Simple math on Stripe new RSU policy

Google
xRWu80

Go to company page Google

xRWu80
Jan 19, 2021 26 Comments

Option#1: $400K RSU from FAANG with 20% yearly growth.
After 4 years, you'll get $400K * (1.2) ^ 4 = $829.44K
(Let aside the tax implications)

Option#2: $400K RSU from Stripe with 40% yearly growth.
After 4 years, you'll get $100K *1.4^4 + $100K * 1.4^3 + $100K * 1.4^2 + $100K& 1.4 = 994.56K

The time-value of unvested RSU is very real, even with double speed growth, Stripe can only beat FAANG with a very thin margin.

And also the marginal gain can only hold pre-IPO, after IPO, everyone can swap their FAANG RSU to Stripe, actually, post-IPO will make the fix-value grant a pure downside. (assuming FAANG can steadily go up) #tech #stripe #rsu

Looks the company doesn't want its employees to grow with it.

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 TOP 26 Comments
  • I think Stripe is so confident in the value of their equity, they arenโ€™t willing to offer enough to make a competitive TC for 4 years with standard terms. This scheme is a way around that. It eliminates most of the financial upside to joining such a company, but if a candidate is just comparing offers by TC, they may not get it and join anyway.

    Or to put it another way: itโ€™s too late to join the club. The drawbridge has been raised. You might as well be a contractor.
    Jan 19, 2021 2
    • Google
      xRWu80

      Go to company page Google

      xRWu80
      OP
      Exactly, whoever joins with such term is likely just comparing the TC without doing any math.
      Jan 19, 2021
    • Lyft / Eng
      mkor206

      Go to company page Lyft Eng

      PRE
      Facebook, UberCloud, Stripe, Microsoft
       mkor206
      Except that employees never get to exercise it, so the Stripe TC RSU value is secretly $0
      Feb 1, 2021
  • Uber
    Clpn22

    Go to company page Uber

    Clpn22
    This doesn't include refreshers and your 20%/40% numbers are totally arbitrary. Facebook could be flat for a decade like Microsoft was. One year of a 2x or 3x will easily beat 4 years of ho-hum 20% increases. Nobody knows what'll happen

    Most people will maximize earnings by by joining a highly profitable public company like Facebook or Amazon. Join an earlier stage company because you want to build something and prefer working somewhere everything isn't yet figured out
    Jan 19, 2021 3
  • OP smoked enough assuming every year 20% FAANG growth
    Jan 19, 2021 4
  • Airbnb
    jim.holden

    Go to company page Airbnb

    jim.holden
    OT, but itโ€™s funny how blind tagged simple the company in your post๐Ÿ˜‚
    Jan 19, 2021 0
  • Google
    berniebr

    Go to company page Google

    berniebr
    When does the conversion from dollar to rsu happen? At the beginning of the year or at the end of the year? Assuming I join today, will the 1st year grant quantity be decided now or a year from now?
    Jan 28, 2021 4