Great points. I don't know about the 90s, but in this era, you either want founder-level equity or market salaries. There's too much uncertainty about the outcome, too many circumstances that can affect it, and too long a time window in which these circumstances can play out, for anything else.
Time is an important factor here, more for employees than, say, investors because you don't have a portfolio of multiple lives. Several years of your life count for a lot; be clear-eyed about where they're going.
> Codified at 26 U.S.C. § 83(b), this election lets you decide at the start of your vesting agreement to be taxed for the entire amount that will eventually vest at the present value. Rather than paying tax each year then, you pay all the tax up front based on the value of the stock when it was granted to you. In order to make this election, you have to send a letter to the IRS within 30 days of the grant being made.
What do you mean? You can file 83(b) elections when you exercise your options. Usually that's done when you leave the company, but sometimes it happens earlier.
I guess I could have been more general: the ability for employees to be granted equity and put off paying taxes until they decide to sell said equity would be a good start.
the ability for employees to be granted equity and put off paying taxes until they decide to sell said equity would be a good start.
They can - that's what early exercise is. If you exercise on the day you are granted the options (not they day they vest - the day you join the company) your spread is zero, so your tax liability on that is zero.
Of course, you still have to pay the strike price out of pocket, but the IRS doesn't take anything (yet).
Yea don't take that deal. I honestly feel bad for people taking that deal that think it's a good shot at getting rich. Not fetting rich in .2% of non Facebook
Which is why startups shouldn't be in SF then. A startup in the Midwest can give you a good living for 95k which is approx market rate for a senior developer, and then equity is just icing.
Discovering the market-clearing price is easy! Just keep tweaking the offer until your acceptance rate crosses some threshold. This is how markets have operated for thousands of years!
The choice to underpay and offer lottery tickets in lieu is a conscious, deliberate one by the founder/investor class, and hey, if you can't get enough suckers from amongst the Workers you can always lobby Congress to increase the H1B cap and let you import some from overseas...
When a recruiter contacts you, be friendly, and tell them a high number for your desired salary (I suggest starting at $200k). Soon you will get a feel for what they are willing to go for, and sometimes they will even tell you directly what their maximum is. FWIW Right now in Silicon Valley, $170k seems to be the max for senior devs, and $200k is actually reachable for managing tech leads.
I've seen $350k-400k for a lead frontend position around the Valley, and $250k + bonuses for a director of engineering position in the Valley - these are firsthand numbers. The numbers possible are higher than you might expect, and I am even relatively young in terms of experience (a little under 4 years).
I assume you are excluding the top companies or not considering stock and bonus compensation? Because $170k is closer to a new grad compensation package at places like Google or Facebook.
American employers have tricked employees, via eg: unenforceable legal threats, that sharing salary information is illegal, self-harming, and in bad taste.
Time is an important factor here, more for employees than, say, investors because you don't have a portfolio of multiple lives. Several years of your life count for a lot; be clear-eyed about where they're going.