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Accounting

Is 10k a year raise or $40k in equity over four year better? The equity has to double to get the same value right? Sell equity at 80k bought at 40k

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I hope this is a real scenario based on a job offer, and not a question in your college Finance class 🤷🏼‍♂️

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10k/yr is 100k over 4 years. 10+20+30+40. I have no idea what you are asking. Are you buying into your firm?

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I feel like it shouldn’t his hard for accountants to figure this out 😄 After reading Director 1’s comments, they are clearly much smarter than I am so will defer to their answer. I can’t explain why “if it doubles you will have made 3-4 times the pay increase after taxes.” Ummmmm ok?

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I’m confused by the question as well. Consider: Would the equity also receive preferential tax treatment? Eg taxed as capital gains vs employment income?

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Equity by all means if the company is stable. It vests 25% each year so same value. Never the less after a time period you pay less tax. You also don’t pay other taxes that you pay with pay increase, which can be 20-40% depending on the salary range. There is some risk in stock if it drops but generally with a good company even if it loses 25% value you are better than paying taxes upfront. And if it doubles then you actually made 3-4 times than the pay increase after taxes.

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I asked in my original question which is better to get

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