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It is different for employees who have options vs employees who have RSU. Only early employees have options so for most employees, it is RSU. For RSU, anything that was vested at time of IPO is taxed at that price as income. This is handled by the companies withholding the appropriate amount of shares so ideally the employee pays the taxes at best time with the shares.
Options are not taxed until exercise, and then taxed as income. RSU is taxed as income at IPO with stock price = the price the company sells to underwriters (not opening day price). That is $45/share for Uber. Most employees have RSUs not options.
so if Uber tanks, hypothetically it reaches $20. Then these people have paid roughly ~40% (state+federal) tax on $45/share = $18. Then if they sell at $20 they are just barely breaking even????
Since they already paid the tax at vest by having stock withheld, the $20 per share would be pure money in pocket.
IPO date