• Posts
  • RSS
  • ◂◂RSS
  • Contact

  • Giving: is money better than options?

    January 5th, 2012
    ea
    When I joined Cogo Labs, about a year ago, I started getting about a third [1] of my pay in stock options. Being risk neutral in donating, I decided to spend my salary on me and donate any proceeds from my stock options. This let me increase the fraction of my pay I was giving away without decreasing what I keep. Mathematically and economically, considering just what I can give, I think this was the right decision.

    The problem is, much of my potential impact is from convincing others to give, and if I have to talk about stock options, expected value, and money that I intend to give away it's confusing and distracting. Things were much simpler saying "we lived on about $22,000 and gave about $45,000". Should I switch back to giving money?

    It would not be an easy switch. Options represent a small chance of a lot of money, and they're not very valuable to me personally. (Each additional dollar is worth less than the last). If I were to start giving a third of my compensation away as cash, that would be about 2/3 of my paycheque [2]. Which would be pretty hard. Maybe I should donate some combination of cash and options? Making this more complicated, I had negotiated more options in exchange for a $10K lower salary, figuring that for money I was giving away this was the right thing to do. Suggestions?


    [1] You might say "how can you say 'about a third' when you have no idea whether your stock options will even be worth something ever?" What I did was estimate how likely I thought Cogo Labs was to be worth $X in about ten brackets ($0, $10M, $50M, ...), and then calculate an expected value as $0*P_1 + $10M*P_2 + $50M*P_3... Then I multiplied by the fraction of the company whose options would vest to me each quarter, and got something about half my quarterly salary. So: one third of compensation.

    [2] It's 1/2 my salary (the last third is options) but 2/3 of takehome pay because 1/6 of my pay goes to taxes and other paycheque deductions.

    Comment via: google plus, facebook

    Recent posts on blogs I like:

    Parenting expectations and experiences

    12 people on what it was like for them The post Parenting expectations and experiences appeared first on Otherwise.

    via Otherwise June 17, 2022

    10x (engineer, context) pairs

    Your actual output depends on a lot more than just how quickly you finish a given programming task. Everything besides the literal coding depends deeply on the way you interact with the organization around you.

    via benkuhn.net June 9, 2022

    Buckingham Palace

    I love England. Especially because of the big castle called Buckingham Palace. I got to see the outside there, but my mom showed me some pictures of the inside. I love it there. But the outside doesn't look very fancy to me. But I never knew why those …

    via Anna Wise's Blog Posts April 25, 2022

    more     (via openring)


  • Posts
  • RSS
  • ◂◂RSS
  • Contact