After one year at my employer (coming up this fall) I will start to receive RSUs. This is the 3rd company I've been with where I have received equity. I am aware of the standard advice (common among MMM but also elsewhere) that it's not good to hold too much company stock, or any at all given a few factors. Concentration of risk being one (if the company hits rough times, your stock will go down and you are also at risk of being laid off). Also the adage of "if you had been given a cash bonus, would you immediately buy your company's stock?"
But the first company I worked at was Amazon (was employed there form 2006-2010). I followed the "standard" advice and as a result sold ~900 shares of AMZN between 2007-2010 for prices between $40-$117 (rough estimates). I ran the exact numbers a couple years ago and the shares would have been worth about $600K at that point. Now it's well over a million. This is not counting my 401k match which was paid in AMZN stock and I transferred into my regular asset allocation in the account periodically.
It makes me sick thinking about it - I could probably be retired now if I had held on to the stock, but of course hindsight is 20/20. It could have easily gone the other direction, in fact I sold a bunch of my 2nd employer's stock around $10-$12/share and they are now in the $2-$3 range (not even close to as much money in this case though).
So now I'm faced with what to do at my current employer. I'm thinking I might keep 25% of the after-tax shares delivered to me and sell the rest. I still believe the rational decision is to sell all and invest in index funds, but keeping that small amount will quell my FOMO. If the stock goes up 50x like Amazon has done since 2006, I'll make enough gains that I'll be tremendously happy. And if the company and stock both tank, the amount lost won't be so much to keep me up at night.
As a last aside, if you followed my plan, would you include the company stock in your domestic equity slice for asset allocation, or consider it a separate pool than your index fund percentages?