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0 pointsbertil2y ago0 comments

I’ve seen that for a well-known large tech company, and I wasn’t even employed in the US, making those seem stranger. Friends and former colleagues pushed back against that (very publicly and for obvious reasons in one case) and didn’t get to keep their vested options: they had to exercise what they had before leaving.

There was one thing that I cared about (anti-competitive behavior, things could technically be illegal, but what counts is policy so it really depends on what the local authority wants to enforce), so I asked a lawyer, and they said: No way this agreement prevents you from answering that kind of questioning.

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srockets2y ago

A 90 days exercise window is standard (and there are tax implications as well in play).

OpenAI is different: they don’t grant options, but “Units” that are more like RSUs.

blackeyeblitzar2y ago

Don’t those come with bad tax implications then? The point of options is to give ownership without immediate financial burden for the employee.

srockets2y ago

It depends on the details.

Often RSUs in non public companies come with a double trigger: you need both the vest to happen and a liquidity to happen for the actual delivery of those, so no tax implications until a liquidity event (afaik. But don’t take tax advice from randos on the internet).

dartos2y ago

You pay normal tax on them when you sell after holding for 1 year, but an increased tax if you sell within that year.

srockets2y ago

That’s not completely accurate.

In the US, equity given as compensation for work could be taxed as wages, or, under certain circumstances, as capital gains.

The one year is for some capital gains to get considered long term gains, which may be taxed at a lower marginal rate than regular wages.

In other words, if you are granted equity as compensation, go talk at length to a tax professional to get an understanding of the taxation of it.

j / k navigate · click thread line to collapse

0 comments

srockets2y ago

A 90 days exercise window is standard (and there are tax implications as well in play).

OpenAI is different: they don’t grant options, but “Units” that are more like RSUs.

blackeyeblitzar2y ago

Don’t those come with bad tax implications then? The point of options is to give ownership without immediate financial burden for the employee.

srockets2y ago

It depends on the details.

dartos2y ago

You pay normal tax on them when you sell after holding for 1 year, but an increased tax if you sell within that year.

srockets2y ago

That’s not completely accurate.

In the US, equity given as compensation for work could be taxed as wages, or, under certain circumstances, as capital gains.

The one year is for some capital gains to get considered long term gains, which may be taxed at a lower marginal rate than regular wages.

In other words, if you are granted equity as compensation, go talk at length to a tax professional to get an understanding of the taxation of it.

j / k navigate · click thread line to collapse