Author Topic: Sanity or Stock Options (Golden Handcuffs)  (Read 3597 times)

desire2Fire

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Sanity or Stock Options (Golden Handcuffs)
« on: February 08, 2018, 01:52:16 PM »
Hi,

I'm a software engineer at a recently acquired startup. After the startup was acquired and I am ahead on my savings plans. Though working here has cost me a significant amount of sanity, and I now have an mild anxiety disorder and burnout symptoms. I have little time outside of work to manage my investments properly and other events so my FIRE plan is in its early stages.

I still have more in the money options vesting over the next 2.5 years, but I am worried for my health and my ability to generate future income as the burnout has been slowly crippling my reasoning abilities. (Low performance review coming up, looking into special accommodations)

If there is no cash on the table, I would have left immediately for health reasons, but since the options are worth something and will evaporate on my termination, I am at a lost of what to do. This blessing/luck has now turned into a curse, so I wanted advice on how other moustachians navigated the juggling act of income vs health.

Life situation
  • Late 20s
  • Company does generous pretax RRSP (Canadian IRA) matching
  • No vesting of options on leave of absence
  • Wish to Fire, but also to hit a leadership role (staying means I can fire earlier, but lose out on promotion due to lack of performance)

Your advice would be greatly appreciated!

TL;DR Startup company acquired, options are in the money. Losing sanity due to burnout/over time. Stay or leave?


Answer from Moustachians:
If the options are > 1.5x your take home salary then it would be a contender, otherwise you are better off taking care of your health.
« Last Edit: February 12, 2018, 12:47:16 PM by desire2Fire »

MaybeBabyMustache

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #1 on: February 08, 2018, 02:46:42 PM »
This is a tough one, and I wish you well on your situation/burn out. Just to make sure I understand, if you keep working at this same company for 2.5 years, how much money are we talking? Either real dollars or as a percentage of your FIRE goal? I'd hate to walk away from that money, given how much you've already personally invested. Of course, your health & wellness comes first, so if there's no way to manage your current workload & position while staying healthy, I think you should look for another role. Sometimes larger companies will "buy you out" of your options, by offering you a similar vesting schedule at their company. YMMV.

If you are already facing a low performance review, you may not be in the strongest negotiating position. But, have you already been working with your manager to be clear on expectations, support, prioritization, etc? Is he/she aware & supportive of you generally? That would also modify my position.

MayDay

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #2 on: February 08, 2018, 07:15:47 PM »
Kind of depends how much money.

If you make 50k and the options are 1 million, stay.

If you make 150k and the options are 100k, bail.

Or something.

desire2Fire

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #3 on: February 09, 2018, 07:57:37 AM »
@MayDay   Yeah your are right on the ball with the 150K and 100K ratio.

@MaybeBabyMustache  in essence the options per year is 50% more on my salary. So in 2.5 years I'll be making a 1.5x more salary and some.  Though since the vesting is in Equity, maybe +/- 7% a year on that amount. Its at max 5-7% more towards my Fire number (still finding the exact number).

Currently trying to negotiate some type of accommodation, but just worried on the confidence hit / lost of trust. If I was older I would stay no questions asked, but I think I'm still young so there is growth opportunities that it'll impact.

I think a number or some function to determine how to value future income / growth vs money on the table.


MaybeBabyMustache

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #4 on: February 09, 2018, 08:01:47 AM »
@MayDay   Yeah your are right on the ball with the 150K and 100K ratio.

@MaybeBabyMustache  in essence the options per year is 50% more on my salary. So in 2.5 years I'll be making a 1.5x more salary and some.  Though since the vesting is in Equity, maybe +/- 7% a year on that amount. Its at max 5-7% more towards my Fire number (still finding the exact number).

Currently trying to negotiate some type of accommodation, but just worried on the confidence hit / lost of trust. If I was older I would stay no questions asked, but I think I'm still young so there is growth opportunities that it'll impact.

I think a number or some function to determine how to value future income / growth vs money on the table.

I wouldn't risk my health for that ratio. Context, I'm working a job that's "more" than I'd like, in terms of stress & overall demands, but my yearly stock package is typically 2-3x my salary, and I also get a bonus. A few more years means a full completion of FIRE. I'm willing to accommodate, to make that happen. (Still trying to balance life & stress to make it more enjoyable on the ride, of course).

Have you explored other career options? Do you know how much you could make elsewhere?

Lady SA

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #5 on: February 09, 2018, 08:45:46 AM »
Have you explored moving to a different company? I've heard startups can be a meat grinder to work for, very exciting but very demanding also. More established and mature companies can be more relaxed. I work for a large company in the midwest in their tech/digital division, and my software engineers work from 9-4, sometimes 5pm. My husband is an engineer at the same company, and he is always home before 5pm.

I would explore either taking a sabbatical or quitting and taking a few months to decompress and heal, then focus on finding a job at a less intense company. You are a software engineer, you are in high demand literally anywhere in the country or the world. You could find a job to cover bills with a bit left over within a week if you wanted.

Leave the stock on the table. if the job is affecting you to this degree, I don't think it is worth it. Mustachianism is about optimizing your LIFE, not your finances. Your life is suffering right now.

neil

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #6 on: February 09, 2018, 10:41:45 AM »
There's not just quit and not quit:

- If the company values your experience and input, it's a lot easier to negotiate health issues and work something out.  Sure, this will burn you come review times, but as an alternative to quitting, both you and the company make out better as they don't have to retrain your replacement.  If they don't care to help, this is not a company you can work for, anyway.
- Taking medical leave might leave the door open to returning, if you find all you needed was a breather.  Then you won't lose options in the meantime.
- Dial it down and don't sweat the consequences.  If you look around, you'll notice employees doing less than you and management generally deals with it because they are doing enough to not be worth replacing.  They maneuver extra work to performers to make up any gaps.  Being salaried doesn't mean 100% of your life is available to the company for work.  If management always claims emergencies, they are either not emergencies or they fail at staffing.

Alternatively, realize that your options might be worth zero when they vest.  I would not necessarily assume these handcuffs are worth collecting on in the face of other concerns.

cchrissyy

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #7 on: February 09, 2018, 11:36:31 AM »
I would think about finding sanity without leaving such as:
- a medical leave of absence
- a long vacation
- an unpaid non-medical leave of absence
- switch to working from home some or all days
- switch to part time (such as switching to 3 days a week for 60% of the pay)

if none of that is possible, then I suggest looking for a job at a less demanding company. you could quit this one and take a break to figure out what you want, or you could search while still employed and set a start date with a big gap to decompress in between jobs.

desire2Fire

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #8 on: February 12, 2018, 12:46:15 PM »
Thanks all for your advice.

The summary from what I understood is as follows:

  • If you make 50k and the options are 1 million, stay.
  • If you make 150k and the options are 100k, bail.

The ratio of how much the options are worth in relationship to your employment income is the answer to Sanity.
If your options are worth a 2x or more of your take home salary and it significantly affects FIRE times then it would be a contender to stay, but for something less than that it is not worth the health risk.


bacchi

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #9 on: February 12, 2018, 12:56:07 PM »
Thanks all for your advice.

The summary from what I understood is as follows:

  • If you make 50k and the options are 1 million, stay.
  • If you make 150k and the options are 100k, bail.

The ratio of how much the options are worth in relationship to your employment income is the answer to Sanity.
If your options are worth a 2x or more of your take home salary and it significantly affects FIRE times then it would be a contender to stay, but for something less than that it is not worth the health risk.

Can you continue on though? When I hit burnout at a startup, I stayed 6 months longer than I should have. I got very little done for that 6 months and really fucked up a project because it was so hard to be motivated and I was sleeping 14 hours/day. It would have better for all concerned if I had just quit earlier.


The_Pretender

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #10 on: February 12, 2018, 04:15:59 PM »
My wife stayed too long at one job and it took her months to come out of it. She ultimately started having panic attacks around food.  Panic attacks are different from anxiety for the fact that she thought she was going to die due to a food allergy (she doesn't have one).  At one point in time, she would only eat 10 different food items.  Panic attacks and mental health need to be taken seriously.  It took her a couple years to get back to "normal" so to speak and eats most items before the episode.  Still stays away from nuts... She went to therapy often and the therapist was the real MVP of her recovery.  Had we not gotten her to this therapist, her road to recovery would've been several years. 

I say this because those 2 years really tested both her and me and our marriage... till death parts us and all that.  Either way this really impacted her confidence to go back to her profession.  During this time, she was not able to work.  With out her income, it started to impact our finances and ultimately brought me to MMM.

Take care of your mental health... If your goal is to FIRE, but you lose your identity to accomplish this... was it really worth it?

Check with your company and see if they offer any services... most likely no due to it being a start up.  My company offers 8 free sessions with a (plan-approved) therapist.

Best of luck, living through this with my wife.  It opened my eyes to how much a problem this is and how little attention it gets.

LSUFanTX

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #11 on: February 17, 2018, 07:03:35 PM »

- Dial it down and don't sweat the consequences.  If you look around, you'll notice employees doing less than you and management generally deals with it because they are doing enough to not be worth replacing.  They maneuver extra work to performers to make up any gaps.  Being salaried doesn't mean 100% of your life is available to the company for work.  If management always claims emergencies, they are either not emergencies or they fail at staffing.

Alternatively, realize that your options might be worth zero when they vest.  I would not necessarily assume these handcuffs are worth collecting on in the face of other concerns.

Late to the party, but this. In my career I have always been amazed at how difficult it is to get fired for cause, and how little incremental reward there is for those who work their asses off versus those that are strict 9-to-5'ers. Chances are you'll get a little grief from management if you dial it down, but that is a lot better than working 80 hours a week.

Thinking of the value at vesting is also a good point. My last job was at an oil and gas company that did a lot of stock options and restricted stock. The idea that my stock grant was 38% of my base kept me there for a while until I realized that 38% was grant date fair value and what I was actually realizing at vesting was far less. Moved on to a job with a higher base and annual bonus but no stock, and it is amazing how much more content I am now knowing I'm not leaving awards on the table should something better come along.

desire2Fire

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Re: Sanity or Stock Options (Golden Handcuffs)
« Reply #12 on: February 19, 2018, 01:45:11 PM »
@The_Pretender   
My wife stayed too long at one job and it took her months to come out of it.

I'm seeing early symptoms, and I have been contemplating the risk reward trade/off of getting a mental health bug. I contribute open source to a friends Mental Health initiative, so I'm aware of how bad untreated mental health issue can get. The real question I find is, how much stress is enough before its not just "character weakness". We need stress to become better, but where is the line where we can say I tried my darn-est and I don't regret leaving/quitting. I think its especially hard for ambitious people. I hope she regains her confidence, and to let her know that even if her ailments are stigmatized, she can still kick ass at what she chooses to do. She knows all the danger points, so now its invaluable experience for an awesome mentor / manager.

@bacchi 
Can you continue on though? When I hit burnout at a startup, I stayed 6 months longer than I should have. I got very little done for that 6 months and really fucked up a project because it was so hard to be motivated and I was sleeping 14 hours/day. It would have better for all concerned if I had just quit earlier.

I'm 6 months behind on my current project, and its hard to get motivated. Though my manager is understanding as his girlfriend (ex-employee of same team) left due to stress/anxiety. So he can understand the situation, the support is nice, but  I don't want to drag my corpse around if I can't produce. I'm worried about how much self confidence I'll be losing sticking around and failing tasks, as I still have a >10 year career prospects in me.


@LSUFanTX

 The idea that my stock grant was 38% of my base kept me there for a while until I realized that 38% was grant date fair value and what I was actually realizing at vesting was far less.

Yeah I'm along the same lines, after a lot of taxation (Canada) its not as much as what it says on paper. Its just hard to quantify how much you would earn to compensate for the lost options if say, you had more space/time to invest better. Though on the grand scheme of things since my FIRE timeline is 10 - 15 years. It does feel very small in retrospect.