Stripe does this, and Coinbase's move to annual equity grants also has a similar effect. There are a lot of tradeoffs in all directions, but the fundamental one is that the reduction in risk naturally carries an equivalent reduction in ability to participate on the upside (eg table at the bottom here: https://www.aeqium.com/post/a-survey-of-equity-refresh-progr...).
You can also argue that it's not good for employees, because downside is capped (stock goes to $0, you keep your salary) but upside is unlimited (Shopify becomes the next Microsoft, you're still driving a Kia).
The reality is that RSUs are a better deal because of the unlimited upside. If my RSUs go to zero, I jump to another company and reset my cost basis- there is actually little risk here beyond the first year lock up.
That's effectively an implicit call option. You can buy an explicit version on the public market.
The question is "Is the cost of an explicit call option greater than the cost of finding a new job?"
There is some benefit in that with an explicit call option, you have to pay up front, while with job switching, you only incur the cost if the implicit option "expires worthless". But that's balanced by the fact that with the implicit option you're exposed to sector-wide risk (eg, see the current tech-wide turndown), while you're not with the explicit one.
Pretty much. Also with the call option you have to pay the premium (and possibly the rollover cost if for some reason you wanted to match exactly the equivalent RSU schedule), on the other hand if the stock price goes down at worst you lose the premium, while the downside with RSU can be much larger.
In practice it would be foolish to invest a large part of your salary in call options of the company you work for. But for the same reason RSUs are also similarly risky and you should always prefer cash and diversify your risk instead.
Edit: If you buy an at the money call and sell the equivalent put you can reduce the premium and replicate the risk profile of the RSU. But I'm not an option trader.
If anyone ever learns how to actually stop comparing themselves to others I'd love to hear it. Many of the most well-adjusted, pleasant people that I know still compare themselves to others naturally, it feels like a subconscious behavior almost at the level of breathing or getting hungry. (I liked the article though)
1. If you compare yourself and envy someone, consider what you specifically envy. Then consider whether you are willing to change EVERYTHING with that person to get that one thing. Their parents, their childhood, their spouse, and so on. I always say no and move on.
2. Instead of comparing yourself upwards, compare yourself downwards. We frequently envy people who are more successful, wealthy, intelligent, and so on. But how many people envy you? How many people are actually less successful, less wealthy, or less intelligent? Most of the time it helps to calm me down.
As a young man, I was out for a bike ride when a man drove past me in a very expensive Mercedes coupe. My first thought was that I would love to be in his shoes, and what an amazing life he must have.
My next thought was that a man of his age would probably see a young man like me out for a weekend bike ride and wistfully think of his own youth. Not just the vigor of youth but also the lack of responsibilities.
-When you are young you have energy and time but no money
-When you are an adult you have money and energy but no time
-When you are old you have time and money but no energy
Obviously the answer is to embrace what you have in the moment but easier said than done.
Can't find a link, but there have been some studies on students and schools that show the students near the top of their class in not-so-great schools tend to be more successful than kids who are below average in elite schools, even if the latter have higher test scores. It really shows you the power of comparison and the importance of choosing the right pond for the size of fish you are.
And thus it is very wise to be grounded to the reality, however that is possible. Everyone is worse than me == superiority. Everyone is better than me == inferiority. Everyone does what they can and I should focus on what I can also, believing in myself and investing in my own growth == freedom.
While it's pretty morbid, another thing to consider is that whatever thing that person has that you want, there have been countless people who had copious amounts of that thing and were still so depressed that they killed themselves. That includes plenty of people who were the envy of everyone around them.
It's a good reminder that there are no silver bullets when it comes to happiness and a meaningful life. Beyond meeting basic needs, it's much more about being happy with what you have than trying to obtain something that you don't.
> another thing to consider is that whatever thing that person has that you want, there have been countless people who had copious amounts of that thing and were still so depressed that they killed themselves.
I find this lazy argument completely unconvincing and reject it entirely.
Very rarely would something like 2x total comp change the way someone lives, and if suddenly stumbling into a double income radically changes your life to the point where you become depressed, then that's kind of on you. Get therapy (you can actually afford it now), trade your money for more free time, seek meaning, be more generous and altruistic - acquire more friends, help others.
> Beyond meeting basic needs, it's much more about being happy with what you have
That sounds nice on paper, until you realize you've lived a few decades unable to afford anything beyond basic needs. I know this is HN, so 90% of people here are in an income bubble, but please try to imagine for a split second how miserable life is if you can't afford hobbies, healthcare, stable housing, or a companion pet.
"Get therapy (you can actually afford it now), trade your money for more free time, seek meaning, be more generous and altruistic - acquire more friends, help others."
I don't dispute that people who do these things would tend to be happier on average, and I agree they are all good ideas, but we can also conclusively say they aren't silver bullets, since there are many people who do all those things but still end up finding their lives so intolerable that they kill themselves.
"try to imagine for a split second how miserable life is if you can't afford hobbies, healthcare, stable housing, or a companion pet"
I'd put healthcare and stable housing in the basic needs bucket, though of course they both exist on a spectrum.
And again, that's my point. There are countless people who have enough money that they have no financial worries whatsoever and yet are still miserable, while there are others with a modest income who feel content. If you are unhappy and feel that making more money will fix it, and you're not struggling with basic needs, this should indicate that at the very least, there's no guarantee it will be a solution to your unhappiness.
I understand your point, and like I already said, it's a lazy argument that boils down to "rich people sometimes have it hard too".
Sure, yes, that happens. But on average they have the resources to deal with it, so bringing it up every time is tired, lazy and disrespectful to those who are struggling and have no safety network.
It obviously doesn't boil down to that. It doesn't seem to me that you actually read and understood what I wrote (either that or you're deliberately mischaracterizing for whatever reason), so it's a bit ironic for you to talk about lazy arguments.
It does read like that unfortunately. I understand that you're trying to say that money doesn't give happiness in a more verbose way. It's just not true though (it's a popular adage, and has even had some scientific study).
> Past research has found that experienced well-being does not increase above incomes of $75,000/y. This finding has been the focus of substantial attention from researchers and the general public, yet is based on a dataset with a measure of experienced well-being that may or may not be indicative of actual emotional experience (retrospective, dichotomous reports). Here, over one million real-time reports of experienced well-being from a large US sample show evidence that experienced well-being rises linearly with log income, with an equally steep slope above $80,000 as below it. This suggests that higher incomes may still have potential to improve people’s day-to-day well-being, rather than having already reached a plateau for many people in wealthy countries[0].
You've referenced basic needs without defining what that means. The vast majority of people in the US are not in the HN bubble. They're in the barely making basic needs or just above that.
More money for people in stress (i.e. at the border) is going to bring relief and therefore less sadness[1].
Money was one small part of my point. And you, like the other poster, are arguing against a strawman.
I already addressed the issue of basic needs. I also made no claim as to whether more money makes people happier on average. It very well might—as you point out, there are conflicting studies on this so I don’t know if there’s conclusive evidence either way.
My point was only that money (like any other advantage one can have in life) doesn’t make everyone happy, and so there is no guarantee it will make any particular person happy if they get it.
Neither you or the other poster have addressed this point whatsoever, rather arguing against something I didn’t even say.
I think most of the time, comparing doesn't mean envying. It's often a feeling of being inadequate, or feeling to not meet expectations other people put on us.
What exactly is the issue with comparing oneself to others?
I came from a less fortunate background in some ways, and LinkedIn has been a godsend for me to compare myself to others and get to where I want to be: I just look people up who I’m really impressed by, see their history and combined with other research I find the patterns that got them where they are, and then develop goals for myself to surpass them. It’s almost like they’re my mentor and don’t even know it.
I wouldn’t say I’m wildly successful now, but any time I encounter someone noticeably “more successful” along the axes I care about, there’s a moment of envy that quickly turns into “what can I learn from this person to accomplish that and surpass them”? I’m way more accomplished than I was even just a year ago, and I find myself saying that every year. I’ve sold businesses, lead teams, received awards, and have accomplished things that just a few years ago seemed like a pinnacle of success because of this mindset.
Comparing oneself to others is so powerful, especially now the availability of peoples background info basically makes it a labeled dataset for learning how to become “successful” in whatever way you define it. I think that’s always been the point of it biologically: if you’re worried you’re falling behind - fix it! The issue is the same as calorie counting: there’s a healthy way to do it and an unhealthy way. Most people compare themselves to others in the unhealthy way, so it’s unproductive and just anxiety-inducing. The healthy way uses that low level anxiety as a catalyst for action.
> What exactly is the issue with comparing oneself to others?
Because the society's standards are capricious, and they change almost every decade. They can even suddenly change in a single year. What is 'the place to be' a yesterday could be a place that people don't want to be tomorrow. What's 'cool' yesterday can be 'lame' tomorrow. If one builds his or her life on the society's changing perspective, he or she can easily end up unhappy in a decade or two, being in a place and situation which does not merit the effor that went into it to get it and keep it.
The ideal is going in the direction which YOU want to go. Where YOU want to be. That's where all those 'inner drive' talk comes from. And they are right - in 10-20 years, all the people who had shaped the standards of the current society as adults or parents will be gone. The standards and perspectives will change. It happens every ~20 years. And when that happens, its better to have that 20 years lived by your own standards and drives than the ever-shifting societal standards.
I don't think these two things are mutually exclusive. It's fully possible someone else is living a life that is what I want my life to be, not because social standards have forced anyone to do anything, but because they've accomplished (through intrinsic motivation) what I also set out to accomplish (through intrinsic motivation).
> It's fully possible someone else is living a life that is what I want my life to be
Its fully possible, but its also statistically improbable for enough number of people to be doing that, and even more improbable for it being a common aspiration in the society. The aspirations and standards of the society generally follow the lines of money and a hip/desirable status at any given time according to the dominant fad.
I think what you're saying is "most people blindly follow trends", which might be true. But it seems totally orthogonal to whether somebody is comparing themselves to others because they are trend followers or not. Your argument basically is "but it's quite likely a random person is a trend follower anyway", but that's not a good reason to tell people to avoid compare themselves to others. Rather it's a good reason to tell people not to follow fads...
> I think what you're saying is "most people blindly follow trends"
More than that. Society, especially parents, relatives and peer groups keep pressure on the individuals to follow the 'desirable' trends.
> "but it's quite likely a random person is a trend follower anyway"
Yes. That's quite likely. Because the general sample set available to the public for making comparisons, generally end up people who have followed the trends. Be it among the relatives, be it from the sample set at Linked in. You will scarcely find people saying 'I became a poet and Im happy' or "I followed my dream of becoming an oil rig worker instead of a lawyer". The public, vocal feedback will tend to follow the society's requirements.
I'm not sure I follow why that would be. Surely most people, even when intrinsically motivated, would be expected to gravitate toward certain common interests that are appealing to human beings at large.
You're more likely to find a human interested in learning to play the guitar than staring intently at a squirrel out the window for hours (although a a cat might be interested in that).
> would be expected to gravitate toward certain common interests that are appealing to human beings at large.
They do. But these rarely end up being the jobs that the society respects and recommends. Things may change in near future with new ways of working and making a living. But currently, what you really want to do and what society things to be 'good' will likely not overlap.
Of course. Anyone can admire anyone, and actually people should admire people. But choosing to govern one's own life and fate over other people is not a good way to go where one really would want to be, from deep inside.
> there’s a moment of envy that quickly turns into “what can I learn from this person to accomplish that and surpass them”?
Therein lies the rub. Many have not developed this skill, and it isn't taught anywhere. In American culture, when a person verbally relates or otherwise expresses their negative emotions experienced as a result of comparing themselves with others, most other people will respond with some variation of "don't worry about it," whether that's friendly reassurance that their worth lies elsewhere or a bit of patronizing admonishment for immaturely keeping up with the Joneses in the first place. Rarely are people handed a guide to using those feelings constructively.
But yeah, learning to do so can get you quite far in life.
I don't think there is an issue with it when done in moderation, but with social media it has become more wanting an end result without understanding the process or the risks involved with getting there. If studying others and using that knowledge to move up in the world is working for you and gives you fulfillment, I think that is a great thing.
> I just look people up who I’m really impressed by, see their history and combined with other research I find the patterns that got them where they are, and then develop goals for myself to surpass them.
I suppose that's a kind of "comparing yourself to others", but I think it's more accurate to say that's "learning from others" rather than comparing.
You are not assessing your worth based on the perceived worth of others. Your are spotting people who have accomplished things similar to what you want to accomplish and seeing how they got there.
One way is to reject the idea of free will as an absolute. Every effect has a cause, and the causality chains extend from the beginning of time (assuming there is such a thing). Humans are part of nature, and the causality chains also control each and every human's actions and destiny.
It's somewhat related to the Nietzsche's concept of Amor Fati:
"My formula for greatness in a human being is amor fati: that one wants nothing to be different, not forward, not backward, not in all eternity. Not merely bear what is necessary, still less conceal it - all idealism is mendacity in the face of what is necessary - but love it."
But perhaps the cause-effect relationship is inverted - perhaps generally happier people tend to think free will exists, because they never had a reason to doubt it? In contrast, people who are generally unhappier are the ones who are thinking about topics such as free will, determinism, etc. to try to make sense of the world. Sometimes it works, and makes them less unhappy - but they had to be unhappy in the first place to start thinking about it.
I'd say practicing non-dualism à la Zen Buddhism helps a lot. In short it helps see through preconceived (or any form of) notions, such that one doesn't become attached, including to the notion of becoming unattached itself.
It points outs that the separation of our individual self from others can be seen as illusory, that we're all deeply connected. Sure my left arm is weaker than my right, but that doesn't make it "less important", and in fact thinking in such a way is preposterous. But might be useful in another context such as left/right balance for fitness.
I've been reading The Courage To Be Disliked” about Adler's theories, and it's very interesting. According to him, we all have feelings of inferiority. It's normal and could even be healthy, it'll help us to improve. What's negative is the inferiority complex: when we internalise our feelings of inferiority and use them as an excuse to avoid changing.
The idea of feelings of inferiority being a normal part of living is freeing, it helps to accept them.
Eh. It depends on the context for me. I try to only compare me to me. An easy way to do that is to compare me to a ~6 month version of me. I started a job about 6 months ago. Comparing today me to that previous me is straightforward. I knew little about React when starting this job. Now I've shipped multiple react projects.
I started doing bjj about 6 months ago. Its obvious to me that if I was wrestling against myself from 6 months ago it would be easy to beat myself.
This becomes harder as you have more experience in something, comparing your 5.6 years of exp to your 5 years is less obvious than 6 month and 0 months, but its still possible if you are tracking your achievements.
I have a "hype" doc where I write down my accomplishments every three weeks. Sometimes there are many. Sometimes there are only 1 or 2 things to note.
Do I still feel very silly and incompetent when pairing with a significantly more senior engineer? Do I still get smashed by more experienced grapplers? Sure. But I dont have to dwell on it because I know I'm making progress of my own.
I think there is a healthy way and an unhealthy way to go about it. Suppressing the urge to compare ourselves to others seems like it would be counterproductive and energy intensive. Some people take it a step further though and use others as a hard reference point for themselves. The issue I see with this is that we pretty much never know what is going on with someone else past a surface level, and this behavior can mute our individualistic strengths as well.
This isn't to say that having a reference point is not a good thing to have, role models can be a great thing. It is not difficult to imagine the best and worst version of yourself, and just use that as a spectrum for moving through life, imo.
My view is that we are human and comparison is a subconscious activity like you said. I feel one can become aware of when one is comparing and walk back from it. Being pleased for others people success is helpful here.
Agree, I think it is impossible not to compare with others. I don't think you always have to "walk back from it", sometimes is good to achieve your goals, the challenge is doing it in a healthy way.
In my experience it is the ego that wants to compare. As I've gotten older I've noticed the comparisons have less jealousy and confusion, more envy and understanding of the complexity.
I think rather than focusing on "not comparing myself" to others in general I make sure I don't obsess over it when I do... it's kind of inevitable and not something I can perfectly stop doing, but I can certainly control not letting those thoughts overrun everything else I have going on.
I am sure there is some strong correlation between drive, entrepreneurial success, an always-on churning mind, and insomnia. And lying in bed awake at night is a hard time to choose your own thoughts - it just happens.
I think the most important thing is to recognize that you can’t objectively assess others and you can’t objectively assess yourself if it’s something you care about. You may find yourself comparing anyway, but knowing that your “findings” have the credibility of an Elon Musk tweet helps to lower the stakes.
Frankly, the decline looks less bad than I'd expected, given how short my own appreciation and of those in my bubble lasted. Google searches are still at ~50% of peak volume (not going to log in to Twitter just to view the thread). Also, Wordle is fun enough that I can see it having a renaissance at some later point (look at Rubik's cubes - the initial boom lasted for 1-2 years, but they're still popular four decades later).
How tight is the correlation between tweets and users though? Anecdotally I know quite a few people who play every day but only ever share their results in private channels. For those that want to compare their results with the general population there is now also WordleBot which probably eats into the tweetshare.
You’re welcome to find other quantifiable sources, but to me Google trends speak for themselves. Also, less and less people not sharing answers reduces odds of new users finding it. WordleBot might aggregate stats, but it’s not them same as getting users to share on social media.
Honestly indifferent, thought Wordle was doing better, but I do believe in quantifying trends via notable significant sources; again, if you’re able to think of any, for example NYT article covering it’s grow since being acquired, I would be interested.
I hadn't actually commented on Google. I am saying that I think there is much weaker correlation between tweets and users/growth than in the early days. I therefore don't think WordleStats is a very useful barometer for the Times' investment.
As for Google Trends, I actually think those are some good numbers. Considering what the 100% peak represents in absolute terms, 40% of it is still very solid. I think it's more informative to look at the trend in the context of other search terms. Pick any of the news major stories that have captured the public's attention over the past few months: Russia's invasion of Ukraine; Depp v Heard; Roe v Wade. Wordle is crushing them all. Indeed it seems the only thing more viral than Wordle is COVID. Maybe we'll see some official numbers from the Times at some point but in the absence of anything concrete I suspect they are happy with their purchase.
In any case, do I think Figure can match the meteoric rise of Wordle? It's statistically unlikely. Can it be profitable? I'm no expert in game monetization but for the OP's sake I hope so. I like it.
More likely that part of the fun of sharing Wordle was it was not prompting a huge media company, as soon as NYT bought it, my guess is people were less likely to share it, especially other news organizations.
I was honestly surprised to see it had declined, since Wordle still shows up in top ten Google trends on almost a daily basis.
This is a solid post, and setting comp is both important and nuanced.
One really important topic that isn't addressed here as part of Compensation Reviews is re-evaluation of equity grants – particularly at times like these when tech equities are falling rapidly. A scenario that I think we will unfortunately see a lot of:
* Employees have equity grants worth $100k/year in equity, with the value based on a fundraise from last summer (not uncommon for senior engineers in tech)
* Tech co valuations from last summer were white hot. 50x, 70x, 100x ARR
* The market has cooled significantly with valuations at say 6x, 10x, 15x ARR
* As a result, the "true" value of employee equity will be way lower than expected
* With comp that far below market lots of people will quit
Of course, there's the question of what to do as a manager. Topping up all employees or raising cash comp for all is more fair but also increases burn, which is _exactly_ what VCs or public markets don't want to see right now. Behind closed doors many companies will top-up high performers and tacitly encourage low performers to leave the company.
I was also a bit surprised to see that this post didn't discuss how companies think about and create bands beyond percentiles (example of how many companies approach the creation of bands: https://www.aeqium.com/post/how-to-create-compensation-bands). Using percentiles to determine pay can work, but is typically a lagging indicator, as these sorts of comp benchmarks are based off of surveys that only go out so often. This is especially true in times of considerable compensation volatility like right now –comp for roles like engineering, design, product management, data science have all increased dramatically in the last 3-4 quarters, but this growth will probably slow significantly or even reverse given the current tech market downturn. That's very unlikely to get captured by percentile-based assessments.
re-pricing of options or an exchange [1] is indeed a very important aspect of compensation of private companies. While public companies value options based on publicly reported figures (and are restricted by NYSE/NASDAQ), private ones have to follow set rules in the 409a [2].
I see this argument a lot: companies shouldn’t offer more equity in a down market because employees wouldn’t be willing to give back equity if they were up significantly.
It doesn’t matter if this situation is “fair” though. What matters to the company is people will quit if they’re making half of what they expected to make.
This is exactly right. In some situations it's a matter of practicality not morality. Anyone compensated in equity in large part needs to be willing to accept some share price volatility, but at a certain point people are going to leave and the company has to be proactive about that.
How do you value equity in a public company like Netflix or Shopify? I don't think you're wrong, taking it further it's really hard to value anything but AAMG (not FAANG lol) at face value.
Netflix was always a nothing burger when it came to BigTech. It was the 50th most valuable company before the stock crash. It’s an accident of history (and CNBC) that it was ever included as a FANG stop. Notice the missing “A”? Cramer didn’t include Apple even though Apple was already the most valuable company by then or Microsoft that had been in the top 5 since 2000.
Fortunately for employees of Netflix, all of their compensation is cash.
Is that a recent change? At least to me, Netflix was known to pay the most base salary b/c they didn't believe in giving out RSUs or other stock based comp.
Yup and that's your prerogative, but practically speaking there are many people in the market who do put the expected value of their equity above $0, and they're going to present a retention risk if their total compensation inclusive of equity gets too low. Fwiw this problem exists for public companies too.
And those people don’t know the statistics of how rare it is for any company “succeeding” well enough for their equity be meaningful, how long it takes a company to have an exit (on average 7 years) or how brutal the IPO market can be during a bear market.
The majority of employees at startups have never experienced a bear market.
I hear you, although for better or worse teams somewhat need to manage to their employees' expectations and perceptions as well as the statistics on startup survival and liquidity. There's also a wide spectrum for the probability of a profitable liquidity event based upon scale, market, stability, etc...
How can you “presume” that when they explicitly said…
> Employees have equity grants worth $100k/year in equity, with the value based on a fundraise from last summer?
Yes I have RSUs from FAANG that are down 30% YTD. But when they vest in the next two months, at least I can sell them and diversify and use them for something.
This issue impacts both private and public companies, although indeed my comment did reference a private company scenario. However, you could just as easily replace that language with something like "with RSUs granted last summer" or similar. The issue is going to impact anyone who has a major equity grant set during prior_market_conditions who is now vesting that equity during current_very_different_market_conditions.
Also as you called out the problem is largely worse for private companies.
It’s much much worse. At least with all of the BigTech companies (FAANG - Netflix + Microsoft), they have huge profit generating business and they can pivot to offering more cash (like Amazon did before the crash) or even more stock. No one believes that those five companies will have worthless stock during their vesting periods.
Private non profitable companies are stuck in a catch-22. If they offer more cash they increase their burn rate. If they don’t, their best employees leave and they lessen their chances to ever go public. On top of that, how many VCs will just cut bait and let the business fail? What are the chances that they can get another round of funding and if so, it’s not a down round making it even worse for existing employees?
If someone in NYC came up to me and started acting friendly on the street I'd assume they were trying to scam me, sell me something, or get me to sign a pamphlet. It's more considerate to offer the help with no ceremony.
You can also argue that it's not good for employees, because downside is capped (stock goes to $0, you keep your salary) but upside is unlimited (Shopify becomes the next Microsoft, you're still driving a Kia).