How much TC to value an ESPP w/ 6m lookback 15% discount?

period length: 6 months max contribution per period: 10625 purchase price: (0.85) * MIN(price at start of period, price at end of period) FWIW At Akamai i have made about 5-7k every year on this program. Not that much but a nice little benefit. The lookback is the key piece. How much should this be valued toward TC?

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VMware doof_s Oct 13, 2019

It cannot be. TC is strictly the base salary, stock and bonus.

Akamai Technologies hpBF22 OP Oct 13, 2019

TC = Total Compensation Are you saying that this ESPP plan is not compensation? I would argue it is compensation because it clearly has value.

Citadel Securities bluetiger Oct 13, 2019

So does free food, insurance plan, 401k matching, company swag, gym memberships, etc. the convention is to only count base, stock and bonus

F5 Networks RRA Oct 13, 2019

If you need to think about ESPP to measure TC, then you may need a higher TC. We compare TC/YOE to get a sense of what others are getting offered so we have a stronger negotiating hand. ESPP value is not relevant for this purpose.

Akamai Technologies hpBF22 OP Oct 13, 2019

Why ignore benefits? Which is a better offer 300k @ Amazon or 280k at Google? Google has free food, a much better 401k, etc. I bet if you do the math on it the Google offer is higher.

F5 Networks RRA Oct 13, 2019

That's not what we commonly consider TC.

Salesforce QlTT41 Oct 13, 2019

There’s two reasons two ask this question and the answer to both is: practically nothing. If you’re asking for dick measuring purposes, you’ve lost if you need to measure from the balls. If you’re asking for your own understanding of your income, prepare to be disappointed. Suppose you’re capped at 15% of your base (that’s usually how the contribution is calculated). Further, suppose your base is 300k. I’m being super generous to illustrate how irrelevant that is. Further ignore fixed limits (I believe there’s a cap around 25k per year of contributions but let’s ignore that). So you’re putting 15% of your 300k into ESPP, $45k per year or 22.5k per half. The potential upside of espp is unlimited so I will ignore stock market growth. In a 6 month period it’ll only grow so much. Let’s say 10% year, roughly 5% per half. So you are basically getting the stock at 20% discount of current market value. That works out to 9k per year before taxes. On 300k of income this is 3% of your base. It’s nice but this very generous calculation doesn’t change anything significantly. The real net benefit for most people will probably be closer to 1-2% of base. It’s still 100% worth doing because limited downside and unlimited upside. But it’s not a huge factor TC wise. I find it works nicely as a psychological way of saving that ESPP money and getting a nice “bonus” every six months. TC: 380 (without ESPP)

Akamai Technologies hpBF22 OP Oct 13, 2019

If my penis is measuring at 254k can I round to 260k with the ESPP?

F5 Networks RRA Oct 13, 2019

Of course. Just pull on it.