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Open guide to equity compensation

(github.com)
656 points mooreds | 2 comments | 13 Apr 25 19:13 UTC | HN request time: 0.425s | source
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retiredpapaya ◴[13 Apr 25 23:26 UTC] No.43676621[source]▶
The Netflix approach to this [1], where Netflix allows employees to choose how much of their compensation is cash vs options seems like the best approach - you can tune based on your risk tolerance.

> Each employee chooses each year how much of their compensation they want in salary versus stock options. You can choose all cash, all options, or whatever combination suits you. You choose how much risk and upside (down) you want. These 10-year stock options are fully-vested and you keep them even if you leave Netflix.

[1]: https://jobs.netflix.com/work-life-philosophy

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1. robocat ◴[14 Apr 25 08:14 UTC] No.43679163[source]▶
The stock options are for common stock, right?

However investors that put money in get preferred shares (not common stock) right?

The tradeoff is not equal: taking less salary and receiving stock of less value seems risky to me. I can't imagine the employees discount is very good (those preferred shareholders don't want to be diluted).

Better sibling comment here with in depth opinion: https://news.ycombinator.com/item?id=43677084 : which answers my question:

  when your options vest, is that you are essentially allowed to make an equity investment in the company with really unfavorable terms (ie ur not even getting preferred stock or any voting rights unlike your average investor).
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2. tomp ◴[14 Apr 25 13:32 UTC] No.43681071[source]▶
> when your options vest, is that you are essentially allowed to make an equity investment

isn't the idea that you buy shares at book value, which is way less than "last round valuation"? so you're getting a discount.

I mean, hopefully that's how it works, I never put enough money when exercising my option to care...