Relying on RSUs
Looking to get some insight into whether or not folks rely on RSUs for their monthly expenses. Context: - RSUs are only guaranteed for the first 4 years of employment, resulting in a "cliff" - Stock price is volatile - Stock refresherers aren't guaranteed - RSUs can be a significant portion of your TC, and it may not be possible to live on base salary alone So curious to know which scenario is most common, and how people treat their RSUs
This is basically asking if you work for Amazon or not. Wouldn't that be an easier poll?
No. Many companies issue RSU however, often not in the way AMZ do to 'top-up' salary, rather as bonus. Also immediate vesting of RSUs is not always the norm, My company issues RSU to me, they have a 3 year grant period. Before that period they are just an option not worth the paper they are written on so-to-speak
Not sure what you are talking about hpe. I am referring to the fact that amzn has a salary cap.
RSUs are not granted only for the first four years. All places I have been at gave refreshers every year to anyone who meets expectations. In fact, at stable state, yearly RSU vesting is usually more than what you would get in the first or second year from your initial grant and a refresher. This doesn’t count stock appreciation or higher refreshers because you may be in the growth stage in your career.
I don't have much experience with this, but since I've never seen or heard of a written agreement for refreshers (eg, similar to target bonuses), I'm hesitant to assume they'll come every year. Eg I'm guessing refresher amounts would reduce significantly if the company/economy was going through a rough period. Would love to learn more though.
You clearly haven't been at Microsoft 😂
Most of us get paid more salary+bonus than we spend, so RSUs are saved/invested for the future. However if I could trade $X of my salary for $1.2X more RSUs (with no initial 1-year vest), I would. As for the 4 year cliff, I figure either the company refreshes you or you go somewhere else for more. Win-win.
This is my initial thinking. Joining G soon and doing some budgeting. Ideally, I would want to survive off of my base salary. But if I save all of my RSUs + max out my 401k, I'll be saving about 50% of my net TC! Is that really what most people do?! No wonder everyone is FIRE-ing in their 30s lol
One of the most famous (so probably misquoted) Warren Buffett sayings is that the most powerful force in the universe is not love, it’s compound interest. I wish I could go back 20 years to my younger self and tell me to find a gig that allows me to save/invest half of what I make. Kids and a family are expensive. It’s very easy to adjust to living in a more lavish lifestyle and it gets exponentially harder in life to adjust to spending less money consistently, even when your partner is thrifty. The salaries in tech right now are insane levels of luxury. If you can put away 70% of your income to savings and investing and still live comfortably, by all means do so young man/woman. If you feel weird about it or impostor syndrome kicks in, donate 10 of those 70% to good causes. Trust me, nothing feels better than knowing your future is safe, your job is interesting and helps you grow, and you’re making the world a better place to those not as lucky as you. Money is not the root of all evil. Lack of money is. Money can allow you to do amazing things and you need a lot of luck to get it. I recognize a lot of signals now similar to the years before the tech bubble burst in 2001, it made things really harsh for tech afterwards. There’s no Y2K event coming now though so this might last a couple more years. Jump in there if you can.
Yeah, been really rethinking investment since rsu became bigger part of income over salary and bonus
I dont rely on one, because I dont get one
Whats rsu?
Restricted Stock Units. Employers supplement your base salary with company stock to further increase your total compensation (TC)