5 ms·

Details: $2MM/year in salary, the rest in performance based incentives. The $692MM figure is based on hitting all of the maximums (200% of a few different targe

by jcheng 6mo ago

Details: $2MM/year in salary, the rest in performance based incentives. The $692MM figure is based on hitting all of the maximums (200% of a few different targets) and is the total for three years.

Someone1234 6mo ago
[flagged]
- lingrush4 6mo ago
  [dead]
- ChadNauseam 6mo ago
  I don't think this would be considered capital gains if it's being paid to him. You typically pay income taxes on your income, if it's in the form of money given to you by your employer.
- andsoitis 6mo ago
  > then up to $230M/year is "lower tax rate than his secretary" income? Why do you think that?
  - Someone1234 6mo ago
    The IRS thinks that too. Stock grants, assuming they're EVER taxed (which isn't a given), are taxed at a lower rate than income. But as I indicated, most are never vested in the traditional sense, and are even lower than standard capital gains.
    - ahmedtd 6mo ago
      Stock grants (RSUs, like Google gives out) are taxed as ordinary income at the moment they vest. If you sell them immediately, then you don't pay any additional capital gains tax, because there were no capital gains from the moment you got them to the moment you sold them. If you hold on to them, you will eventually pay capital gains on any increase in value from the moment they vested until the moment you sell them. Perhaps, once they are vested, you could take loans against them, to get some cash while avoiding selling them. But no matter what, they are taxed at the moment you receive them, and again at the moment they leave your possession.
- Matticus_Rex 6mo ago
  No, not at all. You're taxed on equity at fair market value when it vests. It's only after that when you get taxed at a lower rate on the capital gains.
  - Someone1234 6mo ago
    [flagged]
    - option 6mo ago
      What do you think happens with loans?
      - Someone1234 6mo ago
        That they pay interest at a lower relative rate than the cost of the taxes that would be due, what do you think happens with the loans?
    - philipallstar 6mo ago
      Those share options need excising, which probably incurs income tax on the allocation Vs strike price. Then the shares are only worth something to inheritors if that company is doing useful work for its customers over an extremely long period of time. That is likely far more valuable than the tax going towards paying off the interest for a year on some vote-buying spending that happened 20 years prior.
    - jcheng 6mo ago
      You're thinking of realized capital gains, not tax on the exercise/grant. I don't think there is a way to dodge the latter, and you can't take out a loan or pass down options you never exercised or stocks you were never granted.
    - compiler-guy 6mo ago
      You should probably read the filing. First, these aren’t options, it is straight up stock and it does vest. Second, even if they were options, they definitely vest, otherwise Pichai would never gain control to be able to use them as collateral for a loan. What you might be thinking is that they never get exercised, which is when the person uses the option to actually buy the share. But even that isn’t as straightforward as you seem to be making it out to be. The money to actually pay the interest on those loans and that is usually done by selling stock acquired this way. And then that income is almost certainly subject to AMT as well as other special taxes in California.
- onlyrealcuzzo 6mo ago
  No, these are RSUs, which - to your shock - are taxed as ordinary income upon payout (if that even occurs). He did not get some custom stock now that will appreciate in value magically, if and only if he meets targets - or certain types of options can also act like this. Even if GOOG stock grew so much, that this ended up being a $3B pay package, he'd be taxed as ordinary income on the full amount at payout - not even the reduced capital gains on the extra ~$2.7B in growth between agreement and payout.
  - compiler-guy 6mo ago
    These aren’t options, but you are otherwise correct.
  - ajb 6mo ago
    Shocking? Taxed on payout is a discount versus ordinary stiffs who get taxed every year. A percentage taken from the increase of an amount every year, is more than the same percentage taken at the end; as the former foregoes the opportunity to earn a return on the amount taxed earlier. This is quite significant over longer periods. (I learned that from one of Warren Buffet's annual letters - I think he was explaining why insurance is a great business to be in, because the same effect applies to long-horizon insurance policies).
    - plorkyeran 6mo ago
      Getting a lump-sum payment at the end of three years is worse than getting paid incrementally, and is sort of the opposite of how insurance companies make money (which is taking frontloaded payments for long-term liabilities and investing the float).
      - ajb 6mo ago
        You're thinking about cash. This is options
        plorkyeran 6mo ago
- deleted 6mo ago
  [deleted]
deleted 6mo ago
[deleted]

by jcheng 6mo ago

Details: $2MM/year in salary, the rest in performance based incentives. The $692MM figure is based on hitting all of the maximums (200% of a few different targets) and is the total for three years.

Someone1234 6mo ago

[flagged]

lingrush4 6mo ago
[dead]
ChadNauseam 6mo ago
I don't think this would be considered capital gains if it's being paid to him. You typically pay income taxes on your income, if it's in the form of money given to you by your employer.
andsoitis 6mo ago
> then up to $230M/year is "lower tax rate than his secretary" income? Why do you think that?
- Someone1234 6mo ago
  The IRS thinks that too. Stock grants, assuming they're EVER taxed (which isn't a given), are taxed at a lower rate than income. But as I indicated, most are never vested in the traditional sense, and are even lower than standard capital gains.
  - ahmedtd 6mo ago
    Stock grants (RSUs, like Google gives out) are taxed as ordinary income at the moment they vest. If you sell them immediately, then you don't pay any additional capital gains tax, because there were no capital gains from the moment you got them to the moment you sold them. If you hold on to them, you will eventually pay capital gains on any increase in value from the moment they vested until the moment you sell them. Perhaps, once they are vested, you could take loans against them, to get some cash while avoiding selling them. But no matter what, they are taxed at the moment you receive them, and again at the moment they leave your possession.
Matticus_Rex 6mo ago
No, not at all. You're taxed on equity at fair market value when it vests. It's only after that when you get taxed at a lower rate on the capital gains.
- Someone1234 6mo ago
  [flagged]
  - option 6mo ago
    What do you think happens with loans?
    - Someone1234 6mo ago
      That they pay interest at a lower relative rate than the cost of the taxes that would be due, what do you think happens with the loans?
  - philipallstar 6mo ago
    Those share options need excising, which probably incurs income tax on the allocation Vs strike price. Then the shares are only worth something to inheritors if that company is doing useful work for its customers over an extremely long period of time. That is likely far more valuable than the tax going towards paying off the interest for a year on some vote-buying spending that happened 20 years prior.
  - jcheng 6mo ago
    You're thinking of realized capital gains, not tax on the exercise/grant. I don't think there is a way to dodge the latter, and you can't take out a loan or pass down options you never exercised or stocks you were never granted.
  - compiler-guy 6mo ago
    You should probably read the filing. First, these aren’t options, it is straight up stock and it does vest. Second, even if they were options, they definitely vest, otherwise Pichai would never gain control to be able to use them as collateral for a loan. What you might be thinking is that they never get exercised, which is when the person uses the option to actually buy the share. But even that isn’t as straightforward as you seem to be making it out to be. The money to actually pay the interest on those loans and that is usually done by selling stock acquired this way. And then that income is almost certainly subject to AMT as well as other special taxes in California.
onlyrealcuzzo 6mo ago
No, these are RSUs, which - to your shock - are taxed as ordinary income upon payout (if that even occurs). He did not get some custom stock now that will appreciate in value magically, if and only if he meets targets - or certain types of options can also act like this. Even if GOOG stock grew so much, that this ended up being a $3B pay package, he'd be taxed as ordinary income on the full amount at payout - not even the reduced capital gains on the extra ~$2.7B in growth between agreement and payout.
- compiler-guy 6mo ago
  These aren’t options, but you are otherwise correct.
- ajb 6mo ago
  Shocking? Taxed on payout is a discount versus ordinary stiffs who get taxed every year. A percentage taken from the increase of an amount every year, is more than the same percentage taken at the end; as the former foregoes the opportunity to earn a return on the amount taxed earlier. This is quite significant over longer periods. (I learned that from one of Warren Buffet's annual letters - I think he was explaining why insurance is a great business to be in, because the same effect applies to long-horizon insurance policies).
  - plorkyeran 6mo ago
    Getting a lump-sum payment at the end of three years is worse than getting paid incrementally, and is sort of the opposite of how insurance companies make money (which is taking frontloaded payments for long-term liabilities and investing the float).
    - ajb 6mo ago
      You're thinking about cash. This is options
      - plorkyeran 6mo ago
deleted 6mo ago
[deleted]

deleted 6mo ago

[deleted]