

Ask HN: Am I getting screwed? RSUs in dollars vs shares - rsursu

I've got an offer for employment from a startup that is issuing restricted stock units in a dollar amount. From the research I've done, they can be expressed in a dollar amount or number of shares with a price. Unless I'm misunderstanding something, accepting dollars vs shares+price seems like an easy way to screw over your employees. Let me illustrate with an example:<p>Scenario 1:
$10,000 in RSU that vests over 4 years. 
At the end of 4 years, I'll have benefitted $10k regardless of how well the company does (assuming it has IPO'ed)<p>Scenario 2: 
1,000 shares of RSUs priced at $10/share that vests over 4 years.
At the end of 4 years I'll have 1,000 shares of public stock regardless of the price (whether it is a penny stock or something like $50/share). Assuming it is $50/share in 4 years, thats $50k (don't know how the original share price works into this formula).<p>What am I missing? It seems like RSUs in dollar amounts are a bust (almost identical to the cash equivalent) and not tied to how well the company does post-IPO (don't care about the tax implications, I'm sure thats a whole nother topic).<p>Can anyone shed some light on the dollars vs shares RSU scenarios?
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epc
Scenario 3: the startup hasn't done a 409a pricing of its stock yet. They're
committing $10k of RSUs at whatever the valuation ends up being. If it’s
$10/share then you receive 1000 RSUs. If it’s $5/share, then it’s 2000 RSUs.
If $100/share, then 100 RSUs.

You need to find out if they're literally granting $10,000 in stock to you, or
if they’re waiting for a valuation and until then literally don’t know the
number of shares.

A dollar amount is not all that unusual…I received a grant equal to 25% of my
income vesting over three years from an already public company. That is, they
calculated the number of shares equal to 25% of my then income. That didn’t
seem to be a lot but the stock split twice during the vesting period (this was
in the 1990s) and ended up being a nice sum.

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epc
Also: you need to find out what the tax implications are of RSUs. If it’s
considered to be $2500 in income each year you may end up paying tax on that
even though the RSUs are not liquid, and will only have value if the company
has a liquidation event.

