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Guys,
What will be my in-hand salary ?
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Rising Star
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I have currently 5.5 LPA having 2 years of experience. How much should be my expected salary?
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It's a retention tactic. Most people won't leave $50k on the table, even after year 3.
It's also an incentive to do good work and drive the share price up. That last $50k may be worth $100k by the time 4 years passes.
If you prove your worth, they will surely incentivize you to stay, maybe RSUs, maybe something else. If they don't, they are hoping you'll leave.
Search: "Golden Handcuffs"
I would think about it as an annual bonus equivalent eg about 50k/year. Most tech companies do annual RSU refreshers which is typically done as another 4 year grant, so essentially raises the bonus amount over time. For example - if you got a 20% refresh, that’s another 40k over 4 years, so the next year bonus goes to 60k.
If this is Amazon, they will fire you before it cliff vests.
Amazon has a back ended vest for initial sign on. Something like 5% year one, 15% year 2, 40% years 3+4.
Lots of anecdotal evidence of amazon firing after years 2 or 3 and people therefore missing out of those big vest amounts. Hard to know for sure if this is a policy of theirs but definitely amazon is more up or out than much of tech.
Yours sounds very much like a flat vest. So this is less of an issue.
I generally sell RSUs when they vest and I’m in our trading window. My company takes out a ~1/3 for tax purposes when they vest, so I’m usually happy to cash out then (i treat it like a bonus). However, If I have reason to believe stock is going up, then I hold them longer and sell in future trading window.
ESPP is free money. I hold ESPP for at least 1 year after the purchase for long term capital gains.
Also make you sure you understand it will typically be taxed as ordinary income.
Pro
Many tech companies will give refreshers each year that are smaller in value. I.e 100k / 4 years. These can stack up over the years.
If you perform well you should see an increase in your RSU comp year over year. They generally grant you additional shares each year so you can never leave without walking away from a chunk of money.
Thanks for the insight P1!
This is a good offer. I have same YoE as you and in a Finance-adjacent role making $325k TC (with RSUs valued at grant value)
Thanks D1! I’ve accepted the offer 🥳
Thank you both! Super helpful
Another couple of questions: do you all typically just sell all the shares as soon as you get them? Also, the company offers an ESPP where you can buy shares at a discount. This seems like free money… am I missing something there? And lastly, on those ESPP shares, how do the taxes work? Is it all ordinary income when you sell or could you make it cap gains if you hold over a year?
ESPP and RSUs do NOT have the same tax treatment. RSUs are taxed as soon as they vest. ESPP is not taxed until you sell, and when you do sell, the tax rate you incur depends on how long you held the ESPP.
Can you share what role & level will be at tech company?
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