{"items": [{"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/307960135908966?comment_id=307975945907385", "anchor": "fb-307975945907385", "service": "fb", "text": "1) First rule of options negotiate for them as if they have infinite value and financial plan for them as if they have no value 2) I hope your future value computation included comparable companies that are already public or have been acquired to bracket your expectations. 3) I have strong sense that there is little or no savings component to your financial life this has a number of down sides. I had this debate with myself when I was younger. I strongly suspect a wise plan of savings and investing will actually yield overall larger donations, but will lower your current donations. 4) I say all of the above because I think your impact involves the people with whom you interact, not just your story. While you are better at walking the walk than most I have met, I think you need to consider your audience and your credibility with them. Very few people with real means are likely to listen to you from where you stand today, nad they will be the ones with the large impact.", "timestamp": "1325773298"}, {"author": "James", "source_link": "https://plus.google.com/106345404829653994850", "anchor": "gp-1325776309997", "service": "gp", "text": "Orthogonal to the risk issue, but still important when donating, is that nonprofits are exempt from capital gains taxes. This means that if you happen to end up with stock that has appreciated since you got it, you should give stock before you give dollars; and if you have stock that has depreciated, you should keep that before you keep dollars, since selling it will offset other taxes. I believe Fidelity has a special fund that lets you transfer ownership of stock, sell it without capital gains, and give the charity dollars with no extra overhead for them.", "timestamp": 1325776309}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/307960135908966?comment_id=308004392571207", "anchor": "fb-308004392571207", "service": "fb", "text": "@Phillip: \"First rule of options negotiate for them as if they have infinite value and financial plan for them as if they have no value\"
Planning financially as if they had $0 value makes sense: if they have a high chance of being worth $0 you can't count on them for anything. Negotiating for them as if they have infinite value is strange (as an employee): wouldn't that mean I was willing to trade off my whole salary for any amount of options, given the choice?
\"I hope your future value computation included comparable companies that are already public or have been acquired to bracket your expectations.\"
I tried to, though I don't think I did a good job with \"comparable companies\". That the company had spun off one (now two) companies that got acquired for >$100M is a big part of my estimate.
\"I have strong sense that there is little or no savings component to your financial life this has a number of down sides. I had this debate with myself when I was younger. I strongly suspect a wise plan of savings and investing will actually yield overall larger donations, but will lower your current donations.\"
We do actually save money. I'm currently saving about 2/3 of my takehome pay, or 1/3 my overall compensation. I think you're right about it yielding larger overall donations.
I don't understand your point #4.", "timestamp": "1325776973"}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1325777079369", "service": "gp", "text": "@James\n I will definitely look into that if my options end up being worth something; thanks!", "timestamp": 1325777079}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/307960135908966?comment_id=308007585904221", "anchor": "fb-308007585904221", "service": "fb", "text": "@Jeff, Infinite value was hyperbole. I suppose I should be care about that with engineers:-)", "timestamp": "1325777365"}, {"author": "Jeff Kaufman", "source_link": "https://www.facebook.com/jefftk/posts/307960135908966?comment_id=308011855903794", "anchor": "fb-308011855903794", "service": "fb", "text": "@Phillip: I'm not trying to be silly, though. If you negotiate with an inflated sense of how much options are worth, you will be overly willing to trade off salary for options.", "timestamp": "1325777808"}, {"author": "Peter", "source_link": "https://www.facebook.com/jefftk/posts/307960135908966?comment_id=308022995902680", "anchor": "fb-308022995902680", "service": "fb", "text": "There are formulas that professional investors use to value stock options. One, known as Black\u2013Scholes, earned its devisors a Nobel Prize. There are newer ones than that. Most require the underlying asset to be traded frequently enough to have a market price and a volatility.", "timestamp": "1325779190"}, {"author": "Phillip", "source_link": "https://www.facebook.com/jefftk/posts/307960135908966?comment_id=308024672569179", "anchor": "fb-308024672569179", "service": "fb", "text": "Jeff, didn't think you were trying to be silly, agree you can't inflate them, also bad. I was really talking about the more usual case that doesn't involve trading off salary. @ Peter, B/S is useful for things which have a market as you mention, not nearly so useful for privately held companies.", "timestamp": "1325779380"}, {"author": "David Chudzicki", "source_link": "https://plus.google.com/106120852580068301475", "anchor": "gp-1325779384541", "service": "gp", "text": "I think you're saying it might be better for convincing others if you were making more of a visible sacrifice. One thing I like about your current method is that it isn't about how big your sacrifice is -- it's about how effective your (expected) contribution is.\n
\n
\nAlso, I guess you can think about the the case where your options are worth a lot and you give it all away. That may be fairly effective at convincing others... (so you can think about that aspect in terms of expected value as well).", "timestamp": 1325779384}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1325781052637", "service": "gp", "text": "@David Chudzicki\n \"you can think about the the case where your options are worth a lot and you give it all away. That may be fairly effective at convincing others\"\n
\n
\nActually, I expect it isn't very effective at convincing. If you read some of the profiles on Bolder Giving [1] there are a lot where people say \"I was living my life, and then suddenly got more money than I could imagine using. I decided to give all it away.\" Reading them, I have trouble seeing how they would be very inspiring in non-windfall situations.\n
\n
\n[1] \nhttp://boldergiving.org/", "timestamp": 1325781052}, {"author": "David Chudzicki", "source_link": "https://plus.google.com/106120852580068301475", "anchor": "gp-1325781729414", "service": "gp", "text": "Hmm, fair enough. I too was imagining little impact on non-wealthy people or people in non-windfall situations. But impacting people with money is disproportionately effective.", "timestamp": 1325781729}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1325782637032", "service": "gp", "text": "@David Chudzicki\n \"impacting people with money is disproportionately effective\"\n
\n
\nSure. But there are a lot of people who could be giving 10%.", "timestamp": 1325782637}, {"author": "David Chudzicki", "source_link": "https://plus.google.com/106120852580068301475", "anchor": "gp-1325791067233", "service": "gp", "text": "Yeah, but one person making ten times as much, giving 50%, contributes the same as 50 of those. I'm not saying I know how to evaluate these trade-offs, just that it's not clear.", "timestamp": 1325791067}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1325822698519", "service": "gp", "text": "@Lucas\n You get to deduct the full market value of the stock on the day it was given, \nin addition to\n never paying capital gains tax on the appreciation. This is a big win. I'm planning to structure my giving this way for 2012 and beyond. \n
\n
\n The phrase for the Fidelity product \n@James\n describes is a \"donor-advised fund\". Many major brokerages have one. Technically, it's an independent non-profit, so your gifts are tax-deductible and irrevocable at the moment you transfer them to the fund. The fund then follows your advice about giving grants to actual charities from your account, and takes a small percentage of the assets each year to cover its costs.", "timestamp": 1325822698}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1325823813169", "service": "gp", "text": "@Jeff Kaufman\n Do you have ISOs, or NQSOs?", "timestamp": 1325823813}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1325855794870", "service": "gp", "text": "@David German\n ISO", "timestamp": 1325855794}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1325861050624", "service": "gp", "text": "@Jeff Kaufman\n In that case, I'm pretty sure that if you hold the stock for two years after option grant and one year after option exercise, you can then donate it to charity, deduct the FMV, and avoid capital gains tax on the entire difference between exercise price and FMV. (Analogously, donations of appreciated stock are only treated in the way I previously described if the capital gains are long-term.)\n
\n
\nhttp://www.pgdc.com/pgdc/practical-charitable-planning-employee-stock-options", "timestamp": 1325861050}, {"author": "Jeff Kaufman", "source_link": "https://plus.google.com/103013777355236494008", "anchor": "gp-1325862452170", "service": "gp", "text": "@David German\n That's confusing. It almost makes me glad that my options have a good chance of being worthless (so I won't have to take the time to understand it).", "timestamp": 1325862452}, {"author": "David German", "source_link": "https://plus.google.com/111229345142780712481", "anchor": "gp-1325901816223", "service": "gp", "text": "@Jeff Kaufman\n Then don't stress it! If the time comes, just consult a tax CPA with options experience before you make any transactions.", "timestamp": 1325901816}]}