A lesson in finance for the rsu clowns

Albertsons rvUd7211
May 11 165 Comments

FNG has only had good stock for past 1-2y. It has crashed in 99, 09, 2015... Every ten years about, and stays low for the majority of the time.

Say you got an Amazon job in 2014 when the stock was 380. By the time it vested you've lost a third of it's value. And if your base was 150 with 100k stock, it's a 270k TC. Less, since the present value of the future comp declines 10% a year because you could invest yourself.

Compared to, say, a 250k C2C contract at Albertsons or whatever.

If the stock has a volatility of 100% and a 30% chance of crashing any given year, there's something called a Sharpe Ratio that comes into play. That's your risk adjusted return. Doing your own investments at a 100% return (just hold a hedged Amazon position) and 10% risk of loss is 3x better Sharpe than your hypothetical rsus.

So the stock TC is pretty worthless, if you do the math correctly it's about 1/3 of it's purported value due to the company investing for you like you're a babby. Plus add 15% for C2C. The 500k goog salaries with 200 base are comparable to a 120 hr contract, which is a really a 100hr contract plus negotiation.

Everyone pays the same faang just plays math games.

comments

Want to comment? LOG IN or SIGN UP
TOP 165 Comments
  • Microsoft gfba68
    Sure, TC drops in a crash but you are wildly, wildly exaggerating. Most employees of those companies have done extremely well. 100% volatility with a 30% chance of crashing any given year isn't even within the realm of reasonable
    May 11 99
    • Microsoft gfba68
      You should read a book or two
      May 19
    • Albertsons rvUd7211
      OP
      Since you're not responding I'm assuming you sold it 4 years later at 20% more and count this as buying below market. Or never sold at all
      May 19
    • Microsoft gfba68
      You should read a book or two
      May 19
    • Albertsons rvUd7211
      OP
      Which book? Mein Kampf?
      May 19
    • Salesforce Go-diva
      Wow this was a wild ride
      Jun 20
  • Apple net worth
    Yes poor folks at FB/G struggling so much. Hope they get free food at least
    May 11 5
    • Albertsons rvUd7211
      OP
      They are rich because they don't know to invest on their own and have the company do it for them.
      May 11
    • Airbnb UxqX57
      Most of F/G friends I know have their RSU automatically sold upon vesting and transferred to an index fund.

      Stop being so insecure and jealous.
      May 12
    • Albertsons rvUd7211
      OP
      But the vesting takes years. Correct me if I'm wrong but goog and fb give fixed number of rsus that appreciate over years before vest.
      May 12
    • Airbnb UxqX57
      No, the cliff period is one year. Then, the stocks get vested on monthly basis.
      May 12
    • Albertsons rvUd7211
      OP
      No, you get a 4 year grant and it vests monthly. So if you joined fb in 2014 and sat on your ass your 200k grant would be 1m.
      May 12
  • Oracle bT43cv
    This guy has serious insecurity problem.
    May 11 1
    • Airbnb UxqX57
      He got rejected interviewing for a FANG, and now posts a bunch of posts to make himself feel better.
      May 12
  • New / Eng na206
    This guy is seriously a pretentious dickhead. Like really who cares. My take home is 5500 a month. My gf 4000 a month. We have a 5 bedroom house in the suburbs of Renton. I pay 850 a month in child support to a previous relationship and we live great.

    You sound really bitter like you’ve been rejected from FANG 100% of the time.

    I’m so glad you work at Albertsons and not somewhere else because I know I have zero chance working with you.

    If you are in your thirties acting like the child you are over money you have some serious growing up to do.

    Learn to be happy with what you have. Glass door reports you guys make between 84-101k a year.

    Learn to be happy with what you got and stop dick measuring on TC and stocks.
    May 11 18
    • Tableau / Eng
      The Plague

      Tableau Eng

      PRE
      Microsoft
      The Plaguemore
      >2.5k/mo in Seattle has to be a great apartment. And I think almost every big company has offices here
      May 12
    • Google ovBk62
      Dude this Albertsons guy can't even search on Google on his own or what? Utterly clueless about the fact that there are states in US without state taxes...making rubbish claims about which companies are where and what not.
      May 12
    • New / Eng na206
      @tableau. It’s a bit disappointing for the price. You can get a downtown amenity equivalent in the burbs for like 2k with 1300 sq feet.
      May 12
    • New / Eng na206
      @square. I agree. Vegas also has no sales tax and the real estate there is fucking amazing.
      May 12
    • Albertsons rvUd7211
      OP
      It's amazing because there are no jobs. 1/3 people are resort workers, the only tech co is Zappos and some obscure ones.
      May 12
  • Google ovBk62
    This is the same Albertsons guy from that other random post I think
    May 11 1
    • Oracle bT43cv
      You don’t have to think. It’s obvious. That guy was a loser too.
      May 11
  • Microsoft MSFTBRO
    Someone sounds jelly.

    My bonuses pay bonuses every qtr.

    Many people dont sell their rsu as soon as it vests.
    May 11 3
    • Albertsons rvUd7211
      OP
      But bonuses are still gambling, they could fire or whatever and it's the same as a crash.
      May 11
    • Microsoft MSFTBRO
      Yea those idiots who held Amazon RSU because they dont know finances!

      I pity them.
      May 11
    • Albertsons rvUd7211
      OP
      It's because the company did that for them.
      May 11
  • Facebook bigdickE3
    lmao this guy again
    May 11 0
  • Square / Eng SQ
    Tldr: I'm jealous that I'm not at FNG so let me write something to make me feel better.
    May 11 0
  • Honeywell that1guy
    OP is jealous because he’s poor AND can’t get into FAANG.
    May 11 0
  • Salesforce lololl
    You math is way off. Whoever got amzn at 380 is a millionaire now
    May 11 2
    • Albertsons rvUd7211
      OP
      Because they held the stock, it is not TC.
      May 11
    • Salesforce lololl
      Even if sold its still way off
      May 11
  • Northrop Grumman HowCouldYu
    I love this guy
    May 11 0
  • Tableau / Eng
    The Plague

    Tableau Eng

    PRE
    Microsoft
    The Plaguemore
    Hahaha this guy again
    May 11 3
    • Albertsons rvUd7211
      OP
      Literally half the responses
      May 11
    • Tableau / Eng
      The Plague

      Tableau Eng

      PRE
      Microsoft
      The Plaguemore
      You are famous, congrats
      May 11
    • Albertsons rvUd7211
      OP
      Now to convert blind trolling fame into FAANG TC
      May 11
  • Apple / Eng yrdscba
    Lol OP. You know that no one is going to buy your logic , right ?
    May 11 2
    • Albertsons rvUd7211
      OP
      They don't care because the company does everything for them
      May 11
    • Square / Eng SQ
      Can't hear you over me getting paid more than double. And that's if I sell as soon as it vests 😂
      May 11
  • Facebook whodattt
    Lol yet another 'IDK WTF IM TALKING ABOUT BUT I CANT GET HIGH TC SO IT MUST NOT BE REAL' thread.
    May 18 0
  • SpaceX uevh5
    OP sounds like a bitter Russian/Ukrainian (or some other Eastern European country, but not likely) who desperately tries to convince himself he's doing good if not better than the rest of us. Shitty, know-it-all attitude, lack of skills and broken English left him stranded in Albertsons, but he was doing just fine until he found Blind.

    Now he is trying to get a forced admission from everyone that our TCs are product of our collective imagination.
    May 11 2
    • Facebook whodattt
      Man you got most things right but some crazy stereotyping...
      May 18
    • SpaceX uevh5
      I know... But this type attitude is frustratingly common in Eastern Europe, that's why I was so bold in my wild guess.
      May 18
  • American Express bugger!
    You are going to continue to work until 60 or beyond on your shitty pay while folks at same age as you at Faang would already be retired 10-20years before you. If they decide not to retire, they most likely would be your boss'boss'boss'boss because skills gained at Faang r more valued than at shitty company like albertsons. Continue to live in your world. We all have the basic need to feel safe and you can't seeing high TCs here. Or you can accept the fact for what it is, use blind as a resource and get a job at Faang.
    May 15 1
    • Albertsons rvUd7211
      OP
      Or just buy the stock
      May 15
  • LinkedIn / Eng qALR45
    Seems like op is jealous of FNG people making money
    May 12 0
  • Goldman Sachs fake engineer
    1/3 is too low. It costs less than 2/3 to buy an at the money put 1 year out to lock in the value.

    I would say this depends on the stock's price, but I would give the usual 4 year vesting 1 year cliff RSU grant a 10-30% discount if it's a bigger company that is profitable. 30% if the valuation is crazy, 10% if it's safe looking like Google in 2014. I think the lack of liquidity for 1 year should be considered at the very minimum a 10% discount.

    Pre-IPO RSUs you have to pay income tax on even if you never get a chance to sell, so those deserve to be slashed by something like 50%.
    May 12 5
    • Albertsons rvUd7211
      OP
      You can leverage 3x better Sharpe for 3x return silly, that is the point. You would actually be better off getting the money sooner and not deferred Comp.
      May 12
    • Goldman Sachs fake engineer
      I'm more than happy to buy all your future vested RSUs for 2/3 price immediately. You say they're only worth 1/3, I'll gladly give you an immediate 100% profit. Silly me.
      May 13
    • Albertsons rvUd7211
      OP
      You're a fake banker, obviously leveraging them immediately will give you a better return than waiting to vest. But whatever
      May 13
    • Amazon c'est what
      You misunderstood the way RSU work, at least at Amazon.

      Amazon has a comp target for me and issue RSU to hit that target. If the stock goes up I just get +2yr RSU to set me at that target every year. But if the stock goes down I will get +1yr RSU as well to bring me back to target.

      Thus my exposure to downside risk is extremely limited as compared to an ordinary shareholder. Those top ups mean that I will quickly recover from any losses in stock value while benefiting from increases.

      My exposure is effective limited to 12 month rolling windows in that within that time frame I will be made whole again. So I will only suffer diminished comp for on average one six month vesting before Amazon fixes it.

      You will be challenged to do the math for the Sharpe ratio of that because it's asymmetrical.

      While the above is specific to Amazon I believe every FANG company would issue additional grants to make employees whole if their comp was going to drop significantly below what they could get by jumping to a new company.

      And that's the leverage we have with RSU: if they go down we can "reset" them by interviewing and taking a new offer baselined at our target comp. We don't have to wait around and realize the losses, and companies understand this as well which is why they all will top people up to avoid attrition, according to their various ways of calculating that.
      Jun 24
    • Albertsons joinednflx
      The companies with good stock plans like your describing have the crappiest comp. The high comp faangs have the crappiest conditions
      Jul 8
  • Amazon / Eng DeepObsess
    Come to the party and enjoy it while it lasts. Sell or hold is up to you, this decision does not definite your TC.
    May 11 1
    • Albertsons rvUd7211
      OP
      But for blind, it does.
      May 11
  • Salesforce kg7bc1
    FAANG pays top of market price for employees. Market price is high now.
    May 12 0