Stock vs Cash compensation.

Bloomberg tesco
Sep 22 20 Comments

Is getting a large chunk of your TC in stocks (of a public company) really an issue? My company pays all cash, so we have a higher base salary but TC tends to be lower than companies that hand out stocks. Any real benefits of getting an all cash comp?

I imagine you can always sell right after it vests and most companies you want to jump to give you the equivalent in their stocks.

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TOP 20 Comments
  • New / Mgmt
    xsAS42

    New Mgmt

    PRE
    PARC
    xsAS42more
    Inflated. Especially now when we are seeing peak FAANG and on the heels of another dip. If you make it to 4 years which 80% of people don't id say reduce the cash value of the stock to 33% of the offer value at best.
    Sep 22 2
    • Microsoft / Mgmt Dunph
      😂🤣😂 feel free to short faang stocks if you are so confident
      Sep 22
    • New / Mgmt
      xsAS42

      New Mgmt

      PRE
      PARC
      xsAS42more
      I will short Apple and Netflix. Fb stays flat over the next 4 years. Google grows marginally. Amazon has a strong run over the next 3 years. Financial dip affects everyone best to keep cash out of markets.
      Sep 22
  • Oath Atinlay2
    It depends on the stock
    Sep 22 2
    • Bloomberg tesco
      OP
      Does it though? Can't you sell it immediately and get you cash?
      Sep 22
    • Oath Atinlay2
      Not if you have to wait for it to vest
      Sep 22
  • Citadel Securities / Eng bluetiger
    Most lenders or mortgage brokers prefer to see cash income over stock compensation, even if it’s a public company.
    Sep 22 3
    • Apple MUvh73
      I have not found this to be true. Sure, they ask for paycheck stubs but they also ask for W2 history since they recognize that through elective deductions a paycheck does not show a complete picture of income history.
      Sep 22
    • Citadel Securities / Eng bluetiger
      Not sure how this disproves my statement. Of course a lender is going to look at your history to get a sense of how stable your income is and how likely it will continue in the future. Variable compensation is still going to be heavily discounted
      Sep 22
    • Apple MUvh73
      I am not trying to disprove, just adding to the conversation. I have no experience in the weighting applied to different forms of income in a mortgage application. I do know that in none of the documents requested could the lender have figured out what my RSU contribution was, or how much the bonus or salary was. They just had W2 and bank statements.
      Sep 22
  • Microsoft iamletired
    We're in a 10 year bull market so engineers who've gotten a big chunk of their compensation in equity have done very well. Some people remember 2008 and 2000, though. Those people tend to prefer cash.
    Sep 22 0
  • Bloomberg tesco
    OP
    What could I expect in a stock/cash comp. Currently I make 320K cash.
    Sep 23 1
    • Google UWOM24
      Levels.fyi
      Sep 23
  • Bloomberg LOL<GO>
    TC & YOE?
    Sep 22 2
    • Bloomberg tesco
      OP
      320K, 7 YOE, and as the title says, all cash.
      Sep 23
    • Bloomberg 0oe71@4xns
      How many years of those 7 YOE were spent at Bloomberg? And are you currently a software engineer, TL, or in some other role?
      Sep 24
  • Bloomberg tesco
    OP
    Hmm looking at levels.fyi, let's say I made 415K with stock/base/bonus. It would be something like 230/170/15.
    Even if it were to vest at the bottom of the market, let's say down 50 percent. I'd walk away with 230+85+15 = 330. Lots of assumptions here but over all it appe appears worst case scenario is still not that bad. You still come out ahead, or very close.
    The 2008 crash maybe took 3 to 4 years to recover. So I'd happily take letd say 7bor 8 years of a much higher salary and 3 or 4 years of about the same as an all cash person.
    I'm sure I'm making lots of bad assumptions here. Happy to hear them.
    Sep 24 0
  • Capital One fallx
    Benefits of all cash: immediately spendable, value not dependent upon market performance (e.g., crash/bull market) or company performance.

    RSUs typically have a vesting schedule

    I’d look beyond the RSU angle when comparing offers. Is there a significant difference in benefit value (e.g., 401k matching, medical plan costs or copays, etc.)
    Sep 23 0
  • Google UWOM24
    A stock market crash erases stock compensation if it vests at the bottom of a recession.
    Sep 22 0
  • Logitech pTxN84
    If the stock does well, your annual RSUs are suddenly worth a lot more. Mine have 5x from my hire date. But it could go the other way too. Higher salary is probably better most of the time.
    Sep 22 0

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