Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refresh

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crossbow
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Joined: Mon Nov 12, 2018 6:47 pm

Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refresh

Post by crossbow »

I hit the 4 year mark at my company (Bay Area, non-FAANG) and my initial RSU grant is coming to an end. This means that in Year 5 and going forward, my total annual comp is going to be lower than the past individual 4 years. I've only just realized this a couple months after having the upcoming year's compensation chat with my manager. For each of the past 3 years, I've gotten 3-5% increments to base salary with a token number of RSU refreshes. However, it baffles me that that the longer I work at this company, the less I'll earn, although granted, it looks like I'm getting a raise annually.

Has anyone gone through something similar and have any suggestions on how to broach this topic with my manager? I really like working working here and I'm not sure if this compensation structure is the norm - do people usually get a big RSU refresh after their initial grant has fully vested? Should I stay or should I go.
HawkeyePierce
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Location: Colorado

Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by HawkeyePierce »

You should get refreshers. If not, leave.

Definitely talk to your manager.

I've been at a non-FAANG tech company for a little over five years and I've had six different grants in that team.
zrail
Posts: 89
Joined: Sun Jan 28, 2018 9:18 am

Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by zrail »

Not getting a refresh is the company incentivizing you to seek other employment.
sailaway
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by sailaway »

The common thing is to get annual refreshers with a similar vesting schedule. If your token annual grants are significantly less than your sign on grant, either the company is in trouble or you aren't being appreciated.
Marseille07
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Joined: Fri Nov 06, 2020 1:41 pm

Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by Marseille07 »

It's normal. You can discuss but I doubt you get much refreshers. I think your options would be:
a) get a job elsewhere and see if they counter-offer upon 2-weeks notice
b) just get a job elsewhere and switch

Either way, you want to brush up interview skills and start interviewing. These days interviews are all on zoom.
wickywack
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by wickywack »

crossbow wrote: Thu Nov 12, 2020 6:24 pm I hit the 4 year mark at my company (Bay Area, non-FAANG) and my initial RSU grant is coming to an end. This means that in Year 5 and going forward, my total annual comp is going to be lower than the past individual 4 years. I've only just realized this a couple months after having the upcoming year's compensation chat with my manager. For each of the past 3 years, I've gotten 3-5% increments to base salary with a token number of RSU refreshes. However, it baffles me that that the longer I work at this company, the less I'll earn, although granted, it looks like I'm getting a raise annually.

Has anyone gone through something similar and have any suggestions on how to broach this topic with my manager? I really like working working here and I'm not sure if this compensation structure is the norm - do people usually get a big RSU refresh after their initial grant has fully vested? Should I stay or should I go.
The high-level answer is no, folks usually don't get a big refresh just because their initial grant expires. One way to think about whether you should stay or go: if you got a similar (or updated market) offer from a similar company, would that offer's initial grant outweigh whatever you'd be leaving on the table if you walk away your unvested annual refreshes? If so, it might worth leaving and/or asking for a match.
kiwi123
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Joined: Sun Dec 02, 2012 7:37 pm

Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by kiwi123 »

The only big grants i got were tied to (i) starting the new job, or (ii) promotions. Everything else was small by comparison. Talk with your boss, explain your motivation is strongly tied to stock grants and see what the response is. Expect the answer to be "it's company policy to only do small refresher grants...". If your total comp package is below market, then either go for a promotion or look for another job.
visualguy
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by visualguy »

It's a pretty common problem for refreshers not to keep up with the initial grant, and one of the reasons people tend to move around every few years in tech.
luckyducky99
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by luckyducky99 »

Different places do different things. Some places refresh almost automatically; some only the top X% of performers. It varies by company, by org, and can ever vary within an org.

RSUs might be allocated at the VP or director level and they then have to figure out how to portion them out among refreshes and incremental bonuses. If, coincidentally, a lot of top people on a team cliff at the same time, things can get awkward. I've seen it happen.

I'm not clear on your timing. When do you actually go over a cliff? If you just hit 4 years, and vesting started after a year, then you might not cliff for another year? The time to push your manager is during your last perf review before the cliff.
avidlearner
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by avidlearner »

I have gotten a refresher stock options every 2-3 years after the initial grant. However each subsequent grant has been lower than the initial grant because as the company gets bigger the risk is less so your base salary/bonus increases and stock option grant value decreases, its natural.
privateer79
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by privateer79 »

in my experience you get refreshers every year that are 1/4 or more of the initial grant over a 3/4 year schedule... (which leaves you a slight buble in the first 4 years, that hopefully gets covered by increasing comp/grantsj)...

as you go up the ladder, more of your comp is in stock and this becomes more important.

if you haven't gotten annual refreshers you'll be set up for a cliff because its unlikely they'll give you another large "starter" chunk of stock..... you should talk with your manager... either they don't see you as critical to the long term future of the org, or they think you won't notice and can get away with underpaying you... (given you're just figuring this out 4 years after starting, I think the latter is likely)
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Watty
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by Watty »

crossbow wrote: Thu Nov 12, 2020 6:24 pm However, it baffles me that that the longer I work at this company, the less I'll earn, although granted, it looks like I'm getting a raise annually.
One thing to keep in mind is that many tech stocks have soared over the last four years so even if the RSU that just vested was worth a lot, a lot of the value may just be because the stock has gone up a lot. That can make your recent compensation look artificially high.

Consider what it would have been worth if the stock price had been flat since you originally got it. When you value it that way your total compensation may not have changed as much as you may be thinking.
Tingting1013
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by Tingting1013 »

This is by design.

If you are good, you will have gotten refresher grants and raises / promotions to at least keep you at your initial comp level.

If not, then it’s the company’s way of gently pushing out a lower tier performer.
DonIce
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Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by DonIce »

After 4 years you should have progressed from your starting position to a higher level, which should have come with a substantial pay bump and new RSU grant. If not, you need to look into that and have a talk with your boss about career progression rather than about compensation. That is usually a topic managers enjoy discussing more, anyway. Also, if you like the company, you could look at internal job postings and see if you can apply that way, pay bump for switching jobs within a company can also be comparable to switching companies, if the company likes you.
Topic Author
crossbow
Posts: 197
Joined: Mon Nov 12, 2018 6:47 pm

Re: Initial RSU grant fully vested after 4 years, total comp going forward is less or should I expect an equivalent refr

Post by crossbow »

Thanks for all the feedback. I'll be having a chat with my manager about this soon.
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