[HN Gopher] Ask HN: Percent of employees that benefit financiall...
___________________________________________________________________
Ask HN: Percent of employees that benefit financially from equity
offers?
Title says it all. Equity offers are a very common thing in tech. I
don't personally know anyone who has made money from equity offers,
though nearly all my colleagues have received them at some point.
Does anyone have real data on how many employees actually see
financial upside from equity grants? Are there studies or even
anecdotal numbers on how common it is for non-executives/non-
founders to walk away with any money? Specifically talking about
privately held US startups.
Author : rickcarlino
Score : 12 points
Date : 2025-02-01 03:37 UTC (4 hours ago)
| quantified wrote:
| The answer is findable, but what you really asking? Percentage
| that benefit at some company, or percentage across a basket of
| companies?
|
| RSUs at a public company are straight-up benefit if you survive
| to vesting. Whether that was better than getting more salary is
| only known in hindsight, but some companies are reliable in that
| being pretty good. Not FU money anymore, but when it's over 100%
| of your base it is objectively good. Options at a public company
| are risky, the markets were favorable for a while but you can see
| that high-flyers may be at the top of their market. Anything at a
| private company is a crapshoot, mostly filled with crap. Top
| execs and maybe a few early employees can benefit from some
| equity sales. Since you are asking the question, I'll guess this
| doesn't describe you. In general the company needs to thrive
| pretty well or have an in on a buzzy acquihire for either options
| or RSUs to be worth anything, and you took a salary cut for those
| chances. The old rule of 9 out 10 fail may need updating, but if
| you join at series C or after you have still a 90% chance of 0
| and a 10% chance of a little something (because the quantity and
| pricing at that point is not all that interesting). Plenty of
| companies will not top you up after your first grant, so your
| slice is small. A few companies take care of their employees, but
| you need to treat the employer's statements in this as completely
| suspect. An employee, outside of work and in a social setting, is
| much more reliable.
| westurner wrote:
| From https://news.ycombinator.com/item?id=29141796 :
|
| > _There are a number of options /equity calculators:_
|
| > _https://tldroptions.io/ ("~65% of companies will never exit",
| "~15% of companies will have low exits", "~20% of companies will
| make you money")_
| ost-ing wrote:
| I consider virtual shares (in Germany) an unregulated scam. It's
| a "nice to have" but should absolutely not be considered
| compensation, nor should renumeration be compromised for them. I
| don't know a single person who has come out profiting. Dangling
| carrots.
| itake wrote:
| There are unfortunately a lot of variables. I would expect
| options, double trigger RSU, single trigger RSU, stage of the
| company, to have different risk/reward functions.
|
| I joined a private "startup" one year before its IPO and got a
| 40% return on my equity grant's first vest a week after the
| listing, but ~60% loss on the following grant. The company
| granted me more shares to make up the difference, so my
| compensation (almost) never changed, despite huge drop in value.
|
| This year, I will/have receive about $300k USD in stock (which I
| can immediately sell on the market). My base pay is $245k/yr USD,
| so equity is a significant part of my compensation.
|
| Every employee at the company benefited from the equity, although
| some should have sold when they could have.
|
| 0/ Options
|
| Options are typically bad, because they expire when you leave.
| For example, the company gives you the option to give them $20k
| per year to exercise options.
|
| - But if you're only making $100k/yr, $20k/yr in post-tax paper
| money isn't great - But if you don't exercise the options when
| you get them, you may need to pay additional money for taxes -
| But if you leave the company, you may only have 1-6 months to pay
| for those options.
|
| IMHO, the only way to make money with option equity is if you are
| very lucky and can stay the entire time at the company.
|
| 1/ RSUs
|
| RSUs are shared by later stage company and can be sold before a
| liquidity event. You owe taxes when they vest, unless they are
| double-triggering, unlike options. but at this point in the
| company's lifecycle, hopefully those rsus will be worth
| something.
| indemnity wrote:
| Anecdote: RSUs have been about 40% of my annual income for about
| 8 years now (I work for a mega corp, not FAANG tho). My manager
| refreshes them every year, the grants vest in three tranches, we
| can sell every quarter, and every quarter I have three different
| tranches becoming available for sale.
|
| I sell them whenever they vest, though I would have probably been
| better off to keep them given the past year's stock market.
|
| Selling did help me pay off my house in 8 years.
___________________________________________________________________
(page generated 2025-02-01 08:01 UTC)