Name: Why Big Tech Compensation Is So High - RSUs
Uploaded: 2022-05-02T11:47:14+00:00
Duration: 3 min 45 s
Description: This video explains how Restricted Stock Units (RSUs) work as a major part of tech compensation, especially in large tec

Why Big Tech Compensation Is So High - RSUs

This video explains how **Restricted Stock Units (RSUs)** work as a major part of tech compensation, especially in large tech companies. It outlines key timing mechanisms, industry trends, and the outsized impact RSUs can have on total earnings.

- **RSUs are company shares granted over time**, typically as part of a four-year compensation package. For example, an employee may be awarded 4,000 shares and receive 1,000 per year.
- **Most companies enforce a one-year cliff**, meaning no shares are received until completing the first full year. However, some companies like Google and Facebook have moved toward shorter cliffs, such as three months.
- **After the cliff, vesting usually occurs quarterly or monthly**, gradually releasing shares to the employee. This incentivizes ongoing retention.
- **Graphics help illustrate vesting schedules**, showing an initial cliff followed by incremental monthly or quarterly share distributions over the remaining years.
- **RSUs can far exceed base salary in total value**, especially at the senior level. In some cases, RSUs make up 75% or more of an individual's total compensation in big tech.

This video explains how Restricted Stock Units (RSUs) work as a major part of tech compensation, especially in large tec

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