RSU vs cash bonus discussion with boss

[Surewhitey]

So DW was asked to think about when she wants to retire. Her boss said she would eventually "lose" deferred RSU's if she left before vesting. They currently are paid out annually and she can take ownership in years 3,4&5 after.

He suggested that she could be eligible for the cash bonus equivalent if the math made sense. She'll have to be taxed ~25% on this... She decided to take the RSU's this year, but likely the cash next year & later. She's implying working another 6 years to 65 this way. I've assured her that we can go anytime, so here's to hoping for a buyout or something like it.

 

[Koolau]

It sounds like you are ready (and not worried about funding FIRE) but DW may be hanging on "for the money."

It may be time to show her the "spread sheets."

 

[Route246]

So DW was asked to think about when she wants to retire. Her boss said she would eventually "lose" deferred RSU's if she left before vesting. They currently are paid out annually and she can take ownership in years 3,4&5 after.

He suggested that she could be eligible for the cash bonus equivalent if the math made sense. She'll have to be taxed ~25% on this... She decided to take the RSU's this year, but likely the cash next year & later. She's implying working another 6 years to 65 this way. I've assured her that we can go anytime, so here's to hoping for a buyout or something like it.

I am currently handcuffed by RSUs which is a wonderful problem to have. One lucrative one (many times my base salary at this point) ends in Sept 2025 so my target date for retirement is based on that RSU ending and 3 others being left on the table. I realize I'm leaving a fortune on the table but I spoke with colleagues and ex-colleagues in the same boat and they all told me I will know when it is time to leave and say goodbye to that money left on the table. Had I been offered a lump sum up front instead of RSU a few years ago I would have jumped at it.

 

[pjigar]

Unvested RSU is an age old problem. Leaving that money on the table is just a cost of doing "business" of retirement!

PS: Company may not agree for cash instead of RSUs because how "cost" show up on company balance sheet. RSUs are "hidden" expense since it dilutes shareholder value and it shows up in valuation/share which shareholders can't easily notice. Cash expenses shows up on earnings/share which gets noticed by every shareholder. YMMV.

 

[Surewhitey]

It sounds like you are ready (and not worried about funding FIRE) but DW may be hanging on "for the money."

It may be time to show her the "spread sheets."

Yeah, I actually did show her some morsels on vacation. She's a "small bite of data at a time" kind of gal. Building a 5 yr CD portfolio shows her the 5 yr "safe" income replacement instead of the growth of the complete portfolio.

 

[Surewhitey]

I am currently handcuffed by RSUs which is a wonderful problem to have. One lucrative one (many times my base salary at this point) ends in Sept 2025 so my target date for retirement is based on that RSU ending and 3 others being left on the table. I realize I'm leaving a fortune on the table but I spoke with colleagues and ex-colleagues in the same boat and they all told me I will know when it is time to leave and say goodbye to that money left on the table. Had I been offered a lump sum up front instead of RSU a few years ago I would have jumped at it.

Yeah, I was surprised they even offered the option. I told her (too late) that she should have taken the cash this year to have the option to jump ship a year earlier.

 

[Surewhitey]

Unvested RSU is an age old problem. Leaving that money on the table is just a cost of doing "business" of retirement!

PS: Company may not agree for cash instead of RSUs because how "cost" show up on company balance sheet. RSUs are "hidden" expense since it dilutes shareholder value and it shows up in valuation/share which shareholders can't easily notice. Cash expenses shows up on earnings/share which gets noticed by every shareholder. YMMV.

It helps that her boss is in the same boat and is doing the same. They have a good working relationship so he takes care of her... I asked how old he was and she said maybe a year younger. I think that's making her think the idea is not so crazy if he's RE too.

 

[target2019]

It sounds like this will all work out. She gets her cake, and so on.

However, I wonder if this is a way for the company to find specifics of her retirement plan?

 

[Surewhitey]

It sounds like this will all work out. She gets her cake, and so on.

However, I wonder if this is a way for the company to find specifics of her retirement plan?

I told her she has played her hand for them to know her intentions. She also went to a 4 day work week recently and I think they saw the writing on the wall. She's a pretty important part of customer satisfaction and she is very strong spoken so she is being very clear whatever she expects.

I think her losing a little position for time with the GKs is messing with her head a little. She'll eventually find her "new groove".

 

[Koolau]

I told her she has played her hand for them to know her intentions. She also went to a 4 day work week recently and I think they saw the writing on the wall. She's a pretty important part of customer satisfaction and she is very strong spoken so she is being very clear whatever she expects.

I think her losing a little position for time with the GKs is messing with her head a little. She'll eventually find her "new groove".

Hopefully, the GK's will eventually win out over the RSUs.

Maybe whip out another spread sheet in a couple of months as a "teaser." Then tell her "We've GOT this."

Good luck!

 

[target2019]

I told her she has played her hand for them to know her intentions. She also went to a 4 day work week recently and I think they saw the writing on the wall. She's a pretty important part of customer satisfaction and she is very strong spoken so she is being very clear whatever she expects.

I think her losing a little position for time with the GKs is messing with her head a little. She'll eventually find her "new groove".

GK?

In my last job I went from 5 to 4 to 3 days. It helped a lot. However, the company did absolutely nothing to work in a replacement.

I unwound like that because it worked very much in supporting our goals. Management changes made it very easy for me to walk away finally.

 

[Surewhitey]

GK?

In my last job I went from 5 to 4 to 3 days. It helped a lot. However, the company did absolutely nothing to work in a replacement.

I unwound like that because it worked very much in supporting our goals. Management changes made it very easy for me to walk away finally.

Grand Kids...

 

[Gatormade]

May want to double check vesting rules at retirement. My company, a large public company, has a 3-year vesting on RSU’s, however it changes to 1 year if you retire.

 

[Surewhitey]

May want to double check vesting rules at retirement. My company, a large public company, has a 3-year vesting on RSU’s, however it changes to 1 year if you retire.

Good to know. I'll definitely check. Either way she's going to likely take the cash every year for the next 3, then she's done (wishing)... Working only ~170 days / yr, she may OMY it.

 

[brett]

My employers (large public company) retirement age was 62. Anyone who left over the age of 55 was deemed to have retired.

All unvested options immediately became vested but had to be exercised within 24 months.

It is well worth checking the documentation or checking with HR. Don't rely on heresay.

 

[Surewhitey]

A new twist... She's no longer qualified for RSU's so cash bonus it is. I personally think she should have done this anyhow as it gives her more options...