Comments on: Would You Ask For More Company Stock In Lieu of a Raise?

By: Mr. Miller

Mr. Miller — Wed, 06 Aug 2008 18:30:09 +0000

Definitely a bad idea to take the stock if you have a choice. Let’s say your company takes a turn for the worse. Now you get laid off and your stock declines in value. It’s a double punch in the gut.

By: KC

KC — Mon, 04 Aug 2008 16:18:34 +0000

Only way I’d take the stock is if I could liquidate it fairly quickly and the sale of it, including taxes withheld, would still be more money than I would get by accepting the cash raise. I wouldn’t want a large proportion of my portfolio being in the company I worked for – that’s just too much of your personal wealth (stock and salary) tied up in one company.

By: Randy

Randy — Mon, 04 Aug 2008 15:46:58 +0000

As someone who has worked at multiple startups, you really need to analyze each situation independently. If the company prospects are good, the amount of equity is reasonable, and if it appears that the company will grow at a rate that’s higher than what you could earn elsewhere, then it is probably worth the risk of taking the stock.

By: Transcendental Success

Transcendental Success — Mon, 04 Aug 2008 15:21:59 +0000

It’s pretty simple: Don’t take an equivalent amount of stock versus money .. take the money every time. However, if you can get more stock from the company than money, then you’re obviously better off with the stock. You can convert from one to the other so just get the biggest number!

Some companies offer stock based compensation that has to be held for awhile to keep people around. This can be highly lucrative to the employees and is for sure a benefit to companies. It is lucrative for employees when the stock is growing and/or when the amount is far greater than a cash bonus would be. If it’s just equivalent to a cash bonus, then it’s a bonus with a bunch of strings, also known as a hassle that will limit your future choices.

By: Kyle

Kyle — Mon, 04 Aug 2008 14:26:36 +0000

Definitely not. I’d take the cash and invest it in my existing portfolio. I already took the time and effort required to construct it, why would I want to mess it up by overweighting a single stock?

Of course, most people would probably take the cash and spend it so if you’re one of those people, perhaps you could make an argument for taking the stock instead. Maybe.

By: klerg

klerg — Mon, 04 Aug 2008 13:08:32 +0000

Definitely not. I would take it as a bonus but would I take it in lieu of a cash raise that puts more moolah in my pocket? Nope.

Yes, the wealthy have traditionally become wealthy due to their investments and I hope to someday build wealth by investing in things other than my retirement accounts. But I’m going to invest in mutual funds, a few select single stocks, and maybe real estate and not try to build wealth off of company stock. I honestly believe that those Microsoft Millionaires of the late ’90s and Google millionaires of the past few years, all who became rich off of their company’s stock, are rare occurrences, although I’m happy for them.