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How to evaluate equity from job offer?

190 17 May 7, 2018 at 08:29 PM
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In additional to base salary, I am also getting $10k in Restricted Stock Units and $10k in Non-Qualified Stock Options from a job offer with a public company. They both will vest 25% per anniversary year over 4 years. What does this mean?

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#2
Its a way for the company to getyou to stick with the company for at least 1 year to get 25% of the reward.

https://www.schwab.com/public/eac...facts.html
https://turbotax.intuit.com/tax-t.../L8zsxRi7B
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#3
Is there a reason why I was offered a dollar value but not number of shares or a % of equity? Is one better than the other?
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#4
They're offering you Y units of stock worth approximately $X at that day's price. For me, I was given 100 units, worth $12k vesting over 5 years, but before year 1 matured, the whole thing was worth $15k... The value is flexible based on performance of the stock, and the value at the time you exercise it.
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#5
my experience as always been getting a quantity of stock, but I think it's just their way of helping you visualize the money.
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#6
They're going to give you 10k in stock in a nonqual account. If you leave the company before one year, you get none of that. If you leave the company after 1 year you will get 25% of the stock + 25% of the growth/decline of said stock. If you make it all 4 years you will get all of it, which is the initial 10k plus underlying growth/loss.

The company said 10k because they don't know what the underlying stock value will be by the time you sign the offer and the purchase happens, so offering as a dollar value is the smart way to do it. What if they said they would give you 100 shares in negotiation, which are worth 10k, but the 100 shares are worth 100k upon actually purchasing and placing the shares in the account a month down the road? The company limits their market exposure by just giving a flat dollar amount.
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#7
Quote from Magicite
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They're going to give you 10k in stock in a nonqual account. If you leave the company before one year, you get none of that. If you leave the company after 1 year you will get 25% of the stock + 25% of the growth/decline of said stock. If you make it all 4 years you will get all of it, which is the initial 10k plus underlying growth/loss.

The company said 10k because they don't know what the underlying stock value will be by the time you sign the offer and the purchase happens, so offering as a dollar value is the smart way to do it. What if they said they would give you 100 shares in negotiation, which are worth 10k, but the 100 shares are worth 100k upon actually purchasing and placing the shares in the account a month down the road? The company limits their market exposure by just giving a flat dollar amount.
Out of curiosity, what happens if they lay you off before you vest in year 1, or part way through 2, etc.... My guess is there is fine print stating what happens in the contract?
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#8
go for higher paying job
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Quote from dave388
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Out of curiosity, what happens if they lay you off before you vest in year 1, or part way through 2, etc.... My guess is there is fine print stating what happens in the contract?
Usually RSUs will cliff vest every year. Standard terms are 25% every year at the anniversary date. Some companies will do 25% after 1 yr then a fraction every month or every quarter until 100%.
If you are terminated, you don't get any of the remaining. Rare are cases where your RSUs will have accelerated vesting upon termination.
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