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Your comp questions answered: Stock and RefreshersFeatured

I have two questions regarding stock in a recently IPO’d company. 1. I heard that one of our executives knows I’m being pursued by other companies and is negotiating a new offer to keep me at the company. I won’t have the new offer for a couple weeks, however I do know that the executive is trying to secure a stock refresh in the form of RSU’s since we’re now a public company. However, HR is arguing that the stock refresh should be ISO’s. Obviously RSU’s are preferable, as our stock will likely increase but is already at a fairly high stock price and I can’t imagine the strike price will be much lower than that, if at all. RSU’s would clearly have much greater value. If HR indeed tries to give me ISO’s instead of RSU’s, what are the other negotiating levers I can pull? How common are RSU’s for stock refreshes?2. I participated in our first ESPP, which was very lucrative since our stock has doubled since the IPO, I put in 15% of my paycheck and got a 15% discount on the IPO price. I have to make a decision about if it’s worth investing in the second round of ESPP and if so, how much to invest. 15% of my paycheck means I can pay my bills, contribute to 401k, but can’t save much beyond that (I already have an emergency fund, luckily). Our stock will likely increase at the end of the 6mo ESPP period, but it’s not clear by how much and obviously the market is volatile. Is there a good rule of thumb for figuring this out?
graceyoung's profile thumbnail
Why do you say “obviously, RSU’s are preferable?” It’s not obvious, especially since you’d get more options if you’re getting ISO’s, and ISO’s are advantageous from a tax perspective.
jennordhem's profile thumbnail
this is so helpful, and i’d like to dive in deeper with the links you referenced. can you update the links into hyperlinks so they are clickable on the app? thanks!
cadran's profile thumbnail
ah that looks like an issue with the mobile app! working on a fix now.
cadran's profile thumbnail
ok you should be all set on the links now!
bethanye's profile thumbnail
Thanks for fixing me up, @cadran!
Hi Bethanye,My company went public last year (yay!) and the lockup is now over so I am trying to decide how much to exercise and when. I know this is a very tricky question and highly dependent on ones situation and risk level. How would you advise going about finding a CPA or advisor? I’ve heard such mixed advice. Trying to figure out taxes + exercise cost and including things like potential bonuses this year and ESPP is getting quite complicated. Kicking myself for not doing early exercise but I didn’t have cash to pay taxes on all the shares upfront.