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I know it's a naive question probably but in Yahoo we have LTI (long term incentive) which we're getting in cash (it has similar vesting period as RSU, but you'd just be getting cash instead). I know that in many other companies it's being called RSU and instead of getting paid in cash you're getting stocks, is it better than getting cash ? I can always invest the cash in any stock I'd like to, there is no guarantee the company stock will go up in time, it can also crash in which case I'd get less than what I would alternatively be getting with cash. also investing in 1 stock even if it usually goes up doesn't sound like a good idea, if I get cash I can choose to have a much more balanced stocks investment. TC 450k Thanks !
RSUs are given in current price for future. So there is a chance the value would go up(can go down too) when they vest
So cash seems to be safer, I wouldn't want to risk my TC.
You're naive. RSUs are worth the risk. If company is hiring and stable. The stocks most likely will go up. All my major purchases like house/cars wouldn't be possible without my RSU appreciation
Cash is immediate. RSUs are lumpy. I like immediate
RSUs are paid for by investors. Cash is paid for by the company. There's a good reason why companies like to pay RSUs.
So RSU is better for the company and cash is better for employees ?
In a bull market yes in a bear market no. We’re in a bear market
This. In a Bull market, you might end up making more with RSUs. Opposite for bear markets.
What’s yhoo comp structure like now that’s it private? Share your TC?
If you have even the slightest of confidence in your company stock appreciating over the vesting period I’d say RSU’s are better. Yes they could potentially depreciate in value but a fixed amount of cash being vested years down the road guarantees depreciation (of buying power) even with regular 3% inflation. So I look at it as a choice between risking for big gain or big loss vs locking in a guaranteed moderate loss. Choose wisely.
If the company is likely to go up in value it is better. Think of it as being allowed to invest your future salary before you get it. At Yahoo though I would say it is probably a bit worse than cash imo.
In a bull market, if you work at a growing company you are better off with RSUs. We are in a bear market now and with Yahoo beyond its glory days, you are better off with cash.
I am trying to determine why businesses are still hiring so actively
tldr: RSUs are almost always a better option One point missing here is that companies started giving out RSUs so that employees are invested into companies performance. They started off as a way to reward the best employees which would motivate other employees to do the same thing. Now, to your question, if you are in the company, I suppose you know they are going to keep doing good (or better), else why would you stay in a sinking ship. Given that, it is highly probable that RSUs will grow in value over time. In the short-term there is going to be volatility, but in the long-term you will be better off. Unless you are able to time the market really well, getting cash and investing into stocks is as risky as your company’s RSUs. Plus you are always free to sell your RSUs as soon as they vest.
Have to factor in appreciation for RSU but probably better off with cash at yahoo
Thanks. Why better off with cash ?
Don't see verizon/yahoo stock appreciate long term, cash can be used to invest elsewhere