I am reading on the news that Shopify to allow staff to pick between cash and stock components. I wonder why would anyone choose RSU over cash. Isn't better just take all cash, then buy some SHOP in your retirement account? Am I missing something form the news? TC 300
Tax implications could be different
If stock goes up between grant date and vest, you do well. But cash is just cash.
Longer vest could have much higher upside. For eg: if you get $2M rsu granted on start date to vest over 4 years vs get $500k cash each year.
This math checks out? You get $100 in rsu to vest one year from now. It grows by 50% so during vest you pay 30% income tax on $150 so you pay $45 in taxes and left with $105. You get $100 cash, you pay 30% tax so get $70. You buy stocks, which grows by 50% in one year to $105. You pay 15% in capital gain tax of $5.25 so left with $99.75. But is it that for larger rsu grants that puts you in largest tax brackets of 38% income tax vs 20% capital tax, the math reverses?
That is the case if you used up all your 401k limit. It is better to buy stock in a registered account.
Anyone from Shopify fill us in the details? What if you quit before the RSU is vested. Do you forfeit your pay contributed to RSU or do you get the money back at cost, assuming the stock goes up? Any benefits other than tax implications? Maybe the company will do some matching of the RSU portion?
The detail is still unknown.
It’s more of a PR spin for positive press tbh
Read the title, thought the same, opened post to see that was your question too lol