How do you evaluate RSU value in an offer from a major (F10) tech company? Do I factor in some stock appreciation?

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I’d argue appreciation is priced in; that’s the definition of a stock’s value. The most aggressive thing you could do would be to price in market or sector growth using the past as an indicator. But I don’t think that’s wise either because the past is not a guarantee of the future.

The only objective technique is to size the negative value of restriction, which is related to option valuation. In other words, the RSUs are if anything worth modestly less than their face value. If you care to model it there are financial models, though personally I’ve never considered it worth it.

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Growth is factored into the price, but with expected returns, the price is also expected to grow. Growth being priced in does not mean the expected price next year equals the current price.

Generally yes

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It isn’t exact. I looked at vesting schedule and financial analysis to track projection.

I also looked at historical growth over previous 3-4 years as another data point.

I modeled out a projected share price and based my analysis on that.

I would not. Given cash you could have simply bought the stock.

For a four year even vest, I multiply the number by 0.75 and thats it.

M1 - what’s your rationale behind a .75 multiple. Are you saying it’s a long term capital gains tax? Or the value of stock will be 0.75? If someone is offered 600k stock with a 4-year vest - then I would assume that would assume it will be 600 + stock appreciation. Correct?

To elaborate on my reasons:

Volatility: my tech RSUs dropped 75k in value this week due to bad earnings. All things being equal id prefer cash, and make my own investment decisions.

Doubling down on risk: if my company’s stock halved in value, I’m much more likely to lose my job. As I can really only work for one company, best to diversify my investments.

Paper vs. actual wealth. This year my company will claim to gave given me over $400k TC, yet my actual W2 will have closer to $170k. This wealth “on paper” will vanish if I leave the company or am fired. Much better to have money in the bank and the ability to switch companies without losing 6-7 figs of unvested stock

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