to tank, take that as a sign that you should work somewhere else ;)

If you get $600k in cash, and you immediately exchange that into $600k in company stock (with no restrictions on when you can sell that stock), how could that possibly be a worse deal than getting $600k in company stock with restrictions on when you can sell?

Seems like a strawman, as no company is giving you the cash as a lump sum payment like that up front. Even if you get the option, which mostly you don't, it's between:

1. A grant at $Xk, converted to shares on start date and vesting proportionally over 4 years

or...

2. A salary bump equivalent to the grant in (1), paid out ~bi-weekly at (1/104)*$Xk. 104 being the amount of bi-weekly pay periods to occur over a 4 year span.

It's not a strawman, it's a direct response to grandparent comment in this thread, who said:

> getting the $100k worth of stocks a year is at least as good as just getting the cash

I am arguing that getting $100k worth of cash is always at least as good as getting $100k worth of stocks. You're saying that it's not realistic to have the option to get cash instead of stocks, and that's true but it's besides the point.

As soon as your RSU vests, you can sell it for cash. Most companies offer an auto-sell option that works even during restricted windows. With a good vesting schedule, it's almost identical.

Sure, almost identical, but in the direction where cash is always AT LEAST AS GOOD as stock. Not in the other direction.

You're completely wrong because of your neglect to consider pre-vesting appreciation. Please see my previous comment for an example. Why do you think some people get rich joining pre-IPO companies? Because they're granted a lot of shares at a low price point, and by the time they are vested and liquid the shares have a possibility of being worth magnitudes more than when they were granted.

It’s not at least as good as stock, it’s worse in most markets. Because your stock is appreciating before you’re allowed to sell it but the cash is depreciating to inflation.

If you receive $100k worth of stock, you receive $100k worth of stock. If you receive X amount of stock that vests in 1 year, and at that time point it happens to be worth $150k, then you didn't receive $100k worth of stock, you received $150k worth of stock. The question wasn't about comparing $150k worth of stock to $100k cash, the question was about comparing $100k worth of stock to $100k cash.

Every company I know of with the exception of Stripe and Coinbase have 4 year equity grants. In the real world you'd receive a 400k a grant that vests over 4 years. For most white collar workers who don't need the money to pay bills the 400k grant is worth more than an extra 100k a year in salary.

It's a free call option on the stock. If it goes up you keep vesting at the new stock price which might be way above market rate for you position and if it goes down you get refreshers at the end of the year to bring you back to a market rate salary.

If it's about timeframes it can be thought of as like a year end bonus being paid out when it vests. With some risks in terms of share price (which is like variable cash bonuses). The only reason most prefer cash is because it's a hard number that base increases/bonus are computed by and for negotiation in next job.

Please explain to me how you can't achieve your desired stock exposure by receiving cash and then buying stock on the public market with that cash?

Kind of irrelevant because you will likely never receive a cash comp package equivalent to your salary + RSU amount. If it were that simple, virtually everyone would take the cash.

This entire thread is discussing the hypothetical where you could exchange your stock comp to cash. People upthread were claiming that the stock is more valuable, even though cash is exchangeable to stock without limitations, and the opposite is not true. You yourself said "virtually everyone would take the cash", so I take it that you agree with me.

I think you misunderstood, it's not that stock is more valuable, it's that you should opt to cash+stock because the total value of this will be higher than a pure cash offer. Essentially, cash and public stock is the same to an emplloyee, but for companies, paying in stock is better for them.

Let's say you know you will get a bonus that pays out end next year worth 10k. You can chose to receive 10k cash or 10k of google shares at today's prices. Most would trade the risk for potential upside.

At least at Google, you get vested shares every month, and you start receiving them in about the 3rd month.

You can also have your broker automatically sell.

It is pretty close to cash.

> It is pretty close to cash.

Sure, but specifically in the direction where cash is always at least as good as stock, not in the other direction.

You've stated this in something like 5 threads in this post, and you're wrong in every one of them. Please see my previous posts with examples.

Want to know how I know? Because I'm working at my 3rd company where my 6-figure stock grant is vesting at 7-figures due to appreciation.

Are the tax implications the same?

You’re taxed on the stock value as W2 income at vesting time. So more or less, yes.

When you get an offer of $100K cash + $100K in stock, that's before appreciation. So 3 years from now your equity is appreciated but your cash is not, so you get $225K in cash equivalent.

This is false. If you immediately exchanged your cash to stock (as I specified in the post that you are replying to) then 3 years from now your "cash" option is worth exactly the same as your "cash + stock" option.

No one is giving you 4 years of paychecks on day 1. But they do grant 4 years of equity that is appreciating while you’re waiting for it to vest. That’s the difference. Cash is worse.

This is wrong. It would be true if you received all the cash in a lump sum as soon as you're hired, and you used it to buy stock, but if your cash "vests" in the same way as equity typically does then you'd lose out on the opportunity for it to appreciate before vesting like shares can.