Re:Shopify lets staff decide cash-stock pay mix as shares dive
by gpderetta on Friday September 16, 2022 @12:35PM
(#32868607)
Yes, that's why I suggest you should buy calls on the day your grant would have been assigned if you think the stock will go up.
Of course most people won't do it because is very risky. Yet getting RSUs has similar risk (or larger as you can lose more than the option premium).
There might be US tax implications that I'm not familiar with of course.
Re:Shopify lets staff decide cash-stock pay mix as shares dive
by darkwizard42 on Friday September 16, 2022 @02:53PM
(#32870486)
You aren't allowed to do this in the US. Lot of regulations on your RSUs and when you can sell etc. including derivatives on your vested and unvested stock.
Re:Shopify lets staff decide cash-stock pay mix as shares dive
by gpderetta on Friday September 16, 2022 @03:14PM
(#32870713)
We are talking about a scenario in which you get cash not RSU.
Also I'm not familiar with the US case, but I understand those limitations are contractual not regulatory and thus have no bearing in what's would be optimal for the employee.
Re:Shopify lets staff decide cash-stock pay mix as shares dive
by vineyardmike on Friday September 16, 2022 @01:49PM
(#32869615)
30K of missed growth on 400K doesn’t seem so bad to not have 400K tied up in a single company.
If, along those 4 years, your company tanks 25% (Shopify tanked over 50%), you’ll be able to abandon the investment (and get 100k a year of something else), or double down and get more shares (aka dollar cost averaging).
With RSU's, you get $400k1.05^4 (4 years of compounded growth)
With cash, assuming you immediately invest the money, you get $100k1.05^4 + $100k1.05^3 + $100k1.05^2 + $100k *1.05
Running those numbers, the RSU's are worth $486,202 at the end and the cash is worth $452563. RSU's appreciated by $86k over the duration, cash appreciated $52k over the duration.
It's the time value of money. Getting it earlier makes it worth more.