TC Question
Current TC: $68K Base, $5K bonus, $25K RSUs/yr = $98K TC. Bay Area, non-tech role, 2 YOE. Salary will dip after year 3 due to complete vesting of initial RSU grant (refreshers are weak). I have an offer for a position in LA: $100K base, no bonus, $60K pre-IPO stock options over 4 years. I have 2 questions. How should I value these stock options? There is a very strong chance there will be some liquidation event in the next 2-3 years, and the $60K is probably based on the most recent round of funding (series D). Also, 2nd question, what would this compensation offer equate to if it were in the bay area? Nerdwalletโs calculator said it would be $134K in SF, but I really donโt think LA and SF are THAT different in terms of COL.
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What does $60k stock options mean? Is that what it will cost to exercise? I would ask what percent of the total outstanding stock that value represents. It will give you an easy multiplier when you think about how much the company will sell for. Furthermore, stock options aren't worth as much to someone with no cash savings, as you need to pay for the options if you leave the company. There is absolutely no guarantee that there will be a liquidity event before you want/need to leave this position, so if you don't have the cash to exercise when you leave (and also pay taxes on the gains since grant date), then they are worth 0 to you. If exercising these options is within your financial means, if I was in your position (and I felt like the company was likely to have a liquidity event), I wouldn't even consider joining unless the company offered early exercise of the options so I could avoid any tax liability and lock in long term capital gains when I sell. If you instead meant $60k pre-ipo RSUs, that is another matter.