cost of an RSU for a company

Google OoHG83
Jun 10 15 Comments

Say a company gives you 1 RSU worth 100$. How much does it actually cost them? I guess a lot less than if you received 100$ cash but how much? What's the theory behind shares?

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TOP 15 Comments
  • F5 Networks dontalk2me
    You’re definitely a LC hire
    Jun 10 2
    • Google OoHG83
      OP
      A what?
      Jun 10
    • New
      djtmrp20

      New

      PRE
      Google
      djtmrp20more
      Actually a good question that I haven't seen asked on Blind.

      Better than the usual "how's my offer" and "who can refer me"
      Jun 10
  • Google əๅɓoo⅁
    RSUs are new shares and don’t cost the company anything as they don’t have to actually buy them.
    When/if your RSU vests, shareholders lose $100 (or whatever the market price is on that day) as their shares are diluted.
    Jun 10 2
    • Wayfair WNEm45
      This. It's dilution of existing shares.

      Be careful of companies with large RSU commitments if you are a shareholder; as an employee, sell shares on the day of vest and diversity your holdings.
      Jun 10
    • Pinterest stoc
      How to find out whether a company has large RSU commitments?
      Jun 12
  • Amazon / Eng
    sgJf21

    Amazon Eng

    PRE
    Microsoft, Nordstrom
    sgJf21more
    Although they don't cost the company anything in cash they do have to be expensed at fair market value. So, they also reduce profitability.
    Jun 10 1
    • Expedia metapod
      But Wall Street has proven not to care about standard ebitda accounting and prefer metrics like adjusted CFO, etc where RSUs don’t impact valuation. So it’s not clear that RSUs have a material impact on a firms stock price (theoretically they should I agree though)
      Jun 11
  • Oracle pzd
    Why do you think it's a lot less? Of course there's a vesting schedule so you need to take time value of money into account, but other than that I can't think of anything. RSUs are a way to tie your incentive to company performance. They are not a cost saving mechanism.
    Jun 10 1
    • Google OoHG83
      OP
      You misread my question. I'm not asking if it is worth less to me but to the company. If they give me 100$ , it comes from a bank account. The company has to earn that money and they could buy a sandwich with it. If they give me a RSU, it's like printed money. They don't have to "directly" have earned it.
      Say a company makes 0 profit but is highly valued.
      Jun 10
  • Credit Karma kqqo46
    Non cash expense
    Jun 11 0
  • Apple public2.
    Not one satisfactory answer. No one here knows shit.
    Jun 10 0
  • LinkedIn boringdude
    Company’s do stock buy backs all the time especially when stock price is low.
    Also if it is just IPOed company, they have pre ipo shares which probably had. A lot lower value.
    Jun 10 0
  • Amazon hhQK87
    There are tax implications (benefits) for company’s issuing RSUs as well
    Jun 10 0
  • New ==<>===
    It depends if they buy back shares from the market or not
    Jun 10 0

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